How Much Does an LLC Cost in Massachusetts
It costs at least $500 to start an LLC in Massachusetts. Other related expenses could increase the total to over $3,000.
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Here are the following costs to consider:
- Certificate of Organization: $500
- Foreign Registration: $500
- Annual Report: $500
- Permits and Licenses: At least $65
- Business Taxes: 5% of taxable income
- Optional Fees: Up to $3,000+
The rumors are true: Massachusetts is one of the most expensive states to form a limited liability company.
Registration fee alone already costs $500. Annual fees are at least $500, too. So before forming an LLC in Massachusetts, read on to see how much it will cost you.
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Massachusetts Domestic LLC Fee
Cost: $500[1]
To form an LLC in Massachusetts, you must submit the Certificate of Organization to the Secretary of the Commonwealth. Once the documents are approved, your LLC will be recognized as a separate legal entity.
A Massachusetts LLC's Certificate of Organization contains the following information, among other details:[2]
- Limited Liability Company name
- Office address
- Business purpose
- Resident agent name and address
- Federal Identification Number
The Articles of Organization and Certificate of Organization mean the same in most states. But in Massachusetts, the Articles of Organization is a form for incorporating, while the Certificate of Organization is for forming an LLC.[1]
Massachusetts Foreign LLC Fee
Cost: $500[1]
If you already have an LLC in another state and want to expand your business to Massachusetts, you need to register it as a foreign LLC.
To create a foreign LLC in Massachusetts, you must submit a Foreign Application for Registration to the Secretary of the Commonwealth with the filing fee. Additionally, you must have a resident agent who has a physical address in the state.
If your LLC's original name is unavailable in Massachusetts, you must register a trade name instead. This assumed name becomes your LLC's official business name only in Massachusetts.
One of the benefits of an LLC in Massachusetts is the state's diversified economy. Thriving sectors include technology, healthcare, education, and finance. Additionally, it's home to Harvard, MIT, and other prestigious institutions. This gives LLCs a large pool of highly skilled and educated workers.
Massachusetts LLC Annual Report Fee
Cost: $500[1]
Massachusetts LLCs must submit annual reports to the Secretary of the Commonwealth. This report shows any changes to the LLC's address, resident agent, and other details.
Annual reports are due on the anniversary date of your LLC. For example, if you filed the Certificate of Organization on March 4, 2024, you must submit an annual report every 4th of March in the succeeding years.
There's a $25 penalty fee for LLCs that fail to file the annual report on time. Additionally, the Secretary of the Commonwealth may close your LLC if you don't file the annual report within six months after the due date.[3]
Massachusetts LLC Permits and License Fees
Cost: At least $65[4]
Massachusetts does not have a state-level general business license. Instead, the state prefers leaving business licensing requirements to local jurisdictions and specific industries.
A city business license
in Boston costs $65 and must be renewed every four years. Most cities charge around the same cost or more.
Additionally, your LLC may need to get local permits like:
- Food Handler Permit - selling or handling food in any way
- Building Permit - construction and renovation businesses
- Liquor License - serving or selling alcoholic beverages
- Occupational License - professional services like dentistry and barbershop
The number of permits and licenses your LLC needs depends on its business purpose. Some businesses may be regulated by various governmental offices simultaneously. The fees may also vary per city and could be renewable yearly.
Unlike other states, Massachusetts provides sales tax permits to businesses for free. All businesses that sell tangible goods in the state must have a sales tax permit.
Massachusetts LLC Taxes
Cost: 5% state income tax[5]
Massachusetts imposes a flat income tax rate. Additionally, LLC members must pay federal income taxes:[6]
| Tax Rate | Taxable Income |
|---|---|
| 10% | $0 to $11,000 |
| 12% | $11,001 to $44,725 |
| 22% | $44,726 to $95,375 |
| 24% | $95,376 to $182,100 |
| 32% | $182,101 to $231,250 |
| 35% | $231,251 to $578,125 |
| 37% | $578,126 and up |
Self-employed LLC members must also pay the 15.3% federal self-employment tax.[7] This tax covers Social Security and Medicare contributions.
Some LLC formation fees can be claimed as tax deductions:
Massachusetts LLC Optional Fees
While the fees below are generally optional, some are unavoidable depending on your business needs.
For example, obtaining a Certificate of Good Standing is often necessary when opening an LLC bank account.
See what other costs you may need to consider below.
| Massachusetts LLC Optional Fees | Cost |
|---|---|
| Expedited Services | $3 to 4.5% of the subtotal |
| Resident Agent Services | $0 to $400 |
| Change of Resident Agent | $25 (no fee if filed electronically) |
| Operating Agreement | $0 to $500+ |
| Employer Identification Number | Free |
| Name Reservation | $30 |
| Trade Name Registration | At least $65 |
| Certificate of Amendment | $100 |
| Certified Copy | $12 for Certificate of Organization; $7 for the first page + $2 for each additional page for all other certified copies |
| Certificate of Good Standing | $25 |
| Certificate of Existence | $12 |
| Website Domain | $20 to $30 |
| Business Insurance Premiums | Varies |
Let's get to the details of each.
Massachusetts LLC Expedited Service Fee
Cost: $3 to 4.5% of the subtotal[1]
Massachusetts offers expedited services to process your LLC application faster. These services are also available for most documents filed by fax or online.
Fees vary depending on the subtotal cost of your order:[1]
| If your order subtotal is between: | Your expedited service fee is: |
|---|---|
| $0.01 - $14.99 | $3 |
| $15 - $24.99 | $3.50 |
| $25 - $84.99 | $6 |
| $85 - $149.99 | $10 |
| $150 - $499 | $15 |
| $500 | $20 |
| Over $500 | 4.5% of the subtotal |
It takes approximately 1 to 2 business days to form an LLC in Massachusetts. However, days vary based on the volume of business registrations that the Secretary of the Commonwealth is reviewing.
Massachusetts LLC Resident Agent Fee
Cost: $0 to $400
A resident agent is responsible for receiving business and legal documents on behalf of your LLC. This includes government notices, tax forms, and annual reporting forms.
Massachusetts can close your LLC if you don't have a resident agent. Then, you'll have to pay $100 to re-open it.[1]
You can be the LLC's registered agent as long as you're at least 18 years old and have a physical street address in Massachusetts. You must be available to receive documents during regular business hours.
Alternatively, you could hire a resident agent service to avoid putting your details on the public record.
You'll need a person's consent before appointing them as a resident agent. Their signature is required in the Certificate of Registration form.
Massachusetts LLC Change of Resident Agent Fee
Cost: $25 (free if filed online)[1]
An LLC can change its resident agent's details anytime. Changes include the agent's name and address.
To update your resident agent's information, submit a Statement of Change to the Secretary of the Commonwealth as soon as possible.
There's a different form for registered agents who want to resign from the role.[8] It also costs $25.[1]
In Massachusetts, a Certificate of Amendment is used to change the business name, business purpose, and other details. Meanwhile, the Statement of Change is focused solely on changes regarding the resident agent.
Massachusetts LLC Operating Agreement Fee
Cost: Up to $500+
LLCs in Massachusetts are not required to have an operating agreement. However, having one is recommended because it defines important rules and regulations that all members and managers must follow.
An LLC operating agreement contains the following:
- The roles and responsibilities of each member
- How new or departing members will be treated
- How business profits and losses will be divided
Ideally, you must already have a signed Operating Agreement before forming an LLC in Massachusetts. But if your LLC is already formed, you can always make one.
The costs associated with the operating agreement come in the drafting of the document. However, startup businesses can use free operating agreement templates online. Some resident agent services offer this as a part of their annual packages.
Employer Identification Number
Cost: Free
An EIN is a unique nine-digit number assigned by the IRS. It's used to identify a business entity for tax-related purposes.
Single-member LLCs in Massachusetts don't need to get an EIN. However, you might still require it down the line if you want to hire employees or open a business bank account.
A bank account is necessary for your LLC. Separating your LLC's finances from personal assets is a requirement of liability shielding. Use a separate bank account to accept payments and pay business expenses to prevent corporate veil piercing.
Massachusetts LLC Name Reservation Fee
Cost: $30[1]
If you've already got a business name but you're not yet ready to form an LLC, you can reserve your desired name first. Paying the name reservation fee will prevent others from using that name for 60 days.[9]
You can renew the name reservation for the same price but with a different form.
Check online to see if your business name is available as a web domain. Even if you don't plan to make a business website today, you may want to buy the URL to prevent others from acquiring it.
Massachusetts LLC Trade Name Fee
Cost: At least $65[4]
A trade name (also known as a "Doing Business As" or DBA) allows your LLC to operate under a name different from what's legally registered with the state.
Some LLCs use a DBA for branding purposes. It's also ideal if you want to use a name that doesn't have an "LLC" at the end.
In Massachusetts, you must apply for a DBA in every city where your business operates. Procedures for getting a DBA may vary per county, like in Boston, where a business certificate and a DBA are the same.
DBAs in Massachusetts typically cost $65 or more and are renewable every four years.
Massachusetts LLC Amendment Fee
Cost: $100 (online only)[1]
Your Massachusetts LLC's Certificate of Organization contains specific details about your business. Should these details change, you must submit an Amendment to the Secretary of the Commonwealth.
You must file an Amendment if you:
- Add, remove, or change an LLC member or manager
- Update your LLC's business address
- Modify your LLC's stated business activities
Massachusetts LLC Certified Copy Fee
Cost: $12 for Certificate of Organization; $7 for the first page + $2 for each additional page for all other certified copies[1]
Certified copies of documents verify that your LLC is legitimate and that its details are accurate.
You might need these for circumstances like opening a business bank account or expanding your LLC in another state.
Additionally, some LLCs keep certified copies of their initial Certificate of Organization and Amendment (if any) on their own accord.
Massachusetts LLC Good Standing Fee
Cost: $25[1]
A Certificate of Good Standing is an official document by the Secretary of the Commonwealth. It verifies that your LLC is updated with all state filings and has paid all its fees and taxes.
You might need a Certificate of Good Standing to:
- Open a bank account
- Apply for business loans
- Qualify for business insurance
- Conduct business as a foreign LLC
Contact the Secretary of the Commonwealth to ask why your LLC is in bad standing. The most common reasons include:
- Failure to file the annual report
- Failure to renew business permits
- Not having a resident agent in Massachusetts.
Pay any outstanding fees and penalties. You might also need to file a Reinstatement Form with the $100 filing fee.[1]
Massachusetts LLC Existence Fee
Cost: $12[1]
A Certificate of Existence confirms that your LLC exists in Massachusetts. It verifies that your business was formed legally and is currently registered with the state.
It may be required when opening a bank account or registering to do business in another state.
In most states, the terms "Certificate of Good Standing" and "Certificate of Existence" are often used interchangeably because they refer to the same document.
However, Massachusetts is an exception. A Certificate of Existence proves your business is currently registered with the state. Meanwhile, a Certificate of Good Standing proves your business exists and is in good standing with the state.
Business Website Domain Fee
Cost: $20 to $30
A website domain and social media presence provide dedicated online spaces for your business. It's essential for marketing, customer engagement, and brand visibility in today's digital world.
Even if you're not planning to build a business website now, it's a good idea to at least buy the domain name. This prevents others from using your LLC's name as a web address.
Domain squatters often monitor newly registered LLC names. They purchase corresponding website domains and then resell them at significantly higher prices.
Business Insurance Premiums
Cost: Varies
Most businesses with one or more employees in Massachusetts must have workers' compensation insurance.[10] Massachusetts does not have a state fund for workers' compensation, so you must self-insure or get it from a private company.
You can also apply to the Massachusetts Assigned Risk Pool. An insurance carrier will then provide a quote for your business.
You might also be required to get other types of insurance:
- General liability insurance
- Commercial property insurance
- Professional liability insurance
- Cyber liability insurance
Bottom Line
To start an LLC in Massachusetts, you need at least $500 to file the Certificate of Organization. The same charge applies every time you file an annual report.
However, the total cost will increase depending on the additional services, documents, and licenses your LLC needs.
Set Up Your LLC - $0 + State Fees
- Free business plan included (no credit card required)
- Lifetime compliance alerts
- Comprehensive name check
- Lifetime customer support via email and phone
Business Formation Service - $39 + State Fees
- Form Your LLC, Corporation, or Nonprofit Today
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Economy Package at $149 + State Filing Fees
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- Other services are available with additional costs
Nonetheless, it's never a bad idea to set aside an extra budget for unexpected fees.
References
- ^ Secretary of the Commonwealth of Massachusetts. Corporations Division Filing Fees, Retrieved 07/09/2024
- ^ The Commonwealth of Massachusetts. Limited Liability Company Certificate of Organization, Retrieved 07/09/2024
- ^ The General Court of the Commonwealth of Massachusetts. Section 112, Retrieved 07/09/2024
- ^ City of Boston. How to Apply for a Business Certificate, Retrieved 07/09/2024
- ^ Commonwealth of Massachusetts. Personal Income Tax for Residents, Retrieved 07/09/2024
- ^ IRS. Federal Income Tax Rates and Brackets, Retrieved 07/09/2024
- ^ IRS. Self-Employment Tax (Social Security and Medicare Taxes), Retrieved 07/09/2024
- ^ Secretary of the Commonwealth of Massachusetts. Limited Liability Company Information, Retrieved 07/09/2024
- ^ Secretary of the Commonwealth of Massachusetts. About Name Reservations, Retrieved 07/09/2024
- ^ Commonwealth of Massachusetts. Workers' Compensation Insurance Requirements, Retrieved 07/09/2024
Nicole King is a research analyst at CreditDonkey, a business formation services comparison and reviews website. Write to Nicole King at nicole.king@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
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