Each state has different requirements for forming a limited liability company (LLC). Whether you are starting a business or incorporating a business already in existence, you'll want to understand the Massachusetts state requirements for LLC formation.
How to start an LLC in Massachusetts
Starting a new business comes with a variety of challenges. The following highlights some of the critical steps needed to keep your business compliant if you decide to form a Massachusetts LLC. For more information on forming an LLC for your business, view our webinar “What You Need to Know When Deciding Whether to Register Your Small Business”.
Decide on a name for your LLC
Naming your business is an important step that needs to be considered carefully. There are many business and compliance requirements to weigh when making the final decision on your LLC’s name.
Generally, your name cannot be the same as the name of another business entity on file with the Massachusetts Secretary of State, and it can’t be misleading. Read our article for more tips on naming your business.
Determine management structure (member vs. manager)
One of the reasons you may have selected an LLC as your business type is the management structure. LLCs can have one of two management structures: member-managed, or manager-managed. The difference between the two comes down to the relationship between management and ownership:
If an LLC is member-managed, then all members are active in the decision-making processes.
If an LLC is manager-managed, then one or more managers are designated to make the decisions on its behalf. A manager may be a member or a non-member.
When starting your LLC, it is critical to understand how you plan to manage your business. Read our article LLC members vs. LLC managers for more information on LLC management structure.
Select your registered agent
A registered agent (also often referred to as agent for service of process) is a person or business you appoint to receive and forward to you important legal and tax information. Massachusetts requires an LLC to appoint and continually maintain a registered agent (which Massachusetts refers to as a “resident agent”) located in the state. The resident agent must sign the consent to appointment on the Certificate of Organization when forming. BizFilings includes this service in all incorporation packages.
Prepare and file with Massachusetts
Creating your LLC in Massachusetts requires you to submit a completed Certificate of Organization with the Massachusetts Secretary of State. Any managing members listed in the Certificate of Organization that are foreign entities (that is, entities not organized in Massachusetts) must be qualified to transact business in Massachusetts. When submitting, the Secretary of State requires either two originals or an original and one photocopy of the Certificate of Organization.
Massachusetts does not require you to submit an Operating Agreement to form your LLC. However, it is important for every LLC to have an Operating Agreement, establishing the rules and structure of the business. The Operating Agreement is a private agreement and is not filed with the state. Read our article on LLC operating agreements for more information.
Obtain a federal employer identification number
A Federal Employer Identification Number (EIN or Tax ID) is an IRS identification number used for businesses. The most common comparison is to an individual’s Social Security Number. The EIN must be obtained by LLCs to be used when filing taxes. However, it is also often used for other important business activities, such as opening a business bank account, obtaining a loan, or paying invoices. Check out our article on Federal EIN for more information.
Meet your license and permit requirements
Your LLC may be required to obtain licenses and permits before it can legally operate in Massachusetts. There are many factors that go into determining which licenses and permits at the federal, state, and local levels are required for your business. For example, if you plan to hire employees, you may need a payroll tax registration and depending on where they are based that could have implications as well. Read our article “Understanding business licenses” for more information.
Cost to form a Massachusetts LLC
At BizFilings, we clearly outline our fees and the Massachusetts state fees. When you view our pricing to form an LLC you plainly see:
- BizFilings’ package prices. BizFilings offers three incorporation service packages from which you can choose.
- State fee for standard turn-around. Our pricing clearly shows the state fee to incorporate in Massachusetts with standard turn-around.
- Expedited turn-around. You will see the BizFilings and state fee, if any, for expedited turn-around.
- 24-hour turn-around. Massachusetts has a 24-hour filing option, which is outlined in our pricing.
- Certified copy. Our pricing also clearly displays the BizFilings and state fee, if any, for issuing a Certified Copy of the Articles of Organization.