How to Start an LLC in Massachusetts: If you’re interested in setting up a Massachusetts LLC, you’ve come to the right place. Having an LLC not only protects your personal assets but also is less complicated than other business structures. Massachusetts laws make it easy to establish your LLC in Massachusetts. On this page, You’ll find all the steps that must be taken to ensure that your Massachusetts LLC has been correctly established. We recommend you read the whole article very carefully word by word, don’t miss anything 🙂
On this page, you’ll learn about the following:
- How to Start an LLC in Massachusetts
- After Starting Your Massachusetts LLC
- Massachusetts Foreign LLC
- Massachusetts LLC Formation Review
How to Start an LLC in Massachusetts
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection.
If you wish to start an LLC in Massachusetts, you mainly have to file your Certificate of Formation with the State and pay a filing fee of $500. There are some more steps to follow to get your LLC established in Massachusetts. The following steps explain everything you need to create your LLC in Massachusetts in 2022. Let’s get started! It is always recommended to hire a professional LLC formation service in Massachusetts to set up your LLC.
Step 1: Decide a Name for Your Massachusetts LLC
The very first step while forming an LLC in Massachusetts is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
Massachusetts LLC Naming Guidelines
There are a few specific requirements all the LLCs in Massachusetts have to follow while naming their Company. Some of the most important requirements are as follows:
- Your business name should be available and no other existing business in Massachusetts can have the same name. Perform a name search from the below-mentioned source to be sure your name isn’t taken already.
- “Limited Liability Company”, “Limited Company”, “LC”, “L.C.”, “LLC”, and “L.L.C.” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Massachusetts State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
|Important Links –||Submit Offline Form to –|
|Massachusetts Business Entity Search – Online Search |
Name Reservation Form – PDF
Name Availability Standards – Guidelines
Massachusetts LLC Name Search – Instructions
|Secretary of the Commonwealth|
One Ashburton Place, Room 1717
Boston, Massachusetts 02108
Reserve Business Name for Future
If you do not wish to file your LLC right now but want to hold the name you have decided then you can reserve your LLC name for 60 days. To keep the name, you have to file a name reservation application and pay $30 to reserve your name with the Massachusetts Secretary of State.
Doing Business As (DBA) or Trade Name
Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the Massachusetts Secretary of State by submitting an Application to File Trade Name in Massachusetts along with the filing fee of $65 (An additional fee of $35 for the non-Massachusetts residents).
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TailorBrands – ($49 + State Fees) Online LLC Setup
TailorBrands offer DIY website templates and incredible logo designs. If you plan to get a website then it is wise to have a “.com” domain for your business but these days you can also use other TLDs like “.company”, “.xyz” etc. With TailorBrands, you can get everything you need at an affordable price.
It is not legally mandatory to use the word LLC in your domain name or email. If you want you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Registered Agent in Massachusetts
The second step to forming a Massachusetts LLC is to appoint a Registered Agent. A registered agent is a person or business entity that will act or work on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Massachusetts. Hence, hiring a competent Massachusetts Registered Agent for your LLC is necessary.
Make sure your registered agent is a resident of Massachusetts or has a physical street address. Their business address or the principal address should be in Massachusetts. Most LLC formation companies also provide registered agent services. Below are two great LLC setup services, even if you buy their cheapest plan (normally $49/year) you also get registered agent service and other services at a reasonable price.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Massachusetts. Some LLC formation services offer standalone Massachusetts registered agent services. You can purchase only Registered Agent services from them without purchasing any other LLC formation services.
A person who is above 18 years of age and has a physical address in the state of Massachusetts can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One who is responsible for handling all the legal documents.
Yes, you can be your own registered agent if you are a resident of the state of Massachusetts and you are above 18 years of age. To become a registered agent you must have the authority to conduct any type of business in Massachusetts.
Registered Agent Consent Application
In Massa, there is no separate Consent Letter to be produced to the Secretary of State. At the time of change of Registered Agent (or the name or address), the new Registered Agent has to sign the consent letter. It comes with the Application form to Change the Registered Agent. The filing fee of $25 should be paid for it. For more information on the same, read our guide on Massachusetts Registered Agent.
Step 3: File Certificate of Organization in Massachusetts
The third and most important step in forming a Massachusetts LLC is to file the Certificate of Formation. This Massachusetts Certificate of Organization is a legal document needed to officially register your business with the Secretary of State. It costs $500 to file your formation certificate in Massachusetts. (Read more on LLC cost in Massachusetts).
The Certificate of Formation includes details like the name of the LLC, registered agent’s name, address, employees’ details, and structure of the company (member-managed or manager-managed). Before hiring employees in Massachusetts LLC, one should know about the rules and regulations thoroughly. Also if you are expanding your existing business (an LLC) to Massachusetts then you need to register as a Massachusetts Foreign LLC.
How to File Online
Go to the Secretary of State Online Service. You will get the online service page. If you are already a subscriber then click on the “log in to Subscribe Account” option and log in with your credentials. If you’re not subscribed, then you can directly start filing your LLC by clicking on the “Online Filing” button below. Read more about the Massachusetts Certificate of Organization for online registration.
How to File by Mail
If you prefer filing real-life forms for your Massachusetts LLC registration, then you can download Domestic LLC Formation Form. Read the form thoroughly, fill it out, and mail it to the following address,
William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Room 1717
Boston, MA 02108
Fax To: (617) 624-3891
Processing Time: It takes 4 hours to get a Massachusetts LLC if you file it online. For the mail filing, it takes 4 to 5 business days to get an LLC. By paying an additional fee, it can be expedited.
Recommended: Online LLC Formation service can provide all these documents within 6-8 days with lifetime customer support and 100% accuracy. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
Step 4: Create Your Massachusetts LLC Operating Agreement
Moving on to the fourth step, filing your operating agreement. An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to filing a Massachusetts LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation. Like Massachusetts, there are other states that do not have a mandatory rule to file operating agreements. But, this document would be useful if you decide to dissolve Massachusetts LLC later. Hence, having an operating agreement may not be necessary but it is definitely ideal.
Recommended: You can get operating agreement templates at only $29 with TailorBrands. You don’t need to worry about drafting it as they will take care of it on your behalf. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
Step 5: Filing a Massachusetts LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business for that matter.
EIN is needed when the LLC hires employees. Hiring employees in Massachusetts LLC requires following specific rules and regulations. On the other side, EIN for Massachusetts foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally complete the form and send it to the address given. You can also get an EIN Assistant who can help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Recommended: This hassle will be reduced when you hire an LLC formation service. They take care of obtaining EIN and all other things for your LLC. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
Congratulation, you are now done with all the necessary steps to form your Massachusetts LLC. If you do it yourself it should take you a long time to properly understand and do all the steps.
However, if you use TailorBrands, it should be way faster. You will always have a live chat option as well as phone support with experts for any help you need. Their worry-free service will make things easier for you.
After Starting Your Massachusetts LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File Massachusetts business permits & licenses
- Get general liability insurance and professional liability insurance with coverage for employees
- File a Massachusetts LLC annual report or biennial report
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Cost of Massachusetts LLC
Forming an LLC in Massachusetts is no doubt more cost-effective than other structures of a business. There are some fees and charges one has to bear to form a Massachusetts LLC. LLCs have pass-through taxation. Hence, your Massachusetts LLC won’t bring you a massive tax burden. Here are some of the fees and taxes are needed to be paid while forming an LLC in Massachusetts,
|Fees/Tax||Amount to be Paid|
|Name Reservation Fee||$30|
|Certificate of Organization Fee||$500|
|LLC Annual Fee||$500|
In Massachusetts, an LLC name reservation is not mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then you can do that online. Your LLC name will be reserved for 30 days without registering your LLC. It can be renewed once for another 60 days by paying $30.
In Massachusetts, an Annual Report has to be produced every year. It costs $500. Also, the state of Massachusetts has to pay a Sales Tax of 6.25%. Read our guide on LLC costs in Massachusetts for more information.
Massachusetts Foreign LLC
If you are interested in forming a Foreign LLC in Massachusetts then you need to file the Certificate of Foreign LLC to the Massachusetts Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the Massachusetts SOS to form your foreign LLC in Massachusetts. To know more in detail, check out our guide on Massachusetts Foreign LLC.
Reasons to Start an LLC in Massachusetts
Below discussed are some of the long-lasting benefits of the Massachusetts LLC. For an LLC, especially start-ups, Massachusetts have diverse business funding options. Depending on the type of business, for example, a woman-owned business, get loan facilities. Some of the benefits that a new LLC business will enjoy in the state are discussed. It will help a person take a step towards the formation of an LLC and start their business. LLCs have the opportunity to earn extra profit as it costs lesser than other types of business structures.
Succession of shares
While setting up a Massachusetts LLC, entrepreneurs will enjoy the benefit of a succession of shares to their heirs. In other states, this facility is not available. Generally, after the death of a member, the shares of that particular person get distributed to other members. On the other hand, in MA, the shares will be passed on to their family/heirs. If any misfortunate incident happens with any of the members while serving in LLC, his/her family can continue as a member/partner.
Discounted prices of taxes for LLCs
The tax one has to pay while setting up an LLC in Massachusetts is discounted for many businesses. Around 25% to 40% discounts are given to the LLCs on paying state and federal taxes. Read more on Massachusetts’ classification of LLC tax.
Moreover, there is a discount for the members on the health insurance as well. It helps in an overall saving in the monthly costs of the member, and one can use it to bear some of the company’s costs.
Economic development incentive program credit
The government of Massachusetts State starts the IPC program to ensure some savings on taxes. It will help LLCs to create jobs and develop the state’s economic status. Additionally, the government can provide a credit of up to $5000 for every job created by the LLC. But for getting this benefit, one needs to qualify their business under the state’s laws.
Great point of attraction for investors
If someone looks forward to starting a Massachusetts LLC, they benefit from attracting an investor and raising funds. The state let the LLC issue their stocks in the early stages to onboard the investors with the help of stocks and explore their USPs in a much better way.
Brownfield Tax Credit
The BTC is again an incentive for LLCs in Massachusetts in which the members are allowed to lease their contaminated land, which will help them get over their financial burdens and keep the LLC in a running state.
Best Businesses in Massachusetts
Several businesses are established in Massachusetts state that you should know before you form an LLC in Massachusetts. That is why here is a list of top businesses operating for a longer period of time.
If you look at Massachusetts’ geography, then it has around 1500 miles of Atlantic ocean borderline. This has enabled the traders to easily trade through the marine ways, which has become a major part of the state’s domestic economy with time. This growing industry has contributed around $2.40 billion to the state GDP. Through the sea links, goods can be transported easily and at lower prices.
Another benefit of such a huge sea coast is the seafood and its product. A whale can be easily found in the Atlantic sea, and they have been hunted for its precious oil and food. Other valuable sea fishes are haddock, Atlantic cod, Black Sea Bass, etc.
According to recently generated reports, the northeastern state of Massachusetts is home to 1700 IT companies. The reason behind such a massive number of IT companies is the easy availability of highly qualified staff in the state. They are established in the state, offering plenty of IT and technology-related services to businesses and organizations to help them grow. The IT sector’s contribution to the GDP of Massachusetts is around $35.18 billion, which is expected to double in less than a decade.
Finance and Real Estate
The contribution of the financial and real estate businesses to the state GDP is around $110 billion. More than dozen of fortune 500 companies are formed and located in the state that is helping people. Many personal and corporate financing houses are available in the state that handles all your business-related finances and issues.
Some small business ideas of Massachusetts state are:-
- Customized tour and travel services
- Berry farming and export
- Life coaching
Massachusetts LLC Formation Review
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Massachusetts. Click on the steps in this list to read the full detail.
- Name your Massachusetts LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In Massachusetts, it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming an LLC in Massachusetts. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in Massachusetts but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
How Fast Can I Form an LLC in Massachusetts
Online filings for Massachusetts LLC may be processed within 4 hours of payment. If filing via mail, it may take up to 4-5 business days. By paying additional fees to the state, the process can be expedited.
Whether you are considering opening a Massachusetts limited liability company (LLC) or you’re already one, you may have some questions about the state’s business environment. While it isn’t the smallest state in the nation, Massachusetts ranks among the best in terms of business environment. This ranking is based on a number of factors, including the number of business start-ups, the number of companies that are founded in the state, and the amount of venture capital invested in the state.
If you’re looking for a quick and easy way to form an LLC, you can get started with a service like TailorBrands. They offer a comprehensive online platform, live chat support, and worry-free service. They can also help you create an operating agreement in Massachusetts.
The Secretary of the Commonwealth offers a robust Business Entity Search. This search can be used to determine whether or not your business is legally formed. It can also answer your questions about filing your LLC’s paperwork. You will also want to make sure to include the most important information on your documents. This includes your name, registered address, and contact information for your resident agent. The resident agent is the person responsible for receiving important legal mail and submitting the appropriate tax returns for your business.
The state’s Department of Revenue provides information about filing the right paperwork for your business. It also offers MassTaxConnect, an online portal that allows you to file your state tax returns online. This service doesn’t charge a registration fee, and you can pay taxes online. The EIN (Employer Identification Number) is also an important piece of information to keep track of. If your business has employees, you will need to provide the EIN on your payroll information and tax returns.
The state’s Certificate of Organization is the official document that establishes your Massachusetts LLC. It’s like a birth certificate for your company. This document should include the name and address of the resident agent, the latest date of dissolution, and the general character of your business. It can be filed by mail or online, and you can expect the filing process to take about 24 hours. However, you can also opt for an expedited filing, which costs an additional fee.
The Secretary of the Commonwealth also offers a robust Business Entity Search, which searches the most important terms in your name. It’s also worth checking out their Business Card Search. The best part is that you can see the results in real-time, which is a major plus for the small business owner.
The state also offers an EIN application that can be completed online in just a few minutes. You may want to keep a copy of this information on hand as you go about operating your business. You can also apply for an EIN with Incfile, which offers a similar service.
The most important part of any business is keeping track of your finances. You’ll want to keep detailed financial records so you can make informed business decisions. You should also keep a business bank account for your business. This creates a legal divide between you and your LLC, and helps protect your assets from lawsuits.
If you are a resident of Massachusetts, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $500 (domestic LLC) and $500 (foreign LLC), LLC costs in Massachusetts include $500 for Annual Reports every year. LLCs are liable to pay sales tax of 6.25% every year.
It takes 4 hours to get a Massachusetts LLC if you file it online. For the mail filing, it takes 4 to 5 business days to get an LLC. If you hire a professional LLC service, then it might take less than that. We recommend TailorBrands which has impeccable turnaround time.
Every year all the LLCs have to submit an Annual Report and pay $500 to the Massachusetts Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the Massachusetts Classification of LLC Tax.
Having an LLC is easier than other forms of business. LLCs have a ‘pass-through taxation’ advantage LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start an LLC in Massachusetts at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, and leave a comment below.