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How to Start a Business in Massachusetts

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Massachusetts is home to some of the most prestigious research institutes in the country, including Harvard and MIT. Because of this, Massachusetts is a hub for STEM jobs, second only to Washington. “The Bay State” frequently shows up on “top 10” lists for new business for a few reasons: in 2012, a bill was passed that allowed Massachusetts to invest in several long-term research and development activities, provide $1 million for paid internships in startups, and another $1 million for a program to mentor entrepreneurs. Although the cost of living in Massachusetts is very high compared to other best states for business, the quality of life also remains high. For example, less than 4% of people did not have health insurance in 2013, the lowest rate nationwide.

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General resources for starting a business in Massachusetts

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Fun facts about starting a business in Massachusetts

Famous business founded in Massachusetts New Balance

New Balance is a footwear manufacturer founded and based in the Brighton neighborhood of Boston, Massachusetts. The company was founded in 1906 as the “New Balance Arch Support Company” and is one of the world’s major sports footwear manufacturers. The company has reached a total profit of approximately $40 billion since 1991.

Famous entrepreneur born in Massachusetts Leo Kahn

Leo Kahn (1916-2011) was a reporter and entrepreneur born in Medford, Massachusetts. He was the co-founder of Staples Inc. Kahn is also considered a pioneer of the natural and health food supermarket industry, founding the Fresh Fields and Nature’s Heartland chains, which are now part of Whole Foods Market.

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Which type of legal structure is best for my business in Massachusetts?

At bizHUMM we strongly recommend you incorporate, but you must consider the tax, legal, and liability implications carefully before deciding on the best structure for your business.

Here are 5 helpful steps to help you determine the best legal structure:

Click one of the buttons below to learn more about the different types of business legal structures and how to start them in the state of Massachusetts.
LLC (Limited Liability Company)
A limited liability company, commonly called an "LLC," is a legal business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Steps to starting an LLC in Massachusetts:

  • Step 1 — Choose a name for your LLC.
  • Step 2 — File a Certificate of Organization.
  • Step 3 — Appoint a Registered Agent.
  • Step 4 — Prepare an Operating Agreement.
  • Step 5 — Comply with any publication requirements.
  • Step 6 — Comply with other tax and regulatory requirements.
  • Step 7 — File Annual Reports.
  • Step 8 — Register foreign LLCs doing business in Massachusetts.

For help forming your LLC in Massachusetts we recommend CorpNet (they have fees for their service).
Alternatively, you can visit the Massachusetts Secretary of Commonwealth website.

Other Massachusetts resources for LLCs:

Secretary of State Business Name Database: Search for the availability of your LLC name here.
File your “Application of Reservation of Name” here.
File your “Certificate of Organization” here.
File your “Annual Reports” here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your LLC here. If your LLC has more than one member, you must get an EIN, even if you have no employees.

Licenses and Permits: Search for what licenses and permits may be required of your business here.

Massachusetts Department of Revenue: If you will be selling goods or will have employees, you’ll need to register here.

Sole Proprietorship
A sole proprietorship is the simplest and most common structure chosen to start a business. It is an unincorporated business owned and run by one individual, with no distinction between the business and the owner. The owner is entitled to all profits, and is responsible for all the business’s debts, losses, and liabilities.

Steps to starting Sole Proprietorship in Massachusetts:

  • Step 1 — Choose a name for your sole proprietorship.
  • Step 2 — File a business certificate with city or town clerk’s office.
  • Step 3 — Obtain licenses, permits, and zoning clearance.
  • Step 4 — Obtain an Employer Identification Number (EIN).

For help forming your sole proprietorship in Massachusetts we recommend CorpNet (they have fees for their service).
Alternatively, visit the Massachusetts Secretary of Commonwealth website.

Other Massachusetts resources for Sole Proprietorship:

Secretary of State Business Name Database: Search for the availability of your business name here. A sole proprietor may use his or her given name, or an assumed business name.

U.S. Patent & Trademark Office: Federal database for existing trademark registrations. Click on the “TESS” link to conduct a search.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your sole proprietorship here. If you hire employees, you will need an EIN.

Licenses and Permits: Search for what licenses and permits may be required of your business here.

Massachusetts Department of Revenue: If you will be selling goods or will have employees, you’ll need to register here.

Partnership
A partnership is a business operation between two or more individuals who share both management and profits. The two most common types of partnerships are general and limited partnerships. Each partner contributes to all aspects of the business, and shares in the profits and losses of the business.

Steps to starting Partnership in Massachusetts:

  • Step 1 — Name your partnership.
  • Step 2 — File an assumed business name.
  • Step 3 — Create a partnership agreement.
  • Step 4 — Obtain licenses, permits, and zoning clearance.
  • Step 5 — Get an Employer Identification Number (EIN).

For help forming your partnership in Massachusetts we recommend CorpNet (there are fees for their service).
Or, you can visit the Massachusetts Secretary of Commonwealth website.

Other Massachusetts resources for Partnership:

Secretary of State Business Name Database: Search for the availability of your business name here. A partnership may use the surnames of the individual partners, or a fictitious business name.

U.S. Patent & Trademark Office: Federal database for existing trademark registrations. Click on the “TESS” link to conduct a search.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your partnership here. Partnerships must have an EIN, whether you have employees or not.

Licenses and Permits: Search for what licenses and permits may be required of your business here.

Massachusetts Department of Revenue: If you will be selling goods or will have employees, you’ll need to register here.

S Corporation
An S corporation (or S Corp for short) is a special type of corporation created through an IRS tax election. An eligible domestic corporation can avoid double taxation (once to the corporation and again to the shareholders) by electing to be treated as an S corporation. What makes the S corp different from a traditional corporation (C corp) is that profits and losses can pass through the shareholder’s personal tax return. Consequently, the business is not taxed itself.

Steps to starting S Corporation in Massachusetts:

  • Step 1 — Choose a corporate name.
  • Step 2 — Prepare and file Articles of Incorporation.
  • Step 3 — Appoint a registered agent.
  • Step 4 — Set up a corporate records book.
  • Step 5 — Prepare corporate bylaws.
  • Step 6 — Appoint initial corporate directors.
  • Step 7 — Hold your first Board of Directors meeting.
  • Step 8 — Issue stock.
  • Step 9 — Comply with annual report requirements.
  • Step 10 — Comply with other tax and regulatory requirements.
  • Step 11 — Register foreign corporations doing business in Massachusetts.

For help forming your S corporation in Massachusetts we recommend CorpNet (they have fees for their service).
Alternatively visit the Massachusetts Secretary of Commonwealth website.

Other Massachusetts resources for S Corporation:

Secretary of State Business Name Database: Search for the availability of your corporate name here.
File your “Application for Reservation of Name” here.
File your “Articles of Organization” here.
File your “Annual Report” here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your corporation here.

IRS S corporations: Specific instructions for your tax requirements as an S corp.

Licenses and Permits:Search for what licenses and permits may be required of your business here.

Massachusetts Department of Revenue: Register here to fulfill your business tax requirements.

C Corporation
A C corporation (or C corp), refers to any corporation that is taxed separately from its owners. A C corporation is distinguished from an S corporation, which generally is not taxed separately. From a legal standpoint, C corporations are separate entities that can sue and be sued. From a tax standpoint, they are separate taxpayers, paying tax at special corporate tax rates that differ from those applicable to individuals.

Steps to starting C Corporation in Massachusetts:

  • Step 1 — Give your corporation a name.
  • Step 2 — File Articles of Incorporation.
  • Step 3 — Find a registered agent.
  • Step 4 — Set up a corporate records book.
  • Step 5 — Prepare corporate bylaws.
  • Step 6 — Appoint initial corporate directors.
  • Step 7 — Hold your first Board of Directors meeting.
  • Step 8 — Issue stock.
  • Step 9 — Comply with annual report requirements.
  • Step 10 — Comply with other tax and regulatory requirements.
  • Step 11 — Register foreign corporations doing business in Massachusetts.

For help forming your C corporation in Massachusetts we recommend CorpNet (they have fees for their service).
Alternatively, you can visit the Massachusetts Secretary of Commonwealth website.

Other Massachusetts resources for C Corporation:

Secretary of State Business Name Database: Search for the availability of your corporate name here.
File your “Application for Reservation of Name” here.
File your “Articles of Organization” here.
File your “Annual Report” here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your corporation here.

Licenses and Permits: Search for what licenses and permits may be required of your business here.

Massachusetts Department of Revenue:Register here to fulfill your corporate tax requirements.

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Why choose Massachusetts for my business?

  • 1

    Business News Daily “The Best States for Entrepreneurs” (2015)
    Massachusetts ranks #8.

  • 2

    USA Today “The Best States for Business” (2015)
    Massachusetts ranks #2.
    Massachusetts led the nation in technology and innovation, due in large part to the high volume of research institutions, highly educated workforce, and the abundance of technology and science positions.

  • 3

    Massachusetts Small Business Development Center
    “The Massachusetts Small Business Development Center (MSBDC) Network provides one-to-one free comprehensive and confidential services focusing on, business growth and strategies, financing and loan assistance as well as strategic, marketing and operational analysis. In addition, low cost educational training programs are offered across the state targeted to the needs of small business.”

  • 4

    Economic Development Incentive Program (EDIP)
    “The Economic Development Incentive Program (EDIP) is a tax incentive program designed to foster job creation and stimulate business growth throughout the Commonwealth. Participating companies may receive state and local tax incentives in exchange for job creation, manufacturing job retention and private investment commitments.”

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