Many Massachusetts entrepreneurs choose to form a limited liability company (LLC) because of the many benefits of this business entity type. An LLC provides liability protection, for instance, so your assets are not at risk if your business is sued or cannot pay debts.
An LLC is a “pass-through entity” for tax purposes, meaning that the LLC itself is not taxed. Instead, income passes through the business to the LLC owners or members, who report it on their tax returns. LLCs also offer flexibility in terms of management and taxation.
Creating an LLC is relatively straightforward, but ensuring it’s done correctly is crucial to getting your Massachusetts business on the right foot. The most critical step is filing a certificate of organization.
What Is a Certificate of Organization for an LLC?
The certificate of organization (also known as Articles of Organization in other states) is a legal document filed with the Massachusetts Secretary of State to form an LLC officially. It will include your business name, address, resident agent information, and more, as detailed below.
First, Select a Resident Agent for Your Massachusetts LLC
Massachusetts requires LLCs to appoint a resident agent, a person or company authorized to accept and respond to official business correspondence, such as legal, tax, or financial documents.
The resident agent ensures all required notices and documents are received. In Massachusetts, the resident agent can be an LLC member, individual, or entity that meets state requirements. In Massachusetts, a resident agent must:
- Be 18 years or older
- Have a physical address in the state
- Be available during regular business hours
- Be registered to operate in the state, if it’s a business
Many business owners hire a resident agent service to ensure their LLC stays fully compliant and for convenience.
If you choose to be your resident agent, you must be at your resident agent’s address for all business hours. A resident agent service allows you to be wherever you need to be to run and grow your business.
How to Submit a Certificate of Organization in Massachusetts
To start, visit the Massachusetts Corporations Division to access the certificate of organization online. You’ll find a fillable document, so you’ll enter all the required information on one page.
In Massachusetts, the certificate of organization requires the following information:
- LLC name
- Principal office address
- Resident agent information
- Resident office address
- The general character of the business
- Name and address of managers
- Name and address of persons authorized to execute documents for the business (usually the members)
- Name and address of each person authorized to execute, acknowledge, deliver and record any recordable instrument purporting to affect an interest in a property
Once you fill in the required information, you’ll click the submit button at the bottom of the page.
You’ll have an opportunity to review the information before being taken to payment.
The filing fee is $500. You should receive confirmation in one to two business days if you file online. The turnaround time for filing by mail can be up to two weeks.
Some entrepreneurs hire an LLC formation service like ZenBusiness to handle this step, saving time and ensuring the process is done correctly.
Draft an Operating Agreement
Massachusetts does not require an operating agreement, but it’s a crucial document that defines members’ ownership percentages and profit allocations. Those are the two key elements, but it should also include the following:
- Each member’s rights and responsibilities
- Management structure and roles
- Voting rights of each member
- Rules for meetings and voting
- What happens when a member sells their interest, becomes disabled, or dies
You can find operating agreement templates online, but it’s best to have them drawn up or reviewed by an attorney. The language of an operating agreement is crucial and can often help determine how member disputes will be resolved. Here you can obtain a free operating agreement template for your Massachusetts LLC.
Contact Information for the Massachusetts Secretary of State
Massachusetts Secretary of State
Secretary of the Commonwealth
One Ashburton Place, 17th floor
Boston, MA 02108
Email: [email protected]
There’s only one way to create an LLC in Massachusetts: by successfully filing a certificate of organization. If you make any mistakes, you’ll likely have to refile, so be sure to do it right the first time and set your business up for serious success!