Massachusetts LLC
Limited Liability Company in Massachusetts is a great choice for entrepreneurs. Learn how to form and maintain an LLC in Massachusetts, including the advantages and disadvantages of doing so.
$500
Formation fees
$30
Name reservation fees
$520
Annual report fees
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Willy Justin
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StartGlobal: Legal + Taxes + Bookkeeping for solopreneurs
Product
For small businesses, managing taxes, accounting and everything legal is just a pain. Nobody wants to do it, but they have to. Instead of working with CPAs, attorneys and others separately, Start brings all of them under a single subscription. It’s just smooth.
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I know the team behind StartGlobal very well. It’s a very hardworking group of individuals who are genuinely passionate about small businesses. They are backed by successful founders like Balaji Srinivasan, Biz Stone(Twitter) and others.
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Getting a CPA or attorney is a matter of thousands of dollars. It’s just unfair to pay so much when you’re a small business. Start has a single subscription that covers it all. It is a definite money saver.
$599 one-time
What is an LLC?
Limited Liability Company
LLC is a business entity in the U.S that provides limited liability to its members. It has characteristics from both corporation and sole proprietorship. LLCs are permitted under State statutes of each US state.
Limited liability
Personal assets are protected for people with limited liability when they are sued.
Corporation
A business entity that can issue shares and give limited liability to shareholders.
Members
Owners of an LLC are referred to as members. They own membership interest in the LLC.
Sole proprietorship
Where an individual engages in business activity without formal organization.
Types of LLC
Depends on the number of members and whether it has elected to change its IRS classification.
Single-member LLC
Has only a single member. IRS considers it as a sole proprietorship for tax purposes.
LLC as C-corp
Owners of an LLC are referred to as members. They own membership interest in the LLC.
Multi-member LLC
Has two members. IRS considers it as a partnership for tax purposes.
LLC as S-corp
A special election for a maximum of 100 US shareholders.
Actions
Here are some possible actions to take in a Massachusetts LLC. Click below to read in detail:
How to form an LLC in Massachusetts?
Follow these 7 steps:
1. Name your LLC
Think of a list of names for your business that your customers would find appealing. Show it to your friends and some customers and get their feedback. If you already have a few names in mind, great.
To check if those names are available in the state of Massachusetts, go to the official entity search tool on the Secretary of State website. It’s free to search.
You can reserve a name with the state, by paying reservation fees. The reserved name will be expired after a specified duration. If you are filing Certificate of Organization, you need not reserve a name separately.
Reservation fees
$500
Reservation duration
4 hours
Every LLC needs to be identified with a designator. Shall contain the words ''limited liability company'', ''limited company'', or the abbreviation ''L.L.C.'', ''L.C.'', ''LLC'' or ''LC''.
Make sure you follow LLC naming guidelines specified by Massachusetts state as per M.G.L. §156C.3. This includes not using names similar to existing companies, etc.
2. Get a mailing address
If you have an office or factory in Massachusetts, you can use that as your official company address. Note that this address will be made public. You can even use your home address as your official company address. But that may not give you privacy.
Alternatively, pick a virtual office address. This way, you pay a company for a street address and they handle all your mailing. You can then give this address to the state.
3. Hire a registered agent
Every Massachusetts LLC requires a registered agent in the state. If you are a resident of Massachusetts, you can be the registered agent for your LLC. However, your details will be made public and you must be available during all business hours to receive service of process.
Alternatively, there are companies that provide registered agent services for a fee. Pay for their service and you get to keep your privacy and ability to freely move around without worrying about compliance.
4. File Certificate of Organization
Once you have a registered agent and an official office address, you can go ahead with filing your Certificate of Organization. You can file it online on Commonwealth of Massachusetts website.
Filing fees
$500
Processing time
4 hours
Address
Secretary of the Commonwealth
One Ashburton Place, Room 1717
Boston, MA 02108
5. Create an Operating Agreement
Operating agreements are not mandatory in Massachusetts, but it is highly recommended. There are websites where you can customize operating agreements to your needs. Create and get it signed by your LLC members.
6. Get Employer Identification Number (EIN)
EIN is used by IRS to identify business entities. You create an EIN for free at IRS website.
7. Open a business bank account
It is important to separate your business and personal transactions. There are several ways to create business bank accounts. You can definitely open business checking accounts at traditional banks like Chase, Wells Fargo, etc. There are several other modern banking solutions that offer plenty of benefits to entrepreneurs.
Entity name
Every LLC should have a unique name in Massachusetts. Massachusetts maintains a list of names of entities in the state. Go through it to check if your chosen name is available.
Search for names
Go to the official website of the Massachusetts business entity search tool to see if the name you want is available.
Searching fee
Free
Reservation
You can reserve a name for your LLC for a specific duration by paying reservation fees to the Massachusetts corporations division. You will have to file your LLC formation documents within this period to keep the name. Alternatively, you can directly go ahead with the LLC formation without any reservation. That's fine too.
Reservation fee
$30
Reservation period
60 days
LLC naming guidelines
The name you choose for your LLC must the official naming guidelines.
Massachusetts General Laws (sect156C.3)
Visit
Here are some of the guidelines in simple language:
- 1
Shall contain the words ''limited liability company'', ''limited company'', or the abbreviation ''L.L.C.'', ''L.C.'', ''LLC'' or ''LC''.
- 2
Don’t include terms that indicate that you are doing an activity that you are not authorised to do.
- 3
Your name should be ‘distinguishable’ in the Secretary of State records. Adding a punctuation or ‘the’ does not make it distinguishable.
- 4
Don’t use words that makes it seems like you are a governmental entity or has an affiliation.
Certificate of Organization
In Massachusetts, Certificate of Organization is the form you file with the Secretary of State to form an LLC. It contains the articles of formation for the LLC.
Filing Certificate of Organization
There are a couple of ways to file
Address
Secretary of the Commonwealth
One Ashburton Place, Room 1717
Boston, MA 02108
Online fee
$500
Online processing time
4 hours
Mailing fee
$500
Mail processing time
4 - 5 hours
Operating agreement
Operating agreement is an internal business document that outlines the general rules and policies of the LLC.
Importance
It is not a legally mandatory document. However, it is recommended to have one since many courts, banks and financial institutions use it for verification. It is also nice to clearly outline the duties and relations between multiple members of an LLC—so you avoid any confusion in the future.
Format
There is no ‘required’ format for an operating agreement. You can include anything reasonable in it. In general, it has the following sections:
Basic Business information
Contains name, address, names and details of members, purpose
Member relationship
Contains membership interest, decision making process, powers, duties.
Membership transfer
Contains details on how to add or remove members and managers.
Accounting and tax
Contains details on how company records and distributions are maintained.
Dissolution
How to dissolve, wind up and terminate, due process to follow and exceptions.
Resident agent
A resident agent is an agent of your LLC on whom any notice, process or demand may be served. Every LLC in Massachusetts needs to have a resident agent located in the state.
Requirements
According to Massachusetts Code 112.13:
- 1
Resident agent can be an individual or an authorised organisation.
- 2
Resident agent must have a street address where they can personally receive service of process.
- 3
Office of Resident agent cannot be just a mailbox service of a telephone answering service.
- 4
Resident agent must give a documented consent to serve as your LLC's agent.
Form
LLC Annual Report
Every LLC has to file this report in Massachusetts to stay compliant with the state laws.
Filing Annual Report
Massachusetts LLC is expected to file this report annually
File it online on Massachusetts Secretary of the Commonwealth website
Visit
Mail a form to Massachusetts Secretary of the Commonwealth website
PDF
Address
Secretary of the Commonwealth
One Ashburton Place, Room 1717
Boston, MA 02108-1512
Online fee
$520
Online processing time
instant
Mailing fee
$500
Mailing processing time
1-3 days
Failure to pay
Any annual report received after the due date will cause your LLC to become delinquent.
Note
The annual report is due by your formation or foreign qualification anniversary date. So if you formed on February 16th, then your annual report is due by February 16th.
EIN
An Employer Identification Number, also known as Federal Tax Identification Number, is used to identify a business entity.
Who must have an EIN?
Single member LLC elected to be taxed as C-corp or S-corp
Single member LLC with an employee
All multi-member LLC
LLC in Massachusetts
Like limited liability companies, other business entities are available for businesses in Massachusetts.
Massachusetts Business search
Massachusetts LLC add member
Massachusetts LLC remove member
Page sponsorWhy we like StartGlobal?
My genuine thoughts
Willy Justin
Founder, Statepedia
StartGlobal: Legal + Taxes + Bookkeeping for solopreneurs
Product
For small businesses, managing taxes, accounting and everything legal is just a pain. Nobody wants to do it, but they have to. Instead of working with CPAs, attorneys and others separately, Start brings all of them under a single subscription. It’s just smooth.
Team
I know the team behind StartGlobal very well. It’s a very hardworking group of individuals who are genuinely passionate about small businesses. They are backed by successful founders like Balaji Srinivasan, Biz Stone(Twitter) and others.
Price
Getting a CPA or attorney is a matter of thousands of dollars. It’s just unfair to pay so much when you’re a small business. Start has a single subscription that covers it all. It is a definite money saver.
$599 one-time