The Maryland General Assembly eased the burden on small business owners this past legislative session, something it should seek to do with greater frequency. Both the Maryland Senate and the House of Delegate passed a bill, which was subsequently signed by Governor Larry Hogan, which exempts from recordation and transfer taxes the transfer of real property from a sole proprietorship to a limited liability company (LLC) if the sole member of the LLC is identical to the converting sole proprietor and if other specified conditions are met. This means that sole proprietor business owners who own real estate can now organize an LLC and transfer their business real estate holdings into that LLC, without be subjected to unnecessary and burdensome recordation and transfer taxes. The law takes effect July 1, 2017.
Click here for more information on Senate Bill 111.
Paul Skalny is an attorney with the Business and Transactional practice group at Davis, Agnor, Rapaport & Skalny, LLC. For questions regarding the implementation of this new law, or your own business Real Estate matters, please do not hesitate to contact Paul.