establishing an llc in massachusetts [You Asked]



Last updated : Sept 2, 2022
Written by : Aldo Plonka
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establishing an llc in massachusetts

How much does it cost to start an LLC in Massachusetts?

The costs to start an LLC in Massachusetts are significant. LLCs pay a $500 formation fee and $500 annual report fee. Most corporations pay only $275 to get started then $125 per year. Massachusetts registered agent and resident agent are synonymous.

How do I start an LLC in Massachusetts?

  1. Debts.
  2. Obligations.
  3. Liabilities.

Do LLC pay taxes in Massachusetts?

No Corporate/Franchise Taxes Massachusetts does not require LLCs to pay a corporate or franchise tax. The only taxes owed on the LLC's revenue is the personal income tax paid by the members.

How long does it take for an LLC to be approved in Massachusetts?

The Commonwealth of Massachusetts will process and approve your LLC in 24 to 36 hours. They will not mail anything back once your LLC is approved.

What is the disadvantage of an LLC?

Disadvantages of creating an LLC States charge an initial formation fee. Many states also impose ongoing fees, such as annual report and/or franchise tax fees. Check with your Secretary of State's office. Transferable ownership. Ownership in an LLC is often harder to transfer than with a corporation.

What are the benefits of an LLC in Massachusetts?

Benefits of starting a Massachusetts LLC: Limits and separates your personal liability from your business liability and debts. Simple tax filing and potential advantages for tax treatment. Strong support for small local businesses. Numerous business tax credits.

Do LLCs pay taxes?

All of the profits and losses of the LLC "pass through" the business to the LLC owners (called members), who report this information on their personal tax returns. The LLC itself does not pay federal income taxes, although some states impose an annual tax on LLCs.

What are the benefits of an LLC?

  • Limited Personal Liability.
  • Less Paperwork.
  • Tax Advantages of an LLC.
  • Ownership Flexibility.
  • Management Flexibility.
  • Flexible Profit Distributions.

What is better LLC or INC?

In general, corporations have a more standardized and rigid operating structure and more reporting and recordkeeping requirements than LLCs. LLC owners have greater flexibility in how they run their business. Taxwise, LLCs have more options than corporations.

Do you have to renew LLC Every year in Massachusetts?

The State of Massachusetts requires you to file an annual report for your LLC. You can mail in the report or complete it online at the Corporations Division website. You'll need a customer ID number and PIN to access the online form.

What should I name my LLC?

  • Make It Legal. The most important thing when you're choosing an LLC name is to make sure it's legal.
  • Make It Memorable. You want your LLC name to be something people can remember.
  • Make It Meaningful.
  • Make It Original.
  • Make It Distinctive.
  • Make It Domain Name Ready.
  • Make It Social Media Friendly.

Can I be my own registered agent in Massachusetts?

Can I Be My Own Registered Agent In Massachusetts? Yes, you can be your own registered agent in Massachusetts. However, after considering the registered agent requirements most business owners elect to hire a registered agent service instead.

Does an LLC need an EIN?

An LLC will need an EIN if it has any employees or if it will be required to file any of the excise tax forms listed below. Most new single-member LLCs classified as disregarded entities will need to obtain an EIN. An LLC applies for an EIN by filing Form SS-4, Application for Employer Identification Number.

What is the difference between LLP and LLC?

An LLC is a tightly held business entity that incorporates the qualities of a corporation and a partnership. An LLP is a type of partnership in which participants' liability is fixed to the amount of money they invest. Here, directors are the owners of the firm. Here, partners are the owners of the firm.

What is a sole proprietorship vs LLC?

An LLC exists separately from its owners—known as members. However, members are not personally responsible for business debts and liabilities. Instead, the LLC is responsible. A sole proprietorship is an unincorporated business owned and run by one person.

Why is LLC may not beneficial?

Profits subject to social security and medicare taxes. In some circumstances, owners of an LLC may end up paying more taxes than owners of a corporation. Salaries and profits of an LLC are subject to self-employment taxes, currently equal to a combined 15.3%.

Why an LLC is the best option?

An LLC lets you take advantage of the benefits of both the corporation and partnership business structures. LLCs protect you from personal liability in most instances, your personal assets — like your vehicle, house, and savings accounts — won't be at risk in case your LLC faces bankruptcy or lawsuits.

Why are LLC so popular?

Limited Liability The key advantage of an LLC for small business is it protects business owners' personal assets from a company's debts, as would a corporation.

How do I get a tax ID number in Massachusetts?

Get Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can get Forms W-7 and SS-4 from the IRS by calling 1-800-TAX-FORM (1-800-829- 3676) or from the IRS's Internet Web Site www.irs.gov.

How do I apply for LLC?

  1. Choose a Business Name.
  2. Check the Availability of Your Business Name.
  3. Register a DBA Name.
  4. File Your LLC's Articles of Organization.
  5. Designate a Registered Agent.
  6. Draft an Operating Agreement.
  7. Fulfill the Publication Requirement.
  8. Obtain Business Permits and Licenses.


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establishing an llc in massachusetts


Comment by Abraham Savich

are you wondering how to start an LLC in Massachusetts today you will learn about the most common ways to start your business including the correct forms you'll need how to register your LLC critical naming requirements and all other vital tips and tricks then as a bonus later in the video I will reveal a trustworthy registered agent who will help set up your LLC for free so make sure to stick with me until the end the state of Massachusetts like other states has several specific LLC requirements there are three main ways you can start an LLC in Massachusetts first is the DIY or do-it-yourself process where you mostly depend on Massachusetts State's website the second way is hiring a professional service that practically offers more efficiency and Security in a process of creating your LLC while the third one is hiring an attorney we will skip the attorney hiring portion because that's expensive and most business owners won't need that service first let's take a look at the steps required for starting an LLC on your own step one choose a name for your Massachusetts LLC under Massachusetts law an LLC name must contain the words limited liability company limited company or the abbreviations LLC LC LLC or LC the name may contain the name of a member or manager of the LLC your llc's name cannot be deceptively similar to the names of other business entities already on file with the secretary of the Commonwealth corporations division names may be checked for availability by searching the Massachusetts name database you may reserve a name for 60 days by filing an application for reservation of name the filing fee is thirty dollars the reservation can be extended by an additional 60 days by paying an additional 30 fee before the initial 60-day period expires the application must be filed by mail with the secretary of the Commonwealth corporations division Step 2 Massachusetts requires LLC to have a registered agent every Massachusetts LLC must have an agent for service of process in the state this is an individual or business entity that agrees to accept legal papers on the llc's behalf if someone sues the company a registered agent can be an individual who resides in Massachusetts or a domestic or foreign corporation authorized to do business in Massachusetts if it's a corporation its articles must authorize it to act as an agent the registered agent must have a physical street address in Massachusetts step 3 file articles of organization with the Massachusetts Secretary of State after that you must file the certificate of formation with the Massachusetts Secretary of State's business entities Division and the office of the judge of probate to officially incorporate a domestic Massachusetts limited liability company the Massachusetts state filing cost for LLCs is 500 for both domestic LLCs and for foreign llc's basically a domestic LLC means that you are already a resident of Massachusetts and you want to build a business in Massachusetts foreign LLC on the other hand is for people living outside Massachusetts but wanting to start a business or a franchise of their business in Massachusetts with that said most businesses would be applying for a domestic LLC you can file the certificate of formation online or by mailing it to the Secretary of State expect the LLC certification process to take approximately two weeks this is three to four days for the judge of probate and 10 days for the Secretary of State step 4 prepare an operating agreement now an operating agreement is a good idea to have in place with the other members if your LLC has more than one member although a limited liability company operating agreement is not necessary for Massachusetts your operating agreement should clarify how your company or business will handle big picture issues such as allocating earnings and losses and dissolving the company your operating agreement should also cover the transfer of membership interest profits or losses and distributions initial Investments decision-making Powers voting rights and management and lastly dissolving the business step 5 of file annual reports all llc's doing business in Massachusetts must file an annual report with the secretary of the Commonwealth corporations division domestic llc's file a limited liability annual report foreign llc's file a foreign limited liability annual report the report must contain the same information as the certificate of organization the report must be filed by the llc's anniversary date the report can be filed online or by mail the filing fee is five hundred dollars step 6 obtain an EIN an EIN or employer identification number is a federal tax ID issued by the IRS your EIN is used by them to readily identify your firm and tax filings all Massachusetts firms pay a business privilege tax and the state requires you to have an EIN to file you may also be required to provide your EIN when opening a bank account or applying for municipal permits or licenses obtaining an EIN is a slightly longer process compared to their previous steps I'm sure you know anything to do with the IRS is confusing first you have to have complete knowledge of your LLC such as your company information managing member information business address business information company details and even critical information regarding vehicular assets and federal excise taxes this is another reason why getting a professional registered agent is way more convenient as they can do this for you as part of their service now let's talk about the second option to form an LLC and that is hiring a professional formation service professional formation services do all the steps you should be doing on your own from filing necessary forms to acting as your registered agent you usually have to allocate a specific budget for this option as I already mentioned earlier Inc file is one of the best companies out there to help you form your LLC you can click on the link in the description to get access to this deal Inc file is one of a kind as it offers a free package with services such as preparing and filing your articles of organization well you still have to pay 237 dollars for the state fees which you would have to do anyway if you chose the DIY option but looking at the bigger picture all other companies will still charge their service fee on top of State filing fees Inc file does not collect this fee this plan already includes a free registered agent for your first year of subscription and 119 annually moving forward if you decide to continue the service after the first year Inc file's next packages are the gold and platinum packages which both have package fees already on top of the 237 dollar State fee each package has its own set of services which are all worthy of the subscription you are paying for the gold package offers you the benefits of filing reports and taxes for your LLC every year USA LLCs are required to file a state annual report this report is essentially an information update of your file so that the state knows who is now in charge and how to contact your company USA LLCs are also required to file state tax returns to make matters


Thanks for your comment Abraham Savich, have a nice day.
- Aldo Plonka, Staff Member


Comment by Dorthy

hey my name is eric in today's video we're talking about starting an llc in massachusetts so in this video i'm not only going to show you three different ways you can do this but also three things that you should be aware of that may create potential cracks in your llc now if you're not familiar with the terms such as piercing the corporate veil registered agents or in your case in massachusetts it's called the resident agent or the term co-mingling funds you're definitely going to want to watch this video because i'm not only going to show you how you can set up an llc but make sure that it's actually protected and doing what it's supposed to do for you and your business now the first screen that we're on here comes from nolo.com this is just a very reputable website written by attorneys and you can see that it's talking about the current filing fee of a certificate of organization so setting up for an llc in massachusetts is 500 by mail and 520 for an online filing so it is an extra 20 to file online which is ridiculous because it should cost less you would think but i just wanted you to know that that fee no matter what route you go to set up your llc in massachusetts you're going to pay that fee so if you do it yourself through their state website through an online legal tool or even if you go through an attorney they may bake that fee into their cost structure but you're going to pay that 500 now if you want to do it yourself going through the state website this is the url that you would do that through uh know that all resources that i'm mentioning in this video are in the description below so you can go to the description and click through to get any of these resources if any of them are paid links i will let you know that in advance but my goal with this video is not to steer you necessarily in one direction or the other but to give you all the information so that you can make the best decision for yourself now if you're looking at this the two methods you can go here is file online which in my opinion is one of the most difficult states to do this within i've never come across this before but you can see here it says if you don't have a cid and pin please contact our office with their email address so basically you have to email their office then get a customer id number and pin number and then be able to go through the process and it is going to cost you an extra 20 bucks if you go online so some people may be deterred by that especially because it's talking about like you need a browser capable of 128-bit encryption blah blah there's a lot of hoops to jump through so some people may want to go the route of the pdf here now the interesting thing though about this pdf is it's very vague with the amount of information and guidance it gives you so if we scroll down and we look at section 5 here it says the name and street address of the resident agent in the commonwealth so i don't like the fact that they just kind of just gloss over this and say like who is your resident agent and the reason for that is if you don't have a proper resident agent set up for your business and i'll explain what all that is in a minute i can create what i was talking about earlier is cracks in your llc so this might be a good time to explain what an llc is and what it is not you probably understand but sometimes people get a little bit confused some people think they're going to set up an llc for tax purposes there's no tax advantage for setting up an llc the advantage of setting up an llc is limiting your liability so when you have your business you have your business assets and then you also have your personal assets so in the business you know it could be the office space the income that you're generating etc but then on your personal side it could be your personal home personal bank account cars all those things so when you set up an llc what you're doing is you're drawing a division between your personal and business assets now if you were to be sued for some reason the attorney who is suing you is going to try to find cracks in your llc and you might remember earlier i talked about a term called piercing the corporate veil so that's like the technical legal jargon but basically what they're trying to do is find a crack in your llc and one of the ways they may be able to do that is if you don't have a proper resident agent set up for your llc and one of the things i don't like by going through the state website is they just kind of really gloss over things they just say you know what's the name street address of the resident agent in the commonwealth to me that's kind of doing a disservice to the person getting set up because it's not explaining what the resident agent is so why don't we take a look at what a registered agent is so if we go to this uh this blog post here from inkfile which is an online legal tool that you can set up within llc and we scroll down a little bit this is really helpful here so down here it says are there other names for a registered agent so it's known by different names in different states in massachusetts as we saw it is called a resident agent that you can see right here so if we go back here you can see that that is mentioned as well here some states call it a statutory agent agent of for services of processor commercial regis registered agent so what does that registered agent actually do in your case resident agent official letters and correspondence from your secretary of state so any kind of information that's coming through they kind of act as a third-party go-between between you and the state service of process notices so if your corporation or llc is sued or needs to appear in court for example so if an attorney is suing your company because their client slipped and fell at your business or fill in the blank the million ways you can get sued uh they are going to make sure that you're showing up and getting that documentation uh the third uh section here official federal government correspondents information notifications fourth bullet point tax forms and requests for payment and fifth bullet point request to complete permits company filings or reports so what that registered agent is doing is they're just making sure that you're compliant and you know crossing your t's dotting your eyes for your llc so the reason that's important too is you want a registered agent that is within the state lines so in your case you want to make sure that that resident agent i should be saying is in your state and i really just don't like the fact that they just kind of leave this very vague right so a lot of people they may end up like filling out section five here and saying you know it's my cousin sarah she's my resident agent because i'm gonna save a few dollars and i'm gonna put her information in here but she actually doesn't know what she's doing as resident agent maybe she's not forwarding you the correspondence or making sure that you're you know keeping up on your annual reports and when that happens what can happen is you have a crack in your llc so then when that attorney comes after your business what they'r


Thanks Dorthy your participation is very much appreciated
- Aldo Plonka


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