Registering a Business in MA: Everything You Need to Know
Registering a business in MA requires a bit of patience. However, it is a fairly straightforward process. We break the process down into three separate steps to make it easier to move your business forward.3 min read
Registering a business in MA requires a bit of patience. However, it is a fairly straightforward process. We break the process down into three separate steps to make it easier to move your business forward.
1. Determine the Type of Business Entity that You Will Form
You can choose a partnership, corporation, or limited liability company. (If you are operating as a sole proprietorship, you might not need to register your business. You may, however, wish to register any "doing business as" name you use. This could protect it from future use by another business.)
The limited liability company (LLC) tends to be popular. This business form protects owners' personal assets while also eliminating the need for corporate formalities such as appointing a board of directors. The LLC also allows for pass-through income taxation so that the company and the owners aren't both paying tax. Learn more about limited liability companies (LLCs) to make sure this structure meets your needs.
If you will be selling or issuing shares of stock to raise money for your business, a corporation may serve you better. For a closely-held (as opposed to publicly traded) corporation, you can make a subchapter "S" election with the Internal Revenue Service to avoid double-taxation.
If you already have a business in another state and want to register it in Massachusetts, you may wish to continue the same structure you already have. The Secretary of the Commonwealth of Massachusetts provides information on registering a foreign corporation and registering a foreign LLC.
2. Prepare Your Organization's Initial Documents
Whether your business is for-profit venture or a non-profit organization, you must file certain documents with the Secretary of the Commonwealth. First, do a name search to make sure your business name is available.
Next, you can apply for an Employer Identification Number (EIN). (If you are registering a foreign business you do not need a new EIN.) You will need your EIN to complete the paperwork that you will file with the Secretary of the Commonwealth.
Decide who will act as the company's Registered Agent. This person will accept service of notices or legal filings on behalf of the business. The Agent must be a resident of the Commonwealth of Massachusetts or a corporation already registered in Massachusetts. Many businesses use a lawyer or a professional statutory agent service to fulfill this requirement.
The forms you will file depend on what business structure you are using. You can file them with the Secretary of the Commonwealth in any of the following ways:
You will need to pay a filing fee with your initial documents.
3. Additional Legal Compliance
Massachusetts is friendly to start-ups with its efficient online registration portal. The Massachusetts Office of Business Development explains how to register with MassTaxConnect . (If you are personally relocating to Massachusetts, you may also want to learn about the Commonwealth's personal income tax requirements.)
You must comply with all taxing authorities at the federal, state, and local levels. If your goods or services are subject to sales or use tax, you must register with the Department of Revenue. If your company has employees, you need to register with workers' compensation and the Department of Unemployment Assistance. Government penalties and interest accrue at an alarming rate, so it is important that you do not make any missteps here.
Your particular industry or nature of your business may impose additional requirements. It is advisable to have a lawyer at least review your business filings to make sure that your company gets started on the right track.
If your business has more than one owner, you will want to make sure you have a solid Operating Agreement, Close Corporation Agreement, or other documents to govern your business. These are internal documents that the Commonwealth does not require. However, they are vital when your business must address such situations as:
- What happens if someone wants out of the business?
- What happens in the event of death or divorce?
- How will the company allocate profits and losses among members?
- How often will owners receive distributions?
If you need help registering a business in MA, you can post your legal need (or post your job) 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.