Forming a Massachusetts LLC

By Cole Young

A majority of our clients set up a Limited Lability Company (“LLC”) for their business, which offers great protection for personal assets. For a variety of reasons, usually tax and fundraising, some clients form Partnerships, Corporations or Professional Corporations. For purposes of this post, though, we will focus on forming a simple LLC in Massachusetts.

  1. Choose a Name
    • The LLC’s name must be unique and include “Limited Liability Company,” “LLC,” or “L.L.C.”
    • Check name availability through the Massachusetts Secretary of the Commonwealth website. Note that if a name is close to another one, the filing might be rejected. It’s a little trial and error.
  2. Appoint a Registered Agent
    • A registered agent must be designated to receive legal documents on behalf of the LLC.
    • The agent must have a physical address in Massachusetts. Meaning, a PO Bos will not work!
  3. File a Certificate of Organization
    • Submit the Certificate of Organization to the Secretary of the Commonwealth.
    • This document includes basic LLC details such as name, address, and management structure.
    • Filing can be done online or by mail, with a filing fee. As of today, the fee is $500 (plus a $20 convivence fee for filing online).
  4. Create an Operating Agreement (Optional but Recommended)
    • Although not required by the state, an operating agreement outlines the management and operational procedures of the LLC. This is usually only necessary when there are multiple owners.
  5. Obtain an EIN (Employer Identification Number)
    • Required for tax purposes, hiring employees, and opening a business bank account.
    • Can be obtained for free from the IRS.
  6. Comply with Massachusetts Tax and Regulatory Requirements
    • Register with the Massachusetts Department of Revenue if applicable.
    • Certain LLCs may need to collect sales tax or pay state business taxes.
  7. File an Annual Report
    • Massachusetts LLCs must file an annual report with the Secretary of the Commonwealth.
    • The report is due on or before the LLC’s anniversary date each year. Again, as of today, that fee is $520, including the convenience fee.

The process for filing an LLC is fairly straightforward. Whether you should be forming an LLC instead of a different entity, or whether you should be forming in a different state and/or need an Operating Agreement, can be a complex and important decision. If you’re thinking of doing this, reach out to one of our great attorneys who can guide you through the process and make an informed decision!

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