How to Form an LLC in Massachusetts in 7 Steps

In Massachusetts, you must pay fees to the Secretary of the Commonwealth when you create the LLC and when you file your yearly report. At the time of this writing, the fee for the certificate of organization is $500, and the annual fee is $500.

The filing fee for a limited liability company certificate of organization is $500.

Each year after the year of your LLC formation date, you must file an annual report and pay a $500 fee.

• Single-member LLC. A single-member LLC (SMLLC) is a limited liability company with only one member. Forming an SMLLC in Massachusetts is similar to a multi-member LLC, using the same certificate of organization form and paying the $500 filing fee.
• Multi-member LLC. Massachusetts also allows multi-member LLCs where multiple people or "members" own the LLC. The members nominate someone or a group of people as "manager-members" to operate the LLC.
• Professional LLC. Certain businesses in Massachusetts require professional licenses, for example, dentistry, medicine, law, and engineering. If you are forming a professional services LLC (PLLC), you file the same way you would as a Massachusetts LLC, but you must also file a Certificate by Regulatory Board.

A certificate of organization is commonly called articles of organization or certificate of formation in other states. A certificate of organization is proof that Massachusetts accepted your LLC.

You may need to show your certificate of organization to your bank, lender, or state licensing board. You can get a copy of the LLC registration from the Commonwealth of Massachusetts for a $12 fee. This certificate only proves your LLC a Massachusetts LLC. It is different from a certificate of good standing.

A certificate of good standing shows that your LLC is authorized to operate in Massachusetts and complies with state law. You may need one in the following situations:

• Opening a business bank account
• Setting up a merchant account for credit or debit cards
• Applying for a loan or credit
• Registering as a foreign LLC to do business in another state
• Selling your business

You can order your Massachusetts certificate of good standing online. There is a $25 fee to request a certificate of good standing in Massachusetts.

There are only a few requirements to form a Massachusetts LLC:

• LLC business name
• Resident agent and resident agent's office address
• Completed certificate of organization
• Payment of the $500 application fee

You do not need an operating agreement for an LLC in Massachusetts, but it is good to have one for other business reasons.

Personal liability protection and tax advantages are the main benefits of the LLC structure.

According to Massachusetts law, LLC status protects members' personal assets from business liability. In other words, you can act as a member or manager of your LLC without putting your personal bank accounts, home, cars, or other assets at risk of your company's liabilities. Limited liability is a significant benefit to the LLC structure.

A general partnership or a sole proprietorship does not give you liability protection. With those business structures, you can be personally liable for your company's debts, lawsuits, and other obligations. To avoid this, you should create a business structure that gives you liability protection, like an LLC.

Entrepreneurs also recognize another benefit of an LLC, which is pass-through taxation. With pass-through taxation, your LLC can pay taxes on its profits through the members' personal income tax returns. Pass-through taxation is preferable to a corporate tax status because corporations are subject to double taxation. Double taxation occurs when the company pays taxes on its profits, and the shareholders also pay taxes on dividends.

Finally, LLCs have fewer reporting and record-keeping requirements than corporations.

There are a few requirements to keep your LLC in good standing. First, you need to follow good record-keeping procedures. According to Massachusetts law, you must have the following on file:

• A current list of your members and managers
• Tax returns
• Your LLC operating agreement (if you have one)
• Financial records and statements

Second, you need to file an annual report. This report is easy to complete on the Secretary of the Commonwealth's website. Or, if you prefer, you can file your annual report by mail. Your yearly report will require you to submit basic company information and a fee. This report is due by the anniversary of the date you initially filed your certificate of organization. It's a good idea to note this date so you can file on time every year.

No, a certificate of organization is a document you file with the state to establish your Massachusetts LLC. Your operating agreement is an internal company document. You do not submit it to the state.

An operating agreement is a written contract among your LLC members. It establishes your company's rules on issues such as management style, rights and duties of members, profit allocation, and more. You may need an operating agreement to open a business account or get a bank loan. Banks, accountants, lawyers, and other professionals may ask to see an operating agreement before working with your LLC. You should keep a copy of your operating agreement on file with your other business records.

Yes, you can operate under a different business name from your LLC name. To do this, you must file a DBA (a "doing business as") registration with the city clerk where you do business.

Businesses commonly need a DBA when they want to branch into a new line of business or sell a new product under a different business name. To learn more about filing a DBA name in Massachusetts, you can visit FindLaw's three-step process.

The state of Massachusetts does not require a general business license for your LLC. However, depending on the type of business you operate, you may need to apply for a local business license and permits. Contact your local city or county to determine what licenses and permits you need for your LLC. You may also want to research what other things you need for your business, such as liability insurance.

Yes. You can submit a certificate of organization online with the Commonwealth of Massachusetts Division of Corporations online portal. Or you can use an online business formation service company to file the paperwork for you.

You can submit your certificate of organization in person or by mail. The address is:

Secretary of the Commonwealth
Corporations Division
McCormack Building
One Ashburton Place, 17th floor
Boston, MA 02108

Yes. A resident agent handles contact with the Division of Corporations. Using a registered agent service company has many benefits, from initial drafting and filing your certificate of organization to maintaining your LLC's good standing. Registered agent service companies:

• Accept service of process at your agent's address, keeping lawsuits away from your place of business
• Provide an address for your business so you can maintain privacy
• Forward mail and notify you of annual tax and reporting deadlines
• Help with LLC paperwork and order documents you need, such as certified copies of your certificate of organization or certificate of good standing
• Are available during regular business hours, which may not be yours.

The fees paid to a registered agent service company may be less than the penalties assessed if your Massachusetts LLC misses a tax deadline. Missing deadlines also jeopardizes your LLC status, which is vital to maintain liability protection.

A domestic LLC in Massachusetts is an LLC formed in Massachusetts. When you file a certificate of organization for your LLC in Massachusetts, and the Division of Corporation accepts it, you have a domestic LLC. If you want to do business in another state, you register as a foreign LLC in that new state.

If you want to do business in another state, you must register as a foreign LLC in that state. Contact the Secretary of State's office in that state for the application process. You may need a certificate of good standing for your LLC issued by the Division of Corporations. You should also check to see if your Massachusetts LLC name can be used in that state or if you need to file for a fictitious name or DBA name.

If you have formed an LLC in another state but want to do business in Massachusetts, you register as a foreign LLC in Massachusetts. The procedure is similar to forming an LLC. You need a Massachusetts resident agent and must register the foreign LLC with the Division of Corporations. The fee is $500. Attach a certificate of good standing in the state where the LLC was formed, along with the application.

Contact the Division of Corporations if you want to close your business and dissolve your LLC. You file your articles of dissolution by completing a certificate of cancellation and paying a $100 fee. You will also want to contact the Massachusetts Division of Revenue to close your business registration accounts.

No. Only a few states allow anonymous LLC formation, meaning the Secretary of State does not reveal who the LLC owners are. Only Delaware, Nevada, New Mexico, and Wyoming offer true anonymous LLCs. Massachusetts does not.