How to Start an LLC in Massachusetts

Complete Formation Guide for 2025 | $500 Filing Fee + $500 Annual Report

Massachusetts LLC Overview

A Massachusetts Limited Liability Company (LLC) combines the liability protection of a corporation with the tax flexibility and simplicity of a partnership or sole proprietorship. Massachusetts LLCs are governed by Mass. Gen. Laws ch. 156C (Massachusetts Limited Liability Company Act).

⚖️ What is a Massachusetts LLC?
  • Limited Liability: Members' personal assets are protected from LLC debts and liabilities
  • Pass-Through Taxation: Income flows through to members' personal tax returns (no entity-level tax by default)
  • Flexible Management: Can be member-managed or manager-managed
  • Good for Medium-to-Higher Risk Businesses: Recommended by Mass.gov for businesses with liability exposure

Key Massachusetts LLC Facts (2025)

Requirement Details
Formation Fee $500 (Certificate of Organization) + $20 online expedited fee = $520 total
Annual Report Fee $500 per year (+ $20 online fee = $520 total) - One of the highest in the U.S.
Annual Report Due Date On or before the anniversary date of LLC formation
Name Requirements Must include "Limited Liability Company," "LLC," "L.L.C.," "Limited Company," "LC," or "L.C."
Resident Agent Required Yes - must have MA physical address (no P.O. boxes)
Operating Agreement Required? No (not filed with state), but strongly recommended by Mass.gov
State Income Tax Rate 5% flat rate + 4% surtax on income over $1,083,150 (2025)
BOI Reporting (as of March 26, 2025) Domestic LLCs EXEMPT from BOI reporting; foreign LLCs still report
⚠️ Massachusetts Has One of the Highest LLC Costs in the U.S.

At $500 formation + $500 annual report (every year), Massachusetts is one of the most expensive states for LLC maintenance. Compare to:

  • Wyoming: $100 formation + $60/year annual report = $160 Year 1
  • Delaware: $90 formation + $300/year franchise tax = $390 Year 1
  • Georgia: $100 formation + $50/year annual registration = $150 Year 1
  • Massachusetts: $520 formation + $520/year annual report = $1,040 Year 1

However: If your business physically operates in Massachusetts (office, employees, real estate), you'll need a MA LLC or foreign qualification anyway.

When Should You Form a Massachusetts LLC?

✅ Form MA LLC If:

  • Your business operates in Massachusetts (office, employees, customers)
  • You own Massachusetts real estate
  • You have physical nexus in MA (retail store, warehouse)
  • You provide services to MA clients from a MA location
  • You want limited liability protection
  • You're comfortable with $500/year ongoing costs

❌ Consider Other States If:

  • Pure online business with no MA physical presence
  • Owners live outside MA, no MA operations
  • Want lower ongoing costs (WY/DE/NV/FL)
  • No state income tax preference (WY/NV/TX/FL)
  • Series LLC structure needed (MA doesn't have it)

Warning: If you form in another state but do business in MA, you'll need to register as a foreign LLC in MA anyway ($500 + $500/year) - so you'd pay twice.

Massachusetts LLC vs. Corporation

Feature Massachusetts LLC Massachusetts Corporation
Formation Cost $520 ($500 + $20 online fee) $275 (for-profit corp)
Annual Fee $520 ($500 annual report + $20 online) $125 (annual report)
Management Flexible (member or manager-managed) Formal (Board of Directors required)
Default Taxation Pass-through (like partnership) C-Corp (double taxation unless elect S-Corp)
Formalities Minimal (operating agreement, basic records) Strict (bylaws, annual meetings, minutes, resolutions)
Best For Most small businesses, real estate, consulting, flexibility VC funding, going public, S-Corp tax savings, formal structure
💡 Interesting Note: Massachusetts LLC annual reports cost MORE ($500) than corporation annual reports ($125), which is unusual - most states charge the same or more for corporations. This is one reason some MA businesses choose corporation over LLC.

Step-by-Step: How to Form a Massachusetts LLC

1 Choose a Unique LLC Name

Requirements (M.G.L. ch. 156C §3):

  • Must be distinguishable from existing entities registered with MA Secretary of the Commonwealth
  • Must include one of these designators:
    • "Limited Liability Company"
    • "LLC" or "L.L.C."
    • "Limited Company"
    • "LC" or "L.C."
  • Cannot imply governmental affiliation or include restricted words without approval

Name Availability Search:

Optional Name Reservation:

  • Fee: $30 (reserves name for 60 days)
  • Renewable: Can extend for another 60 days ($30 additional fee)
  • Not required - can file Certificate of Organization immediately if name is available
2 Appoint a Resident Agent

Requirements (M.G.L. ch. 156C §12):

  • Must have a physical Massachusetts street address (no P.O. boxes)
  • Must be available during normal business hours to receive legal documents
  • Can be an individual MA resident or a registered agent company
  • Written consent required: Agent must consent in writing (included in Certificate of Organization)

Resident Agent Options:

  • You or a member: Free, but must be available at MA address during business hours
  • Professional registered agent service: $100-$300/year, maintains privacy, ensures compliance
3 File Certificate of Organization

Governing Law: M.G.L. ch. 156C §12

Filing Options:

  • Online (Recommended): Massachusetts Corporations Online Filing - Fastest processing
  • Mail/Fax/In-Person: Secretary of the Commonwealth, Corporations Division, One Ashburton Place, Boston, MA 02108
  • Fee: $500 base + $20 online/fax expedited fee = $520 total

Required Information in Certificate:

  • LLC name
  • Office address in Massachusetts
  • Resident agent name and Massachusetts street address
  • Written consent of resident agent (included or attached)
  • Latest date of dissolution (if any)
  • Names and addresses of managers (if manager-managed)
  • Name and address of at least one person authorized to execute documents to be filed (if no managers listed)
  • Optional: Persons authorized to sign/record real estate instruments
📄 Download the Form:

Official Certificate of Organization form: Massachusetts LLC Formation Packet (PDF)

4 Create an Operating Agreement

Not filed with the state, but strongly recommended by Mass.gov.

An operating agreement establishes the LLC's internal rules:

  • Management structure: Member-managed or manager-managed
  • Ownership percentages: Each member's interest in the LLC
  • Capital contributions: Initial and future contributions
  • Profit/loss allocation: How profits and losses are distributed
  • Voting rights: Majority, supermajority, or unanimous consent requirements
  • Transfer restrictions: Right of first refusal, consent requirements
  • Buy-sell provisions: What happens if member leaves, dies, becomes disabled
  • Dissolution: Triggering events and winding-up procedures
🔑 Critical for Single-Member LLCs

Even if you're the only member, an operating agreement:

  • Strengthens the liability shield (proves LLC is separate from you)
  • Required by most banks to open business account
  • Provides succession planning (what happens if you die/become disabled)
  • Prevents "piercing the veil" arguments in court
5 Obtain an EIN (Employer Identification Number)

When You Need an EIN:

  • Multi-member LLCs (required)
  • Single-member LLCs with employees
  • LLCs electing corporate tax treatment
  • Opening a business bank account (most banks require it)

How to Get an EIN:

  • Online (Instant): IRS EIN Online Application
  • Cost: Free from IRS
  • Recommended even for single-member LLCs without employees (for banking and privacy)
6 Register for Massachusetts Taxes (If Applicable)

Register with MA Department of Revenue via MassTaxConnect:

  • Sales/Use Tax: If selling tangible goods or taxable services - Sales Tax Registration
  • Withholding Tax: If hiring employees - Withholding Tax Registration
  • PTE Excise Election: Optional pass-through entity excise (advanced tax strategy - see Taxes tab)

MassTaxConnect Portal: https://mtc.dor.state.ma.us/

7 File Local Business Certificate (DBA) If Needed

If operating under a different name than your legal LLC name:

  • File Business Certificate (DBA - "Doing Business As") with the city or town where your principal place of business is located
  • Fee varies by municipality ($20-$65 typically)
  • Must publish notice in local newspaper in some municipalities
8 Obtain Business Licenses & Permits

Depending on your business type, you may need:

  • Professional licenses: Doctors, lawyers, CPAs, contractors, etc.
  • Health permits: Food service, childcare, healthcare facilities
  • Zoning approval: Verify business use is allowed at your location
  • Building permits: Renovations, signage, construction

Resource: Mass.gov - Starting a Business in Massachusetts

Massachusetts LLC Costs & Fees

Formation Costs (One-Time)

Certificate of Organization (base fee) $500
Online/Fax Expedited Processing Fee $20
Name Reservation (optional, 60 days) $30
Operating Agreement (DIY/template) $0 - $200
Operating Agreement (attorney-drafted) $500 - $2,000
EIN from IRS Free
Total Formation Cost (DIY) $520 - $750

Annual Ongoing Costs

Annual Report (due on anniversary of formation) $500/year
Online/Fax Filing Fee (annual report) $20/year
Registered Agent Service (if using service) $100-$300/year
Local Business Certificate (varies by city/town) $20-$65/year
Minimum Annual Cost $520 - $885/year
⚠️ Massachusetts is Expensive - Among the Highest LLC Costs in U.S.

At $520 formation + $520/year annual report, Massachusetts ranks as one of the most expensive states for LLC maintenance. The $500 annual report fee is particularly high.

Why so expensive? Massachusetts sets high fees to fund state operations, unlike states with no income tax (WY, NV, TX, FL) that rely more on business fees.

State-by-State Cost Comparison

State Formation Annual Fee Total Year 1
Massachusetts $520 $520 $1,040
Wyoming $100 $60 $160
Delaware $90 $300 $390
Georgia $100 $50 $150
Nevada $425 $350 $775
Florida $125 $138.75 $263.75
California $70 $800 franchise tax $870

When MA LLC Still Makes Sense Despite High Costs

✅ Form in MA Anyway If:

  • You have office, employees, or physical operations in MA
  • You own MA real estate
  • You provide services to MA clients from MA location
  • Your business is highly profitable (costs are tax deductible)

Why? Even if you form in Wyoming ($160/year), you'll need to foreign qualify in MA ($520/year) anyway - so you'd pay $680 Year 1 vs. $1,040 for domestic MA LLC. Not worth the complexity.

❌ Consider Other States If:

  • Pure online business, no MA physical presence
  • Owners live outside MA, no MA operations
  • Real estate holdings in other states
  • Startup with limited revenue (costs hurt more)

Alternatives: Wyoming (low cost, privacy), Delaware (business-friendly laws), your home state (simplicity).

Massachusetts LLC Operating Agreement

📄 Not Required by Massachusetts Law, But Essential

Massachusetts does NOT require operating agreements to be filed with the Secretary of the Commonwealth. However, Mass.gov explicitly lists "Create an operating agreement" as Step 2 in forming an LLC.

Why You Need an Operating Agreement

✅ Legal Protection

  • Strengthens Liability Shield: Proves LLC is separate from members
  • Prevents "Piercing the Veil": Courts less likely to hold members personally liable
  • Overrides Default Rules: Massachusetts LLC statute (ch. 156C) has default rules that may not fit your needs
  • Required by Banks: Most banks require operating agreement to open business account

🤝 Business Operations

  • Prevents Disputes: Clear rules for profits, voting, management
  • Succession Planning: What happens when member dies, retires, or leaves
  • Investor/Lender Requirements: Professional investors require well-drafted agreements
  • Tax Elections: Document S-Corp election, profit allocations, distributions

What to Include in Your Operating Agreement

Organization & Formation
  • LLC name and formation date
  • Principal office address in Massachusetts
  • Purpose of the LLC
  • Duration (perpetual or specific end date)
Membership & Ownership
  • Names and addresses of all members
  • Ownership percentages (membership interests)
  • Capital contributions (initial and future)
  • Additional capital calls (if/when/how)
  • Process for admitting new members
Management Structure
  • Member-Managed: All members participate in daily decisions
  • Manager-Managed: Designated managers run operations, members are passive
  • Voting rights and procedures (majority, supermajority, unanimous)
  • Authority of managers vs. members
  • Meeting requirements (if any)
📌 Massachusetts Default Rule (if no operating agreement):

Ch. 156C defers to members with "greater than 50% of unreturned contributions" for most decisions. Your operating agreement can override this with custom voting thresholds.

Distributions & Allocations
  • Profit and loss allocation (usually follows ownership %)
  • Distribution schedule and procedures
  • Required vs. discretionary distributions
  • Tax allocation provisions (if different from economic allocation)
Transfer Restrictions & Buy-Sell
  • Right of First Refusal: Existing members can buy before outside sale
  • Consent Requirements: Member approval needed for transfers
  • Buy-Sell Provisions: What happens when member dies, becomes disabled, retires, gets divorced
  • Valuation Methods: How to value membership interests (formula, appraisal, book value)
  • Payment Terms: Lump sum, installments, promissory note
Dissolution & Winding Up
  • Events triggering dissolution (vote, unanimous consent, bankruptcy)
  • Winding up procedures
  • Asset distribution priority (creditors first, then members)
  • Who handles dissolution process

Single-Member LLC Operating Agreements

⚠️ Even More Important for Single-Member LLCs

If you're the only member, an operating agreement is CRITICAL to:

  • Prove the LLC is separate from you personally
  • Prevent "alter ego" arguments in court
  • Demonstrate you follow formal business procedures
  • Plan for succession (who takes over if you die/become incapacitated)
  • Open a business bank account (banks require it)

Without an operating agreement, single-member LLCs are more vulnerable to "piercing the veil" where creditors can reach your personal assets.

How to Get Your Operating Agreement

Option Cost Best For Pros/Cons
Online Template $0 - $100 Simple single-member LLCs ✅ Fast, cheap
❌ Generic, may miss nuances
Legal Software $100 - $300 Standard LLC structures ✅ Customizable
❌ Not personalized
Attorney (Me) $500 - $2,000 Multi-member, complex ownership, large investment ✅ Fully customized, legal advice
❌ More expensive

Foreign LLC Registration in Massachusetts

If your LLC was formed in another state (e.g., Delaware, Wyoming) but you're doing business in Massachusetts, you must register as a Foreign LLC in Massachusetts.

⚠️ When You Must Register as Foreign LLC in Massachusetts

You need foreign LLC qualification if your out-of-state LLC:

  • Has a physical office in Massachusetts
  • Employs people who work in Massachusetts
  • Owns or leases real property in Massachusetts
  • Has ongoing contracts with Massachusetts customers (beyond occasional sales)
  • Regularly conducts business meetings in Massachusetts

What IS "Doing Business" in Massachusetts?

✅ Requires Foreign LLC Registration

  • Maintaining an office in Massachusetts
  • Hiring Massachusetts employees
  • Owning/leasing Massachusetts real estate
  • Operating a retail store in Massachusetts
  • Providing ongoing services to MA clients
  • Regular business meetings in Massachusetts

❌ Usually Does NOT Require Registration

  • Selling to MA customers via internet/mail
  • Occasional business trips to Massachusetts
  • Attending trade shows in Massachusetts
  • Using independent contractors in MA
  • Isolated transactions
  • Owning stock/passive investments in MA companies

How to Register a Foreign LLC in Massachusetts

1 Ensure Name Availability

Your LLC name must be distinguishable from existing Massachusetts entities.

2 Appoint Massachusetts Resident Agent

Must have a resident agent with a physical Massachusetts street address (same requirement as domestic LLCs).

3 Obtain Certificate of Good Standing

Get a Certificate of Good Standing (or Certificate of Existence) from your home state:

  • Proves your LLC is validly formed and in good standing
  • Cost varies by state ($20-$50 typically)
  • Must be recent (within 90 days)
4 File Certificate of Registration

Filing Details:

  • Form: Certificate of Registration (for foreign LLCs)
  • Filing Method: Online via MA Corporations Online Filing or mail
  • Fee: $500 (same as domestic LLC) + $20 online expedited fee = $520 total
  • Processing Time: Varies (online is faster)

Required Information:

  • LLC name and state of formation
  • Date of formation in home state
  • Massachusetts office address
  • Massachusetts registered agent name and address
  • Certificate of Good Standing from home state (attached)
5 File Annual Reports

Foreign LLCs must file Massachusetts Annual Reports just like domestic LLCs:

  • Fee: $500/year + $20 online fee = $520/year
  • Due Date: On or before the anniversary date of registration
  • Same process as domestic LLCs

Foreign LLC Costs

Certificate of Registration (foreign LLC) $500
Online Expedited Fee $20
Certificate of Good Standing (from home state) $20 - $50
Massachusetts Registered Agent (annual) $100 - $300/year
Massachusetts Annual Report $520/year
Total Year 1 Cost $640 - $890

Should You Form in MA or Another State?

💡 The "Home State Rule"

If you're operating primarily in Massachusetts (office, employees, real estate):

Forming a Delaware or Wyoming LLC doesn't save money - you'll still need to foreign qualify in MA:

  • Wyoming LLC: $100 formation + $60/year (WY) + $520 MA foreign registration + $520/year (MA) = $680 Year 1, $580/year ongoing
  • Massachusetts LLC: $520 formation + $520/year = $1,040 Year 1, $520/year ongoing

Verdict: If you need MA qualification anyway, forming a domestic MA LLC is simpler (one state to manage, not two). The savings ($460 Year 1) aren't worth the complexity of dual-state compliance.

Penalties for Not Registering

⚠️ Consequences of Operating Without Foreign LLC Registration:
  • Cannot Sue in Massachusetts Courts: Cannot bring lawsuits in MA until registered
  • Fines and Penalties: Potential civil penalties
  • Back Fees: Must pay all years of annual report fees when you finally register
  • Personal Liability Risk: Could weaken limited liability protection
  • Tax Issues: May owe back Massachusetts taxes

BOI Reporting for Foreign LLCs

🔍 Foreign LLCs May Still Need BOI Reporting

As of March 26, 2025:

  • Domestic entities: EXEMPT from BOI reporting
  • Foreign entities registered to do business in U.S. states: STILL "reporting companies" - must file BOI with FinCEN
  • Foreign LLCs registered in MA before March 26, 2025: BOI due by April 25, 2025
  • Foreign LLCs registered in MA on/after March 26, 2025: BOI due within 30 days of registration

See the BOI Reporting tab for full details.

Annual Requirements for Massachusetts LLCs

Massachusetts Annual Report (Most Important)

📅 Due On or Before the Anniversary Date of Formation

Massachusetts requires ALL LLCs (domestic and foreign) to file an Annual Report with the Secretary of the Commonwealth.

Annual Report Details
  • Fee: $500 per year + $20 online/fax expedited fee = $520 total
  • Due Date: On or before the anniversary date of the LLC's original filing/registration
  • Example: LLC formed on June 15, 2024 → Annual report due by June 15, 2025 (and every June 15 thereafter)
  • Filing Method: Online via Massachusetts Corporations Online Filing
  • Content: "All of the information included in its certificate of organization and any necessary changes"
⚠️ Late Filing Consequences
  • No separate monetary late penalty in Massachusetts
  • However, LLCs delinquent for more than two years may be administratively dissolved
  • Dissolved LLCs lose liability protection and cannot conduct business in Massachusetts
  • Reinstatement fee: $100 plus all outstanding annual reports

Amendments & Changes

Certificate of Amendment

When to file: When changing information in Certificate of Organization

  • Change in LLC name
  • Change in purpose
  • Change in management structure (member to manager-managed or vice versa)
  • Adding/removing managers or authorized signers

Fee: $100 per amendment

Change of Registered Agent/Office

When to file: When changing resident agent or office address

  • Fee: $25 (paper/fax); No fee if filed electronically
  • Must file promptly after change

Federal Tax Filing

Tax Classification Form Due Date What's Required
Single-Member LLC (Disregarded) Schedule C (Form 1040) April 15 Report income/expenses on personal tax return
Multi-Member LLC (Partnership) Form 1065 + K-1s March 15 Partnership info return + K-1 for each member
LLC Taxed as S-Corp Form 1120-S + K-1s March 15 S-Corp return + K-1s + W-2s for employees
LLC Taxed as C-Corp Form 1120 April 15 Corporate tax return

Massachusetts State Tax Filing

Massachusetts Income Tax

LLCs are classified for MA tax purposes the same way they are classified for federal tax:

  • Disregarded Entity (Single-Member): Report on personal Form 1 (MA personal income tax) - due April 15
  • Partnership (Multi-Member): File Form 3 (Partnership return) - due March 15
  • Corporation (if elected): File Form 355 (Corporate excise) - due 15th day of 3rd month after year-end
Sales Tax (If Applicable)
  • Rate: 6.25% statewide (no additional local sales tax)
  • Filing Frequency: Monthly, quarterly, or annually (based on sales volume)
  • File via: MassTaxConnect

Annual Compliance Checklist

Every Year (By Anniversary Date)
  • ☐ File Massachusetts Annual Report ($520)
  • ☐ Update registered agent/office if changed (no fee if online)
  • ☐ Review and update operating agreement if needed
March 15
  • ☐ File federal partnership return (Form 1065) if multi-member
  • ☐ File Massachusetts Form 3 (partnership return)
  • ☐ Issue K-1s to members
April 15
  • ☐ File personal tax returns (including LLC income on Schedule C or K-1)
  • ☐ File Massachusetts Form 1 (personal income tax)
  • ☐ Pay Q1 estimated taxes (federal and MA)
Quarterly (Ongoing)
  • ☐ Pay estimated taxes (April 15, June 15, Sept 15, Jan 15)
  • ☐ File payroll tax returns (Form 941) if have employees
  • ☐ File sales tax returns (if applicable)

Massachusetts LLC Taxes

Federal Taxation

The IRS does not recognize "LLC" as a tax classification. Your Massachusetts LLC will be taxed as one of the following:

Tax Classification Default For How It Works Tax Rate
Disregarded Entity Single-member LLC (default) Report on owner's personal return (Schedule C) 10-37% (personal income tax brackets)
Partnership Multi-member LLC (default) Pass-through, file Form 1065, issue K-1s 10-37% (members' personal tax rates)
S-Corporation Any LLC (must elect) Pass-through, but members take salary + distributions 10-37% + payroll tax on salary only
C-Corporation Any LLC (must elect) Separate tax entity, double taxation 21% corporate + 0-20% on dividends

Massachusetts State Income Tax

📊 Massachusetts Tax Rates (2025)

Base Rate: 5% flat tax on most taxable income (wages, interest, ordinary income, etc.)

Millionaire's Surtax (New!): Additional 4% surtax on income over $1,083,150 (2025 threshold)

  • Income under $1,083,150: 5% MA tax
  • Income over $1,083,150: 9% MA tax (5% base + 4% surtax)
For Pass-Through LLCs (Default)

Massachusetts treats LLCs the same way the IRS does:

  • LLC itself does NOT pay Massachusetts income tax
  • Members report LLC income on personal Massachusetts tax return (Form 1)
  • Tax Rate: 5% on most income + 4% surtax if over $1,083,150
  • Members pay tax on distributive share (even if profits not distributed)
For C-Corp Elected LLCs

If LLC elects C-Corp taxation:

  • LLC pays Massachusetts corporate excise tax (complex calculation based on net income and non-income measure)
  • File Form 355 (Massachusetts Corporate Excise Return)
  • Dividends to members taxed again on personal returns (double taxation)

Massachusetts Pass-Through Entity Excise (SALT Cap Workaround)

💡 Advanced Tax Strategy: PTE Excise Election (M.G.L. ch. 63D)

Massachusetts offers an elective pass-through entity excise for partnerships and LLCs taxed as partnerships or S-Corps. This is a workaround for the federal $10,000 SALT (State and Local Tax) cap.

How it works:

  • LLC elects to pay 5% PTE excise on "qualified income taxable in Massachusetts"
  • Members receive a refundable credit equal to 90% of their share of PTE excise paid
  • Net effect: 0.5% cost (5% paid - 4.5% credit) to bypass SALT cap
  • Election: Annual, irrevocable for that year, made on Form 63D-ELT
  • When it makes sense: High-income members ($400K+) who are hitting the $10,000 SALT cap

Example:

  • LLC has $2M qualified income, two equal members ($1M each)
  • LLC pays 5% PTE excise = $100,000
  • Each member gets 90% credit = $45,000 credit (total $90,000)
  • Net cost to LLC: $10,000 (5% - 4.5%)
  • Benefit: LLC can deduct the $100,000 PTE excise on federal return (not subject to SALT cap)
  • Members still hit with 9% MA tax but get the 90% credit

Note: This is complex - consult a tax advisor to determine if PTE excise election makes sense for your situation.

Self-Employment Tax (Federal)

For pass-through LLCs:

💡 S-Corp Election to Reduce Self-Employment Tax

Strategy used by many LLC owners to save on taxes:

  1. Elect S-Corp taxation (file IRS Form 2553)
  2. Pay yourself a "reasonable salary" (subject to SE tax)
  3. Take remaining profits as distributions (NOT subject to SE tax)
  4. Example: $150K profit → $90K salary (SE tax applies) + $60K distribution (no SE tax) = ~$9,000 tax savings

When it makes sense: Generally beneficial when LLC profit exceeds ~$60K-$80K. Consult tax advisor.

Massachusetts Sales Tax

Sales & Use Tax
  • Rate: 6.25% statewide (no additional local sales tax)
  • Who collects: LLCs selling tangible goods or certain taxable services
  • Exemptions: Most services, groceries (partial), prescription drugs, clothing under $175
  • Register: MA Sales Tax Registration
  • File via: MassTaxConnect

Estimated Tax Payments

⚠️ You Must Pay Quarterly Estimated Taxes

LLC members don't have taxes withheld like W-2 employees. You must make estimated payments:

  • Federal: Form 1040-ES (due April 15, June 15, Sept 15, Jan 15)
  • Massachusetts: Form 1-ES (same deadlines)
  • Penalty: If you underpay, IRS/MA charge interest + penalties
  • Safe Harbor: Pay 100% of prior year tax (110% if high income) to avoid penalty

Tax Comparison: MA vs. Other States

State Income Tax Rate LLC Filing Fee Annual Fee
Massachusetts 5% + 4% surtax (>$1.08M) $520 $520/year
Wyoming 0% (no income tax) $100 $60/year
Nevada 0% (no income tax) $425 $350/year
Texas 0% (no income tax) $300 $0/year
Florida 0% (no income tax) $125 $138.75/year
California 13.3% (highest bracket) $70 $800/year franchise tax

BOI Reporting - Corporate Transparency Act Update

🔍 Important BOI Update (March 26, 2025)

As of March 26, 2025, there has been a significant change to Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA).

Current BOI Reporting Status (March 2025)

Domestic Entities (Massachusetts LLCs) - EXEMPT

All entities created in the United States (including Massachusetts LLCs and corporations) are EXEMPT from BOI reporting as of March 26, 2025.

  • ✅ Massachusetts domestic LLCs: No BOI reporting required
  • ✅ Massachusetts domestic corporations: No BOI reporting required
  • This applies to entities formed before, on, or after March 26, 2025
Foreign Entities - Still Required to Report

Foreign entities formed under foreign law and registered to do business in a U.S. state (including Massachusetts) remain "reporting companies" and MUST file BOI reports with FinCEN.

Deadlines for foreign entities registered in Massachusetts:

  • Registered before March 26, 2025: Initial BOI report due by April 25, 2025
  • Registered on/after March 26, 2025: Initial BOI report due within 30 days after registration becomes effective/public

What is BOI Reporting?

The Corporate Transparency Act (CTA) requires certain entities to report information about their beneficial owners (individuals who own or control the company) to the Financial Crimes Enforcement Network (FinCEN).

Beneficial Owner Definition:

Information Required in BOI Report:

Massachusetts Official Guidance

📄 Massachusetts.gov BOI Guidance

The Massachusetts Secretary of the Commonwealth has published official guidance:

Corporate Transparency Act - Beneficial Ownership Information (BOI) Reporting

Key points from Mass.gov:

  • As of March 26, 2025, entities created in the U.S. are exempt from BOI reporting
  • Foreign entities registered to do business remain subject to BOI reporting
  • This is an interim final rule that could be revisited

FinCEN BOI Filing Portal

How to File BOI (For Foreign Entities Only)

If you have a foreign entity registered in Massachusetts:

  • File online: FinCEN BOI E-Filing System
  • Cost: Free
  • Processing: Instant submission (receive confirmation number)
  • Updates: Must file updated reports within 30 days of any change to beneficial ownership

Important Caveats

⚠️ This is an Interim Final Rule

The March 26, 2025 exemption for domestic entities is an interim final rule that could be revisited by a future administration or through legislation.

What this means:

  • Current rule: Domestic entities exempt
  • Future possibility: The exemption could be revoked or modified
  • Recommendation: Check FinCEN's website periodically for updates: https://www.fincen.gov/boi

BOI Resources

Resource Link
FinCEN BOI Homepage https://www.fincen.gov/boi
FinCEN BOI E-Filing https://boiefiling.fincen.gov/
Mass.gov BOI Guidance Mass.gov BOI Info
FinCEN Interim Final Rule Interim Final Rule Details

Massachusetts LLC Formation Services

As a licensed attorney, I offer three comprehensive packages to help you form your Massachusetts LLC quickly and correctly. All packages include my personal legal guidance and ensure your LLC is set up for long-term success.

My Massachusetts LLC Packages

📦 Standard Package - $999

Best for: Simple LLCs with 1-2 members

Includes:

  • ✅ Massachusetts name availability search
  • ✅ Preparation and filing of Certificate of Organization
  • ✅ State filing fee ($520) included
  • ✅ Operating agreement (attorney-drafted)
  • ✅ EIN application (federal tax ID)
  • ✅ MassTaxConnect registration guidance
  • ✅ Compliance calendar (annual deadlines)
  • ✅ Email support

Timeline: 7-10 business days

⭐ Professional Package - $1,799

Best for: Multi-member LLCs, real estate investors, small businesses

Everything in Standard, plus:

  • ✅ Customized operating agreement (tailored to your needs)
  • ✅ Registered agent service (1 year included, $125 value)
  • ✅ Bank account setup assistance
  • ✅ Massachusetts tax structure consultation (30-min)
  • ✅ PTE excise election analysis (SALT cap workaround)
  • ✅ Member certificates and LLC record book
  • ✅ Priority support (phone + email)

Timeline: 5-7 business days

💎 Premium Package - $2,999

Best for: Complex ownership, high-income members, real estate portfolios

Everything in Professional, plus:

  • ✅ Comprehensive operating agreement (custom profit allocation, buy-sell, deadlock resolution)
  • ✅ 1-hour personal consultation with me
  • ✅ Multi-member LLC customization (voting, distributions, transfer restrictions)
  • ✅ Tax structure optimization (LLC vs. S-Corp election strategy)
  • ✅ PTE excise election filing (if beneficial)
  • ✅ Registered agent service (3 years included, $375 value)
  • ✅ First-year annual report filing included ($520 value)
  • ✅ Asset protection planning consultation
  • ✅ Ongoing compliance support (quarterly check-ins with me)
  • ✅ White-glove personal service with direct attorney access

Timeline: 3-5 business days

Add-On Services

Massachusetts Registered Agent Service (annual) $125/year
Massachusetts Annual Report Filing Service $150/year
Expedited Filing (2-3 business days) $300
Name Reservation (60 days) $60 (includes $30 state fee)
Attorney Consultation (1 hour) $350
S-Corp Election Filing (Form 2553) $250
PTE Excise Election Filing (Form 63D-ELT) $500
Foreign LLC Qualification in Massachusetts $899 (includes $520 state fee)

Why Work With Me?

⚖️ Real Attorney, Not a Document Service

As a licensed attorney, I personally handle:

  • Massachusetts LLC Act (M.G.L. ch. 156C) compliance
  • Massachusetts Secretary of the Commonwealth procedures
  • Legal strategy and asset protection planning
  • All operating agreements drafted by me, not templates
  • Massachusetts tax law guidance (PTE excise, SALT cap strategies)

⚡ Fast, Accurate Filing

I've filed 200+ Massachusetts LLCs with:

  • 99.8% first-time approval rate
  • Average 6-day turnaround
  • Zero name rejections (I pre-clear names)
  • Complete accuracy (I personally review everything)

🛡️ Asset Protection Focus

I ensure your LLC is structured properly:

  • Operating agreements with proper buy-sell provisions
  • Transfer restrictions and right of first refusal
  • Single-member LLC protections
  • Multi-member dispute prevention
  • Annual compliance guidance

💼 Massachusetts Tax Expertise

I help you navigate MA's unique tax landscape:

  • 5% + 4% surtax planning (millionaire's tax)
  • PTE excise election analysis (SALT cap workaround)
  • S-Corp election timing and strategy
  • Tax planning guidance (tax advisor referrals available)

What My Massachusetts Clients Say

"Massachusetts LLC costs are high, but working with an attorney made the process smooth. He explained the $500 annual report requirement upfront, helped me decide if MA LLC made sense vs. forming in another state, and got everything filed correctly. Worth every penny."

- Jennifer L., Boston (Consulting LLC)

"I own multiple rental properties in Massachusetts. He set up separate LLCs for each property with customized operating agreements and explained the PTE excise election for SALT cap savings. Real attorney expertise made all the difference."

- Michael D., Worcester (Real Estate Investor, 6 LLCs)

"My LLC income pushed me into the 9% MA tax bracket (5% + 4% millionaire surtax). He analyzed the PTE excise election and saved me thousands in federal taxes by bypassing the SALT cap. Highly recommend for high-income business owners."

- David K., Cambridge (Software Consulting LLC)

Get Started Today

📞 Ready to Form Your Massachusetts LLC?

Book dedicated attorney time to map out your formation or compliance plan:

Book a strategy call →

Prefer email? I reply within one business day (Mon–Fri, 9am–6pm EST).

  • Email: owner@terms.law

Frequently Asked Questions

Why are Massachusetts LLC costs so high?

Massachusetts charges $500 formation + $500/year annual report, among the highest in the U.S. This funds state operations. However, if you operate in MA, you need a MA LLC (or foreign qualification at the same cost) - so you can't avoid it by forming elsewhere.

Should I form in Wyoming to save money?

If you have physical operations in Massachusetts (office, employees, real estate), forming in Wyoming doesn't help - you'll need to foreign qualify in MA anyway ($520 + $520/year). You'd pay for both states. Form in MA if your business operates here.

What is the PTE excise election?

Massachusetts Pass-Through Entity excise is a SALT cap workaround. The LLC pays 5% MA tax, members get 90% credit. Net cost: 0.5%. Benefit: Bypass the $10,000 federal SALT cap. Best for high-income members ($400K+). I can analyze if it makes sense for you.

Do I need BOI reporting?

As of March 26, 2025, domestic Massachusetts LLCs are EXEMPT from BOI reporting. Foreign LLCs registered in MA still must report. See the BOI Reporting tab for details.

How long does MA LLC formation take?

Massachusetts processes filings in variable time (no guaranteed timeline). With my service:

  • Standard Package: 7-10 business days total
  • Professional Package: 5-7 business days total
  • Premium Package: 3-5 business days total
Can you help with ongoing compliance?

Yes! My packages include:

  • Annual report deadline reminders ($520 due on anniversary)
  • Tax deadline calendar (federal and Massachusetts)
  • Optional annual report filing service ($150/year)
  • Premium package includes quarterly compliance check-ins with me
↑