How to Become Incorporated in Massachusetts: Everything You Need to Know
How to become incorporated in Massachusetts involves following some very simple steps that provide the owners of a business with protection against personal liability. The key benefit is that only the assets of the corporation can be used to pay off corporate debt.4 min read
How to become incorporated in Massachusetts involves following some very simple steps that provide the owners of a business with protection against personal liability. The key benefit is that only the assets of the corporation can be used to pay off corporate debt.
There are other benefits to becoming incorporated in Massachusetts. Perhaps the most appealing one to corporations is that inventory held by the company is tax exempt. This exemption helps lower the cost of doing business in the state.
6 Steps to Forming a Massachusetts Corporation
Any business interested in becoming incorporated in Massachusetts should first visit the website for the Massachusetts Secretary of the Commonwealth. The Commonwealth’s Corporations Division page provides forms, guidance, and answers to frequently asked questions that can help business owners become familiar with the incorporation process.
Incorporating in Massachusetts involves the following procedures:
Select a Corporate Name:
The name a business intends to use must be original and not currently used by another business or similar to an existing name. A search of the Secretary of the Commonwealth’s corporate database can be used to avoid filing under an existing name. The name also cannot be protected by a current U.S. trademark or service mark registration, regardless if it used in the commonwealth.
- The name must include “Corporation,” “Incorporated,” or “Limited,” or the accepted abbreviations for each.
- The name should not suggest that the business exists for any other purpose than is provided in Article II of the company’s Articles of Incorporation.
- Corporate names can be reserved for up to 120 days by paying a fee.
Complete and File Articles of Incorporation
Also called Articles of Organization, this document is filed with the Secretary of the Commonwealth and can be completed online or delivered by mail. Information required in the document includes:
- Corporate Name.
- Corporate Purpose. The phrase “engaging in any lawful business” is sufficient, although a more limited purpose can be provided.
- Information Regarding Stock. The number of shares being issued by the corporation and the par value of the shares must be provided. If separate classes of stock will exist, these must be indicated as well. Preferences, limitations, rights pertaining to each class of stock, and any restrictions on their transfer should be indicated.
- Filing Default Date. This date may be no later than 90 days later than the actual filing date of the Articles.
The Commonwealth also requires additional information at the time of filing that will not be a permanent part of the Articles of Organization. These include:
- Name and Address of Registered Agent. Having a designated registered agent who is responsible for receiving legal documents addressed to the corporation is a requirement for every Massachusetts corporation. The address must be a street address and be an individual or corporation that is qualified to do business in the commonwealth.
- Initial Directors and Officers. The names and addresses of the initial director (the commonwealth requires at three if there are more than three shareholders), president, treasurer and secretary.
- Fiscal Year End.
- Description of type of business the corporation will conduct. This is different than the purpose and should be brief and broad enough to prevent the need for revising the Articles in the event the business expands.
- Street Address of Corporation. This must be the principal address of the corporation and P.O. Boxes are not accepted.
- Records Address. This is where the corporate records will be kept. It may be its principal address, the address of the secretary/treasurer, address of registered agent or address of a transfer agent.
- Special Filing Instructions, if necessary.
- Filer’s Contact Information.
- Signature of Incorporator.
Create and Maintain a Corporate Records Book
A corporate records book is where the entire corporation’s important documents are kept, including minutes of meetings of directors and shareholders (as required by Massachusetts law) and stock certificates/stubs. This book must be kept at the principal office of the corporation or at office of registered agent.
Prepare Corporate Bylaws
Although not legally required by the commonwealth or filed with the Secretary of the Commonwealth’s Office, bylaws are important to describe the roles and responsibilities of directors and officers and operating rules. They can help avoid misunderstandings as the corporation evolves.
Appoint Initial Corporate Directors
The individual who signed the Articles of Organization as the incorporator initially appoints the corporate director. They will serve until the first annual shareholders’ meeting, at which time the shareholders will elect the directors.
Hold First Board Meeting
At this meeting corporate officers are appointed, bylaws adopted and approved, stock is issued and the corporate seal is adopted.
Congratulations. By following these steps, your business will be incorporated in Massachusetts.
To learn more about how to become incorporated in Massachusetts, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.