You probably are here for an easy to follow Massachusetts DIY guide. Well, you don’t need to look any further to create an LLC in Massachusetts. Just follow these 6 simple and there you go.
This how to guide will walk you through every single step of establishing an LLC in any US state along with filing and compliance costs.
Before You Go!
If you are not from Massachusetts, find your state here. Majority of entrepreneurs think they are better off without indulging themselves in paperwork and legal formalities. They simply hire an LLC services and let them take care of the rest.
If you feel the same, our experts have reviewed and shortlisted the best options for you. Our editors recommend ZenBusiness in most of the cases due to its outstanding feedback and a range of services that fulfil personalized needs of its customers.
6 Easy steps to form a Limited Liability Company in Massachusetts
If you seek to limit lawsuits and personal liability to your business, a Limited Liability Company (LLC) is the best way to do so. You can start an LLC in Massachusetts by following these 5 steps
- Decide on a suitable name for your LLC
- Choose a registered agent for documents correspondence
- Submit LLC application (Articles of Organization) to Department of State
- Submit Statement of Information
- Draft an Operating Agreement
- Get Federal Tax ID Number or EIN
1. Decide on a suitable name for your LLC
The first step towards forming an LLC in Massachusetts is to choose an appropriate business name for your LLC that must contain the following words in it;
- Limited Liability Company
If you try to register your LLC name without the above mentioned words, they state may reject your LLC. It is because, the state may assume that your LLC is an insurance, government or banking affiliated company.
Moreover, your LLC’s name should be distinguishable and has not been taken by any other business registered with the Al Secretary of State. To make your LLC’s name unique, you should:
- Include one or more distinctive keywords
- Ensure that the keywords are used in passive, singular, or plural form
- Change the order of keywords
- Change the Arabic numerals into written form or roman numerals and vice versa
- For a complete guide on naming LLC rules in Massachusetts, you can read Massachusetts’s Code of Regulations.
How to check Business Name Availability?
To check the name availability, visit name search section of the State of Massachusetts website.
2. Choose a registered agent for documents correspondence
In Massachusetts, by default, the Secretary of state acts as a registered agent for all the LLCs registered with the Massachusetts Department of State. The Department accepts the legal documents in case of lawsuits against an LLC and forwards these papers to the concerned person you labeled your registered agent.
You are required to give the Massachusetts Department of State the details of your registered agent (name and corresponding address). State will forward process (complaints and summons for lawsuits) and other legal documents to your nominated registered agent.
You can be your registered agent, or appoint someone who is a resident of Massachusetts, or hire a registered agent service.
Pro Tip: To avoid your personal information from publicizing, consider a registered agent service such as ZenBusiness that reduces the cost of publication and keeps your information private.
3. Submit LLC Articles of Organization to Massachusetts Secretary of the State
Filing Fee: $70, payable to the State of Massachusetts (Nonrefundable)
To register your LLC, you need to fill LLC application form or Article of Organization and submit it to the Massachusetts Secretary of State. This document gives your company the authorization to commence business in Massachusetts. The Article of Organization must include the following:
- The LLC’s name
- The Massachusetts’s county where the LLC will be located
- The LLC must designate the Secretary of State as its agent for service of process
- The Registered Agent’s address where the Secretary of State should forward legal documents to the LLC
- Signature the LLC’s members
- Name and address of the filer of the Articles
Secretary of State
Business Entities Filings
P.O. Box 944228
Sacramento, CA 94244
331500 11th St.
Sacramento, CA 95814
Mon-Fri. 8 a.m. to 5 p.m.
4. Submit Statement of Information
Every Massachusetts LLC is required to file an Initial Statement of Information. This statement needs to be sent to Massachusetts Secretary of State within 90 days after formation.
Secretary of State, Statement of Information Unit
P.O. Box 944230
Sacramento, CA 94244
331500 11th St.
Massachusetts Secretary of State Sacramento Office
1500 11th Street
Sacramento, CA 95814.
Pro Tip: You can get all the paperwork done and procedural aspects covered by hiring an LLC registration service online at a fraction of the cost.
5. Draft an Operating Agreement
An Operating Agreement is a legal document that outlines the LLC members’ powers, rights, duties, obligations, and liabilities among themselves and to the LLC.
It ensures that LLC members are on the same page and minimizes the risks of future conflicts. Unlike article of organization, it is an internal document and you do not need to submit this to state authority.
Massachusetts does not make it obligatory to adopt an LLC operating agreement. However, adopting a formal written Operating Agreement will help you deal issues with the other LLC members, banks, and customers.
If you do not adopt an operating agreement and your LLC dissolves, Massachusetts’s default law will decide what will happen to company’s remaining assets and debts.
Since, you have not outlined these situations in the form of an operating agreement, the defaults state laws may not be in your favor in that case.
Pro Tip: Better Legal online LLC formation service helps you draft custom Operating Agreement and bylaws to run your business smoothly and avoid unpleasant legal situations.
5. Get Federal Tax ID Number or EIN
Employer Identification Number (EIN) aka Federal Tax ID number (FTIN) or Federal Employer Identification Number (FEIN) is like a social security number for business. It is a nine-digit number assigned by the Internal Revenue Service (IRS) to help identify businesses for tax purposes.
You need an EIN;
- If you choose to be taxed as a corporation rather than a sole proprietorship
- If you plan to hire employees
- If your LLC has more than one member
- To open a Business bank account
How to Apply for EIN?
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Pro Tip: For international EIN applicants, you do not need a Social Security Number. Moreover, you can get an EIN free of cost (IRS does not charge any fee to assign an EIN). However, if you have obtained an EIN as a sole proprietors and now wish to convert your business into an LLC, you need to get a new EIN.
What to do Next?
Many new business owners think that they have registered their LLC, and that is it. But the truth is, the real game starts after the filing process which distinguishes your company from the others. So, the most important thing you need to do after forming an LLC is to Comply with tax and regulatory requirements. Here is how you can do that;
The state of Massachusetts requires you to obtain a business license or permit for certain businesses. You can check Massachusetts State’s CalGold website which helps you learn the state’s license requirements. Some businesses may also require a local business license from the municipality; for that, contact the local county clerk and the clerk of the city, town, or village of your LLC operation.
Massachusetts LLC Biennial Report and Franchise Tax
Biennial report typically includes basic information about your business including change of registered agent, or change of address, etc.
File the biennial report online or download the form(no information has changed) or form for reporting change of information and email it to bizfile.sos.ca.gov. The regular filing fee is $20, however, state of Massachusetts charges a $250 penalty for failure to file on time..
Doing Business As (DBA)
Doing Business As (DBA) is a fictitious business name or assumed name or trade name under which you run your business. It could be different from the name you used as your official LLC name in the Article of Organization.
In Massachusetts, you can register your assumed business name online with the Secretary of the State. You can also download Certificate of Assumed Name form and mail it to SOS. First-Time Filing Fee is $26 and $5 for each additional Business Name.
If you want to hire someone professional for DBA filing, try LegalZoom. In this services, LegalZoom offers name search, DBA filing, publication and more.
More on Massachusetts LLC
How to Hire Employees in Massachusetts?
If you plan to hire employees for your Massachusetts LLC, you must follow the guidelines of 2021 Massachusetts Employer’s Guide. You can stay compliant with the law by following these steps:
- Make sure new hires are US citizens or can work in the US by having work permit
- Report new hiring to the state
- Provide workers’ compensation insurance if required by state regulations
- File quarterly reports on wages and taxes
- Withhold taxes from paycheck until withheld federal income tax has been paid out or owe any past-due amounts at time of annual return filing deadline
- Report job refusal
How to Form Massachusetts Foreign LLC?
Foreign LLC Fee: $70 (Non-refundable)
Operating as an LLC in multiple states is a great way to manage your business expansion. If you want to do business in Massachusetts, but are resident of a different state, then it’s time for some filing.
Entrepreneurs often form an LLC in a state other than the one they reside to have some tax benefits and reduce formation cost. Moreover, many business owners’ companies are franchises with multiple states across America. Such entrepreneurs register their newly formed business or franchise as foreign limited liability corporation (LLC).
Send your foreign LLC application to the Secretary of State, Business Entities, Filings Unit, P.O. Box 944228, Sacramento, CA 94244.
How to Get Massachusetts Certificate of Good Standing?
Certificate of Compliance Fee: $5 (Non-refundable)
A Certificate of Good Standing is an important document verifying that the formation, operation, and maintained of your LLC is done in a compliant fashion. It is also called certificate of compliance and can help you avoid unnecessary problems down the line. Moreover, it helps you in:
- Seeking funds and investments from banks or investors
- Filing your business as a foreign LLC
- Acquiring or renewing relevant business licenses or permits
Download certificate of good standing and send it to the Secretary of State, BE Certification and Records, P.O. Box 944260, Sacramento, CA 94244. To submit in person go to 1500 11th St., 3rd Floor, Room 380, Sacramento, CA 95814 (Mon-Fri. 8 a.m. to 5 p.m.).
How to Terminate an LLC in Massachusetts?
Termination Fee: $25 (Non-refundable)
Whether you want to dissolve your LLC in Massachusetts or no longer wish to continue operating there, it’s important to officially dissolve it. Tax liabilities and legal troubles can arise if company has not been dissolved properly – including fines or worse jailtime. Here is what generally needs doing:
- Have all member receive consent by submitting a notice of dissolution which
- Signify the document of termination
- Pass an agreement among members agreeing that their individual shares may be sold at any point after approval
- Pay any outstanding debts collectively before termination
- Download the Articles Of Dissolution form from the Secretary Of State website.
- Mail this form to the Secretary of State, Business Entities Filings Unit, P.O. Box 944228, Sacramento, CA 94244-2280.
Massachusetts LLC FAQs
How to form an LLC in MA online?
By filing your Article of organization with the Massachusetts Department of State using this link, you can register your LLC in MA online. The above article describes all the steps to form an LLC in MA online in detail.
How much does it cost to form an LLC in MA?
The state fee of forming an LLC in MA is $70.
How long does it take to form an LLC in Massachusetts?
The Massachusetts Department of State usually takes about six to seven weeks to process your document. Hence you can have 42 days in mind to set up an LLC in MA.
Is there an annual fee for an LLC in Massachusetts state?
Yes, state of Massachusetts charges you $20 for each biennial statement which you need to pay every second year by the end of the month in which your LLC was formed. In case of failure to file on time, Massachusetts charges a $250 penalty fee.
Is hiring an LLC formation service is good idea in MA?
Starting a new business is already a huge task. We suggest you to focus on establishing your business in a highly competitive market of Massachusetts and let the legal and procedural aspects of your LLC creation covered by professional LLC formation Services. Why to put yourself in such hassle when these companies offer you their services with 100% accuracy and guaranteed satisfaction at a rock bottom price.
Which LLC formation company is best to form an LLC in MA?
Although LegalZoom is a famous LLC formation company with brand power, but its order processing is slow and add-ons make it pricier. You can consider ZenBusiness as the best alternative. It is economical with most comprehensive silver package and offers expedited or rush filing option to get your LLC registered super fast.
What are the other alternatives of LegalZoom?
Our experts have reviewed and tried hundreds of LLC creation companies available online and came up with 8 best LLC formation services. You can read the detailed review of these companies and select the company which better serves your customized needs.