For example, all of the stockholders must be natural persons, and there can be no more than 35 stockholders. Other limits make this a restrictive form of doing business, but advantageous for the small or medium size business. The 5 other main forms of business entities in Maryland are Partnerships , Limited Partnerships , Limited Liability Companies , Limited Liability Partnerships and Sole Proprietorships . Of these, Partnerships and Sole Proprietorships do not offer limited liability for the owners, which make them less attractive except in certain circumstances. However, general Partnerships and Sole Proprietorships are very informal, and require little or no adminstrative formality.
Limited Partnerships are more formal.
There must be at least one general partner, and one limited partner. Limited partners are not permitted to participate in management of the entity, except to a very limited extent. This form of entity used to be popular in tax shelter income producing real estate businesses. In this form, the general partner does not have limited liability, but the limited partners do. Finally, the two newest forms of entity are Limited Liability Companies and Limited Liability Partnerships .