Forming an LLC in MA is often avoided because people aren’t quite sure how to do it. They tend to just go with a DBA or Sole Proprietorship instead because they think it’s easier to do. The reality is that forming an LLC in MA is actually quite simple if you know what to do. For that reason, I’m going to take a few minutes to show you exactly how to set up an LLC in Massachusetts.
Legal Note: I’m not an attorney. I recommend seeking out legal advice from an attorney when forming an LLC in MA.
Step1 : Create a Name for your LLC
Go ahead and come up with a name that suits your business needs. You just need to be sure that the name isn’t already taken by doing a search in the MA Business Database. You also can’t come up with a name that may fool people into thinking you are someone else.
In Massachusetts, your name must include one of the following within the name:
- Limited Company
- Limited Liability Company
Go ahead and complete a search in the MA Business Database to make sure your business name doesn’t already exist.
Step 2: Setting up an EIN (If Applicable)
If you will only have one member, an Employer’s Identification Number (EIN) is not required but you can set one up if you would like. Most people set one up anyways, but it’s up to you.
However, if your LLC will have more than one member, than an EIN (Also known as a Tax ID Number or TIN) will be required.
To set up an EIN, you will visit the IRS website (don’t worry, I’ll share the EIN application link with you in a minute). You want to be sure that when you get to the end of the application you choose to receive your new EIN by PDF. Otherwise, you will have to wait for them to mail it out to you.
Okay, I think you’re ready to complete step 2 of forming an LLC in MA. Apply for an EIN online.
Step 3: File a Certificate of Organization
Now that you have your EIN, you’re ready begin forming an LLC in MA by completing your certificate of Organization. The price to file a Certificate of Organization with the State of Massachusetts is $520.00 (or $500 if you do it by mail, but I recommend just doing it online).
When you’re ready, go ahead and file a Certificate of Organization with the State of MA.
A Note on Foreign LLCs
If you’re organization is set up outside of Massachusetts, but you’re conducting business in MA, you will need to file a Foreign LLC Application. This should also include a certificate of good standing from the state you are based out of.
Other Things to Consider When Forming an LLC in MA
There are a few other things that you will want to be aware of when setting up an LLC in MA.
- Operating Agreement: Although not required by the State of MA, I strongly recommend that you set up an operating agreement, which is a form that breaks down how you do business. If you are applying for a loan, your financial institution may ask for one of these.
- Filing Annual Reports: Each year, you will need to file an annual report with the State of Massachusetts. This will run $500.00 each year.
- Business License: Your town, city, or municipality may require that you also get a business certificate. These aren’t usually very expensive (most likely around $30 to $40).
Congratulations, you have succeeded in forming an LLC in MA. Now it’s time to start working!