How to Start an LLC in Massachusetts: Step By Step Guide

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A limited liability company is a legal way to structure a business.

Moreover, any business owner who seeks to limit their liability for business debts and lawsuits should consider forming an LLC.

As a new LLC business owner in Massachusetts, there are procedures and steps to setting up an LLC

These procedures include everything that will keep your business up and running. 

So in this article, you will learn about the ultimate guide on how to start an LLC in Massachusetts with ease. 

How To Start An LLC in Massachusetts

Here is a step-by-step guide on how to start an LLC in Massachusetts. 

Here are the most straightforward steps involved in forming your LLC in Massachusetts: 

  • Choose a Name for Your LLC
  • Appoint a Registered Agent
  • File Certificate of Organization
  • Prepare an Operating Agreement
  • Comply With Other Tax and Regulatory Requirements
  • File Annual Reports

Choose a Name for Your LLC

According to Massachusetts law, an LLC name must contain one of the following: “limited liability company” or the abbreviation “L.L.C.,” “LLC,” “L.C.,” or “LC.’

Also, your LLC’s name must not be similar to the names of other business entities already on file with the Massachusetts Department of Assessments and Taxation.

However, you need to check for the availability of the name by searching the Massachusetts business name database.

In addition, you can carry out any business transaction with your tradename known as (DBA)

With this, you don’t have to use your LLC’s official legal name registered in your articles of the organisation when you do business out in the real world. 

Meanwhile, you can register a trade name with the Massachusetts Department of Assessments and Taxation by filing a Trade Name Application. 

The filing fee is $30, and the reservation can be extended by an additional 60 days by paying an additional $30 fee before the initial 60-day period expires. 

However, the application must be filed by mail with the Secretary of The Commonwealth Corporations Division.

Appoint a Registered Agent

Your LLC in Massachusetts must have an agent for service of process in the state. These agents are called registered agents in Massachusetts. 

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This Individual,s or business agrees to accept legal papers on the LLC’s behalf if it is sued. 

However, a registered agent may be any Massachusetts citizen over eighteen, a Massachusetts corporation, or a Massachusetts LLC. 

Meanwhile, the registered agent must have a physical street address in Massachusetts.

File Certificate of Organization

All Massachusetts LLCs are required to file a Certificate of Organization with the Secretary of the Commonwealth Corporations Division

The Certificate of Organization must include:

  • the LLC’s federal (employer) identification number (if any)
  • the LLC’s name and street address in Massachusetts
  • the general character of the LLC’s business
  • the date of the LLC’s dissolution, if any
  • the name, address, and signature of the LLC’s registered agent
  • the names and addresses of each manager, if any: and
  • the names and addresses of any people authorised to execute documents for the LLC.

Kindly note that there must be at least one such person if the LLC has no manager.

The filing fee is $520 for online filing and $500 for paper filing.

Prepare an Operating Agreement

An operating agreement is not required for LLCs in Massachusetts but is highly advisable. 

An operating agreement is an internal document that establishes how your LLC will be run. 

It is not filed with the state and sets out the members’ and managers’ rights and responsibilities, including how the LLC will be managed. 

Also, it can help preserve your limited liability by showing that your LLC is a separate business entity. 

However, the state LLC law will govern how your LLC operates in the absence of an operating agreement, 

More so, the operating agreement should include the following:

  • the members’ percentage interests in the LLC
  • the members’ rights and responsibilities
  • the members’ voting powers
  • how profits and losses will be allocated
  • rules for holding meetings and taking votes, and
  • buyout, or buy-sell, provisions determine what happens when a member wants to sell his or her interest, dies, or becomes disabled.
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Comply With Other Tax and Regulatory Requirements

Your Massachusetts LLC may require additional tax and regulatory requirements, which may include:

Employer’s Identification Number  (EIN): A must obtain an EIN with the IRS if your LLC has more than one member, even if it has no employees. 

Also, you may need an Employer Identification Number (EIN) if you form a one-member LLC.

Meanwhile, you may obtain an EIN by completing an online application on the IRS website with no filing fee.

Business Licenses: Depending on its type of business and location, your LLC in Massachusetts may need to obtain other local and state business licenses.

Department of Revenue: If you have employees or will be selling goods and collecting sales tax, you’ll need to register with the Massachusetts Department of Revenue (DOR). 

However, you can register online using the DOR’s MassTax Connect

File Annual Reports

All LLCs in Massachusetts must file an Annual Report and Personal Tax Return with the Secretary of the Commonwealth Corporations Division. Domestic. 

Foreign LLCs in Massachusetts must file a Foreign Limited Liability Annual Report. 

Also, the report must contain the same information as the certificate of the organisation.

In addition, the report must be filed by the LLC’s anniversary date. 

The reports can be filed online or by mail for $500.

Conclusion

The first step on how to start an LLC in Massachusetts is to choose a unique name for your business, appoint a Registered Agent, prepare an operating agreement, file your certificate of organisation, and comply with additional tax and regulatory requirements like getting an EIN and the file an annual report on the LLCs anniversary date. 

However, if you find these processes daunting, you can choose to seek professional services at a cost. 

We hope you find the article on how to start an LLC in Massachusetts advantageous.

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