Starting an LLC in Massachusetts comes with more costs than just filing the initial paperwork. But it doesn’t have to be as expensive as you think.
We explain all of the initial and ongoing Massachusetts LLC cost details below, as well as give you tips on how to save money.
How much does an LLC cost in Massachusetts?
It costs $500 to form an LLC in Massachusetts. This is a fee paid for the Certificate of Organization.
You’ll file this form with the Massachusetts Secretary of State (aka Secretary of the Commonwealth). And once approved, your LLC will go into existence.
In addition to this LLC filing fee, there are other costs to be aware of when forming a Massachusetts LLC (Limited Liability Company).
Costs to forming a Massachusetts LLC
There is a $500 one-time state filing fee to form a Massachusetts LLC.
There are also ongoing fees (like a $520 Annual Report fee), which we discuss below.
LLC Costs in Massachusetts
|Registered Agent||$0 or $125 per year|
|Certificate of Organization||$500|
|Operating Agreement||$0 (free on our site)|
|EIN Number||$0 (free through IRS)|
|Annual Report||$520 (every year)|
|Taxes||varies (filed and/or paid every year)|
Massachusetts LLC Certificate of Organization Filing Fee ($500)
Starting an LLC costs $500 in Massachusetts. This is the state filing fee for a document called the Massachusetts Certificate of Organization.
The Certificate of Organization is filed with the Massachusetts Secretary of State. And once approved, this is what creates your LLC.
The $500 fee is a one-time Massachusetts LLC filing fee. You don’t have to pay any monthly (or annual) fees to start your Massachusetts LLC.
Note: LLCs are the most common business structure used in Massachusetts. They are the most popular business entity because they offer liability protection for the LLC owners.
Depending on the state, the Certificate of Organization form is sometimes called a Certificate of Formation or the Articles of Organization. Certificate of Organization is the most common name used in Massachusetts – but they all mean the same thing: the form used to create your LLC.
Massachusetts business name cost ($0)
Naming your Limited Liability Company doesn’t cost anything. Your Massachusetts LLC Name is approved (at no extra cost) when your Certificate of Organization filing is approved by the state.
You may have read online that LLC Name Reservations are required. However, this is not true in most states. Most states don’t require a Name Reservation to form an LLC.
How much does a DBA cost? ($50)
A DBA is filed with the state or the county. In Massachusetts, you can choose whether to simply register your DBA with the County Clerk, or to register your DBA as a Trademark with the state. A state-level Trademark filing costs $50. The fee for a DBA Certificate filed with the county varies, so check with the county where your LLC operates.
Note: A DBA is sometimes called a Trade Name, Fictitious Name, Assumed Name or Fictitious Business Name. They all mean the same thing.
Tip: You aren’t required to get a DBA for your LLC. It’s optional. For more information, read our article: Do I need a DBA?
Massachusetts Registered Agent Fee ($0 or $125/year)
Massachusetts law requires that you designate a Registered Agent (aka Resident Agent) when forming your LLC.
A Massachusetts Registered Agent is a person or company who receives legal documents and state notices for your LLC. A Registered Agent needs a street address in the state and should generally be available during normal business hours.
There is no additional cost if you will be your own Registered Agent, or have someone you know be your LLC’s Registered Agent.
However, you have the option of hiring a Registered Agent service. This will cost you between $100 to $300 per year. But Registered Agent services offer other helpful business services and can protect your privacy.
Hiring a Registered Agent service is a good idea if:
- You don’t have an address in the state (Massachusetts law requires Registered Agents to have a physical address in the state
- You want to keep your address off public record (depending on which company you hire, you may be able to use their address to keep your address private)
LLC Operating Agreement Fee ($0)
A Massachusetts LLC Operating Agreement is a written contract between the LLC Members. Operating Agreements include detailed information about LLC ownership, how the LLC is managed, and how profits are distributed.
Single-Member LLCs and Multi-Member LLCs should draft an Operating Agreement, keep it with their business records, and give a copy to each Member.
Most websites charge $50 to $200 for LLC Operating Agreements.
Here at LLC University®, we offer free LLC Operating Agreement templates for all types of LLCs.
LLC EIN Number Fee ($0)
An EIN Number is also known as an Employer Identification Number (EIN) or a Federal Employer Identification Number (FEIN).
This number is used to file income taxes, to open an LLC bank account, and to hire employees (if applicable).
Although many websites charge a service fee to get an EIN for your LLC, it can actually be done for free.
You can obtain an EIN for your LLC from the Internal Revenue Service (IRS) at no cost. The online filing can be completed in a few minutes.
Massachusetts LLC Annual Report Fee ($520/year)
Massachusetts requires you to keep your LLC’s information up to date by filing an Annual Report.
This keeps your Massachusetts LLC in good standing and in compliance with state law so it can continue operating. You simply confirm the information on the Annual Report, file it with the Massachusetts Secretary of State, and pay the Annual Report fee.
The Massachusetts LLC Annual Report costs $520 per year when you file online. This fee is paid every year for the life of your LLC.
If you choose to file your Annual Report by mail, you save a little money. The fee is only $500 when you file by mail.
Massachusetts Business License and Permit Fees (varies)
Depending on where your LLC does business in Massachusetts and the industry you’re in, you may need to obtain additional Business Licenses or Permits. For example, you may need to get a City Business Permit.
The costs for these other business licenses or permits will vary depending on location and industry, but usually the fees are not very high. Some licenses and permits are issued at the state level, and others are issued by a municipality (the town, city, or county).
LLC Taxes (varies)
There are many different types of Massachusetts LLC taxes that owners must pay, so this annual cost varies widely.
Some of the taxes LLC owners pay include:
- Federal taxes
- State income tax
- Local income tax
- Business taxes
- Self-employment taxes
- Sales and use tax
- Payroll tax (if you have employees)
- Property tax (if the LLC owns property)
Your Massachusetts LLC taxes depend on your industry and amount of business activity, so we’re not able to provide an estimate. Every business is different, and your specific circumstances determine what taxes apply to your LLC.
Hiring an Accountant
How much your small business pays in taxes is best determined by working with a qualified accountant in Massachusetts.
The amount you’ll pay your accountant will vary. However, most accountants will charge $300 per year for a simple tax return, or up to $900 for more detailed filings.
Note: We recommend speaking with a few accountants in Massachusetts to make sure they can help you meet all of your federal, state, and local tax obligations. We offer detailed tips on How to Find an Accountant.
Massachusetts Secretary of State
If you have any questions about the cost of opening a Massachusetts LLC, you can contact the Corporations Division at the Massachusetts Secretary of the Commonwealth.
Massachusetts LLC Cost FAQs
Some LLCs may need a business license in Massachusetts. This depends on your industry and where your LLC is located. The cost of local business permits varies.
If you hired a Registered Agent service, you’ll have an annual subscription fee to pay each year. This is usually about $125 per year.
Some LLCs may need a business license in Massachusetts. This depends on your industry and where your LLC is located. You’ll need to check with your municipality to see if there are any annual renewal fees for the business permit.
However, if you want to save time and make sure your LLC is filed correctly, we recommend hiring Northwest Registered Agent.
Northwest Registered Agent has excellent customer service and they include Registered Agent services free for the 1st year. They also offer other services, like an Operating Agreement and filing your Annual Reports.
Check out Best LLC Services for more suggestions.
However, some people may want to hire an attorney if their LLC has a complex ownership or management structure, has investors, or requires industry-specific documentation.
A business attorney usually charges between $800 and $2,500 to form an LLC.
- Choose an LLC business name and make sure it’s available
- Choose who will be your Massachusetts Registered Agent
- File the Massachusetts Certificate of Organization
- Complete and sign an LLC Operating Agreement
- Get a Tax ID Number (EIN) from the IRS
- Open a business bank account
- Check whether you need a business or sales tax license in Massachusetts
By forming your LLC yourself, being your own Registered Agent, and using our Operating Agreement template you can save over $400.
You can get an LLC in Massachusetts approved in 1-2 business days if you file online. On the other hand, filing by mail also takes about 1-2 business days (plus mail time).
And you might be able to find a bank that doesn’t charge any monthly fees.
Before you open your LLC business bank account, we recommend calling and asking if there are ways to avoid the monthly maintenance fees.
The Massachusetts Foreign LLC cost is $500.
If you form an LLC in Massachusetts, it is called a “Domestic LLC”. If you formed your LLC in another state, it would be a Foreign LLC once you register it in Massachusetts.
However, the most important factors in deciding where to start a business are where you live and where you’re doing business.
Meaning, if you live in or do business in Massachusetts, then you should start your business in Massachusetts. While many websites talk about tax rates and advantages of certain states, none of that applies if it’s not the state where you live and do business. And just because a certain state has cheaper LLC fees doesn’t mean it’s a good idea to form your LLC there.
For example, if you form an LLC in Wyoming, but live in and conduct business in Massachusetts, you’ll also need to register your Wyoming LLC in Massachusetts (and pay fees). And you’ll end up paying Massachusetts taxes anyway. This ends up leading to more costs and more headaches with no advantages.
In summary, if you are a Massachusetts resident, then yes, Massachusetts is the best state to form an LLC. If you don’t live in and do business in Massachusetts, then no, Massachusetts probably isn’t a good state to start an LLC.