Cost To Form An LLC In Massachusetts 2024: Detailed Review & Guides

Creating a Massachusetts LLC can be a great way to enjoy enhanced liability protection, a better tax situation, and more flexibility with your manager-managed LLC. But you may be wondering what the total Massachusetts LLC cost is if you want to create this type of business entity.

That’s why we’ve put together this article. It breaks down every component to tell you exactly how much you would need to spend to complete your operating agreement, set up a business bank account, and create your new Massachusetts LLC.

So, without further delay, let’s get into it.

What Is An LLC In Massachusetts?

An LLC in Massachusetts is a type of business structure that small businesses can use, just like an S corp and a sole proprietorship. In order to use this business type and form an LLC, you need to submit a variety of legal documents and government correspondence to the principal office of the Massachusetts Secretary of the Commonwealth.

You can use a Massachusetts LLC formation service that may also serve as a registered agent service. They file a certificate of organization for Massachusetts LLCs and complete all other paperwork to remain in good standing with the Massachusetts Secretary of the Commonwealth.

Or you could submit all of the required Massachusetts business documents to the Massachusetts Secretary of the Commonwealth yourself. This may be cheaper than using an LLC business, but will also take up more of your time.

We’ll cover both of these options in more depth in a later section.

LLC Cost In Massachusetts

The cost to form an LLC with the Massachusetts Department of Corporations Division can vary based on the kind of business you run and how that impacts which Massachusetts certificate of organization you need.

That being said, we’ll break all of the possible costs down for you in this section. Keep reading to learn all of the service fees and the state filing fees that you may need to pay during your LLC’s formation.

Massachusetts LLC Filing Fee

The baseline cost of creating a limited company in Massachusetts is $500. These LLC costs are quite a bit more than what you’d pay to form an LLC in many other states. So it’s at least worth considering whether your LLC members would execute documents filed elsewhere.

You may be able to pay an extra expedited service fee with your comprehensive operating agreement to speed up the process of reviewing your operating agreements after you file online.

Massachusetts LLC Annual Report Fee

In addition to the formation process fees for Massachusetts, you will also have to pay $500 for annual reports each year to stay in good standing. This means your Massachusetts LLC will pay at least $500 per year to keep its corporation’s division active.

Registered Agent Fee

You will also need a Massachusetts registered agent. You can be your own registered agent for free. Or you can look into hiring a registered agent service to accept legal documents on your behalf. Registered agent services can vary in price from around $100 to $300 annually

Cost to Form a Foreign LLC in Massachusetts

The cost of creating a foreign LLC in this state is $500 as well. You will submit this payment with your operating agreement and certificate of the organization while first registering with the Massachusetts Secretary of the Commonwealth.

Business Permits and Licenses 

You may also need a business certificate or license to complete the LLC formation process and get your limited liability company up and running.

These can cost between $50 and $350, depending on the type of business you’re running. You may also have to pay a filing fee if you submit to the Secretary of the Commonwealth outside of the standard LLC formation service process.

Taxes

Your taxes can vary quite a bit while running one of these companies based on your LLC’s certificate of organization, whether you hire employees, and even your LLC membership interest.

With that in mind, and acknowledging that this isn’t legal or tax advice, here are some of the taxes that you could pay after setting up an LLC in Massachusetts.

State Income tax

The state of Massachusetts charges a flat-rate income tax of 5.05%. That means this is the rate you’ll pay regardless of whether you earn the most money in your Massachusetts LLC business bank account or the least.

Sales tax

When you create a Massachusetts LLC, you will have to start charging sales tax in your stores and on your business website. The rate for this is 6.25%. You may want to keep these funds in a separate bank account to make things easier for your personal assets and the resident agent who might help you manage them.

Federal Self-Employment Tax

As the owner of a Massachusetts LLC with a business bank account and operating agreement, you will also be responsible for the federal self-employment tax. This rate is 15.3%, which is important to keep in mind while counting up the personal assets in your bank account for your annual report at the end of the year.

Federal Payroll Tax Withholding

Finally, due to federal payroll tax withholding requirements, you will need to withhold 7.65% of your employee’s wages while running a Massachusetts LLC through a certificate of organization or operating agreement.

Other LLC Filing Costs

There are some other LLC cost options that you may encounter while creating a Massachusetts LLC. But these are add-on fees that the Secretary of the Commonwealth may not charge you. 

Here are the major ones to consider.

LLC Name Reservation Fee

If you want to reserve a business name for your S corp, then it will cost $30 to do so. But you don’t have to pay this fee if you submit the LLC name on your LLC’s certificate of organization and file online. 

These are only LLC costs you’ll encounter if you want to reserve a business name before submitting your full operating agreement and certificate of organization for your Massachusetts LLCs.

“Doing Business As” (DBA) Name

You can also put a doing business as (DBA) name on file with the state. The Massachusetts LLC cost for this is $65, plus an additional $35 for non-residents.

Business Domain Name & Website

The cost of registering a domain name and setting up your website can vary significantly based on the services that you use to do this and how desirable your domain name is.

Certified Document Copies

The state charges $12 for each certified copy of a document like your operating agreement, resident agent paperwork, or certificate of organization.

Certificate of Good Standing (Certificate of Compliance)

You will have to pay $12 for a certificate of good standing each time you need one for things like business insurance or your LLC’s resident agent during regular business hours.

Articles of Organization Fee

The Massachusetts LLC cost for articles of organization is a $275 minimum for up to 275,000 shares, and then another $100 for each additional 100,000 shares you want to issue.

Attorney Fees

Your attorney fees will vary based on the professionals that you hire and how long you need to use them.

Tax ID Number (EIN)

Every LLC in Massachusetts must have an employer identification number (EIN). But it doesn’t cost anything to set your employer identification number up online.

6 Basic Steps to Start an LLC in Massachusetts 2024

Now that we know how much it costs to create your LLC, here are step-by-step instructions for completing the process.

Choose a Name for Your LLC in Massachusetts

First, you’ll need to select a name for your LLC. This name cannot already be in use by another company in the state. You can reserve a name that you like now if you aren’t quite ready to file your full LLC paperwork.

Choose a Registered Agent in Massachusetts

Next, you’ll have to designate a registered agent to accept important legal documents and business paperwork on your behalf. Your LLC formation company can do this or you can do it yourself.

Read More: Best Registered Agent in Massachusetts 2024

File Organizational Paperwork With the State

Now you’re ready to file your organizational paperwork with the state. This is when you pay the filing fees and provide the state with all of the information they need to know about your new business venture.

Obtain a Certificate from the State

After you submit the paperwork, the state will get back to you with an official certificate telling you that your business is now licensed and ready to operate. All that you need to do is wait to receive that paperwork.

Prepare an LLC Operating Agreement

At this point, you will need to submit an LLC operating agreement. This is the document you use to tell the state how your new business will be run from an organizational and financial standpoint.

Read More: Best LLC Services 2024

Obtain an EIN for Your LLC in Massachusetts 

Finally, you’re ready to set up your federal employer identification number. You can do this for free online.

The Top 2 LLC Services in Massachusetts

Product
Name	ZenBusiness	Northwest Registered Agent
Full review	Read full review	Read full review
Link	Check Price	Check Price

Zenbusiness

ZenBusiness is a great alternative to Northwest. They’ll also act as your business address, help you with your annual report, and can even work with you on setting up a business insurance plan with another provider.

With ZenBusiness, you also get access to after-hours customer support. Plus, they’ll help you create your LLC for free if you pay for their resident agent service.

Northwest Registered Agent

Northwest Registered Agent can help you create your LLC and then provide registered agent services, such as acting as your business address and helping you prepare your annual report. They’re consistently rated very highly by customers and provide many different online resources that can help your business thrive.

Pricing can range from nothing to about $275 per year depending on the plan you select. Note that you’ll only qualify for the free option if you pay for another service from them.

Final Thoughts

Starting an LLC can be an expensive process in Massachusetts. The filing fee is $500, and you will have to pay an additional $500 every year when submitting an annual report. You may face other charges for your certificate of organization or registered agent as well.

That being said, your LLC will give you access to some solid tax benefits and enhanced liability protection for your personal assets, so it could definitely be a smart idea, depending on your goals.

Whether you plan on using a service like ZenBusiness or Northwest, or you want to launch the LLC on your own, we hope this guide has helped you figure out the best way to do so.

Frequently Asked Questions (FAQs)