As a business owner, selecting a thriving entrepreneurial ecosystem to form your business is a crucial decision that could predict the trajectory of your company. However, this procedure entails expenses requiring stable financial capability. In this post, our industry experts will walk you through all Massachusetts LLC fees to help you operate smoothly within the state.
Formation Costs for a Massachusetts LLC
Business Name Reservation
It’s not a mandatory requirement, but an LLC has the option to reserve your chosen business name 60 days before they proceed into filing formational documents. The cost for this process includes a $30 filing fee. As you may already know, your LLC name must not be similar to any existing businesses operating within Massachusetts.
Certificate of Organization
Like in any other state, you need to file your LLC’s certificate of organization to the office of the Secretary of the Commonwealth. Through this document, your company will be officially encoded in the state’s public record as an active business entity.
You have the option to file it by mail which costs a $500 one-time submission fee. If you find yourself short of time, you can file your certificate of organization online or via fax along with a $520 processing payment.
Ensuring to elect an excellent resident agent service provider is among the most essential state requirements an entity must maintain to keep its operating rights. This role serves as the communication bridge between you and the state government.
Any individual or company can be your agent, as long as it qualifies on all the standards set by the state like age, business hours availability, and physical/mailing address.
Hiring a professional service provider or LLC formation company with lots of industry experience in handling your time-sensitive documents is one of the wisest pieces of advice our trade enthusiasts could give. The price range of annual subscription to these packages could range from $0-$300.
Another step you must take to make your business entity legal is acquiring an employer identification number (EIN) or most commonly known as a Federal Tax ID number. Through this nine-digit requirement, the government could tax your LLC appropriately, and you’ll have no problem opening bank accounts or hiring employees .
There’s no succeeding fee when you request an EIN, and you can even apply online. However, if you choose to let a formation company obtain it for you, expect additional expenses for the processing fee.
It’s no secret that business licenses and permits incur a huge portion of all the Massachusetts LLC fees that any business entity must settle during the formation process. Depending on your business activities and transactions, you can apply online to the specific regulatory agency in terms of state, local, and federal jurisdictions.
Foreign LLC Registration
If you’re thinking of expanding your business in the state of Massachusetts, you have to file a Foreign LLC Application for registration instead of the regular certificate of organization. This process also requires you to pay $500 via mail or online.
(To make the process easier for you, getting the help of the top online incorporation services is a smart decision)
Massachusetts LLC Annual Fees
Annual Report Fee
Once you form your company and proceed to operation, the Corporations Division of the Massachusetts Secretary of the Commonwealth requires all business entities within its area of jurisdiction to submit an annual report.
This periodic filing allows the government to be updated on your company information, such as your registered agent address and many more. Along with this, submission entails an annual fee of $500.
The government typically treats Massachusetts LLCs as pass-through entities. This term means that the company doesn’t need to file a corporate tax return. Instead, all profits and losses will be taxed through the personal returns of LLC members.
If your company hires employees, you may need to settle withholding or unemployment insurance taxes to maintain your LLC. Sales and use tax are also common for companies selling merchandise.
(For a break downs of all the LLC expenses, you can visit our page about LLC formation cost and yearly fees here)
How much is an LLC in Massachusetts?
An LLC in Massachusetts costs $500 upon filing the certificate of organization form by mail or $520 when submitted online or by fax. On top of this, you’ll need to file annual reports to the state government and pay $500 every year to maintain good standing and keep your right to operate within the state.
How is an LLC taxed in Massachusetts?
An LLC in Massachusetts is taxed as a pass-through entity. Through these taxation perks, a company won’t need to file its own tax returns. Instead, its LLC members will be taxed through their personal returns. Specific taxes like unemployment tax could also add to your expenses depending on the nature of your business.
Planning your expenses before forming a business is a move that our business experts highly recommend. And now that you’re well-acquainted with all the Massachusetts LLC fees you need to cover, keep in mind that maintaining these requirements remains the primary factor to keep your limited liability protection perks and operation rights within the state.