- According to U.S. News & World Report, Massachusetts tops the list as the best state for starting a business for 2021, with the “highest amount of venture capital investment and the highest patent creation rate of any state.”
- Before you register your startup in Massachusetts, in addition to creating a business plan, you must also determine your organization's legal ownership structure, such as a limited liability company or corporation.
- When you’re ready to register your startup, depending upon your chosen business structure, Massachusetts requires you to choose a unique business name, differing from any other registered businesses in the state.
- You’ll also need to select a registered agent, who is the designated recipient of any legal documentation on behalf of your startup. You can specify an individual or an entity as your registered agent. Further, your entity itself can serve as the registered agent.
- Depending upon your chosen business structure, you’ll need to register with the Massachusetts Secretary of the Commonwealth before commencing operations in the state. You may file your formation forms online, by fax, by U.S. mail, or in person.
- If you are a female startup founder in Massachusetts, you can obtain a certification from the Massachusetts’ State Office of Minority and Women Business Assistance (SDO), verifying that your ownership and business control is by a woman or minority.
The startup boom is no longer relegated to New York or Silicon Valley. Other cities have started to become known for their entrepreneurial spirit, and Boston is making a splash. According to a recent study, Boston, Massachusetts, ranked number six in the top entrepreneurial regions globally, trailing New York, Seattle, Los Angeles, Tel Aviv, and Silicon Valley.
Boston is privy to plentiful startup money for its highly educated entrepreneurial sector. With both Harvard University and the Massachusetts Institute of Technology (MIT) within its borders, Massachusetts produces some of the brightest graduates in the country.
According to U.S. News & World Report, Massachusetts tops the list as the best state to start a business in 2021, with the “highest amount of venture capital investment and the highest patent creation rate of any state.” Additionally, with just over 600,000 small businesses employing 1.5 million people, it’s easy to see why more founders are launching their startups in the Bay State.
If you consider registering your startup in Massachusetts, this article will walk you through what you need to know.
How to Register a Business in Massachusetts
When you register your startup in Massachusetts, you'll need to satisfy several legal requirements. However, before registering your startup, it’s a good idea to plan, for example, researching the market and potential competitors, mapping out your financing, plan for operations and personnel, and creating a business plan. Massachusetts provides various resources to help you start a business and identify what resources you’ll need as you launch your startup.
In drafting your business plan, you’ll want to consider marketing, advertising, sales, location, and ownership, to name a few categories. To help guide you, you can check in with the U.S. Small Business Administration or the Commonwealth of Massachusetts, which provide additional guidance for creating a business plan.
Once you’ve identified some of the basics about your business’s operation, it is then time to register your startup. Below, we'll walk you through the steps necessary to register your business in Massachusetts.
Determine Your Business’s Entity Structure
Before you register your startup in Massachusetts, in addition to creating a business plan, you must also determine your organization's legal ownership structure. For example, in the Commonwealth of Massachusetts, you may choose to register as a:
- Limited Liability Company (LLC)
- Limited Liability Partnership (LLP)
- Sole Proprietorship
Your chosen business entity determines the next steps in registering your startup. For example, if you choose a sole proprietorship, you won’t need to register your business with Massachusetts’ Secretary of the Commonwealth. However, if you choose to use a name different than your own, you’ll need to file for a “doing business as” certification, otherwise known as a DBA, with the clerk’s office of your local city or town.
On the other hand, suppose you choose a limited liability company for your business structure. You would file your certificate of organization with the Secretary of the Commonwealth’s Corporations Division online, by fax, by U.S. mail, or in person, accompanied along with the $500 registration fee.
Choose the Name of Your Startup
When you’re ready to register your startup, depending upon your chosen business structure, Massachusetts requires you to choose a unique business name, differing from any other registered businesses in the state. Specifically, a business name “may not be the same as, or so similar as to be likely to be mistaken for the name of any other existing corporation or other entity authorized to transact business in the commonwealth or any reserved name.”
To confirm if your startup’s name is distinguishable from any other registered businesses, you can use Massachusetts’ business search tool.
If you’re not quite ready to register your startup, but you’d like to preserve your company’s name, you can file a name reservation with Massachusetts, along with a filing fee of $30. You may keep your business name reserved for sixty (60) days. If you need to extend your reservation, you may do so along with an additional $30 filing fee.
Identify Your Registered Agent
You’ll also need to select a registered agent, who is the designated recipient of any legal documentation on behalf of your startup. You can specify an individual or an entity as your registered agent. Further, your startup itself can serve as the registered agent.
To designate a registered agent in Massachusetts, you’ll need to file a Statement of Appointment of Registered Agent. According to Massachusetts law, your selected registered agent must consent to the appointment, which such consent is part of your Statement of Appointment.
Submit Your Formation Forms
Depending upon your chosen business structure, you’ll need to register with the Massachusetts Secretary of the Commonwealth before commencing operations in the state. You may file your formation forms online, by fax, by U.S. mail, or in person.
The Secretary of the Commonwealth gives you straightforward explanations on how to file for partnerships, corporations, and limited liability companies. For example, for a corporation, you can use the sample forms provided on the site for your articles of incorporation, which also notify you of the required filing fee. Further, the site highlights other required documents for your corporate startup, such as your annual report.
What to Do Next
After you submit your formation forms to register your startup with the state, you’ll also need to obtain a federal employer identification number for banking and tax filings. Additionally, you’ll need to check in with the Commonwealth of Massachusetts and your local city and county to see if there are any additional business registrations required, such as a business license.
How Long Does It Take to Register a Business in Massachusetts?
With online filing options, you can register your Massachusetts startup in as little as a few hours. If you mail in your registration forms instead, you may have to wait a few days for your startup to be up and running officially.
Like any other task, preparation is vital. The more you prepare, the faster you’ll complete your registration. By researching your business’ services or products, determining if your startup name is unique, and choosing your ownership structure, you’ll be better prepared to complete the necessary registration forms.
How Much Does It Cost to Register a Business in Massachusetts?
Depending upon your chosen entity for your startup, you will have filing fees due when registering your company. For example, if you register as a corporation, you’ll pay a filing fee of “$275 for up to 275,000 shares plus $100 for each additional 100,000 shares or any fraction thereof.” If you register as an LLC, you’ll pay a fee of $500.
Also, depending upon your entity, you may be liable for Massachusetts’s corporate excise tax, which considers your startup’s net income and the value of either tangible or intangible property. To better understand your state tax obligations as a startup, you should consult with an accountant familiar with Massachusetts tax laws.
After submitting your registration forms, you need to learn about any required state or local licenses, such as a business license. You must also understand what annual registrations and fees are required of your startup, such as an annual report. Fees for these reports differ depending on your entity’s legal structure. For example, the annual report filing fee for an LLC is $500, where the annual report filing fee for a corporation is $125.
How Do You Register as a Woman-Owned Business in Massachusetts?
Suppose you are a female startup founder in Massachusetts. In that case, you can obtain a certification from Massachusetts’ State Office of Minority and Women Business Assistance (SDO), verifying that your ownership and business control is by a woman or minority. Through the SDO, you can obtain two specific certifications: one for the Commonwealth of Massachusetts and one for federally-funded Department of Transportation projects.
The SDO process typically takes about thirty (30) days from when your application is completed with any required documentation. Further, SDO requires all applicants to attend a precertification workshop. This workshop explains the requirements of the certification.
In addition to the state certification, you can also explore national certifications, such as those offered by the Small Business Administration (SBA). For example, the SBA offers three types of certifications for women-owned businesses, including the Women’s Business Enterprise (WBE), the women-owned small business (WOSB), and the Economically Disadvantaged Women-Owned Small Business (EDWOSB). To learn more about these certifications, visit the SBA’s website.
Benefits of Registering a Business in Massachusetts
Here are some benefits of registering your startup in Massachusetts:
- Massachusetts has a thriving startup environment, encouraging founders to launch their companies in the Bay State.
- Massachusetts has continuing economic growth, encouraging startups and small businesses to anchor in the state.
- According to U.S. News and World Report, there are 80 colleges and universities in Massachusetts, contributing directly to the highly skilled workforce.
- Massachusetts has a flourishing tech industry, with some placing the Commonwealth in the top five in the country.
Limitations of Registering a Business in Massachusetts
Here are some limitations of registering your startup in Massachusetts.
- The highly qualified talent in Massachusetts also increases the demand for the best of the best. With so many qualified candidates, the labor market is tight, making it a job seeker’s game.
- When an economy grows, housing prices increase. Massachusetts is no exception, with pricey real estate and a higher cost of living than other states.
- Although state regulations aren’t unbearable, they can be a considerable headache for startups and small businesses.
We can help!
At AbstractOps, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most — your business. If you're looking for help registering your Massachusetts startup, we can get your documentation ready, overall shepherding this process to ensure it's done right. Sign up to get started.
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