LLC Cost in Massachusetts – How Much to Pay for an LLC


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Perhaps you are hoping to form a Massachusetts LLC. People assume that starting an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in Massachusetts.

Massachusetts LLC Cost of Filing

Here are the costs involved in forming an LLC in Massachusetts.

Cost of Filing Formation Certificates

The Massachusetts Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the Massachusetts Secretary of State

Massachusetts Domestic LLC

  • Online Filing costs $500
  • Annual Report filing costs $500
  • Name Reservation costs $30
  • By mail: Fill out the Application Form PDF, and submit it to the address, The Commonwealth of Massachusetts, Secretary of the Commonwealth, One Ashburton Place, Room 1717, Boston, Massachusetts 02108-1512

Massachusetts Foreign LLC

  • Online filing: not available
  • Annual Report filing costs $500
  • Name Reservation costs $30
  • By mail: Fill out the Application Form PDF, and submit it to the address, The Commonwealth of Massachusetts, Secretary of the Commonwealth, One Ashburton Place, Room 1717, Boston, Massachusetts 02108-1512

You can visit the Secretary of Commonwealth of Massachusetts website to learn more about the forms and fees.

Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.

Massachusetts LLC Formation Service or Registered Agent Fee

You need a registered agent to form an LLC in Massachusetts, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.

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Business Permits and Licenses 

The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the Massachusetts Department of Revenue for regulatory boards or agencies requiring licensing. 

Massachusetts LLC taxes to be Paid

The business LLCs in the State of Massachusetts are subject to different State tax filing obligations. Though the fees may vary from county to county.

Massachusetts State Income tax

This is the State Tax levied on any income you pay to yourself. The State has a standard tax rate of 5% levied on the total amount of taxable income.

Massachusetts Sales tax

The standard rate of sales tax applicable is at the rate of 6.25%. Though the taxes may vary depending on the county and city.

Massachusetts Federal Self-Employment Tax

Any profit that Massachusetts LLC Business members draw out from the business is liable to pay self-employment tax. The standard tax rate is 15.3%.

Massachusetts Payroll Tax Withholding

If you hire employees in Massachusetts, you must withhold payroll tax from their salaries. The standard rate of withholding is 7.65% of the taxable salary of the employees.

Cost Comparison Among States

Every state has different costs of filing for an LLC to their respective State Authorities. If you wish to gain a better understanding of the costs of opening an LLC in a different state in comparison to Massachusetts, read the table below:

StateFiling FeeAnnual Fee/ Biennial FeeSales Tax
Massachusetts LLC$500$5006.25%
Connecticut LLC$120$806.35%
Rhode Island LLC$150$507.00%
New Hampshire LLC$100$1000%
Vermont LLC$125$356.00%

Massachusetts is the wealthiest state in the US. Its economy is largely reliant on technological research and development, the service sector, and tourism.

Other Costs

How Much Does It Cost to Maintain an LLC in Massachusetts

To maintain an LLC in Massachusetts you will need to pay an annual fee of $500 along with sales tax at 6.25%, income tax at 5% and federal taxes.

There are several expenses involved in maintaining an LLC in Massachusetts. First, you will need to choose a name for your business. Then, you’ll need to check whether the name is available. Depending on the business’ size and the type of operations it’s likely to undertake, the name can cost hundreds of dollars. To avoid being stuck with a name that is already in use, you may want to consider using an alternative one.

Another important part of establishing an LLC in Massachusetts is the choice of registered agent. The registered agent will receive important mail and serve as a receiver of any service of process. The initial resident agent will be listed on the Certificate of Organization. If the registered agent changes, it’s typically only a small fee. In addition to hiring a resident agent, an LLC can choose to use the address of an owner or entity in Massachusetts as the registered agent. The benefit of using a resident agent is that it’s far cheaper than hiring individual agents.

In Massachusetts, it’s also important to get an operating agreement for your LLC. This legal document outlines the ownership and operating procedures of the LLC. A comprehensive operating agreement will help you control your business and avoid conflict by setting up the LLC as a legal entity. You can also obtain an EIN (Employer Identification Number), which is like the Social Security number of your company. The IRS offers free EINs.

In addition to filing annual reports with the state, LLCs in Massachusetts are required to maintain an operating agreement. This agreement states the rules of the company and how disputes should be handled. It will also tell you how to let new members in and exit from the LLC. An operating agreement will also lay out who does what and gives standards for everyone’s job. These documents will save you time and money in the long run.

The main expense of forming and maintaining an LLC in Massachusetts is the $500 filing fee for a Certificate of Organization. This form is required to officially record your business with the Secretary of Commonwealth. In addition, you’ll need to pay an annual report to the Secretary of the Commonwealth. You can either file it online or mail it, but remember that your annual report is due on the date of formation. Additionally, it’s a good idea to hire a registered agent service for your LLC so you’ll be aware of important deadlines and avoid paying late fees.

When establishing your LLC in Massachusetts, the first state filing required is the Certificate of Organization. You’ll need to file this document with the Corporations Division of the Secretary of the Commonwealth. This document is relatively simple, and includes your LLC’s name and address, its registered agent, and some other basic information. An attorney is recommended before filing a certificate of organization. If you’re not sure what you’re doing, contact a lawyer for advice.

F.A.Qs

Can I start an LLC for free?

It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.

Is an LLC expensive?

It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.

Does an LLC need a bank account?

The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.

In Conclusion

The cost of Massachusetts is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.

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