This guide of how to start an LLC in Massachusetts will take you through the step by step process to make sure your Massachusetts LLC is a Limited Liability Company that the Massachusetts Secretary of State’s office will recognize as a business entity that is valid.
Rather than going through the step by step process below, you can use a professional service where their entire business is just helping LLC owners setup their Massachusetts LLC the right way.
I also love giving you a few creative ideas on what type(s) of businesses you can setup based on what Massachusetts is known for so let me give you some business advice delivered straight.
The best type of business to start in Massachusetts seems to revolve around the tourist industry. It’s the landing place for the Mayflower and has the nation’s first library. I’d highly recommend building some type of tourist business as a Limited Liability Company as your Massachusetts LLC.
Now let’s get into the step by step process of what you need to do in order to get your business structure setup and make sure the LLC operates in the right way with the right legal documents.
Name Your Massachusetts LLC
Yes it’s true. Your business needs a name and you need to check with the Massachusetts Secretary of State’s office whether that name is available for you to use for your business.
The way to do this is by doing an official business name search and making sure it’s a Massachusetts LLC name that is available.
Business Name Search:
Business Name Reserved Search:
Once you’ve been able to determine if the name is available, you’ll want to make sure you’re following the Massachusetts LLC naming guidelines.
Your LLC Name in Massachusetts Must Contain:
The words “Limited Liability Company” or the abbreviation “L.L.C.” or “LLC”
No other words or abbreviations may be used
Your LLC name cannot contain any profanity, infringement on another company’s name, or anything that implies you are a government agency.
Your LLC’s name is important for marketing, banking, and building your business brand but it’s not the most important part of starting an LLC. So if you’re really stuck on what to name your business, move on and come back to this later. You can always rename your LLC down the road.
If you have figured out what your name is going to be, you’ll want to make sure that the domain is available too. It’s not just about the state feeling good about it, you’ll need to have a digital version of this too.
If you’re going to setup a single member LLC, individual or business entity or are looking at a foreign LLC as an option – it’s still important to have the digital version figured out.
Massachusetts law doesn’t state that you need to have a digital version of the business but it’s just a good business practices as you’re going through the LLC formation process to have make sure you’re also locking down your digital footprint.
From here you can go get a business website setup and use your domain and official Massachusetts LLC name to do so.
Choose your registered agent
A Registered Agent is someone who is responsible for receiving legal paperwork on behalf of your business.
The reason this is so important is because this gives the state and anyone else an official way to contact you and your business. No one wants to be served legal papers but if it ever happens, you’ll want someone who can accept them and then get them to you as soon as possible.
You are allowed to be your own registered agent in the state of Massachusetts but I would caution against this. Unless you have a very small business with little risk and you’re the only person involved, it’s just not worth the hassle.
Being a registered agent comes with some responsibility and you need to make sure that if something does come up, you’re available during business hours to accept it. If you have an LLC with multiple members or are planning for growth, this is going to be even more important.
You’ll want to make sure you choose a registered agent service that is reputable and has a good track record.
I recommend using Northwest Registered Agent because they give you the first year of the registered agent service included as you’re setting up your Massachusetts LLC so use them.
The other thing you could do is use a law firm that’s based in Massachusetts. Some law firms offer registered agent services by making sure you’re doing what’s needed as the service here.
Making sure you have a service setup like this whether it’s for a sole proprietorship, Massachusetts Limited Liability Company or you’re just setting up a single member LLC – it matters so just get it setup!
Prepare and File Certificate of Organization
The next step in the process is to prepare and submit your Certificate of Organization with the state.
You can find the form here: https://www.sec.state.ma.us/cor/coridx.htm
The filing fee is $520 and can be paid by check or money order.
Make sure you include the following with your Certificate of Organization:
The name and address of your LLC
The name and address of your Registered Agent
The names and addresses of each member
Whether your LLC will be managed by members or managers
The effective date of your LLC
You can also include additional language in your Certificate of Organization but it’s not required.
Once you have everything together, you’ll want to mail it to the following address:
Secretary of the Commonwealth
One Ashburton Place, 17th Floor
Boston, MA 02108
You can expect to receive your Certificate of Organization within 4-6 weeks.
Create an Operating Agreement
Welcome to my favorite part of getting a Massachusetts LLC setup. You’re going to need an operating agreement that covers topics from making sure your personal assets are not tied into your business.
You may have already setup an LLC operating agreement but operating agreements can all look a bit different depending on the type of Massachusetts LLC operating agreement you’d like to see.
If you’re looking for something a bit more custom or just want to see what others are including in their LLC operating agreement, I recommend taking a look at some example LLC operating agreements.
You can find an LLC operating agreement template (as well as other business templates) over at the US Small Business Administration website: https://www.sba.gov/starting-business/get-business-entity-documents-forms
Just scroll down a bit and you’ll see the different types of business entity templates that are available for download.
The LLC operating agreement is important because it will outline:
- How your LLC will be run
- Who the members are
- What happens if someone wants to leave the LLC
- How decisions will be made
It’s important to have an LLC operating agreement in place so that everyone is on the same page and knows what to expect.
It’s not required to have an operating agreement in place but I recommend getting one setup as soon as you can.
You don’t need to file your LLC operating agreement with the state but you should keep it in a safe place so that it’s readily available if you ever need to reference it.
Get an Employer Identification Number
The next step is to get a Federal Employer Identification Number (EIN) for your business.
This is also known as a Federal Tax Identification Number and it’s basically the social security number for your business.
You’ll need an EIN in order to open a business bank account and it’s also required if you have employees.
You can apply for an EIN online through the IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
It’s a pretty simple process and you should be able to get your EIN within a few minutes.
Once you have your EIN, you’ll want to keep it in a safe place so that you can reference it when needed.
You’ll be using this for a business bank account, legal documents and any annual report that you’ll need to file with the internal revenue service (IRS).
Open A Business Bank Account
Now that you have your EIN in hand, it’s time to open a business bank account.
This is important because you’ll want to keep your personal and business finances separate.
It’s also helpful for tax purposes because it will be easier to track expenses and income if everything is in one place.
I recommend that you go get an account setup with Novo.com which makes it easy to file online and not worry about going into a bank. Check out their banking service and it will make it really easy for you to setup your business.
Get Small Business Insurance
There are different types of business insurance that you’ll potentially need to consider.
The type of insurance you’ll need will depend on the business you’re in as well as other factors.
Some common types of business insurance include:
General liability insurance
Professional liability insurance
Product liability insurance
Workers compensation insurance
You can get quotes for small business insurance through sites like Commercial Insurance and they can get you setup correctly.
Get a Business License or Permit
Depending on the type of business you’re in, you may need to get a business license or permit.
This is usually required if you’re selling products or services that are regulated by the government.
You can check with your local city or county office to see if you need a business license or permit.
There may also be industry-specific licenses or permits that you need to get.
For example, if you’re in the food business, you’ll need to get a food permit from your local health department.
The best way to find out if you need a license or permit is to contact your local city or county office.
File an Annual Report
If you’re a corporation or LLC, you’ll need to file an annual report with the state.
This is also known as a business license renewal.
The deadline for filing your annual report will depend on the state you’re in but it’s typically due between January 1st and March 31st.
You can usually file your annual report online through the state’s website.
The fee for filing an annual report is typically around $50.
Pay Annual Taxes
Depending on the type of business you’re in, you may need to pay annual taxes.
For example, if you have a retail business, you may need to pay sales tax.
If you have an online business, you may need to pay income tax.
You’re also going to need to determine if you need to:
- Collect Sales Tax
- Handle Federal and State Taxes
- Your tax structure
- Track your business expenses for tax purposes
- Hire Employees and the tax implications for doing so
Starting an LLC in Massachusetts is a pretty simple process but there are a few things that you need to do in order to get everything setup correctly.
I’d recommend you just go use Northwest Registered Agent to set it up but you can also go through all these setups if you’d like to do that too.
How much does it cost to start an LLC in Massachusetts?
The filing fee for the Certificate of Organization is $520.
Do I need a business license to start an LLC in Massachusetts?
Yes, you will need to get a business license before you can operate your business. You can contact the town or city