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.

Having the right business structure can be crucial for your company’s success. For example, a limited liability company (LLC) can provide the limited liability benefits of a corporation with the flexibility of a sole proprietorship. However, forming an LLC can be costly. It’s important to understand the costs involved before committing to a particular business structure.

An LLC will need to register with the state and obtain a resident agent. The agent will receive legal correspondence and tax forms on behalf of the LLC. The agent’s name will be listed on the LLC’s Certificate of Organization. A registered agent must live in the state and be available to accept legal mail during business hours.

To register an LLC, you will need to pay a $500 formation fee. This includes a $500 filing fee for the Certificate of Organization and an annual report fee of $500. You can file your certificate online or by mail. If you opt for a paper application, it can take up to 7 to 10 days to process the application. However, you can speed up the process by paying an expedited processing fee of $20.

The annual report is required to maintain your LLC’s good standing with the state. The report must be filed online or by mail at least 2.5 months before the end of your LLC’s fiscal year. It’s important to file your report by March 15 to avoid any penalties. It also needs to be filed on or before the anniversary date of your certificate of organization. It’s also important to include the name of your LLC on the report.

Massachusetts LLCs have a number of advantages. For example, they provide limited liability for the owners and are a popular choice for small businesses. They also provide flexible taxation options. If you form a Massachusetts LLC, you don’t have to pay corporate income taxes on profits. You can also choose to report your federal taxes as a C-corporation. This may save you money on taxes, especially if you are self-employed. Alternatively, you can choose to pay state taxes on income instead of federal taxes. However, a C-corporation will also require you to pay state corporate income taxes.

The Certificate of Organization is the most important form to file for an LLC. Once your LLC is approved, the certificate of organization will officially record your business with the Secretary of the Commonwealth. The fee for a single-member LLC is $500, while the fee for a multi-member LLC is the same. You can file the certificate of organization by mail or by fax.

There are additional administrative documents that you may choose to file, such as a Declaration of Acceptance of Offers, but they are less costly. In addition, you may need to apply for a business license or trade name. You may also have to pay startup costs such as rent or inventory. Depending on the type of business you’re operating, you may also need to purchase computer software and other necessary business equipment.

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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