In Massachusetts, like all states, you can incorporate a limited liability company (LLC) to get many of the benefits of a corporation without all the paperwork. An LLC is a legal corporate structure. LLCs are popular because they offer their owners limited liability protection similar to corporations. Other benefits of an LLC may include tax pass-through and flexibility of management and governance structures. If you're thinking about incorporating an LLC in Massachusetts, here's what you need to do.
Before we dive in, here's a really good explainer video on forming an LLC in Massachusetts for those who prefer a video tutorial.
Benefits of Forming an LLC in Massachusetts
Forming an LLC in Massachusetts offers many advantages. As our expert onboarding guides will advise you, it offers the benefit of limited liability protection for its members. It is more compact than a corporation or an S corporation.
Limited Liability Protection
One of the most important benefits of incorporating your company in Massachusetts as an LLC is that it offers limited liability protection. This means that a complaint from a client or customer about something you did while running your business won't follow you home. The owner is not responsible for any damage, but the company itself.
Your personal assets, such as your car or home, are separate from your business assets in Massachusetts and are not at risk of being taken away if someone sues your business for something you did wrong. Because of this advantage, many entrepreneurs incorporate their business as an LLC.
A Massachusetts LLC has the option of being taxed as a sole proprietorship, partnership, or corporation. This is a good deal for startups as they don't have to worry about finding an accountant or anything like that yet.
Note:Sole proprietorships are by definition treated as sole proprietorships.
Minutes of meetings are not required
Finally, one of the advantages of incorporating your LLC in Massachusetts is that minutes are not required for meetings. People don't have to travel to monthly meetings or anything like that. You must comply with the operating agreement, which does not require many hours per day.
Massachusetts LLC Rules and Requirements
This is a brief summary of the main rules and requirements, which will be discussed in detail in this article.
To apply for a Massachusetts LLC, the company must be domiciled in Massachusetts. Your LLC name must contain “Limited Liability Company” or the abbreviation “LLC”. It can't be something that looks like another company that already exists. As a business owner, make sure you keep accurate records and reports of your business transactions.
Best Incorporation Services of Massachusetts LLC
If you are considering incorporating your LLC in Massachusetts, it is a good idea to hire a professional service provider who can handle the process for you. These services ensure that you submit all the required documents correctly and on time so you don't have to worry about anything going wrong with your business registration.
Find the best LLC formation services in Massachusetts
Choosing the best LLC formation services in Massachusetts is an essential first step for anyone looking to form their own. Here are some of the most important factors to consider:
- Customer Service/Communication
- Integration with accounting software (if required)
Using these factors will help you narrow down the list of potential providers to find one that can provide you with the professional service you need at an affordable price. We reviewed some of the best LLC formation services in Massachusetts here:Best LLC Formation Services.
As mentioned above, it is usually recommended that if you are not familiar with such things, you should consider allowing LLC formation service providers to help you incorporate your own business here in Massachusetts. These services ensure that you comply with state laws and all rules and requirements. If something goes wrong, they are there to help you, so you don't have to worry about it.
Zenbusiness offers excellent LLC formation packages. You can incorporate your LLC in minutes.
However, if you want to do it yourself, you can continue reading our guide to forming an LLC in the state of Massachusetts.
Here's a step-by-step guide to what to expect when incorporating an LLC in Massachusetts:
5 Steps to Forming an LLC in Massachusetts
- Name your Massachusetts LLC
- Choose your Massachusetts based dealer
- File your Massachusetts LLC's certificate of organization
- Create the Massachusetts LLC Operating Agreement
- Get an EIN for your Massachusetts LLC
Step 1: Name your Massachusetts LLC
Choosing your name can be one of the most difficult aspects of incorporating a Massachusetts LLC. You must choose a name that is not already in use by another Massachusetts LLC or is not restricted by the state.
The rules for naming a Massachusetts limited liability company are as follows:
- Your name must not mislead anyone into believing that the Massachusetts LLC is a government agency or federal agency.
- The name must not be too similar to that of any other Massachusetts corporation
- Your name must end with an LLC designation (LLC, LTD., etc.)
- You may be required to complete additional documentation if you wish to use certain words in the Massachusetts LLC name, including Bank, Trust, Trustee, INC. and Corporation.
- If you want to see if a specific LLC name is available, you can search for a company name on the Business Entity Search page on the State of Massachusetts website.
After choosing the perfect name for your new Massachusetts business, you can also secure a good domain name. A domain name is also useful if you want a business email firstname.lastname@example.org.We recommend using Namecheap to register your domain. They offer great prices, fast service and an easy to use website.
☞Check if your domain name is available
Check domain availability for your new business name atNamecheap.comfree of charge.
Step 2: Select your Massachusetts based dealer
Before setting up your LLC in Massachusetts, you must appoint a permanent representative with a physical address in the state of Massachusetts. This person or organization will be responsible for obtaining important documents on your behalf should anything happen that would require such a matter (lawsuits, etc.). You can identify yourself as your agent based in Massachusetts, but this is not recommended because then you cannot claim your anonymity.
What is a standing agent?
A Massachusetts resident agent is an individual or corporation that agrees to accept judicial performance on behalf of a limited liability company.
If you are forming a Massachusetts limited liability company, the state of Massachusetts requires that a resident agent be appointed in order for your LLC to be effective. The Massachusetts Secretary of State's Office will not file your certificate of incorporation unless you designate a permanent representative on your application form.
Who can be a permanent agent in Massachusetts?
As a permanent agent, you can choose an individual or an organization. The individual may be a Massachusetts resident, a Massachusetts corporation, or a non-Massachusetts corporation domiciled in Massachusetts.
You can also use a Massachusetts-based agent service to appoint a permanent agent and obtain a business address. Services like Zenbusiness andRegistered dealer in the Northwestoffer this service as part of some of their packages when you register a Massachusetts business with them.
☞Read our Zenbusiness review
What does a resident agent do in Massachusetts?
A Massachusetts resident representative is available during regular business hours to receive important documents and communications on behalf of your LLC. These can be official court documents such as lawsuits or service of process documents that require the local attorney's signature.
A resident agent is not responsible for managing your Massachusetts LLC, nor is he required to do anything with the documents once they are received at his business address, except to file them in accordance with Massachusetts law.
Step 3: File your Massachusetts LLC's certificate of organization
You have chosen your name in Massachusetts and appointed a permanent agent. Now is the time to incorporate your LLC and become a recognized legal entity.
Before filing, you must choose between a member-managed LLC and a manager-managed LLC. Members manage a member-managed LLC, while a designated manager manages a manager-managed LLC.
To form an LLC in Massachusetts, you must file your certificate of organization with the Massachusetts Secretary of State, which can be done online.The online deposit fee is $500, and a person duly authorized to do so on behalf of the Massachusetts LLC.
Submit your Massachusetts LLC Certificate of Organization online
You will need the following documents to submit your documents:
- The legal name of your Massachusetts LLC
- A brief description of the purpose of your Massachusetts LLC
- The address of your Massachusetts LLC
- The name and address of the agent residing in Massachusetts
- The signature of the representative of your residence
- The signature of the authorized person of your LLC
- your return address
You can submit your organization's certificate through the Massachusetts online business filing system.
Submit your Massachusetts LLC Certificate of Organization by mail
If you choose not to file online, you can also mail your organization's certificate to the Secretary of State. The filing fee is $500 and a person must sign the incorporation documents with authority to do so on behalf of the Massachusetts LLC. You must download the registration form and mail it.
Send a message:
William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Raum 1717
Boston, MA 02108
Step 4: Create the Massachusetts LLC Operating Agreement
After you file your Massachusetts LLC Certificate of Organization, you will want to create an Operating Agreement.
An operating agreement is an internal document that sets out the internal rules of the Massachusetts LLC. These rules address issues like how LLC owners spend money, whether your company is voted on, what happens if someone wants to sell their interest in the company, and more.
Massachusetts does not require an LLC to have an operating agreement, but it is encouraged to create one. A company agreement ensures that all members know and understand their roles within the company. In case they need to take legal action, they will prove in court that the company is more than just an unincorporated association.
This operating agreement should be detailed but concise, specifying everything you want to include about your Massachusetts LLC membership obligations so there is no confusion later.
The operating agreement is also required when opening a commercial bank account in Massachusetts.
Step 5: Get an EIN for your Massachusetts LLC
An EIN or Employer Identification Number is a unique number that the IRS assigns to businesses for tax purposes. An EIN is like your company's social security number. You can use it to file state or federal tax returns and financial statements with various government agencies or open a commercial bank account.
An EIN is required for several reasons. First, as mentioned above, it is necessary to open a merchant bank account for your Massachusetts LLC. You also need an EIN to hire employees, as it is used on payroll tax forms. Finally, an EIN is often required when filing your business taxes.
After you receive your EIN, you will be informed of the various tax classification options available to your Massachusetts LLC.
Internal Revenue Service
Caution: A surgery
Cincinnati, OH 45999
Applying for an EIN for your business is free.
Massachusetts LLC processing time
For electronic filings, it usually takes 1-2 business days for the state of Massachusetts to process your certificate of organization and approve your LLC.
If you choose to submit by mail, processing time is approximately 1-2 business days.
Frequently Asked Questions About Massachusetts LLCs
How much does it cost to form an LLC in Massachusetts?
The electronic filing fee is $500 and the mail filing fee in Massachusetts is $500.
How do I form an LLC in Massachusetts?
Step 1: Choose a name for your Massachusetts LLC
Step 2: Choose an agent based in Massachusetts
Step 3: Submit your certificate of incorporation
Step 4: Create an operating agreement
Step 5: Get an EIN
Is there an annual fee for LLC in Massachusetts?
The annual filing fee in the state of Massachusetts is $500.
How long does it take to form an LLC in Massachusetts?
LLC formation in Massachusetts takes 1-2 business days when filing by mail and 1-2 business days when filing online.