How To Start An LLC In Massachusetts For 2023?

How To Start An LLC In Massachusetts

Massachusetts is a relatively small but highly populated state with a plethora of options for entrepreneurs. You have undoubtedly observed that starting a limited liability company[1] is complex. There is always a lot of relevant data you will need to know before figuring out the next steps. It is not as difficult as you may suppose; nonetheless, you must exercise caution and sidestep some more typical mistakes. In this article, we have developed a comprehensive collection of Massachusetts LLC start-up steps to assist you.

Filing Requirements & Overall Massachusetts LLC Cost

To get your Massachusetts limited liability company (LLC) fully operational, you will need to know what paperwork to submit, where you will file it if an operating agreement is necessary, and how to deal with taxes and licensing requirements.

To establish a Massachusetts limited liability company, you will need to file a certificate of formation (a legally binding document that legally establishes your Massachusetts limited liability company) and other formalities and costs. 

Follow the steps in this step-by-step guideline to form an LLC in Massachusetts. You will be well on your way to owning a Massachusetts limited liability company.

Certificate of Organization

The Certificate of Organization is the most crucial paperwork you must complete to formally register your Massachusetts limited liability corporation with the Secretary of the Commonwealth. 

Your LLC is not constituted until you obtain a certificate of the organization from the Massachusetts Secretary of State. This is your limited liability company’s birth certificate in this state.

The filing cost is $500 for email submissions and $520 for online or fax submissions. This may appear to be a costly fee; however, you will not have to pay it again as long as it is accepted. 

The following is the information you will need to file your Certificate of Organization in Massachusetts:

  • The name of your LLC’s formal business
  • Your LLC’s business address in Massachusetts
  • Names and addresses of your LLC managers
  • Name and address of each person allowed to sign, accept, deliver, and register any recordable document affecting ownership in the actual property recorded with a registry of deeds or a land court district office.
  • Names and addresses of all people are allowed to sign papers filed with the Corporations Division.
  • Resident agent
  • Your signature
  • Your resident agent’s signatures

If you would like assistance with submitting your certificate of organization, we recommend ZenBusiness[2] or Northwest. They provide fantastic, affordable rates and a wide range of services with special promos.

Services for forming a limited liability company

Forming a Massachusetts limited liability company (LLC) can be difficult and time-consuming. You might wish to use an LLC creation service if you want to focus specifically on less paperwork and perhaps more time designing your corporation. 

They will take care of your account’s registration, so you do not have to waste time on investigative work, applications, and paperwork.

ZenBusiness and Northwest are the top two options available for formation services. For a fixed fee, they provide core formation services such as certificate of organization filing, regulatory advice, customer support assistance, and premium packages that include premium services such as the Employee Identification Number[3] (EIN), operational agreements, and fast track filing. 

Business Permits and Licenses

Your LLC may need to get special permits before business operations in Massachusetts after submitting your Certificate of Organization. 

This is mainly dependent on your locale and the kind of your corporation. Furthermore, various cities and counties may have varying licensing regulations, so verify with your local authorities. 

Professional licenses, which are mandatory if your firm works in a regulated field, are among the most typically necessary business licenses for Massachusetts limited liability companies. Alarm permits, construction permits, and zoning authorizations are popular at the local level.

Resident Agent Service

A resident agent is in charge of processing necessary legal tax paperwork and ensuring that your company follows Massachusetts regulations and legal requirements. 

Being a resident agent for your LLC will impose a strain on your time, making it preferable to delegate that task to a professional.

A resident agent service guarantees that your yearly reports and other paperwork are completed in a timely manner, sparing you from the fines of late filings as well as the burden of doing it yourself. 

Annual Fees and Taxes

Certain LLC charges, such as the Certificate of Organization or name booking costs, are exclusively related to the start-up of the corporation. Others, such as the annual report, are recurrent. 

Massachusetts Limited Liability Companies are obliged to make a yearly report with the State to bring them up to date on the latest information. It will cost you $500 for mailed annual reports and $520 for online and faxed yearly reports.

It is also critical to file your taxes and receive a Certificate of Good Standing in addition to completing an annual report. You must sign up your LLC with the Massachusetts Department of Revenue if your LLC sells items and gathers sales tax. 

If you overlook or ignore any of these actions, your company may not be able to conduct business in Massachusetts lawfully.

Your LLC will only be required to pay taxes if certain requirements are met. LLCs are considered pass-through businesses by the Internal Revenue Service[4] (IRS), which suggests they do not really have to submit a completely separate tax return. 

On the other hand, owners and members declare their profits and losses on their tax returns. Massachusetts does not levy a franchise or indulgence tax on its limited liability companies. 

If your business employs people, you will have to pay a retention or layoff tax, and if you sell goods, you will have to pay a sales and use tax. If you have your LLC set up to be handled as a corporation, it will be subject to an 8% taxable income and the Corporate Excise Tax[5].

Foreign LLCs Certification

Your firm can perform effectively as a single entity in many states by organizing a foreign LLC. You must register as a foreign LLC if you already have an LLC and wish to do business in Massachusetts. This may be done either online or in the mail.

Foreign LLCs are required to make an Application for Registration instead of a Certificate of Organization. The application for registration costs $500 and must be supported by a certificate of legal existence issued by an approved authority in the jurisdiction where the LLC is constituted.

The following information is required for the application and qualification of foreign limited liability companies:

  • Name of the LLC if it’s not similar to the name it wants to use in Massachusetts.
  • The date of formation and area where the LLC was initially formed.
  • Federal EIN
  • Business address of the LLC’s principal office

The remaining requirements are the same as for a domestic LLC. It is, however, important to know that all international limited liability companies (LLCs) must qualify in Massachusetts or face harsh fines.

5 Basic Steps to Start an LLC In Massachusetts In 2023

How To Start An LLC In Massachusetts

We’ll walk you through step-by-step guidance on how to form a Massachusetts LLC. If you are certain that a Massachusetts LLC is the right structure for your Massachusetts business, follow these five simple steps to create an LLC in Massachusetts:

Choose a Name for Your Delivery Service, LLC

The first and most crucial step in forming an LLC in Massachusetts is deciding on a name. This entails more than just coming up with a distinctive name. 

Ensure your name conforms with Massachusetts naming regulations and is conveniently found by prospective consumers.

The naming guidelines include;

  • You should include the phrase “Limited liability company” (LLC, L.L.C, or L.C) as part of the name.
  • Restricted terms such as “bank”, “attorney”, “university”, “army”, “government”, and others should be avoided.

After choosing a name that complies with state legislation, double-check that no one else has claimed or reserved that name for their own business. The Secretary of the Commonwealth’s website has a comprehensive Limited Company Search.

Choose Your Registered Agent

According to Massachusetts legislation, your limited liability corporation must have a registered agent in the state. Your LLC’s general public point of contact is a resident or registered agent. For your LLC, that agent picks up crucial communications and delivery of proceedings. 

To ensure that your LLC’s legal resident agent or registered agent responsibilities are satisfied, you can hire a professional agent service. 

Resident agent services ensure that you get all of your LLC’s crucial communications and legal papers while keeping your personally identifiable information safe and private.

The law allows you to choose who you want to be your agent. You can appoint a Massachusetts person or a company conducting business in the state to act as your agent. You may even serve as the resident agent for your LLC. 

However, just because you can does not really mean you might have to. Registered agent services are a simple solution to prevent problems like business disruptions, and they typically cost under $100 per year, allowing you to focus on your company.

File Articles of Organization

After deciding on an LLC name and appointing a registered agent in many states, this is the next step to take. 

However, in Massachusetts, this procedure is known as filing a Certificate of Organization form. The Massachusetts Secretary of the Commonwealth Corporations Division can provide you with this information.

You will have to pay $500 for a Certificate of Organization, which you may submit online or by email. To complete the form online, go to the Secretary Online Service, fill it out, confirm the correct information, and submit it. 

You can easily download the Massachusetts limited liability company Certificate of Organization to fill out paper documents for your Massachusetts LLC registration.

Create an LLC Operating Agreement for a Delivery Service

Your LLC’s ownership and operational procedures are legally outlined in an operating agreement. 

Although an operating agreement is not required in Massachusetts, we recommend that you have one since it is a document that states your LLC’s regulations and it may be extremely useful in resolving disagreements, hiring new employees, removing current members, and dealing with a variety of other unanticipated situations.

A consistently operating agreement enumerates all of the following important aspects of your LLC:

  • Rights and responsibilities of your LLC members
  • Responsibilities and responsibilities of your LLC manager
  • Outline of what the LLC is legally able to do in conducting its business
  • Joining and exiting the LLC rules
  • Circumstances under which the LLC should dissolve
  • Circumstances under which your LLC’s rules should be changed

It is important to realize that you do not have to submit your operating agreement with the state. It is a confidential contract that you retain at your place of business. You may change it and adjust it to your LLC’s needs without further supervision.

Obtaining an EIN

The IRS allocates an EIN to businesses to know them for taxation reasons. It is basically a social security number for your business. 

Because not all Massachusetts limited liability companies are required to have an EIN, consider the following factors to determine whether your Massachusetts limited liability company will require one:

  • Your LLC has more than one member
  • Your LLC has many employees
  • Your LLC is taxed as a C corporation or S corporation.

It should be straightforward and free to obtain an EIN unless you use a formation service. However, you may obtain an EIN straight from the IRS website at zero cost.

Important Steps After Forming An LLC In Massachusetts

You are almost organized to start your business after your LLC is created. You need to take care of a few things initially because they are as crucial as submitting your establishment papers. 

Some of the significant steps to start a Massachusetts LLC are listed below;

  • Open a business bank and credit card account to disconnect your individual and corporation assets and spending and streamline accounting and tax filing.
  • Register for unemployment insurance tax and state income tax collection on account of your staff if you have them. Register for Massachusetts consumption and sales tax if you intend to sell tax liability services and goods in the state.
  • Follow all regulatory requirements and legislation, and acquire all required licenses and permissions.
  • Comply with the state minimum wage; employees must be paid at least the minimum wage determined by the state at times.
  • Set up an administrative scheme to maintain track of your company’s finances and make tax filing easier.
  • Acquire insurance to safeguard your company from frequent issues that business owners face daily.
  • Keep track of annual filings and reports.

The Top 2 LLC Services

Limited Liability Companies (LLCs) are a corporate framework that requires very little paperwork while seeming professional. When creating an LLC, you will need the help of the experts and the specialists. 

However, if you start looking for the finest LLC creation provider, you will almost certainly come across dozens of them, which will make things much more difficult. With this guide, we have listed the top two finest LLC creation service companies in Massachusetts.

ZenBusinessNorthwest
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ZenBusiness

ZenBusiness is a leading online registered agent and LLC formation service provider. ZenBusiness has established multiple approaches to differentiate itself from other formation services since its beginning in 2015. Registered agent services charge a modest fee of $0 per year and state fee. 

ZenBusiness can incorporate an LLC, give you an operating agreement, and act as your registered agent for just $0. It is known for its fast response times, outstanding customer service, and low rates compared to its competitors. 

For most company owners wishing to incorporate an LLC or a company, we consider ZenBusiness to be one of the most acceptable options.

Northwest

Northwest Registered Agent is a dependable, trustworthy specialized organization with an easy-to-use web-based platform and good customer service that will guarantee your LLC formation or registration is completed swiftly and appropriately. 

They have almost twenty years of expertise forming LLCs, having been in business since 1998. They offer LLC creation services for $39+ state costs in the first year, with a complimentary registered agent, and then for $125 every year after that. 

Northwest provides various services, and based on your business needs; you may wish to add more. 

Conclusion

LLCs are less complicated to form than other companies. Smaller companies, particularly start-ups, can form an LLC in Massachusetts for very little expense. Also, they require far fewer documentation and legal procedures to create. 

It is easy to become overwhelmed by the plethora of documents to fill out, paperwork to file (most of which are done online and others by mail), registration fees to pay, and binding arbitration clauses to learn to start an LLC in Massachusetts. 

But once you have finished all of this effort and performed this complicated procedure on your own, you will enjoy the sense of accomplishment you will experience starting your own Massachusetts LLC.

Frequently Asked Questions (FAQs)

How long does it take to get an LLC in Massachusetts?

For online applications, it takes around four days, while for mail applications, it takes about five days to two weeks.

What is the minimum employee wage in Massachusetts?

Massachusetts’ minimum hourly wage is $14.25.

What are the benefits of Massachusetts LLC?

A Massachusetts limited liability company (LLC) safeguards your assets while providing you with beneficial taxation. You may also utilize an operating agreement to tailor your corporate requirements to meet your demands.

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ABOUT THE AUTHOR

ABOUT THE REVIEWER

Kristina Knight-1
Kristina Knight, Journalist , BA
Content Writer & Editor
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Kristina Knight is a freelance writer with more than 15 years of experience writing on varied topics. Kristina’s focus for the past 10 years has been the small business, online marketing, and banking sectors, however, she keeps things interesting by writing about her experiences as an adoptive mom, parenting, and education issues. Kristina’s work has appeared with BizReport.com, NBC News, Soaps.com, DisasterNewsNetwork, and many more publications.

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Bizreport Advisor adheres to strict editorial integrity standards avoids using tertiary references. We have strict sourcing guidelines and rely on peer-reviewed studies, academic research. To ensure the accuracy of articles in Bizreport, you can read more about the editorial process here.

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  2. Trustpilot. (2022). ZenBusiness is rated ‘Excellent’ with 4.7 / 5 on Trustpilot. [online] Available at: https://www.trustpilot.com/review/www.zenbusiness.com.
  3. ‌Bartleby.com. (2012). Employer Identification Number – 838 Words | Bartleby. [online] Available at: https://www.bartleby.com/essay/Employer-Identification-Number-PJKFFG9A7NT.
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  5. Mass.gov. (2021). 2021 Personal Income and Corporate Excise Tax Law Changes. [online] Available at: https://www.mass.gov/info-details/2021-personal-income-and-corporate-excise-tax-law-changes.
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