How to start an LLC in Massachusetts

Check your business name is free

Search for your name on Corporations Division business search. A search of the state's business and reserved-name databases is only a first check. The final decision comes when the Corporations Division reviews your Certificate of Organization (the form that sets up your LLC).

Your name must end with

The name must include "limited liability company", "limited company", "L.L.C.", "L.C.", "LLC" or "LC"

Holding a name

Reserving a name costs $30 and holds it for 60 days. You can extend it once for another 60 days ($30). Transferring the reservation costs $30.

Words you can’t use, or need permission to use:

• "Bank", "banking" or "bankers" (only approved banks may use these), and "trust" for a business that takes deposits
• A professional LLC (one for a licensed profession) must also meet the conditions of that profession's licensing board
• The state's LLC law lists no other banned words. The main test is whether your name is too close to one already on file

Also worth knowing:

• Your name cannot be the same as, or deceptively similar to, the name of a corporation, limited partnership or LLC already formed, registered or reserved in Massachusetts. The exception is if that business gives written consent. This is not a 'distinguishable' (clearly different) test.
• The name can include an owner's (member's) or manager's name. It does not have to be in English, as long as it is written in English letters or in Arabic or Roman numerals.

Choose your registered agent

Every LLC needs a registered agent: a person or company with an address in Massachusetts who receives legal papers and official letters for it. Massachusetts calls it a “resident agent”.

Can you do it yourself?

Yes, if the agent is a person living in Massachusetts. So an owner (member) who lives there can be the resident agent (who receives legal papers for your LLC). Owners outside the state need a Massachusetts resident or a qualifying company.

Address rules

The agent needs a street address in Massachusetts. A post office address (P.O. box) is not enough.

Do they need to agree?

Yes. The agent signs the consent section on the Certificate of Organization, or you attach a separate consent the agent has signed.

• The LLC law accepts these agents: people living in Massachusetts, Massachusetts corporations, and out-of-state corporations authorized in Massachusetts. The Division's rules also accept other Massachusetts businesses and registered out-of-state businesses.
• Changing your agent or the agent's address is free online, or $25 on paper or by fax. If an agent resigns, the resignation takes effect on the 31st day after it is filed.
• If your LLC does not name an agent within 60 days after a notice from the Division, the Division may treat it as inactive. It may then close the LLC down.

File the form that creates your LLC

The form is called the Certificate of Organization. File it online at Corporations Division’s online filing. The fee: $500. Paying online or by fax adds a separate $20 'expedited service fee' on a $500 order, so $520 online

You’ll be asked for:

• Your federal Employer Identification Number (EIN, your business tax ID), if you have one
• The exact LLC name
• Street address of the Massachusetts office where the LLC's records are kept
• The 'general character' of the business (what it does, in general terms)
• The latest date the LLC will close (dissolve), if there is one
• Resident agent (who receives legal papers for your LLC): name, street address and signed consent
• Name and business address of each manager, if there are any
• Name and business address of each person authorized to sign documents filed with the Division (at least one person if there are no managers)
• Optional: people authorized to sign documents about real estate (land and buildings)
• Signature of at least one authorized signer
• A contact name, address, phone or email (used only inside the Division, not published)

Good to know about the Massachusetts form:

• You must describe the 'general character' of the business (what it does). The form has no 'any lawful purpose' box.
• The form asks for your EIN (your federal business tax ID) if you already have one.
• You can name the people authorized to sign deeds and other real estate documents, for use with registries of deeds (the offices that record property).
• You sign the Certificate under penalties of perjury (you can be punished for false statements).

Prefer paper? Yes. You can mail or hand-deliver the paper Certificate to One Ashburton Place, Room 1717, Boston, with a check made out to the Commonwealth of Massachusetts. Or you can fax it with the Division's Fax Voucher Coversheet and pay by card or e-check.

Wait for approval (or pay to speed it up)

The state publishes no official processing time for online filings. The Division says fax filings are usually processed the same business day, and no later than the next business day.

We found no paid option to form an LLC faster. The 'expedited service fee' ($20 on a $500 order) is added automatically to every online or fax payment to cover processing costs. It is not an optional rush service.

After approval: what to do next

Once your LLC is approved, get its EIN (the business tax number), free from the IRS. Then work through what Massachusetts asks for next:

• Annual report to the Corporations DivisionBy each anniversary of the date your Certificate was filed (the first one after one year) · $500 (plus the $20 expedited service fee online or by fax)

  The report repeats all the details from your Certificate and can update them. Agent changes are the exception: they need their own filing. If you miss reports two years in a row, the Division can start closing your LLC down, with 90 days' notice. Bringing it back (reinstatement) costs $100 plus the cost of every missed report.

• Register with the Department of Revenue on MassTaxConnectBefore you collect or owe state business taxes

  Needed if you sell physical goods (sales and use tax; use tax covers goods used in the state when no sales tax was paid), sell meals or rent rooms. Also needed if you have employees, for withholding (tax taken from pay) and Paid Family and Medical Leave. Businesses register with an EIN (federal tax ID). The Department of Revenue's pre-registration checklist also sends you to your city or town for a business certificate and local licenses.

• Register with the Department of Unemployment AssistanceWhen you pay wages for work done in Massachusetts

  Register online through Unemployment Services for Employers, using 'Register your Business' (no login needed). You need the FEIN (federal tax ID) and the SSN (Social Security number) of each owner, officer or member. Most registrations are processed right away.

• Workers' compensation insuranceBefore anyone works for the LLC

  Every Massachusetts employer must carry this insurance (it pays when staff are hurt or made ill by their work), whatever the number of employees. That includes when an owner will be an employee of the business.

• Business certificate (DBA) and local licensesBefore you do business under any name other than the LLC's legal name

  You file the certificate with the clerk of each city or town where you have an office. You sign it under oath, and you must renew it every four years. The state pages we checked show no general business license for the whole state. Other licenses come from your city or town, or depend on your profession.

• Check whether the LLC itself owes state taxOnly if the LLC chooses to be taxed as a corporation

  Massachusetts treats an LLC the same way for tax as the federal government does. So a single-owner LLC, or one taxed as a partnership, passes its income to its owners. An LLC taxed as a corporation registers for corporate excise (state corporate tax) and owes at least the $456 minimum.