How To Start An LLC In Massachusetts

We share step-by-step instructions for starting a successful LLC in Massachusetts. This guide teaches you everything you need to know to start your own LLC. Read on!

Start An LLC In Massachusetts

The formation of a limited liability company is the method that presents the majority of prospective business owners in Massachusetts with the least amount of complexity and difficulty when compared to the other options. 

A limited liability company (LLC) is a great choice for new businesses and companies from startups to medium-sized enterprises because it offers the same benefits and protections as larger corporations while also simplifying some rules and requirements.

This article will take you step-by-step through the process of forming a limited liability company (LLC) in the state of Massachusetts. 

But first, let’s compare Massachusetts to its neighboring states as a place to start an LLC.

StateMassachusettsNew YorkNew HampshireConnecticutUS Average
Population6,984,72319,835,9131,377,5293,605,9446,619,825
LLC Filing Fee$500$200$100$120$130.38
LLC Annual/Biennial Fee$500 (every year)$9 (every 2 years)$100 (every year)$80 (every year)$89.34 (every year)
Corporate Tax Rate8.00%6.50-7.25%7.60%7.50%5.60%
Nominal GDP per capita$91,129$93,463$70,729$82,233$64, 773.08

Before You Set Up An LLC In Massachusetts

There are a number of things you should consider before creating an LLC in Massachusetts. The following are a few highlights of those important considerations.

  • What Will You Call Your Limited Liability Company? To be legally registered, most jurisdictions require that a business’ name be distinct from others already in use. No two companies can have the same name. As a result, it is imperative that you choose a distinct name for your company before you even begin the process of forming a legal entity. Prior to registering a business, many states allow you to reserve the name for a short period of time.
  • Who Will Be Your Registered Agent? The business owner can also be the registered Agent, but if the business owner doesn’t have all the necessary knowledge, it’s usually better to hire a professional. 
ZenBusiness – $49 + state fees to register your LLC (read review)
Incfile – $0 + $50 state fees to register your LLC (read review)

How Much Does It Cost To Start An LLC In Massachusetts?

You will be required to pay certain fees in order to establish a limited liability company in the state of Massachusetts. You can find information regarding the filing fees in the bulleted point below.

  • A filing fee of $500 will be required to file Articles of Organization.
  • Name reservation for 60 days costs $30 and can be extended for another 60 days with an additional cost of $30.
  • Certified Documents Copies cost $7 and an additional $2 per page.
  • Certificate of Good Standing costs $25

Therefore, creating an LLC in Massachusetts requires that you set aside a minimum of $530 to have the LLC set up.

Steps To Start An LLC In Massachusetts

Steps to start and LLC

In the following section of the article, you will find a detailed guide that will walk you through each stage of the process of forming a Limited Liability Company (LLC) in the state of Massachusetts. Check the bulleted points below to form your LLC.

  • Pick a Name for Your LLC: The first and most critical step in forming an LLC in Massachusetts is coming up with a company name. The name you select should meet Massachusetts’ naming standards and be easily found by potential customers. You can check for name availability at the office of the Secretary of the Commonwealth of Massachusetts.
  • Find a Registered Agent in Massachusetts: A resident agent is required for all LLCs in Massachusetts. Your LLC’s primary point of contact with the state is a resident agent. In the event that your company is sued, they are also in charge of taking service of process on your behalf. Your resident agent in Massachusetts must be 18 or older and have a physical location in the state of Massachusetts. Do you need a registered agent in Massachusetts? Visit the directory of registered agents in the State to choose the one that fits your needs.
  • Certificate of Organization: In the state of Massachusetts, establishing a limited liability company (LLC) requires the submission of a Certificate of Organization to the office of the Secretary Commonwealth of Massachusetts. There is a fee of $500 associated with completing the Certificate of Organization online. You can file yours at the official website of the State.
  • Operating Agreement An operating agreement isn’t essential for a Massachusetts LLC, but it’s a good idea if you have one. It is a legal document that outlines the LLC’s ownership and operation rules. A well-written operating agreement helps avoid future misunderstandings by ensuring that all firm owners are on the same page.
  • Get an EIN: This is the abbreviation for Employers’ Identification Number, which is usually a nine-digit number assigned by the Internal Revenue Service (IRS). It is often called a Federal Tax Identification Number (FEIN), which is basically a business’s Social Security Number (FTIN). You can learn how to get an EIN on the IRS website. 
Certificate of organisation

The Forms You Need To Register An LLC In Massachusetts

You will have to fill out some forms while forming an LLC in Massachusetts. These forms can be downloaded from the official website of the State

Did You Know?

The LLC emerged as a business structure in Massachusetts in 1991 and became very popular. It combines the liability protections of a corporation with easier formation along with flexible tax and management policies. Members are taxed on their individual income, not that of the corporation when taxes pass through the business.

LLC Taxes In Massachusetts

Starting an LLC in Massachusetts means that you will pay some taxes. For income tax reasons, a single-member LLC will be disregarded as a separate entity from its owner if it is disregarded for federal tax purposes. 

Also, if it is classified as a partnership for federal tax purposes, an LLC with two or more members will be taxed as a partnership.

How Much Do LLCs Have To Pay In Taxes In Massachusetts?

Below is the breakdown of the different kinds of taxes an LLC must pay to the State and Federal. State Taxes are paid to the State of Massachusetts through the Department of Revenue, while the Federal Taxes goes to the Federation Account.

How Much State Taxes Do LLCs In Massachusetts Have To Pay?

The amount of State taxes required by LLC to pay is stated under the following subheadings.

Sales Tax For LLC In Massachusetts

You may be required to pay sales tax if you offer physical goods or certain services. This sales tax is paid at the point of purchase. The current rate of sales tax in Massachusetts is 6.25 percent.

Income Tax In Massachusetts

As a company owner, if your gross income is $8,000 or more, you must pay Massachusetts income tax on any money you pay to yourself. 

Your personal tax return receives a portion of these earnings. With regular allowances and deductions, you’ll be able to save money on your taxes in Massachusetts.

Use Tax In Massachusetts

This tax may be required if you buy physical goods outside of Massachusetts and intend to use them in Massachusetts. The Massachusetts Internal revenue Service collects this tax. In Massachusetts, the current rate for use tax is 6.25percent.

How Much In Federal Taxes Do LLCs In Massachusetts Have To Pay?

The self-employment tax must be paid by all LLC members and managers who take earnings from the company. Federal Insurance Contributions Act (FICA) administers this levy, which goes toward Social Security, Medicare, and other government-funded programs. The self-employment tax rate now stands at 15.3%.

Is Massachusetts A Good Place To Start An LLC?

Absolutely yes, it provides the conditions necessary for the expansion of firms. The only downside is the relatively high cost of starting an LLC. 

Corporate Tax Rate Massachusetts

How Long To Form An LLC In Massachusetts

In Massachusetts, establishing a limited liability company (LLC) can be done in a matter of minutes. If the required documents are prepared in advance and ready to be submitted, then you may not need more than 10 minutes to get the business in place.

How Much Does It Cost To Run An LLC In Massachusetts

In the State of Massachusetts, starting a limited liability company (LLC) comes with hefty financial obligations. LLCs are required to pay a formation cost of $500 as well as an annual report charge of $500.

What To Do After Formation?

Having your business registered is just the starting point. There is a need for you to do some more things to get the business going. Below are some necessary things you must add to the business.

  • Create a logo: Your business should have a branded logo.
  • Build a website/eCommerce store: To have an online presence, you should create a website or an eCommerce store for the business.
  • Bank account: For ease of transaction, your business will need a Bank account
  • Business insurance: As a risk preventive measure, your business should be insured.
  • Annual reports: To keep your registration active with the State, you must file Annual reports of the Business.
  • Other suggestions Customers relationship management and marketing tools should be procured to make relationships with your customers easy and worthwhile.

Businesses can only grow if all necessary efforts and tools are put in place. It is, therefore imperative to provide the resources and tools listed above for your business.

Resources To Start A Successful LLC In Massachusetts

If you go to the official website of the state of Massachusetts, you will be able to get all the information that you require to successfully register an LLC in that state. 

Also, you can get some additional information and resources by conducting a thorough search on the internet.

Start Marketing Your LLC In Massachusetts

To get more people to see your business, you may be required to outsource the marketing of your limited liability company (LLC) in the state of Massachusetts to either an online or an offline marketing firm in order to have any chance of having your marketing efforts be successful. 

You can also create social media accounts for your company, on which you can run sponsored adverts or unpaid advertisements, depending on which you like.

Marketing is of the utmost importance because, if it is not done, your company will not be able to command the sorts of coverage that you want.

How To Dissolve An LLC In Massachusetts

To dissolve an LLC in Massachusetts, you should document a Certificate of Cancellation through the workplace of the Secretary to the Commonwealth of Massachusetts’ Corporations Division. 

The certificate should include the name of the LLC, Federal Employer Identity number, the date the Article of Organization was documented, effective cancellation date, and justification behind the cancellation.

Conclusion

This article covers practically every aspect of the procedures necessary to establish a limited liability company (LLC) in the state of Massachusetts. 

The one and only exception to this rule is information on how to start an LLC in Massachusetts for free. This is due to the fact that operating a limited liability company (LLC) cannot be done at no cost, but you can bring the costs down if you want. 

You will need to conduct part of the work yourself in order to cut costs, such as acting as the business agent for yourself. We hope this article helps you on your way to creating your own LLC.

Frequently Asked Questions (FAQ)

It takes minutes to set up an LLC in the State of Massachusetts. Within 10 minutes, your business can be up and running if you have all the necessary documents available.

An LLC does not pay Tax if it is owned as a sole proprietorship. As for partnership, each LLC member pays taxes on his or her individual income tax return based on the LLC's profits.

An LLC does not expire but requires the filing of Annual returns to remain active

Yes, by following these 2 steps Get a Certificate of Good Standing from the state where your business is registered. After Articles of Domestication are sent to the state of Massachusetts, the foreign corporation becomes a Massachusetts corporation.

You have to file Annual Returns every year to keep your Massachusetts LLC active.

Author

Matija

Matija

Amazing content is the core of what we do. With more than 5 years of experience in branding, name development, and business, Matija helps create and manage content production.

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