How To Start An LLC In Massachusetts
To start an LLC in Massachusetts, you must file a Certificate of Organization with the Massachusetts Corporation Division, pay a $500 filing fee, and get an EIN from the IRS. The complete steps to forming a Massachusetts LLC are as follows:
- File a Massachusetts LLC Certificate of Organization
- Pay the Corporation Division of the Secretary of the Commonwealth $500
- Print your approved Certificate of Organization
- Get a Federal EIN tax ID for the LLC
- Create a Massachusetts LLC Operating Agreement
- Take these documents to the bank and get a Massachusetts LLC bank account
How to File a Massachusetts LLC Certificate of Organization
To form a Massachusetts LLC, you file a Certificate of Organization by following these steps:
- Choose a name for your new LLC
- Decide what address you’d like to list publicly
- Choose how long you’d like your LLC to exist
- Decide if you want to hire a registered agent service to minimize public disclosures
- Decide who you will list publicly as the members or managers
- File online and pay $520 with a credit card, or mail to the Secretary of the Commonwealth at One Ashburton Place, Room 1717, Boston MA 02108-1512 with a check or money order for $500
HOW LONG DOES IT TAKE TO START A MASSACHUSETTS LLC?
Fastest 2 days: File your Certificate of Organization online yourself. Note that the system doesn’t notify you when your Certificate is approved—you’ll have to search for your LLC’s registration approval online.
Almost Fastest (and some might say better) 2 days: Hire Northwest, answer a few brief questions, sit back and let our Corporate Guides file everything correctly the first time.
Not Too Shabby 2-4 days: You can save the $20 online processing fee if you fill out the downloadable PDF, print it out, mail it to the Secretary of the Commonwealth, and wait for it to be processed by hand.
WHAT IS THE COST OF A MASSACHUSETTS LLC?
The Massachusetts Corporation Division charges a $500 filing fee for Massachusetts LLCs. If you file online, there’s an additional $20 processing fee.
When you hire Northwest, your total, out-the-door cost is $745, including the above fees.
How much does an LLC in Massachusetts cost each year?
There is a $500 a year filing fee for the Massachusetts LLC Annual Report.
What is a Massachusetts LLC Annual Report?
The Massachusetts LLC Annual Report is a mandatory yearly report with a huge price tag—$500 ($520 online). The report itself isn’t especially complicated—it updates the Commonwealth of Massachusetts on your LLC’s contact and ownership information. If your filing is late, however, add on another $25 in late fees. When you sign up with Northwest, we’ll help you remember to file your reports by sending you reminder notifications. You can even hire us to file your reports for you each year.
What are the Massachusetts LLC taxes?
The Massachusetts personal net income tax rate is a flat 5.1%. State sales tax is also a flat rate of 6.25%—cities and counties don’t add on local sales taxes of their own, so the rate is the same across the state.
In addition to more common taxes, Massachusetts also has a unique corporate excise tax—so if your LLC opts to be taxed as either an S or C corporation, note that the minimum corporate excise tax is fairly hefty: $456.
IS A MASSACHUSETTS LLC RESIDENT AGENT REQUIRED?
Absolutely—the Commonwealth of Massachusetts requires LLCs to have and maintain a Massachusetts resident agent (also known as a registered agent). You could do it yourself—publicly list your own address on your Certificate of Organization and make yourself available during business hours. Or, you can hire a service like ours. When you hire Northwest, we list our address and deal with all the junk mail and solicitors. We’re ready and waiting in the office Monday through Friday, so you don’t have to be. And with a consistent address on your Certificate of Organization, you don’t have to worry about checking or updating multiple addresses as your business grows.
DO I NEED A TAX ID NUMBER (EIN) FOR A MASSACHUSETTS LLC?
You’re required to get an EIN for your Massachusetts LLC if you have employees or file certain federal excise taxes. Banks will typically request your EIN when you go to open a business bank account. Vendors will want your EIN when you go to establish credit. You could offer up your personal social security number instead, but that’s always a risk. Basically, even if it’s not specifically required, getting an EIN will make running your business a lot smoother. Plus, EINs are free from the IRS. Don’t want to go through the hassle of filling out more paperwork? Add on EIN service when you hire Northwest, and we’ll apply on your behalf.
DOES A MASSACHUSETTS LLC NEED A BUSINESS LICENSE?
Massachusetts doesn’t have a general, state-level business license, but cities and counties typically have their own licensing requirements. Boston, for example, requires all businesses to get a Business Certificate ($65 for residents) that must be renewed every 4 years.
MASSACHUSETTS LLC VERSUS MASSACHUSETTS CORPORATION:
The fees for starting and maintaining a Massachusetts LLC are higher than the fees for a corporation. To form a corporation, you’ll pay a minimum of $265 compared to $500 for an LLC. Annual report fees are also higher for LLCs. Corporations pay a minimum of $109 while LLCs pay at least $500 a year to file their reports.
While fees are higher, that doesn’t necessarily mean LLCs are more expensive overall. For example, if LLCs keep their default tax status as partnerships or disregarded entities, they don’t have to pay the sizable corporate excise tax (a minimum of $456 a year). Taking the corporate excise tax into account, the costs of maintaining a typical LLC and a corporation are much closer.
Costs aside, LLCs are common choices for small businesses and new business owners because they tend to be simpler to operate. Leaning towards a corporation? Here’s information on Massachusetts incorporation.
DOES A MASSACHUSETTS LLC NEED AN OPERATING AGREEMENT?
No regulatory agency is going to show up on your doorstep one day demanding to see your operating agreement, so in that sense, operating agreements aren’t required. A whole lot of other people will ask to see your operating agreement though: members, managers, investors, partners and lenders. Just to open a business bank account, you’ll almost certainly need to show your operating agreement. Why? Your operating agreement not only spells out important details about your business—who invested what, how profits and losses are allocated—but it also lets people know your LLC has its act together. Anyone with $500 to burn can start an LLC. Your operating agreement shows that you’re a serious business—it’s something tangible that shows how your business operates and what your business is really like.
Your operating agreement is one of your LLC’s most critical documents—which is why we give you one for free. When you sign up for our services at Northwest, we include a free operating agreement, specific to your management style. We also give you free resolutions, membership certificates and more. We’re proud of our forms. Our operating agreements and other free forms aren’t like the other free junk online. We were the first website to give out free LLC forms, and we’ve spent years revising and improving all of our forms to make them better and better. Over a million LLCs have used our free LLC forms:
WHAT IS THE MASSACHUSETTS LLC STATUTE?
MASSACHUSETTS LLC CERTIFICATE OF ORGANIZATION REQUIREMENTS:
- Company Name: Your name must include “Limited Liability Company,” “Limited Company” or an abbreviation. Most businesses keep it short and sweet with “LLC.”
- Principal Office: This must be a street address in Massachusetts. Want to keep things simple (and avoid having to update multiple addresses as your business grows and changes)? When you hire Northwest, you can list our address here.
- General Character of Business: What specifically does your business do? Art restoration? Janitorial services? You only need to include a few words, but you must be specific (even though the form uses the word “general”).
- Latest Date of Dissolution: Want to put an end date on your business? If so, you can include that date in your Certificate. If not (and most businesses don’t), you can skip this section.
- Resident Agent: You can list an individual person or a service like ours. Northwest has been providing expert resident agent service in Massachusetts for years.
- Resident Agent Address: Again, this must be a street address in Massachusetts. When you hire Northwest, our address goes here.
- LLC Management: LLCs can be managed either by managers or members. If your LLC is managed by managers, you’ll list the name and business address of each manager. If your LLC is managed by its members, you’ll list the name and business address of at least one member.
- Person Authorized for Property: What the Commonwealth really wants to know is who in your LLC is authorized to sign any documents relating to real property. In other words, if your company buys a building, who’s allowed to sign off on it? Don’t plan on buying or selling any real estate? You can skip this section.
- Massachusetts LLC Authorized Signatory: This is just a fancy name for the person signing and submitting your Certificate of Organization. Your authorized signatory doesn’t have to be anyone in the LLC. Hire Northwest, and we’ll be your signatory.