Forming an LLC in Massachusetts and keeping it in the right standing involves paying filing fees and covering necessary expenses.
Some of these fees are payable to the local and federal state, while others are paid directly to the Secretary of the Commonwealth of Massachusetts website.
Working with our licensed business specialists, we've summarized some of the most common requirements and fees in this guide.
Here’s what you need to know.
Quick Summary
- Filing for Massachusetts LLC costs $500 to file the Certificate of Organization by mail and $520 if done online.
- All vendors in Massachusetts must collect the sales and use tax of 6.25% in addition to the municipal tax rates levied in different jurisdictions.
- An annual report in Massachusetts costs a filing fee of $500, and all LLCs must submit it to stay compliant.
How Much Does an LLC Cost in Massachusetts?
An LLC costs $520 in Massachusetts if you file online and $500 for mail orders. This is the standard fee for filing your Articles of Organization.
However, the total filing fee may be more because of the other filing costs, such as name registration, registered agent service fee, annual reports, and LLC taxes.
Massachusetts LLC Filing Fee
The filing fee for a Massachusetts LLC is $500 for mailing your Certificate of Organization and $520 if you file online [1]. The $20 is treated as a convenience fee for online submissions.
The standard processing time for a Certificate of Organization in Massachusetts is 2-3 weeks, but you can pay for the expedited shipping.
The two expedited options are paying an additional $50 for a 4-6 days turnaround or $100 for a 1-2 business days turnaround.
As per the Massachusetts Secretary of the Commonwealth, your Certificate of Organization should contain the following details:
- Name of the business structure holding the "L.L.C. abbreviation
- Business street address
- Federal employer identification number
- Contact details of the manager
- Resident agent's contact details and address
- The general character of the Massachusetts business [2].
Massachusetts Registered Agent Service Fee
A registered agent must have a physical office address in Massachusetts and be reachable during all regular working hours to accept Massachusetts business documents and legal correspondence.
The registered agent will also handle any communication with the Massachusetts Secretary of the Commonwealth.
You or another LLC member may serve as the registered agent in Massachusetts.
Also, you can hire and name a good business service to serve as your limited liability company's registered agent. The price of registered agent services in Massachusetts might range from $70 per year to $300 or more, depending on the agent service you choose.
You must complete the Change of Resident Agent form and pay a $25 state filing fee if you need to subsequently modify your registered agent's contact information, such as office address or business name.
You must also submit for the change if you previously served as your own registered agent but now intend to engage a commercial organization.
Massachusetts Sales and Use Tax
All business entities selling taxable goods in Massachusetts must collect the sales and use tax of 6.25% from the Corporations Division [3].
Nevertheless, county or local municipal taxes and the flat state tax rate vary greatly depending on your jurisdiction. For example, municipal sales taxes of 0.75% may apply in some areas.
Hence the total sales and use tax may vary because Massachusetts is a destination-based sales tax state - the location of the buyer at the time the transaction is completed determines the sales tax rate.
This implies that a Massachusetts vendor must charge sales tax (including any relevant municipal sales taxes) on orders placed by Massachusetts customers depending on the buyer's location.
Other LLC Filing Costs
Other LLC filing costs and fees for forming and running a Massachusetts LLC include the following:
1. Business Name Reservation
The first step before reserving your business name is to look up a Massachusetts LLC and check for availability.
If you've decided on a company name and are still not prepared to file the Certificate of Organization, you can hold the title for 60 days. See our article for more information on Massachusetts LLC processing time.
The Massachusetts LLC cost for name reservation is $30.
Moreover, if you can't manage this alone, you can hire a business service to file the name reservation application for a fee.
2. DBA Name Registration
You should register a DBA name, commonly referred to as a trading name or an assumed name, if you wish to use a name other than your official business name for advertising or branding campaigns.
DBA name applications in Massachusetts are not submitted to the Corporations Division at the Secretary of State but at the municipal or town level.
The costs and filing requirements vary by city; expect to pay anything between $50 to $100.
3. Massachusetts Annual Report Fee
To keep the records of your Massachusetts LLC up to date, you must submit a yearly report.
Filing the annual report on time helps your Massachusetts LLC be in good standing and compliant with all laws.
When filing an annual report in Massachusetts, ensure the document has the following information:
- Your name
- Your partners' names and mailing addresses
- Your LLC's legal entity name
- Your LLC's company ID number
- Your LLC's principal place of business
The Massachusetts LLC fee for an annual report is $500. This fee is paid yearly for the term of your LLC.
4. Massachusetts Certificate of Good Standing
Obtaining a certificate of good standing in Massachusetts proves your LLC is legitimately established and meets all requirements to conduct business there.
The Massachusetts LLC cost for this business certificate is $25.
But you must abide by all state regulations for your Massachusetts business to receive a certificate of good standing, including paying your taxes, holding the appropriate Massachusetts business license, and submitting your yearly reports on schedule.
Please note that you will not be qualified to apply for a certificate of good standing if your LLC in Massachusetts does not comply with all state regulations.
5. Certified Document Copies
Through the website of the Secretary of the Commonwealth, small business owners may easily obtain copies of each document necessary for starting their Massachusetts LLC.
Nevertheless, copies of certified records, such as the Certificate of Organization or LLC operating agreement, are not provided for free.
Usually, a plain piece of paper costs $0.30 per document page, and a state-certified copy costs $7 for the first page and $2 for each additional page.
Also, the Massachusetts Secretary of the Commonwealth charges a set price of $12 for certified copies of the articles of the organization.
Certified copies are crucial for opening a business bank account, sourcing potential investors, or registering for a Massachusetts foreign LLC.
6. LLC Operating Agreements
A Massachusetts LLC operating agreement is a crucial legal document that outlines who owns the business and provides essential information on member obligations.
Moreover, it strengthens the financial connection between participants and the management in charge of everyday operations.
Creating an operating agreement is cost-free if you do it manually. Alternatively, you might pay around $100-$200 to use an LLC formation service.
7. Employer Identification Number
The Internal Revenue Service gives every Massachusetts LLC a nine-digit Employer Identification Number.
To file state and federal taxes, register a business bank account, apply for business entity loans, or establish credibility, you must have an EIN.
On the IRS website, you may apply for an EIN for free or hire a business and pay a filing cost of $50 to $100.
FAQs
How Much is a Foreign LLC in Massachusetts?
A foreign LLC in Massachusetts is $500, covering the Foreign Limited Liability Company Application for Registration. The cost is payable to the Massachusetts Secretary of the Commonwealth.
How Much Does It Cost To File an Annual Report in Massachusetts?
It costs $500 to file an annual report in Massachusetts. This document is essential to keep the Secretary of the Commonwealth up to date with all your business amendments.
Do You Need Professional Help with Your Massachusetts LLC?
Forming a limited liability company in Massachusetts takes a lot of work. It won't necessarily be expensive, though, if you're willing to do most of the administrative duties.
But if you don't want to take a chance at making an expensive error, your best choice is to get professional advice from the top LLC formation services in Massachusetts.
These companies offer comprehensive LLC creation services that are reasonably priced to meet your business's demands.
In addition, they provide the expertise and experience necessary to ensure you get the finest service possible, from document filing to ongoing compliance monitoring.
References:
- https://www.sec.state.ma.us/divisions/corporations/general-information/corporations-filing-fees.htm
- https://www.sec.state.ma.us/divisions/corporations/filing-by-subject/limited-liability/corporations-limited-liability-company.htm
- https://www.mass.gov/sales-and-use-tax-for-businesses#
