How to Form an LLC in Massachusetts | 2025

Did you know that 99.5 percent of all the businesses in Massachusetts are small businesses? As of 2024, that’s 722,819 small businesses¹, and you can easily join them by learning how to form an LLC in Massachusetts with this guide. We'll also talk about how Wise Business could help your international businesses transfer funds globally safely and efficiently.

Do you send and receive global payments?

Try Wise Business >>

Wise Trustpilot Score: Excellent 4.3 out of 5 stars
No minimum balance requirement and no monthly fees
Integrates with QuickBooks, Xero, Sage, and more

How to Start an LLC in Massachusetts (Step-by-Step)

To establish a Massachusetts LLC, you must file the right documents with the Massachusetts Secretary of the Commonwealth, appoint a registered agent, and meet several compliance obligations. Here's a breakdown of the formation process.

Step 1: Choose a Name for Your LLC

Your LLC name must be distinguishable from any other business entity registered with the Massachusetts Secretary of State. The name must also include a designation such as "Limited Liability Company" or the abbreviation "LLC" or "L.L.C."

Before filing, use the Secretary’s business name search tool² to check availability. You can reserve a name for 60 days for a $30 fee.

Step 2: Appoint a Registered Agent

Every LLC in Massachusetts must appoint a registered agent (also called a resident agent). This individual or business agrees to accept legal documents on behalf of your company. The agent must have a physical street address in Massachusetts and be available during standard business hours.

You can name yourself or another LLC owner, or hire a professional registered agent service to fulfill this role.

Where does Wise Business fit in your business? Send Fast and Secure Business Payments

---

Step 3: File the Certificate of Organization

To officially register your business, submit a Certificate of Organization³ to the Massachusetts Secretary. This document is your LLC’s formal registration and must include:

• The LLC’s name and office address.
• A general description of business activities.
• The registered agent’s name and address.
• The names and addresses of all LLC managers or authorized signatories.

You can file online, by mail, or in person. The filing fee is $520, one of the highest among U.S. states, and it's due again each year with your annual report.

Step 4: Draft an Operating Agreement

While not mandatory, an operating agreement defines your business structure, the responsibilities of each LLC owner (or single member), profit-sharing rules, voting rights, and exit procedures. This document helps avoid internal conflicts and proves that your LLC is a legitimate business entity in the eyes of banks and courts.

Step 5: Apply for an EIN from the IRS

Most LLCs will need an Employer Identification Number, also known as a Federal Tax Identification Number, from the IRS⁴. This unique nine-digit number is essentially your business’s Social Security number—it identifies your LLC for tax purposes and is required in a variety of situations.

You’ll need an EIN if your LLC plans to:

• Hire employees.
• Open a business bank account.
• File federal income tax returns.
• Pay state business taxes.
• Apply for local business licenses.
• Establish vendor relationships or business credit.

You should obtain an EIN even if you are a single-member LLC. Many banks require one to open a business bank account, and it can also help preserve your personal privacy since you can use the EIN in place of your Social Security number on official forms.

Step 6: Register with the Massachusetts Department of Revenue

If your LLC will collect sales tax or hire employees, you must register with the Massachusetts Department of Revenue. This applies to most retail and service-based businesses. Registration is required for business taxes such as meals, sales, and room occupancy.

Depending on your business activity, you may also need to file with the Department of Unemployment Assistance and the Department of Family and Medical Leave.

Step 7: Get the Required Business Licenses and Permits

Massachusetts does not issue a statewide business license, but cities and towns may require permits or licenses depending on the business type. Examples include:

• Health permits.
• Home occupation permits.
• Zoning clearances.

Contact your local city or town hall for exact licensing requirements.

What Are the Business Requirements for a Massachusetts LLC?

To stay compliant and protect your personal assets, your Massachusetts LLC must meet a few key obligations:

• File an Annual Report: You must file an annual report with the Massachusetts Secretary during your formation anniversary month. The $520 fee keeps your business entity in good standing and updates your LLC’s ownership, registered agent, and business address.
• Maintain a Registered Agent: A registered agent with a valid Massachusetts address is always required. If your agent’s information changes to avoid penalties or dissolution, update the state immediately.
• Separate Business Finances: Open a business bank account in your LLC’s name and avoid using personal funds for business expenses. Keeping finances separate helps preserve liability protection and simplifies tax filings.
• Keep Key Records: Maintain important documents, including your Certificate of Organization, operating agreement, IRS EIN, and tax filings. These records are essential for audits, applying for credit, or selling your LLC.

These basic requirements ensure your LLC remains legally compliant and fully protected under Massachusetts law.

---

Save Time and Money On Overseas Payments With Wise Business

Wise Business can help you save big time on international payments.

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in currencies.

Signing up to Wise Business allows access to BatchTransfer which you can use to pay up to 1000 invoices in one go. This is perfect for small businesses that are managing a global team, saving a ton of time and hassle when making payments.

Use Wise Business >>

Some key features of Wise Business include:

• Mid-market rate: Get the mid-market exchange rate with no hidden fees on international transfers

• Global Account: Send money to countries and hold balances in multiple currencies, all in one place. You can also get major currency account details for a one-off fee to receive overseas payments like a local

• Access to BatchTransfer: Pay up to 1000 invoices in one click. Save time, money, and stress when you make 1000 payments in one click with BatchTransfer payments. Access to BatchTransfer is free with a Wise Business account

• Auto-conversions: Don't like the current currency exchange rate? Set your desired rate, and Wise sends the transfer the moment the rate is met

• Free invoicing tool: Generate and send professional invoices

• No minimum balance requirements or monthly fees: US-based businesses can open an account for free. Learn more about fees here

---

What Are the Benefits of Starting an LLC in Massachusetts?

There are many benefits that make Massachusetts a popular choice for forming an LLC, including:

• Liability Protection: LLC owners (called members) are not personally liable for business debts or lawsuits, protecting personal assets such as their homes or cars.
• Flexible Management: You can structure the LLC as member-managed or manager-managed.
• Favorable Business Climate: Massachusetts has a high GDP per capita, a strong tech and healthcare industry, and access to world-class talent.
• No Franchise Tax: Massachusetts has other business taxes but doesn’t impose a state-level franchise tax on LLCs.
• Privacy and Simplicity: A single-member LLC is easy to manage and benefits from limited liability protection.

How Much Does It Cost to Start an LLC in Massachusetts?

The high filing and reporting fees make Massachusetts one of the more expensive states to form and maintain an LLC. However, depending on your industry and customer base, the benefits may outweigh the costs.

Service	Fee
Certificate of Organization	$520
Annual Report	$520/year
Name Reservation (optional)	$30
Registered Agent (optional service)	~$100–$300/year
Business License (varies by locality)	Varies

Can I Open an LLC in Massachusetts Without Living There?

Yes, you can. You do not need to live in Massachusetts or the United States to start an LLC in the state. The condition is to have a registered agent with a physical Massachusetts address who can receive legal documents.

This makes Massachusetts LLCs a viable option for remote business owners, freelancers, or those expanding operations into the state.

Can a Nonresident Open a Company in Massachusetts?

Absolutely. Non-U.S. residents can own and operate a Massachusetts LLC. There are no citizenship or residency requirements for LLC members. That said, you may need to:

• Obtain an Individual Taxpayer Identification Number (ITIN) from the IRS.
• Hire a local registered agent.
• File IRS Form 5472⁵ annually (for foreign-owned single-member LLCs).

You may also need to consider the implications of federal and estate taxes if you are not a U.S. citizen.

Comparison with Other States

Here’s how Massachusetts compares to nearby states for LLC formation:

Feature	Massachusetts	Rhode Island	Connecticut	New Hampshire
Formation Fee	$520	$150	$120	$100
Annual Report Fee	$520	$50	$80	$100
State Income Tax	Yes	Yes	Yes	No
Business License Required	Local only	Local/state	State & local	Local only
Foreign LLCs Allowed	Yes	Yes	Yes	Yes

Massachusetts has higher filing fees and taxes than neighboring states, but it also offers access to one of the most educated workforces and strongest economies in the U.S. New Hampshire, by contrast, is more tax-friendly, especially for pass-through entities, but lacks the same business infrastructure.

FAQs About Massachusetts LLCs

Are There Privacy Protections for Massachusetts LLCs?

Massachusetts does not offer strong privacy protections for LLC owners compared to states like Delaware or New Mexico. When you file a Certificate of Organization, you must list the names and addresses of the LLC’s managers or authorized signatories. These records are publicly available through the Massachusetts Secretary’s website. If privacy is a priority, you may consider hiring a registered agent service to keep your personal address off public filings.

Why Do People Use Massachusetts for LLCs?

Despite higher filing costs, Massachusetts remains a top choice for forming an LLC due to its highly educated workforce, innovation-driven economy, and robust legal infrastructure. It’s especially appealing for tech startups, healthcare providers, consultants, and professional service firms that benefit from proximity to Boston’s financial and academic centers.

Is a Massachusetts LLC Tax-Free?

No, a Massachusetts LLC is not tax-free. While LLCs are typically treated as pass-through entities for federal income tax purposes—meaning the LLC itself doesn’t pay income taxes—Massachusetts imposes state-level business taxes. Depending on your industry and business structure, your LLC may be subject to:

• Massachusetts income tax (for profits passed to members).
• Employer taxes.
• Sales and use taxes.
• Local business taxes (depending on your city or town).

Massachusetts does not levy a franchise tax, which some other states impose annually regardless of revenue.

What Are the Disadvantages of a Massachusetts LLC?

Some potential drawbacks of forming a Massachusetts LLC include:

• High Formation and Maintenance Costs: At $520 for both formation and annual reports, the fees are among the highest in the U.S.
• Public Disclosure: LLC owners must disclose their identities, limiting privacy.
• Complex Local Licensing: Some cities and towns require additional business licenses or permits.
• Tax Obligations: LLC owners may be responsible for state and federal income taxes, as well as employer taxes, if they hire staff.

These factors can add to the administrative burden, especially for single-member LLCs or small businesses just starting.

Conclusion

While the costs of forming an LLC in Massachusetts are higher than in many other states, the benefits—like proximity to a well-educated workforce, industry clusters, and access to capital—make it a worthwhile choice for many entrepreneurs.

It’s easy to start and grow your company when you understand the legal, tax, and operational requirements. Always stay compliant: file your annual reports, pay applicable business taxes, keep records current, and separate business from personal assets with a dedicated business bank account.

---

Sources:

1. Small Business Profile: Massachusetts – SBA Office of Advocacy (2024)
2. Massachusetts Secretary of State Info – SecretaryofState.com
3. LLC Filing Info – MA Secretary of the Commonwealth
4. Employer Identification Number – IRS
5. About IRS Form 5472