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.

LLC Service

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$99 per year

  • Standalone registered agent service

  • Take you through all steps

  • LLC formation package available

$125 per year

  • 1 year free service along with LLC formation package

  • Fast service

  • Flat rate, no hidden cost

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.

When forming an LLC, you must make sure that the name chosen is not deceptively similar to any other business entity. You can perform a name search in Massachusetts for this purpose. If the name is available, you can file an application to reserve it for 60 days for a fee of $30. When forming an LLC, it is also recommended to obtain a domain name for the business. GoDaddy offers a domain name search for just $4.99.

Filing an application to register an LLC in Massachusetts is the first step. The Secretary of State will issue a Certificate of Organization. The Certificate of Organization will cost $500 and should be filed only once. After that, you will need to pay for a domain name. Additionally, you must have a Resident Agent in Massachusetts to receive any legal documents, including tax notices, subpoenas, and summons. If you are planning to hire an employee, you will need to find a person who is willing to act as a Resident Agent.

The Operating Agreement is also an important part of your LLC. It outlines the rules and responsibilities of all members. This document will also provide guidelines regarding dispute resolution and new member joining and leaving procedures. Finally, you must pay Massachusetts taxes on the income you receive. These taxes must be paid quarterly or monthly. You must register with the Department of Revenue of Massachusetts. When you’re ready to start your business, don’t forget to register your LLC online.

Filing annual reports is a crucial part of the LLC process in Massachusetts. Annual reports must be filed no later than two months after the fiscal year ends. Using a registered agent service can help you stay in compliance and avoid late filing fees. These filing fees can add up quickly and drastically increase the overall cost of maintaining an LLC. You’ll need to keep in mind that you’ll need to file a report every year to avoid penalties and late fees.

The initial costs associated with forming an LLC in Massachusetts are low. A Certificate of Organization, or C-Corporate Document, costs around $500. However, you may need to pay additional fees, such as specialty licenses and trade names, which are typically higher. Luckily, there are many free services out there that will do this work for you. However, the main costs will depend on how complex your business is.

In addition to business insurance, you must also obtain an EIN for your business. This number is basically the company’s social security number. You can get an EIN through the IRS. Once your business has an EIN, you can start looking for other ways to protect yourself and your company. In some states, an LLC needs to obtain workers compensation insurance. The costs for these insurances can be substantial, but you’ll be glad you chose the latter option.

Another important part of LLC formation in Massachusetts is choosing a registered agent. This person receives sensitive documents from the state on behalf of your LLC. They should have an address in Massachusetts, so that they can be contacted quickly and easily if there are any issues. Alternatively, you can find a resident agent service to help you file annual reports and other forms efficiently. The cost of using a resident agent service is less than hiring an individual agent.

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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