How to Start an LLC in Massachusetts

Starting an LLC in Massachusetts Is Easy With These 5 Steps

STEP 1: Name your LLC in Massachusetts

Choosing a company name is the first and most important step of setting up an LLC in Massachusetts. Be sure to choose a name that complies with Massachusetts naming requirements and is easily searchable by potential clients.

1. Follow the naming guidelines:

• Your name must include the phrase “limited liability company” or one of its abbreviations (LLC, LC, L.L.C., or L.C.).
• Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
• Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.
• Your name must be distinguishable from any other Massachusetts limited liability company, corporation, or limited partnership.

2. Is the name available in Massachusetts? Make sure the name you want isn't already taken by doing a Massachusetts LLC search on the Secretary of the Commonwealth's website.

To learn more about searching for a Massachusetts LLC name, read our full guide.

3. Is the URL available? We recommend that you check online to see if your business name is available as a web domain. Even if you don't plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it.

Now that you have verified your name and secured the URL you may select a professional service to complete the LLC formation process for you. We recommend using a professional service:

• Northwest ($29 + State Fees)

STEP 2: Choose a Resident Agent in Massachusetts

You are required to appoint a Massachusetts resident agent for your LLC. A resident agent is more commonly known as a registered agent in other states.

What is a resident agent? A resident agent is an individual or business entity responsible for receiving important tax forms, legal documents, notice of lawsuits, and official government correspondence on behalf of your business. Think of your registered agent as your business's point of contact with the state.

Who can be a resident agent? A resident agent must be a resident of Massachusetts or a corporation, such as a registered agent service, authorized to transact business in Massachusetts. You may elect an individual within the company including yourself.

Recommended: Northwest provides the first year of registered agent service free with LLC formation ($29 + State Fees)

STEP 3: File the Massachusetts LLC Certificate of Organization

To create an LLC in Massachusetts, you will need to file the Certificate of Organization with the Secretary of the Commonwealth. You can apply online, by mail, by fax, or in person.

Now is a good time to determine whether your LLC will be member-managed vs. manager-managed.

For help with completing the form, visit our Massachusetts Certificate of Organization guide.

If you’re expanding your existing LLC to the state of Massachusetts, you will need to form a Foreign LLC.

STEP 4: Create a Massachusetts LLC Operating Agreement

A Massachusetts LLC is not required to have an operating agreement, but it's a good practice to have one.

What is an operating agreement? An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.

Why are operating agreements important? A comprehensive operating agreement ensures that all business owners are on the same page and reduces the risk of future conflict.

For more information on operating agreements, read our Massachusetts LLC operating agreement guide.

STEP 5: Get a Massachusetts LLC EIN

What is an EIN? EIN stands for Employer Identification Number. EINs are a nine-digit number assigned by the Internal Revenue Service (IRS) to help identify businesses for tax purposes. It is essentially a Social Security Number for a business.

An EIN is sometimes referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN).

Why do I need an EIN? An EIN is required to:

• Open a business bank account
• File and manage Federal and State Taxes
• Hire employees

What if I already have an EIN for my sole proprietorship? The IRS requires that sole proprietorships get a new EIN when converting to an LLC.

Where do I get an EIN? You can get an EIN for free from the IRS. Getting an EIN is an easy process that can be done online or by mail.

FOR INTERNATIONAL EIN APPLICANTS: You do not need a SSN to get an EIN. For more information, read our How to Get an EIN as a Foreign Person guide.

Frequently Asked Questions

Important Steps After Forming an LLC

Separate Your Personal and Business Assets

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your Massachusetts LLC is sued. In business law, this is referred to as piercing the corporate veil.

You can start protecting your LLC in Massachusetts with these steps:

1. Opening a business checking account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Need help finding your EIN for your bank application? Visit our EIN Lookup guide for help.

Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.

2. Getting a business credit card:

• Helps categorize and separate all business expenses for end-of-year tax purposes.
• Helps build your business credit score — an essential step toward getting a line of credit or business loan in the future. 
• Allows you to keep track of department expenses by issuing multiple cards (with multiple budgets) to your employees.

For a closer look at business credit cards and their benefits, check out our review of the best small business credit cards.

3. Hiring a business accountant:

• Prevents your business from overpaying on taxes while helping you avoid penalties, fines, and other costly tax errors
• Makes bookkeeping and payroll easier, leaving you with more time to focus on your growing business 
• Manages your business funding more effectively, discovering areas of unforeseen loss or extra profit

Recommended: Find out how much you could be saving today by trying our recommended accounting service.

For more business accounting tools, read our guide to the best business accounting software.

Get Business Insurance For Your LLC

Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance are:

• General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
• Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers claims of malpractice and other business errors.
• Workers' Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths. In Massachusetts, businesses with one or more employees, excluding business owners, are required by law to have workers compensation insurance.

Read our review of the best small business insurance companies.

Create Your Business Website

Creating a website is an important step in legitimizing your business. Every business needs a website if you want your customers to find you.

Send Out a Press Release

Press releases are among the easiest and best ways to promote your business. They are also one of the most cost-effective strategies as they:

• Provides publicity
• Establish your brand presence on the web
• Improve your website’s search engine optimization (SEO), driving more customers to your website
• Are a one-time cost in terms of effort and money
• Have long-lasting benefits

Keep Your Company Compliant

Massachusetts Business Permits & Licenses

Does my Massachusetts LLC need business licenses and permits?

To operate your Massachusetts LLC you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.

The details of business licenses and permits vary from state to state. Make sure you read carefully. Don't be surprised if there are short classes required as well.

Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain.

Find out how to obtain necessary licenses and permits for your business or have a professional service do it for you:

• Business License Guide: Use our detailed Massachusetts Business License guide.
• Federal: Use the U.S. Small Business Administration (SBA) guide.
• State: Use Massachusetts's Professional Licenses & Permits resource. 
• Local: Contact your local county clerk and ask about local licenses and permits.

Massachusetts LLC Tax Filing Requirements

In order to keep your business in good standing, it's important to stay up to date on your Massachusetts LLC taxes.

Depending on the nature of your business, you may be required to register for one or more forms of state tax.

Massachusetts Sales Tax

If you are selling a physical product, you’ll typically need to register for a seller's permit through the Massachusetts Department of Revenue website.

This certificate allows a business to collect sales tax on taxable sales.

Sales tax, also called "Sales and Use Tax," is a tax levied by states, counties, and municipalities on business transactions involving the exchange of certain taxable goods or services.

Read our Massachusetts sales tax guide to find out more.

Massachusetts Employer Taxes

If you have employees in Massachusetts, you will have to register for the Unemployment Insurance Tax through the Department of Unemployment Assistance. Employers will also need to sign up for Employee Withholding Tax through the MassTax Connect platform.

Federal LLC Tax Filing Requirements

Most LLCs will need to report their income to the IRS each year using:

• Form 1065 Partnership Return (most multi-member LLCs use this form)
• Form 1040 Schedule C (most single-member LLCs use this form)

How you pay yourself as an owner will also affect your federal taxes. Visit our guide to learn more about how to pay yourself from your LLC.

File Your Massachusetts LLC Annual Report

Massachusetts requires that LLCs file an annual report with the Corporations Division of the Secretary of Commonwealth. This can be done online, by mail, by fax, or in person.

Avoid Automatic Dissolution

LLCs may face fines and even automatic dissolution when they miss one or more state filings. When this happens, LLC owners risk loss of limited liability protection. A quality registered agent service can help prevent this outcome by notifying you of upcoming filing deadlines and by submitting reports on your behalf.

Hiring Employees in Massachusetts

If you plan to hire employees for your Massachusetts LLC, stay compliant with the law by following these steps:

• Verify that new employees are able to work in the US
• Report employees as "new hires" to the State
• Provide workers' compensation insurance for employees
• Withhold employee taxes
• Print workplace compliance posters and place them in visible areas of your work space

Find out more information from the Massachusetts state website.

Small Business Resources

Get Help Starting a Business in Massachusetts

We understand that creating an LLC and getting your business up and running comes with many challenges. To help you succeed, we compiled the best local resources in every major metro area in Massachusetts. You can get free assistance in the following areas:

Boston | Springfield | Worcester

State of Massachusetts Quick Links

• Massachusetts Limited Liability Company Information
• Contact the State of Massachusetts
• Massachusetts LLC Statutes
• Understanding Massachusetts LLC Laws
• Massachusetts LLC Annual Report
• Best Registered Agent Service in Massachusetts

More Massachusetts LLC Information

Massachusetts Foreign LLCs

Forming a foreign LLC allows your company to operate as one entity in multiple states. If you have an existing LLC and want to do business in Massachusetts, you will need to register as a foreign LLC. This can be done online or by mail.

How to Obtain a Certificate of Good Standing in Massachusetts

A Certificate of Good Standing verifies that your Massachusetts LLC was legally formed and has been properly maintained. Several instances where you might need to get one include:

• Seeking funding from banks or other lenders
• Forming your business as a foreign LLC in another state
• Obtaining or renewing specific business licenses or permits

You can order a Massachusetts Certificate of Good Standing online, by mail, or by fax.

How to Dissolve an LLC in Massachusetts

If at any point in the future you no longer wish to conduct business with your Massachusetts LLC, it is important to officially dissolve it. Failure to do so in a timely fashion can result in tax liabilities and penalties, or even legal trouble. To dissolve your Massachusetts LLC, there are two broad steps:

• Close your business tax accounts
• File the Massachusetts Articles of Dissolution

When you are ready to dissolve your LLC, follow the steps in our Massachusetts LLC Dissolution Guide.