The Ultimate Guide to Starting a Massachusetts LLC

A Massachusetts LLC offers a powerful combination of liability protection, tax flexibility, and simplified management. Here’s why many business owners choose this structure.

An LLC creates a legal separation between you and your business. Your personal assets—home, car, and savings—are generally shielded from business debts and lawsuits. As an entrepreneur, this protection is invaluable.

Unlike corporations, LLCs don’t pay corporate income tax. Instead, profits and losses pass through to the owners’ tax returns, avoiding double taxation. This simplifies tax filing and often lowers your overall tax burden.

An LLC signals professionalism and reliability to customers, vendors, and investors. Operating as an LLC can help you build trust and attract business opportunities.

Massachusetts LLCs allow you to choose between a member-managed structure and a manager-managed structure, allowing you to tailor your company management to your needs.

Forming your LLC is easier than you think. Follow these steps to get your business up and running.

Your name must be unique and include “Limited Company,” “Limited Liability Company,” “LC,” “LLC,” “L.C.,” or “L.L.C.” Be sure to check name availability on the Massachusetts Secretary of the Commonwealth’s website before filing.

If you are a licensed professional, such as an attorney, physician, or accountant, you may be required to form a Professional Limited Liability Company (PLLC) instead. Massachusetts requires PLLCs to include “Professional Limited Liability Company,” “PLLC,” or “P.L.L.C.” in the business name.

While it’s not mandatory in Massachusetts, having an Operating Agreement for your LLC is invaluable. As the roadmap for your business, it outlines:

• Who owns what percentage of the company, 

• What everyone’s responsibilities are within the company,

• How the company will make important decisions, and 

• How profits and losses will be shared.

Without an Operating Agreement, your business will be subject to the default rules of the Massachusetts Limited Liability Company Act. These are general rules that may not align with your vision for your company.

You must appoint a registered agent. Your registered agent:

• Will receive important legal and tax documents on behalf of your company, 

• Must have a physical street address in Massachusetts, as a P.O. Box isn’t acceptable; and 

• Must be available during regular business hours.

You can act as your own registered agent or use a professional registered agent service.

This document legally forms your company and must be submitted to the Massachusetts Secretary of the Commonwealth. You’ll need to provide:

• LLC name and address,

• Registered agent details,

• Business purpose, and

• Names and addresses of organizers.

You can file online or by mail, but be aware there is a filing fee.

An EIN is required if you have employees, multiple members, or need a business bank account. It is essentially your business’s Social Security number. The IRS issues EINs for free, and you can easily apply for one online.

Register with MassTaxConnect to manage tax payments with the Massachusetts Department of Revenue if your company must collect or pay state taxes.

If you want to operate under a name different from your LLC’s legal name, file a business certificate (DBA) with your city or town.

A dedicated business bank account keeps personal and business finances separate, preserving your LLC’s liability protection.

Starting and maintaining an LLC in Massachusetts involves the following fees:

• Certificate of Organization filing fee—a $500 one-time payment;

• Annual Report fee—annual fee of $500 to keep your business active;

• Registered agent fees—using a professional service can cost $50-$300 annually;

• Business licenses and permits—costs vary depending on your business;

• Operating Agreement costs—cost depends on if you draft it yourself or hire an attorney or service; and

• EIN Application—free from the IRS.

Massachusetts has one of the country’s highest LLC filing and annual fees, so budget accordingly.

Failing to file your $500 Annual Report by your LLC’s anniversary date can result in penalties and the potential administrative dissolution of your business. If your LLC is dissolved, you may need to file for reinstatement, which includes additional fees and paperwork.

While forming an LLC in Massachusetts follows standard steps, there are a few unique factors:

• High fees. Massachusetts has the most expensive LLC filing fees and annual report fees in the country.

• Strong consumer protection laws. If you offer services, be aware of Massachusetts’ strict consumer protection regulations that require fair business practices.

• Foreign LLC registration. If you already have an LLC in another state but want to operate in Massachusetts, you must file a Foreign Registration Statement, pay the $500 fee, and appoint a Massachusetts registered agent.
  
  

It is important to thoroughly research and understand the specific regulations and requirements for forming an LLC in Massachusetts to ensure compliance and avoid any potential future issues.

Massachusetts does not require a statewide business license, but many cities and towns require local permits based on your industry. Check with your city or town hall to determine which licenses apply to your enterprise.

• Massachusetts offers a strong economy and thriving market, making it an appealing state for launching an LLC.

• Forming an LLC provides limited personal liability, tax advantages, and increased business credibility.

• An Operating Agreement is not legally required but is essential for outlining ownership, roles, and internal procedures.

• You must appoint a registered agent with a Massachusetts physical address to receive legal documents.

• Filing the Certificate of Organization, which legally forms the LLC, costs $500 and must be submitted to the Secretary of the Commonwealth.

• An EIN from the IRS is required for hiring employees, opening bank accounts, or having multiple members.

• Massachusetts LLCs must register with MassTaxConnect to handle state tax obligations.

• An optional business certificate (DBA) is needed if operating under a name different from the legal LLC name.

• Ongoing compliance requires filing an annual report on the anniversary of your LLC’s formation, with a $500 fee.

• Massachusetts has some of the highest LLC filing and maintenance fees in the U.S., so entrepreneurs should plan accordingly.

A Massachusetts LLC is an excellent way to protect your personal assets, simplify tax obligations, and establish a professional presence. While the state’s fees are higher than average, the benefits outweigh the costs.

Need help with the process? Bizee handles the paperwork so you can focus on growing your business. Get started today!