Massachusetts Business Attorney · Business Law
An LLC is still the most popular structure for new Massachusetts businesses. It’s flexible and quick to set up, and it separates business debts from your personal assets. Here’s what forming one involves today.
Step 1: Pick a name and a resident agent
Your LLC’s name must be distinguishable from other entities on file with the Secretary of the Commonwealth, and it must include “LLC” or similar. Every Massachusetts LLC also needs a resident agent with a Massachusetts address to receive legal papers.
Step 2: File a Certificate of Organization
You file online with the Corporations Division. The filing fee is $500. The certificate names the LLC, its address, its business purpose, its resident agent, and at least one manager or person authorized to sign documents.
Step 3: Get an EIN and open a business bank account
Apply for a free Employer Identification Number from the IRS. Use it to open a bank account in the LLC’s name. Keeping business money separate is one of the most important ways to preserve your liability protection.
Step 4: Put an operating agreement in writing
Massachusetts doesn’t require one, but an operating agreement is where the real protection lives. It covers who owns what, who makes decisions, how profits are split, and what happens if a member leaves or dies.
Step 5: Register for taxes and licenses
Register with the Massachusetts DOR through MassTaxConnect if you’ll collect sales tax or have employees. Check your city or town for any local licenses. If the LLC will operate under a name other than its registered name, file a business certificate (DBA) with the city or town clerk.
Every year after that
- Annual report: Due each year on the anniversary of your filing date, also $500. Missing two years in a row can lead to administrative dissolution by the Secretary of the Commonwealth; reinstatement is possible but adds fees and paperwork.
- Keep records current: Update the Secretary of the Commonwealth when your managers, address or resident agent change. Changes to the resident agent or office can be filed online at no charge ($25 on paper); other changes are made by amendment ($100).
- Taxes: By default, a single-member LLC is disregarded for income tax purposes, so an individual owner reports its income much like a sole proprietorship, though the LLC still uses its own EIN for payroll taxes. A multi-member LLC is taxed as a partnership. Either can elect to be taxed as a corporation, including as an S corporation, and Massachusetts follows the federal choice. Massachusetts does tax S corporations with $6 million or more in total receipts at the entity level.
The tax information above is general information, not tax advice. Talk with an accountant or tax advisor about how your LLC should be taxed.
One filing you can skip: FinCEN now exempts companies formed in the U.S. from federal beneficial ownership (BOI) reporting.
Is an LLC right for you?
Our earlier article, LLC for your new Massachusetts business?, explains how an LLC limits personal liability and where that protection has limits. To set up your LLC correctly from day one, contact our office.
About the Author
Richard Alan Gaudet, Esq. is a Massachusetts attorney at the Law Offices of Richard Alan Gaudet, LLC in Middleton, Massachusetts, who advises clients on LLC formation, operating agreements and business law. His practice focuses on professional license defense, business law and litigation, family law, and landlord representation, serving clients across Northern, Eastern, and Central Massachusetts. Reach him at 978-273-8337 or rgaudet@gaudetlawoffice.com. Office: 35 Village Rd., Ste 100, Middleton, MA 01949.
ABOUT THIS ARTICLE
This article was prepared by a Massachusetts attorney and is provided solely for general informational and educational purposes directed to members of the general public. It does not constitute legal advice and does not create an attorney-client relationship. The law applicable to any particular situation depends on the specific facts and circumstances of that matter. Readers are encouraged to seek the advice of a licensed Massachusetts attorney before taking any action.
