The very first step when creating a LLC is naming your LLC. You must keep in mind that the chosen name should never be misleading in any way to the public or you might get into trouble. This name may contain the next terms:
- Limited liability company,
- limited company, or
- “LC”, “L.C.”, “LLC”, “L.L.C.”
The name of your LLC should not be the same as, or similar to, an existing name on the Secretary of the Commonwealth Corporations Division. You can check availability in the Massachusetts Name Database (for free) to verify if the name you have chosen complies with every name requirement.
Once you find a name that is applicable, you can reserve it for 60 days by filing a Name Reservation Request Form with the Secretary of the Commonwealth Corporation Division. This form can only be handed in by mail or in person. The 60-day reservation has a $30 USD fee and there are two different 60-day reservation periods available (each period costing $30 USD), for a total of 120 days of name reservation.
Keep in mind that you are not obliged to use your official legal LLC’s name when doing business. You can instead use a DBA, (doing business as), which is a fictitious business name. To register your DBA in Massachusetts, you must contact the city or the county where your business is located.
Next step is appointing a registered agent. A registered agent is an individual or private company that agrees to accept legal documents on behalf of your LLC if it were to be sued. The agent may be 1. either a natural person who resides in Massachusetts or 2. a foreign corporation authorized to do business in Massachusetts. This agent must have a physical address in Massachusetts; a post office box is not permitted.
Once you have registered an agent, you must file your articles of incorporation with the Secretary Commonwealth Corporations Division. These articles must include the date of the LLC’s dissolution (if you have one); name, signature and address of the agent for service of process; name and address of the LLC; LLC’s federal (employer) identification number and name and addresses of each manager or individual authorized to execute documents for the LLC
The filing must be done either through mail or hand delivered with a $520 USD fee, or sent online with a $500 USD fee.
Continue by preparing an Operating Agreement. This is not a mandatory requirement, but it is commonly used in an LLC.
The following step is to comply with the Massachusetts Commonwealth tax and regulatory requirements. An example may be the Business Licenses, which solely depends on the type of business the LLC exploits. Another example is the Department of Revenue, were if your LLC sells any good or services and collects sales taxes, you will need to register with the DOR (Massachusetts Department of Revenue).
Finally, every LLC doing business in the Commonwealth of Massachusetts must file annual reports. Keep in mind that the report must contain the same information as the certificate of organization, and just like with the register agent process, the filing must be done either through mail or hand delivered with a $500 USD fee.
Overall, following these steps will get you the LLC needed to operate in the Commonwealth of Massachusetts. Every LLC organized outside of the state must also register with the Foreign Limited Liability Company Application for Registration if they plan on doing business in Massachusetts. Like any other LLC, a foreign LLC must follow all the steps mentioned before to properly operate in Massachusetts. It is also important to know that you can form a professional LLC if you have a professional trait, for example a masseuse or a contractor. You just need to follow the same steps as listed above.
As a final note, creating an LLC can average about $1030 if you go for the cheapest option. Still, if you hire lawyers and outside council, this can add up to thousands of dollars. The choice is yours!