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Our Current Newsletter
Member Profile
Fleshman’s Antiques
in Historic New Market, Maryland.
Back When: The Story of Historic
New Market Maryland
 Joseph
Seng makes a strong case for the historic town of New Market,
Maryland, as being a particularly unusual, colorful and
interesting place. The town was founded in the 1790s by
Nicholas Hall and William Plummer. Seng interviewed 50 long-time
residents, including two direct descendants of Nicholas
Hall. The book contains more than 100 photos, some taken
in the last 1800s and early 1900s.
New Market became an important
stopover point for farmers driving their livestock and goods
to market and for pioneers heading westward to settle new
lands. Six major Civil War battles took place within 40
miles of New Market between 1861 and 1864. One fascinating
tale concerns German prisoners of war working on a New Market
farm during WWII.
Today New Market is a Mecca
for antique collectors and other visitors who enjoy weekend
shopping and the annual celebrations of New Market Days
and Christmas in New Market.
The book sells for $22.00 and
is available at E. Rossig Prints & Custom Framing in
New Market, and the Historical Society of Frederick County
in Frederick, MD, as well as on the Internet.
WHAT’S IN A NAME?
By Ted Goldstock,
Esq.
As small business owners, antique dealers
have many choices as to how to establish their businesses
as legal entities. Each of those choices has advantages
and disadvantages. You also encounter a variety of business
structures in the ordinary course of running your business,
whether it be a landlord, a tenant, a vendor, or a customer.
I thought it might be helpful to review the most common
forms of business structure and see what each implies for
both owners and others who deal with them.
Individual Proprietorship. This is the simplest
form of business entity. It refers to a lone individual
doing business either under his own name or some trade name
(or a “fictitious name” as some states like to call it).
The individual has no partners, and if his business fails
to pay its obligations, his personal assets are at stake,
i.e. he is personally liable for all claims against his
business, including, for example, a lease signed in the
name of the business. If the name of your business is simply
a trade name, such as “ABC Antiques,” Maryland law requires
you to register your trade name so that anyone trying to
identify the owner of “ABC Antiques” will know who the owner
of the underlying business really is.
General Partnership. If you and your friend
decide to operate an antique shop together, you have a general
partnership. There may be no formal document establishing
your partnership, and you may have never registered your
partnership as required, but you have a partnership nonetheless,
with all the legal consequences that the name brings. All
partners in this sort of arrangement have personal liability
for the obligations of the business. Consequently, if your
partner signs a lease, even without your knowledge, you
still becomes liable for the business’s obligations under
that lease agreement. Even were you to subsequently retire
from the partnership, both former partners remain personally
liable for the business’s obligations undertaken prior to
their partnership’s dissolution. Be aware, there is no formal
designation that must appear in the name of a general partnership
to alert the public that the company is transacting business
as a partnership.
Limited Partnership. A limited partnership
is a formal arrangement, and the business entity that operates
as one normally has the letters “LP” at the end of its name.
Limited partnerships are no longer used to any great extent,
and they are usually associated with certain tax shelters
and real estate investments. Nevertheless, their importance
lies in the limited liability that their “limited partners”
enjoy. A limited partner has no personal liability as a
partner in a general partnership does. However, every limited
partnership must also have at least one general partner
who runs the partnership (the limited partners are really
just passive investors), and the general partner has personal
liability for the debts of the limited partnership. If your
landlord is a limited partnership, only the general partner
is personally liable for any claims you may have against
the partnership as a whole.
Limited Liability Limited Partnership. This
form of business entity is only recently on the scene. It
derives from state statutes that allow what were formerly
limited partnerships to convert to this form and thereby
afford the general partner the same protection from personal
liability that the limited partners always had. If you were
relying on the personal credit of the general partner to
guarantee the debts of the business, that guarantee is lost
upon the partnership’s conversion to an “LLLP.”
Limited Liability Partnership. This form of
organization is generally employed by professionals such
as attorneys and accountants, and the letters “LLP” follow
the name of the partnership. Its benefit to the partners
is that it shields them from certain personal liabilities
that they would otherwise have in a general partnership
for the debts of the business. States vary as to how much
liability is limited, however. In so-called “partial shield”
states, the partners escape personal liability for the negligence
of other partners or employees that they do not directly
supervise, but they remain personally liable for the contract
debts of the partnership and negligence claims lodged against
them individually. In so-called “full shield” states, the
partners are shielded from contract claims as well. Maryland
is a full shield state.
Professional Corporation. This type of business
entity is reserved for professionals, such as physicians.
Some states may refer to this form of organization differently,
but the concept is the same. The physicians enjoy protection
from personal liability for the debts of their business,
although personal liability for malpractice claims are excluded
from the corporate shield, just like in an LLP. The letters
“P.C.” may follow the name of the medical practice, or it
may simply describe itself as a “professional corporation.”
Limited Liability Company. This form of business
entity is a relatively recent invention, although it is
fast becoming the dominant form of business organization
among privately held companies. Not only does it afford
its owners protection from personal liability, it is the
most flexible form of business entity. Its owners are usually
referred to as “members,” and their relationship is normally
governed by a “membership agreement,” similar to a partnership
agreement. The owner/members own “interests” in the “LLC,”
not shares of stock, and the members may appoint a professional
manager to operate the business for them. In most instances,
the members have no personal liability for the debts of
the LLC.
Corporation. A traditional corporation has
always offered its shareholders protection from personal
liability, however, its formalized structures have become
outmoded with the advent of the LLC. A corporation usually
has a board of directors and officers (president, vice president,
secretary, etc.). These people also enjoy protection from
any personal liability for the debts of the corporation.
There are also so-called “close corporations” that have
only a few shareholders, and state corporate statutes may
allow them to dispense with a board of directors. A Corporation
is usually designated by the inclusion of “Inc.” at the
end of its name, “Corporation,” “Corp.,” “Limited,” or “Company,”
although such requirements are controlled by the individual
states under whose laws the corporation is organized.
This list is, of course, not exhaustive, and again, states
can differ. There are also business trusts, real estate
investment trusts, associations, cooperatives, and other
variations that you may encounter. However, the list I have
provided covers the majority of business structures.
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