How to Start an LLC in Massachusetts
Massachusetts LLCs provide small businesses with liability protection, tax benefits, and other advantages.
To establish a Massachusetts LLC, file the Certificate of Organization with the Massachusetts Secretary of the Commonwealth. The cost for filing is $500, and you can submit your application online or by mail. Once filed, the Certificate of Organization will create your Massachusetts Limited Liability Company.
To begin the process, refer to our comprehensive guide on starting an LLC in Massachusetts, which provides step-by-step instructions.
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1. Name your Massachusetts LLC
To register your LLC in Massachusetts, you will need to select a name that meets the state's requirements for naming LLCs.
The following are the key requirements to bear in mind:
- The business name should include the words "limited liability company," "LLC," or "L.L.C."
- The name should not be identical to any existing business in the state. You can verify name availability by conducting a search on the Secretary of State's website or by referring to this link.
- The name cannot contain terms that are reserved for use by government agencies, such as State Department, CIA, FBI, Treasury, etc.
- Certain words that are restricted, such as bank, lawyer, attorney, credit union, may require additional documentation and licensure paperwork.
Getting a DBA Name in Massachusetts
To operate your business under a name that differs from its legal name, you must file a "doing business as" (DBA) name at the local level, which is also referred to as a trade name, fictitious name, or assumed name.
You can contact your city clerk for more information about the fees and requirements associated with registering a DBA name for your LLC. To learn more about Massachusetts DBA names, visit the link provided.
2. Assign a Registered Agent in Massachusetts
In Massachusetts, it's mandatory for LLCs to designate a resident agent, who will be named in the Certificate of Organization. The resident agent must have a physical address and be available during normal business hours. The Certificate of Organization must also contain the agent's consent to act as the LLC's resident agent.
A resident agent is responsible for receiving and collecting official government correspondence, legal documents, tax forms, and service of process on behalf of the LLC. In other states, this position may also be referred to as a registered agent, statutory agent, or agent for service of process.
In Massachusetts, there are specific requirements for who can serve as a resident agent for your LLC:
- The resident agent must be a Massachusetts resident who is 18 years of age or older.
- A domestic or foreign business entity authorized to do business in Massachusetts may also serve as the resident agent.
- The resident agent must have a physical street address in the state, which is referred to as a "resident address." It's important to note that P.O. boxes are not accepted as a valid address.
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3. File your Massachusetts LLC Certificate of Organization
To form your Massachusetts LLC, you need to complete the Massachusetts Certificate of Organization form, which requires essential information about your LLC, such as its name, office address, resident agent’s name and address, and business purpose.
Here's what you'll need to include in your Certificate of Organization:
- The exact name of your LLC
- The street address of your LLC
- A general description of your LLC's business
- The name, street address, and signature of your resident agent
- The names and street addresses of any managers
- Your LLC's effective date
To file your Certificate of Organization, you'll need to pay a $500 filing fee, which you can do by making your check payable to "The Commonwealth of Massachusetts" if you submit your form by mail or in person.
Once your Certificate is approved by the Secretary of the Commonwealth, your LLC will be officially recognized as a business entity in Massachusetts.
4. Create a Massachusetts LLC Operating Agreement
Operating agreements may not be required by law in Massachusetts, but they can provide significant benefits to your LLC in the long term. This document is crucial for establishing a detailed framework on how you plan to operate your business and ensure its continued success.
A typical operating agreement includes important information, such as:
- The roles and responsibilities of each member in running the LLC on a daily basis.
- The contributions made by each member and how they may influence the voting process.
- The procedures for admitting new members to the LLC.
5. Apply for an EIN
To keep track of your business activities, your company will need an Employer Identification Number (EIN), which is similar to a Social Security number (SSN). The IRS and the state of Massachusetts use this unique number to monitor your business operations.
Having an EIN is crucial for various tasks such as opening a business bank account, filing federal and state taxes, and hiring employees.
To obtain an EIN for your Massachusetts LLC, you can easily apply for one online for free on the IRS website.
6. File Annual Reports
Massachusetts law mandates that every LLC operating in the state must submit an annual report to the Corporations Division of the Secretary of the Commonwealth.
The Limited Liability Annual Report is to be filed by domestic LLCs, while Foreign Limited Liability Annual Report is to be filed by foreign LLCs. The report should contain the same details as provided in the Certificate of Organization.
The filing due date is the LLC's anniversary date, and the report can be filed via mail or online.
The submission fee is $500.
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