Maryland Franchise Forms - Md Franchise Checklist
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Maryland Franchise Forms FAQ Maryland Franchise Business
What is a franchise?
There is a definition of a franchise which has been developed by the Federal Trade Commission. Basically, a franchise involves an owner of a trademark, trade name and/or copyright giving others a license under certain conditions to use these trademarks, trade names or copyrights in providing goods or services to the public. The franchisor is the party who grants the franchise, and the franchisee is the party who receives the franchise.
What is the legal relationship between a franchisor and franchisee?
Technically, the relationship between a franchisor and franchisee is a relationship between two independent contractors. Their rights are determined by the franchise agreement. A franchise then is not a separate business entity, but is a business relationship between two separate business organizations such as a sole proprietorship, a corporation, or a partnership. The relationship between the franchisor and franchisee is controlled by the franchise contract. A corporation, sole proprietorship, or partnership may own the franchise contract or may be the entity entering into the franchise contract.
What laws govern franchises?
There are laws that restrict termination of some franchises. In some states, prior notice of termination is required. Owners of automobile dealership franchises are protected from termination of their dealerships in bad faith. This protection is provided by the Federal Automobile Dealers Franchise Act.
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What are Articles of Incorporation?
Articles of Incorporation are legal documents that establish a corporation as a separate legal entity. They outline important information about the corporation, such as its name, purpose, and structure. In Maryland, the Articles of Incorporation also need to include the names and addresses of the incorporates, as well as the initial members of the board of directors. These documents are filed with the Maryland Secretary of State to formally create the corporation and give it certain rights and responsibilities.
What to Include in Articles of Incorporation
When you are creating a company or organization in Maryland, you need to file Articles of Incorporation with the Maryland Department of Assessments and Taxation. This document outlines important details about your business, such as its name, purpose, and location. Additionally, you should include information about the initial directors or members of your organization. You may also want to specify whether your organization will be for-profit or nonprofit. It's important to carefully review and fill out the required information in these articles, as they serve as the legal foundation for your business in the state of Maryland.
1. Full Name of Corporation
The full name of the corporation is followed by the mention "in Maryland," indicating that this corporation is legally registered and operates within the state of Maryland. By including "in Maryland," it clarifies that the corporation complies with the rules and regulations set forth by the Maryland state government. This shows that the corporation is not just any generic company, but one that has a specific connection and recognition within the state.
2. Principal Place of Business
The principal place of business refers to the main location where a company carries out its day-to-day operations. In Maryland, this means the primary physical address where a business conducts its activities, such as manufacturing, selling products, providing services, or managing its operations. It could be an office building, a storefront, a warehouse, or any other fixed location where the business operates from in the state of Maryland.
12. Limitation of Director’s Liability
In Maryland, there are limitations on the liability of directors. This means that directors of a company are not personally responsible for all the actions and decisions made by the company. They are shielded from individual liability, which means they are not on the hook for any financial losses or debts incurred by the company. However, it is important to note that there are certain situations where directors can still be held personally liable. For example, if they act in a fraudulent or illegal manner, or if they breach their fiduciary duties. These limitations help protect directors from excessive legal exposure while still holding them accountable for their actions.
