How to Form a Massachusetts LLC
By Bazal Razzaq
Updated: September 04, 2023, 12:30pm
Editorial Note: We earn a commission if you use the services recommended on this page. Commissions do not affect our opinions or recommendations.
- Pick a name for your Massachusetts LLC
- Create a business plan
- Appoint a registered agent for your LLC
- Prepare and file your Articles of Organization report with the Secretary of State
- Obtain an EIN with the IRS
- Set an Operating Agreement
- File your annual report
- Final Word
- How To Form An LLC In 50 States
- Frequently Asked Questions (FAQs)
Are you looking to form an LLC in the “East Silicon Valley” with the most amazing startup ecosystem? Well, you’re at the right place! Our detailed guide will help you every step of the way.
#1 Pick a name for your Massachusetts LLC
The very first step in this LLC formation process would be to pick a suitable name for your company. Your best bet would be to shortlist a unique, distinctive, and legally compliant name that best reflects your brand’s identity.
- Make sure that the name you select for your Massachusetts LLC needs to be different from existing business names registered with the Secretary of Commonwealth of Massachusetts website. This includes corporations, partnerships, LLCs, and all other types of business entities in the State. You can use Massachusetts’s business entity name database to check for availability. You can also check the U.S. Patent and Trademark Office’s site for federal trademarks.
- Your chosen LLC’s name should contain a proper designator to indicate its limited liability status. You can use one of the following abbreviations:
- Limited Liability Company
- Limited Company
- LLC(Most entrepreneurs stick with this one)
- Avoid using certain words related to regulated industries (like “bank,” “insurance,” and “doctor”), as they may require additional approval, documentation, or compliance with specific rules and regulations.
- Also, it’s best not to avoid using words related to government agencies like the State Department, CIA, FBI, Treasury, etc., in your LLC name since they can imply that your business is, in fact, something it’s really not.
- It goes without saying at this point, but your chosen name shouldn’t contain any vulgar, obscene, or forbidden terms as per the state regulations.
- If you plan to use the name of a living individual in your LLC’s name, you will require their written consent.
- Also, if your LLC intends to provide professional services, such as legal or medical services, additional requirements and restrictions may apply, and then legally, it registers as a PLLC. Similarly, you may need to use a specific type of professional entity designation like “Professional Limited Liability Company” or “P.L.L.C.”
Still confused? Here’s a complete list of Massachusetts naming rules and regulations.
If you already have an amazing name in mind but aren’t ready to form your LLC just yet, you always have the option to reserve it by filing an Application for Reservation of Name. The filing fee is $60, and your chosen name will be reserved for up to 30 days. Furthermore, if you wish to extend the waiting period, you simply need to pay an additional fee of $30 before the initial registration of 60 days expires. Doing this will let you hold your name for 60 days more.
Note: Remember that you’re under no obligation to use your official LLC name(one that’s listed in your Articles of Organization form and other relevant legal paperwork) in the real world. You always have the option to use an Assumed Name Or Fictitious Name, more popularly known as a DBA (doing business as).
Since the process of filing a DBA designation in the State of Massachusetts takes place at the state level, there’s no single form available. To obtain specific instructions, LLC owners need to consult with the local county clerks or city offices.
Similarly, the filing process is also local in nature, so there’s no set of instructions or procedures one can follow. However, there are certain details that are typically requested by government authorities when applying for a DBA, such as,
- the name of the filer,
- the current or official name of the LLC
- The names and addresses of LLC members/owners,
- the address of the principal place of business,
- The final DBA name.
#2 Create a business plan
While drafting a business plan is not an obligatory requirement in Massachusetts, we strongly suggest creating one. Why? Because a well-drafted business plan is like a roadmap for your LLC’s success.
Here’s what you can include in your business plan,
- Summary: This will be a brief overview of your business idea, main goals, and key points from the rest of the plan. It’s usually written at the end but specified at the top.
- Business Description: Explain what your business does, its mission, and the problem it solves. Describe your products or services and their unique features.
- Market Analysis: Research your target market. Who are your customers? What are their needs? Study your competition to understand their strengths and weaknesses.
- Competitive Analysis: Detail your competitors and their offerings. Highlight what sets your business apart and how you plan to gain a competitive edge.
- Marketing and Sales Strategy: Explain how you’ll attract and retain customers. Describe your pricing strategy, promotional efforts, and distribution channels.
- Organizational Structure: Outline your company’s structure. Who are the key team members, their roles and responsibilities? If applicable, mention your advisors or consultants.
- Product or Service Line: Provide more in-depth information about your products or services. How will they benefit your customers? Are there any future plans for expansion?
- Funding Request: If you’re seeking funding from the investors, mention how much you need and how you intend to use it.
- Exit Strategy: If applicable, outline how you plan to exit the business, whether through a sale, merger, or other means.
#3 Appoint a registered agent for your LLC
For the next step, you need to pick a statutory agent for your business. A registered agent is an individual or entity authorized to receive and accept official, financial, and legal documentation and notices for your LLC. It can include everything from government correspondence to lawsuit notices and tax notifications. A responsible agent is also liable to handle your paperwork and then send it to the appropriate members/owners.
You usually have the following options for an agent,
- Be your own registered agent.
- Another business entity.
- Hire a registered agent service.
- An individual within the company(manager/employee/member)
- An Attorney, lawyer, or legal facility.
The list doesn’t end here. To be a legally compliant statutory agent for your Massachusetts LLC, the individual/business entity needs to,
- Have a physical street address in Hawaii.
- Be a resident of the State.
- Be at least 18 years old.
- Have the legal authority to accept legal documents on behalf of the company and forward them to the appropriate parties within the company.
- Be available during regular business hours to receive legal documents.
- Consent to act as the LLC’s registered agent.
Note: A PO Box is not sufficient as a business address.
#4 Prepare and file your Articles of Organization report with the Secretary of State
For the next step, you need to prepare and submit your Certificate of Organization document to the Secretary of the Commonwealth. It’s basically a legal document that includes all the basic but necessary information about your company.
We’ve listed general points that are present in almost all variations of Certificate of Organization,
- LLC Name
- Registered Agent: The name, contact details, and physical address of your LLC’s registered agent.
- Principal Place of Business: The primary location where your LLC conducts business.
- Duration: Mention whether your LLC will have a specific end date or if it’s perpetual.
- Purpose: The general purpose of your LLC’s business activities.
- Management Structure: Whether your LLC will be member-managed or manager-managed.
- Management Information: If manager-managed, list the names and addresses of all managers.
- Organizer Information: The names, contact details, and addresses of the individuals organizing the LLC.
- Effective Date: State the date when the Articles of Organization will become effective (can be the filing date).
- Signature: Sign and date the document, along with the organizers’ names and titles.
- Filing Fee: Include the required filing fee.
- Additional Provisions: Any optional provisions or clauses specific to your LLC.
William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Room 1717
Boston, MA 02108
Fax: (617) 624-3891
The state filing cost is $500, which is payable to The Commonwealth of Massachusetts and is nonrefundable. Also, if you’re planning to fax your application, then don’t forget to include a cover sheet.
For Foreign LLCs, you need to pay a $500 fee and complete the Certificate of Registration. Along with this application, they need to provide either a Certificate of Legal Existence or a Certificate of Good Standing. While foreign entities do have the option to submit their paperwork via fax, it’s important to note that online submission is not permitted for this process.
#5 Obtain an EIN with the IRS
A federal employer identification number(EIN) is a unique tax identification number the Internal Revenue Service (IRS) assigns to businesses, including corporations, partnerships, LLCs, sole proprietors, and other entities. It identifies your LLC for taxation purposes and also keeps track of your tax reporting. You can think of it like a Social Security Number(SSN) for your company.
You need this nine-digit number if you plan on,
- Hiring employees for your LLC
- Opening a professional business bank account
- Getting funding/business loan
- Conducting business with vendors
- Apply for different business licenses and permits
- Handle and pay your state and federal taxes to the government
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
There is no filing fee.
#6 Set an Operating Agreement
While creating an operating agreement isn’t a legal requirement in the State of Massachusetts, drafting one just in case comes with multiple benefits and no cons. It’s basically a legal document that outlines the internal rules, structure, and management procedures of your LLC. It is typically created and agreed upon by the LLC’s members/owners.
Here’s what you can include in your Massachusetts LLC operating agreement,
- Name and main address of the LLC
- How long the LLC will exist
- Name and address of the registered agent
- Details about the Articles of Organization
- The main purpose of your LLC
- Members/owners and their shares/contribution
- Allocation of profits and losses.
- The whole process outlines how new members will join, and old members will leave
- Meetings and Voting Rights
- How the LLC is run
- Dissolution and Winding Up
- Indemnification and liability clauses
- Dissolution and winding up
At the risk of sounding repetitive, we yet again recommend creating one because, in the absence of an agreement, the courts make their decisions on the basis of the state laws, which may or may not align with the LLC’s best interests.
#7 File your annual report
In Massachusetts, LLCs need to submit an annual report(statement of information) to the Corporations Division within the Secretary of the Commonwealth’s office.
You have the option to submit it online, by mail, via fax (with a cover sheet), or in person. The annual report fee is $500, or $520 for those opting for hard copy filings. This fee is due annually on the anniversary of your LLC’s registration with the State.
Once your LLC is registered, don’t just sit pretty just yet! Why? Because you’re finally authorized to complete the following tasks,
- Open a business bank account for your LLC
- Apply for a business credit card.
- Apply for necessary licenses and permits.
- Purchase insurance for your business.
- Protect your name and logo with a trademark.
Also, if you plan on hiring employees for your Massachusetts LLC, you need to stay compliant with the local state laws and focus on doing the following,
- Ask your employees to fill out the Employee Eligibility Form.
- Set up a process for the collection and payment of taxes.
- Make sure you have workers’ compensation insurance
- Report to the State about the “new hires” within 20 days of hiring them.
- Pay unemployment taxes.
Lastly, always make sure that your LLC is legally compliant and in “active” status on the State website.
And that’s a wrap! That was all you needed to know before forming an LLC in the Bay State!
Frequently Asked Questions
An LLC, or Limited Liability Company, offers the benefits of both a corporation and a sole proprietorship/partnership. It provides limited liability protection for owners (members) and flexibility in management. Choosing an LLC in Massachusetts can protect your personal assets from business debts and legal liabilities while simplifying administrative requirements.
The Secretary of the Commonwealth’s website, local Small Business Development Centers, and legal or financial advisors can provide valuable guidance and resources for running your Massachusetts LLC successfully.
A Registered Agent is a person or entity responsible for receiving legal documents and official mail on behalf of your LLC. In Massachusetts, you must appoint a registered agent when forming an LLC. This agent ensures you receive important legal notices.