How to Form an LLC in Massachusetts | Guide on Massachusetts LLC

Forming an LLC (Limited Liability Company) in Massachusetts is easy and affordable. The following are few procedural steps on how to start an LLC in Massachusetts. LLCs can be formed in two ways, domestic and/or foreign. If you are planning to set up an LLC in states other than Massachusetts, visit How to Start an LLC.

Massachusetts LLC

Why an LLC in Massachusetts

Below discussed are some of the unique selling points of the Massachusetts LLC. Some of the benefits that a new LLC business will enjoy in the state are discussed, which will help a person take a step towards the formation of an LLC and start their business.

Succession of shares

While setting up a Massachusetts LLC, entrepreneurs will enjoy the benefit of a succession of shares to their heirs. In other states, this facility is not available. Generally, after the death of a member, the shares of that particular person get distributed to other members. On the other hand, in the state of MA, the shares will be passed on to their family/heirs. If any misfortunate incident happens with any of the members while serving in LLC, his/her family can continue as a member/partner.

Discounted prices of taxes for LLCs

The tax one has to pay while setting up an LLC in Massachusetts is discounted for many businesses. around 25% to 40% discounts are given to the LLCs on paying state and federal taxes.

Moreover, there is a discount for the members on the health insurances as well. It helps in an overall saving in the monthly costs of the member, and one can use it to bear some of the company’s cost.

Economic development incentive program credit

The EDIPC program is started by the government of Massachusetts State to ensure some savings on taxes. It will help LLCs to create jobs and develop the state’s economic status. Additionally, the government can provide a credit of up to $5000 for every job created by the LLC. But for getting this benefit, one needs to qualify their business under the laws that the state has passed.

Great point of attraction for investors

If someone looks forward to starting a Massachusetts LLC, then they get an additional benefit of attracting an investor and raising funds. The state let the LLC issue their stocks in the early stages so that they can onboard the investors with the help of stocks and explore their USPs in a much better way.

Brownfield Tax Credit

The BTC is again an incentive for LLCs in Massachusetts in which the members are allowed to lease their contaminated land, which will help them in getting over their financial burdens and keep the LLC in a running state.

How to Start a Massachusetts LLC

Suppose you’re planning to invest in a profitable type of business or maybe about to set up your corporation in Massachusetts. In that case, forming an LLC in Massachusetts is the simplest option for you.

An LLC or a Limited Liability Company a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. This section gives you a step-by-step guide on How to Start an LLC in Massachusetts. 

Step 1: Decide a Name for Your LLC

If you are to start an LLC in Massachusetts, the first thing you do is decide on a business or company name before getting business licenses, and how to name your LLC may be tricky. Thus, you have the option to choose a name that complies with the Massachusetts business naming requirements. It must also be easily searchable for potential clients. Here is a step-by-step guide to follow when naming your Massachusetts LLC. 

Why do you need a proper business name?

If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.

Because of this, here are some of the major benefits of choosing the best LLC corporate names.

  • To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
  • After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
  • You can only get the EIN number when you have your name registration certificate with you.

What are the requirements when deciding a name for your LLC? 

name search is vital to make sure your business’ name is unique. Check the availability of your name with Business Entity Search on the Massachusetts Secretary of State’s website. Reserve the name by completing the Name Reservation Request Form for Domestic Entities.  

  • Don’t include words that could confuse people about your company. Words like ‘treasury, state department.’
  • You should also avoid restricted words like ‘bank, attorney, university,’ because they may require a lawyer and more paperwork.
  • As for a business website and your URL name, check if your name is still available for domain use with NameCheap.

Reserve a business domain

Even if you don’t have plans to set up a website today, it will help if you buy a domain to avoid others from using your name for their website, so do visit NameCheap for your domain name and Kinsta for web hosting.

If you have decided on your URL name and have reserved it, set up a professional email account with Google GSuite.  

Step 2: Assign a Registered Agent in Massachusetts

A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will receive significant tax forms, legal documents, a notice of lawsuits, and other official government correspondence in Massachusetts. Choosing Massachusetts-registered agents for your LLC is required. 

Make sure your registered agents are residents of Alabama. It could also be a business. Here are the recommended agents and employees for you:

These five LLC formation services are recommended agents’ registered services as they are authorized to conduct business in Massachusetts. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years. 

Step 3: File Certificate of Organization in Massachusetts

A Certificate of Name Reservation is needed to file a Certificate of Organization, as other states call it. You need to make reports of this certificate with the Massachusetts Secretary of State, which costs $500. You may file them online or by mail. 

This Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in Massachusetts, like if it is a member-managed or managers-managed

Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Massachusetts LLC will offer.

How to File Online

Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county.

How to File by Mail

If you prefer filing real-life forms for your Indiana LLC registration, then you can download the Massachusetts Limited Company Certificate of Formation. Read the form thoroughly and fill it out. It will have to fill, among others,  your name, principal office address, city, state, zip code, and signature. 

Step 4: Create Your Massachusetts LLC Operating Agreement

An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts. 

Starting an LLC in Massachusetts does not require you to have an operating agreement, but it is ideal to have one that contains all your details of business operation.

Step 5: Filing a Massachusetts LLC EIN

The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes. It is like a Social Security number dedicated to a business. 

It is also called a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). You will need this number for tax filing and to determine tax classification options.

Mail to:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

Fax: (855) 641-6935

Fee: Free

After Starting your Massachusetts LLC 

After forming your LLC, there are still some things that you will need. Take note of the following:

  • Get a company business account
  • File Massachusetts business permits & licenses
  • Get liability for business insurance with coverage for employees
  • File a Massachusetts LLC annual report or biennial report
  • Already existing LLCs that wish to operate in Massachusetts must register as a foreign Massachusetts LLC.  

This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.  

Best Businesses Of Massachusetts State Every Entrepreneur Should Know

A number of businesses are established in Massachusetts state that you should have complete knowledge of before you form an LLC in Massachusetts.  That is why here is a list of top businesses operating for a longer period of time.

Marine trade

If you look at Massachusetts’ geography, then it has around 1500 miles of Atlantic ocean borderline. This has enabled the traders to easily trade through the marine ways, which has become a major part of the state domestic economy with time. This growing industry has contributed around $2.40 billion to the state GDP. Through the sea links, goods can be transported easily and at lower prices.

Another benefit of such a huge sea coast is the seafood and its product. A whale can be easily found in the Atlantic sea, and they have been hunted for their precious oil and food. Other valuable sea fishes are haddock, Atlantic cod, Black Sea Bass, etc.

Information technology

According to recently generated reports, the northeastern state of Massachusetts is home to 1700 IT companies. The reason behind such a massive number of IT companies is the easy availability of highly qualified staff in the state. They are established in the state, offering plenty of IT and technology-related services to businesses and organizations to help them grow. The IT sector’s contribution to the GDP of Massachusetts is around $35.18 billion, which is expected to double in less than a decade.

Finance and Real Estate

The contribution of the financial and real estate businesses to the state GDP is around $110 billion. More than dozen of fortune 500 companies are formed and located in the state that is helping people. There are many personal and corporate financing houses available in the state that handle all your business-related finances and issues.

Some small business ideas of Massachusetts state are:-

  • Customized tour and travel services
  • Berry farming and export
  • Life coaching 

Massachusetts LLC Formation Review

Time needed: 1 hour and 5 minutes.

 Just to recap, here are the easy steps again when forming a Massachusetts LLC. Click on the steps in this list to read the full detail.

  1. Name your Massachusetts LLC

    The first thing you must do is to choose a company name, which should include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
    name llc

  2. Choose a registered agent

    In Massachusetts, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
    get registered agent

  3. File a formation certificate

    Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
    file formation certificate

  4. Create operating agreement

    An operating agreement is not a strict requirement but something encouraged when you start an LLC.
    create operating agreement

  5. Get an EIN

    The Employer Identification Number (EIN), also called  Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
    get an ein

F.A.Qs

What is the difference between ‘domestic LLC’ and ‘foreign LLC’?

A “domestic LLC” is one that conducts business in a state where it was formed. Meanwhile, a “foreign LLC” is an existing LLC that extended business to another state.

What do I need for Domestic and Foreign LLCs?

For Domestic LLCs, it is vital to have a Certificate of Name Reservation and Certificate of Formation. For the foreign LLCs, you must have a Certificate of Good Standing.

Is the cost to form an LLC the same across states?

The cost to form an LLC varies per state.

Does an LLC need to use a DBA?

Seldom do L.L.C.s use D.B.A. or a ‘Doing Business As’ name nor a fictitious business name. However, if you want to have one, you make read more about DBAs here

Why are operating agreements important?

This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.

Is there anything else I should keep in mind when naming my LLC?

>Your name should have “L.L.C. or LLC” or the phrase “limited liability the business.” 
>Do not include words that could create confusion between your LLC and any government business. 
>Words like ‘bank, attorney, university’ are restricted as well. 
>Lastly, your name should distinguish from other limited liability corporations, limited partnerships, or registered limited liability partnerships.

Where can I file my LLC name?

Typically, you can file your LLC name online or by mail. Check with the state where you will set up your LLC name. Take note that the fees for business names may also vary per state.  

How can I know if my URL name is available?

As for a website and your URL name, check if your name is still available for URL use with NameCheap to see if your name is available as a web domain. Even if you don’t have plans to set up a website today, it will help if you buy a URL. Buying it can help to prevent others from getting your name; check out WPEngine, Kinsta, and GoDaddy for hosting and building your website. 

Can I mail the LLC Certificate of Formation to the Secretary of State?

No. Never mail these documents or payments to the Secretary of State directly. 

Why do I need an EIN?

The reason you might need an E.I.N. is that it would help for three reasons:
>Opening a business bank account
>Filing and managing federal and state taxes
>Hiring employees or agents

How do I get an EIN when I do not have a Social Security number?

You are not required a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.

I already have an EIN for a sole proprietorship; what now? 

Note that an LLC is different from a sole proprietorship. If you already have an EIN for your sole proprietorship, the IRS will require you to get a new one when your convert to an LLC. 

Do foreign applicants need an SSN to get an EIN?

International EIN applicants do not need an SSN to get an EIN.

What is an IRS?

The IRS is the one that will issue your EIN. You can request an EIN from the IRS ONLINE or download the FORM, fill it out, and send it by mail or fax.

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