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Massachusetts LLC Formation Costs
Massachusetts LLC State Filing Fees - $500
Recurring Fees - $500 Annual Report Fee
Filing Time - It normally takes 1-2 business days for the LLC paperwork to be approved in Massachusetts.
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The Limited Liability Company (LLC) is a popular business entity choice structure for many businesses starting in Massachusetts. The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in Massachusetts without an attorney.
Unlike a sole proprietorship or partnership where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting for the business owner’s personal assets.
Related: How Does an LLC Protect You?
Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration and management flexibility.
Forming an LLC in Massachusetts is something most people can do on their own, but it’s nice to have some support in case you have questions or get stuck. IncFile and Inc Authority provide LLC formation guidance for only the cost of the state fees!
The cost to form an LLC in Massachusetts is $500 when submitting by mail and $520 when filing online. Approval for the LLC typically takes between 1-2 business days.
HOW TO FILE THE CERTIFICATE OF ORGANIZATION AND FORM A MASSACHUSETTS LLC
The steps for filing online or by mail are largely the same. The screenshots show filing online.
- Begin by visiting the Massachusetts Secretary of the Commonwealth’s website.
- Click on “If you are forming a new entity click here”
- Select Domestic Limited Liability Company
Step 1: Name the LLC
Enter the name you want for the LLC. The name of the LLC also has to differ from other entity names registered with the Secretary of the Commonwealth. Learn how to check on available Massachusetts LLC names before filing to be sure the one you want is available.
Additionally, the name of the LLC must include one of the following designators at the end of the business name:
- Limited Liability Company
- Limited Company
A comma may be used after the business name and before the designator. “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.
Before finalizing your name, you may also want to see if a domain name is also available to have a matching website address.
Step 2: LLC Address
2a. Location of the principal office – In this section, enter the street address, city, state and zip code of the initial principal office. This address can be the physical address of the LLC or it can be the address where the business records are stored. You may not use a PO Box for the designated office.
2b. Address where records are kept – If the records of the LLC will be kept at a different address, enter that information in section 2b. If the address is the same as the principal office, click on the “Same Address as” tab to copy the address.
Step 3: Business Description
Provide some basic information about what the business does. You will need to provide some basic information otherwise, the LLC filing will be rejected. If you want to keep the business purpose more open-ended, you can add “and engage in any lawful business activity for which a Limited Liability Company may be organized in Massachusetts” in addition to the original purpose statement.
Step 4: Date of Dissolution
This section is optional if you intend the business to exist forever, which most businesses do. If you have a specific end date in mind (typically used for investment-related businesses) choose a dissolution date.
5: Resident Agent
To have an LLC in Massachusetts, a Resident Agent (oftentimes known as a Registered Agent) must be identified. The Resident Agent can either be a resident of Massachusetts or a Resident Agent service that is registered with the state. The Resident Agent must have a physical address in the state to act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc on behalf of the LLC.
Even though the business owner can be the Resident Agent, their name and address become public record and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when they are doing business from home.
The Resident Agent must also provide consent that they are the agent for this LLC.
Step 6: Manager Information
If the LLC is Manager-Managed, meaning the members hired a manager to run the LLC, similar to a CEO of a corporation. It’s more common for an LLC to be Member-Managed. If so, leave this section blank.
Step 7: Authorized Signers
A Member-Managed LLC has members (owners) that are active in the day-to-day operations of the business. If the LLC is Member-Managed, enter the name and address of each member who is authorized to sign documents of the LLC. Additionally, if there are non-members, like an attorney or accountant the members give signing authority to, will fill out their information in this section.
Step 8: Authorized Signers for Real Property
If the LLC is involved with buying and selling real property like real estate, enter the name and address of all individuals who are authorized to sign these types of documents. If the LLC is not involved in real property transactions, skip this step.
Step 9: Additional Matters
This is an optional section and not used by most LLCs. Here you would include additional rules for the operation of the LLC.
Step 10: Special Filing Instructions
Another optional section that is usually left blank by more filers.
Step 11: Filer’s Contact Information
Enter the name, address, phone and email of the filer. If it is the same as a previous section, you can copy and auto-populate the fields. Should there be any questions during filing, this is the information they will use to contact someone to fix any problems.
In the “Business Name” field, if you are filing individually leave it blank. This would only apply if you have someone filing the LLC on your behalf.
Step 12: Signature
Have an individual forming the LLC to sign and accept the terms and conditions. Click the submit button to save the information and proceed.
Step 13: Review
Review that all of the information is correct. If there are no corrections, click “Accept”
Step 14: Pay and File
Pay and file the Certificate of Organization.
In approximately 24-36 hours (during the weekday), the LLC will be approved.
If you have questions, contact the Massachusetts Secretary of the Commonwealth.
Companies like IncFile and IncAuthority help guide you to make sure it’s done right and you only pay the normal state fees.
Check out our reviews of popular LLC formation services to learn more.
Tasks After Forming Your LLC
Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.
Prepare an Operating Agreement
The operating agreement is a document that governs the framework of an LLC. This document covers items like ownership rights, member responsibilities, how profits and losses are distributed and more.
Most states do not require an LLC to have an operating agreement but it is still worth considering. Without an operating agreement:
- The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit
- Member’s personal liability protection may be diminished
- Members may not have a full understanding of their roles and responsibilities which could lead to costly disputes in the future
Obtain an EIN
The EIN or Employer Identification Number is a unique 9-digit number for a business. Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.
The EIN will be needed in order to open a bank account, register for business licenses and permits, file tax returns, pay payroll taxes and more.
Related: How to Apply for an EIN
Open an LLC Bank Account
Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.
Several documents will be needed to open a business bank account such as:
- A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
- Copies of the original formation paperwork from the state showing the creation of the LLC.
- Driver’s licenses of the members.
- Depending on the age of the LLC, a Massachusetts Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.
Apply for Business Licenses and Permits
Depending on what your business does and where it is located, there will likely be a variety of business licenses and permits to register for before starting. Some common registrations include:
- Business License – Some cities require businesses to obtain licensing before they can start. In some cases, even home-based businesses must have licensing in order to legally operate.
- Professional License – Certain services such as barbershops, accountants, salons and others must be licensed.
- Sales Tax Permit – In order to sell products and certain services, registration with the Massachusetts Department of Revenue will be necessary.
File Annual Reports
LLCs are required to file an annual report with the Massachusetts Secretary of the Commonwealth. The annual report updates ownership information and other details.