Many people are unsure of the steps towards setting up a corporation in Massachusetts. I put together this guide so you can set up a MA corporation in 3 easy steps. Please keep in mind that I’m not an attorney, nor do I work for the State of Massachusetts.
You should always seek legal advice when setting up a corporation.
Step 1: Decide On a Name for Your Business
You need to make sure that the name of your business doesn’t already exist with the Secretary of the Commonwealth Corporate Division in MA.
When you have a name for your business, do a quick search of the MA Business Database to ensure it doesn’t already exist.
Once you know the name doesn’t exist, you need to also make sure that you include one of the following words at the end of your business name:
- Abbreviation of one of the above words
Check the MA Business Database one more time with your chosen word above at the end to just be 100% sure you aren’t going to have any legal issues with another company.
Step 2: Set Up a Tax Identification Number for Your Business
The first thing you’re going to need to do (as long as you’ve completed Step 1 already), when setting up a corporation is to get a federal tax identification number (TIN) with the IRS.
Important: At the end of the application, you are offered the ability to receive by mail or in PDF format. I would recommend receiving it in PDF format because they will give you your Employer Identification Number (EIN) right away, and you’ll need it to complete your Articles of Organization.
Once you have your EIN (also known as a Tax ID or Federal Employer ID Number), you can proceed with setting up your corporation by completing the Articles of Organization with the State of Massachusetts.
Step 3: File Your Articles of Incorporation
The Articles of Incorporation is the form that you file with the Secretary of the Commonwealth Corporate Division. It must include the corporate name, address, agent information, share information, officers, etc.
This is also where you’ll appoint the registered agent. A registered agent is the person responsible to receive any legal documents. This can be you or someone who you hire or appoint to do so.
Additionally, you’ll be appointing the corporate directs as well. This includes, your President, Vice President, Secretary, Treasurer, as well as any Directors.
The minimum filing fee charged by the State of MA for setting up a corporation is $250.00. The most common reason this would cost more would be due to the number of shares you make available. For example, at the time of writing this, there is an additional charge when exceeding 275,000 shares.
When you’re ready, you can file your Articles of Organization.
Other Items That Should Be on Your Agenda When Setting Up a Corporation in Massachusetts
There are a few other things that you should do when setting up a corporation in MA. Let’s take a look together:
- Corporate Records: This is a place to file any important papers such as meeting minutes, stock information, etc. You can use a binder to get started.
- Corporate Bylaws: Although not required by the State of Massachusetts, having corporate bylaws is highly recommended to set down your new company’s operating rules. In some cases some organizations may ask for these.
- Incorporator’s Statement: This statement names the initial board members until the first annual meeting. You should include this in your corporate records book or binder.
- Board of Directors Meeting: Your Board should meet within a couple of weeks of setting up the business to strategize, set rules, choose business partners, issue stock, etc.
- Annual Reporting to MA: You will need to file an annual report with the State of MA each year. There is also a minimum fee of $125.00 to do this.
- S Corporation: If you choose to be an S-Corp, then you will need to complete the Form 2553 and have it signed by all shareholders.
- Business License: In many towns, cities, or municipalities, it is required to also have a business license or business certificate. This is usually very inexpensive, but you should check with your Town or City Hall to see if they require this.
If your corporation was organized in a State other than MA, but will be operating in Massachusetts, you will need to file a Foreign Corporation Certificate of Registration. The filing fee for setting up a corporation that is a foreign entity to MA is a minimum of $250.00