Like other places, Massachusetts experienced a rise in new businesses during the pandemic. Now is a good time for you to start your Massachusetts LLC. Our guide has simple steps to help you begin.
Step 1: Name your Massachusetts LLC
Step 2: Pick a Registered Agent
Step 3: Submit an Articles of Organization
Step 4: Received a Certificate From the State
Step 5: Create an Operating Agreement
Step 6: Get an Employer Identification Number
Step 1: Name your Massachusetts LLC
When starting a business, selecting a name is the first step before registering your LLC.
Here are the essential requirements to consider:
- Your business name should include “limited liability company,” “LLC,” or “L.L.C.”
- Ensure your name is unique and not already in use in the state. Check the Secretary of State’s website to verify availability.
- Avoid using terms reserved for government agencies (e.g., State Department, CIA).
- Words like “bank” or “lawyer” might need extra documentation.
Refer to this link for the list of Massachusetts’ naming regulations.
Additional Consideration :
Website Domain: Check if your desired website name is available before finalizing your LLC name. Even if you’re planning to wait to create a website, securing the domain name early on is brilliant.
Reserve your name: If you still need to prepare to register your LLC but are worried about someone else taking your chosen name, you can reserve it for a small fee. In Massachusetts, you can reserve a name for up to 60 days by submitting the required form and payment to the state authority.
Step 2: Pick a Registered Agent
In Massachusetts, you must pick a registered agent for your LLC. This individual or entity can receive legal documents and notices for your business.
A registered agent can be a person or a company that provides registered agent services. They need to fulfill these requirements:
- The entity offering registered agent services must have a physical address in Massachusetts.
- The agent should be present and available during standard business hours to accept documents.
Step 3: Submit an Articles of Organization
You must complete the Massachusetts Certificate of Organization form to establish your company as an LLC in Massachusetts officially. This form collects details about your LLC, including its name, office address, resident agent’s information, and business operation.
Submit your forms to the Secretary of the Commonwealth of Massachusetts. You can file online or download the Certificate of Organization and mail it to the following address:
One Ashburton Place,
Room 1717,
Boston,
Massachusetts 02108-1512
Submitting the Certificate of Organization requires a $500 filing fee. For mail filing, ensure your check is payable to “The Commonwealth of Massachusetts.”
Upon approval of your certificate by the Secretary of the Commonwealth, your LLC is officially recognized as a business entity in Massachusetts.
Step 4: Received a Certificate From the State
Once the formation documents for an LLC are filed and approved by the state, the state typically issues a certificate of formation or similar document confirming the LLC’s existence. This certificate is essential for the LLC to conduct business legally.
With this certificate, the LLC can obtain an Employer Identification Number (EIN) from the IRS, apply for necessary business licenses and permits, and open a business bank account. It proves that the LLC is a legally recognized entity within the state.
Step 5: Create an Operating Agreement
Having an operating agreement for your LLC is like having a rulebook that explains how your business will run. Even though Massachusetts doesn’t make it a must, having one is essential. It helps settle disagreements and avoids potential problems. Without it, if there’s a dispute, the courts will make decisions based on state rules, which might not be best for your LLC and its members. So, having an explicit written operating agreement can save a lot of problems in the future.
LLC operating agreements typically cover:
- Profit and Loss Distributions specify how LLC members will divide profits and losses.
- Management and Voting Powers: They outline who manages the LLC and how major decisions are made, including voting rights and procedures.
- Purpose of the Business: They define the primary objectives and goals of the LLC.
- Liability Clauses: They address the limited liability protection afforded to members and outline any exceptions or conditions.
- Changes to Membership Structure: How do we handle membership changes, such as adding or removing members?
- Capital Contributions specify each member’s initial and ongoing financial contributions to the LLC.
- Information about the Certificate of Organization: They may include details about the LLC’s formation, such as the filing date and the state where it was registered.
- Dissolution Procedures: They provide guidelines for the dissolution of the LLC if the members decide to end the business.
Step 6: Get an Employer Identification Number
An Employer Identification Number, also known as a federal EIN (FEIN) or federal tax ID number (FTIN), is essential for businesses. While single-member LLCs without employees can use a Social Security number, getting an EIN is better because it keeps your information private. EINs are free and easy to get from the IRS website.
Follow these steps to start your business in Massachusetts quickly and easily. This guide will simplify and improve the process of setting up your LLC.
LLC State Guides
How To Start an LLC in Massachusetts FAQs
What’s the fee for creating an LLC in Massachusetts?
You must pay $500 to file the Massachusetts LLC Certificate of Organization. If filing online or by fax, an additional $20 is necessary.
How Does Massachusetts Tax an LLC?
Massachusetts taxes LLCs in the same manner as they are taxed federally. LLCs are taxed as “pass-through” entities unless designated as C-corporations.
Why is Having an Operating Agreement Important For My Massachusetts LLC?
An Operating Agreement helps clarify ownership, business management, profit distribution, and other critical aspects of your LLC’s operation. While not required by the state, having one can prevent disputes and protect your business interests.
What Advantages Come With Starting an LLC?
Starting an LLC offers an affordable option for starting a business. LLCs typically have a flexible structure and fewer record-keeping obligations compared to corporations. Moreover, they provide limited liability protection for personal assets and operate as pass-through entities for tax purposes.
