How to Start a Massachusetts LLC
Massachusetts LLC Formation – Basics & Helpful Information
This article is meant to be a general overview of the Massachusetts LLC formation process; including information about how to start a Massachusetts LLC and other basic issues related to Massachusetts LLCs.
Massachusetts LLC Filing Fees
The filing fee to register a Massachusetts LLC is $500.00, if filed by mail or hand-delivered, plus an additional $20.00 to expedite the filing for a quicker turn around. For online filing, the fee is $520.00, which includes the expedited fee.
Massachusetts Filing Time
Regular processing time generally takes 3-5 business days after the document is received, if mailed in, or 1-2 days if walked in. Expedited processing, including online filing, reduces the turn-around time to 24 hours.
Massachusetts Annual Compliance Requirements
Each Massachusetts LLC is required to file an Annual Report with the Division of the Commonwealth of Massachusetts on or before the anniversary date of the filing of its original Certificate of Organization. The annual report should include all of the information in the original Certificate of Organization and any other matters the authorized person determines to include. The annual report may be filed online. The fee to file the annual report by mail or by hand-delivery is $500.00, plus an additional $20.00 to expedite processing for a quicker turn around. If filed online, the fee is $520.00, which includes the expedited fee.
Keep in mind that by default, Massachusetts LLCs are treated as pass-through entities, and individuals are taxed on personal tax returns. However, if the Massachusetts LLC elects to be treated as an S Corp, there may be at least a minimum excise tax of $456 collected. For more detailed information on business income taxes for Massachusetts LLCs.
No franchise or privilege taxes are collected from Massachusetts LLCs.
Form an LLC in Massachusetts
You can use this checklist to help guide you through the process of forming a Massachusetts LLC:
The first step in creating an LLC in Massachusetts is naming your business. You’ll need to check with the Commonwealth of Massachusetts to make sure the name you’ve chosen is available. You can do this online via the Massachusetts Business Search.
It is also highly recommended that you check the US Patent and Trademark Office to see if someone has a federal trademark of the business name you want (the Commonwealth of Massachusetts will not check other state’s databases or the federal trademark database). You can click here to have a comprehensive name availability search performed for you.
Your LLC name must contain the words “limited liability company” or “limited company” or the abbreviations “L.L.C”, “L.C.”, “LLC”, or “LC”. The name of the LLC may contain the name of a manager or member. The name must not be the same as, or so similar as likely to be mistaken for, the name of any other business entity authorized to transact business on the records of the Commonwealth of Massachusetts.See Massachusetts LLC Naming Criteria →
Massachusetts Trade Names
A trade name is similar to a “doing business as” (DBA) name. To register your trade name, or DBA, you must contact the city or town where the LLC will be transacting business. Massachusetts trade names are only applicable in Massachusetts and are not substitutes for a national trademark filing.
Massachusetts Certificate of Organization
Your Massachusetts LLC is formed by signing and filing the Certificate of Organization with the Commonwealth of Massachusetts office. You can also e-file the Massachusetts Certificate of Organization. The Commonwealth of Massachusetts staff will examine the certificate for statutory compliance and will either approve the certificate for filing or reject the certificate with instructions on how to resubmit the document.
The Certificate of Organization must include at a minimum:
- Name and address of the Massachusetts LLC
- General character of the LLC
- Latest date of dissolution, if any
- Registered Agent’s Name and Address
- Name and address of each manager of the LLC
- Name and address of each person authorized to execute documents for the LLC
- Organizer’s Name and Signature
- Registered Agent Acceptance signature or letter of consent of appointment
- Effective date of the LLC
Massachusetts Resident Agent Information
Massachusetts requires that the LLC have a Resident Agent, (also called a Registered Agent in other states), which is an individual, or a business entity, authorized to transact business in the state of Massachusetts, that the LLC appoints for the purpose of accepting service of process (lawsuit papers or legal documents) for the LLC. An LLC cannot be its own resident agent, but the LLC can appoint one of its members as the resident agent. Massachusetts law requires that the resident agent have a permanent, physical address on the records of the Commonwealth of Massachusetts at all times. A post office box is not sufficient. The resident agent must accept the appointment in writing.Read more about Resident Agents →
The governing document for an LLC is called the “company agreement” or sometimes the “operating agreement”. The company agreement is to an LLC like a partnership agreement is to a partnership (or bylaws to a corporation). The company agreement governs the internal operation of the LLC and is typically a private document that is kept in the company book and the principal place of business (it is NOT filed with the state). The company agreement can address many issues, some of the more common concepts found within a company agreement are:
- Limitations on the members liabilities
- The level of consent needed to take various actions (i.e. simple majority required to add new members)
- The percentage of the LLC that each member owns
- How profits and losses are allocated between the members (typically based on ownership percentages)
- Limitations on transferability
- What each member is contributing to the LLC and what happens is such contributions are not made.
- The authority of the members, officers, managers, committees, etc.
- How meetings are conducted
One of the reasons we recommend using an LLC formation company like IncFile is that they can provide you with a company agreement in connection with their LLC formation services.
- Apply Online Yourself: The IRS has an online EIN Application you can use to get an EIN. The turn around time on the EIN using this method is only a few minutes.
- Use Form SS-4: You can get an EIN the old fashion way by completing Form SS-4 and mailing or faxing into the IRS. How long does it take to get the EIN this way? According to the IRS: if you mail in Form SS-4, it will take 4-5 weeks to get your EIN. If you fax in Form SS-4 you should have the EIN back in a week if you provide a fax number or 2 weeks if you don’t have a fax number.
- Have a Third-Party Obtain: All of the LLC formation companies have the ability to get the EIN for you. The EIN obtainment charge varies by company, but it is generally between $50 and $100. If you get one of the higher priced packages, they will sometimes throw in the EIN for free.
After you create your new Massachusetts LLC, you’ll need to determine if your business/profession requires any licenses or permits to conduct business.Read more about Massachusetts Licensing and Permitting →
If you have a non-Massachusetts LLC (aka Foreign LLC) and you are doing business in Massachusetts, you may need to register the Foreign LLC in Massachusetts. Each state has a different definition of “doing business”. In Massachusetts, the kinds of activities that would not constitute “doing business” are outlined in the Massachusetts General Laws Annotated, Chapter 156C, Section 48.
The filing fee for the Application for Registration of Foreign LLC in Massachusetts is $500.See more about registering a foreign LLC in Massachusetts →