You have a big idea, truckloads of ambition, and dreams of a thriving Massachusetts LLC, and you’re mentally prepared to make it happen.
But the Chinese philosopher Lao Tzu once said, “a journey of a thousand miles begins with a single step,” and for you, that first step is filing the Certificate of Organization.
With such grand plans, the last thing you might want to do is file paperwork, but completing the Certificate of Organization is what authenticates your LLC, making it official in Massachusetts. It’s perhaps the most important step in starting your Massachusetts LLC. Following this guide will help take the tedium out of paperwork and get your business started quickly.
But before you dive into the Certificate of Organization, you should have a few pieces of information ready to help streamline the process.
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Choosing an LLC Name
Before anything else, you will need to decide on an LLC name. You must include a business name on your Certificate of Organization, and if the Secretary of the Commonwealth deems that name unacceptable or unavailable, the document will be rejected, so make sure you nail down a good name right away.
Any name you choose must adhere to Massachusetts’ business name requirements. This means it must use the words “limited liability company” or “limited company,” or one of the following abbreviations: “L.L.C.,” “L.C.,” “LLC,” or “LC.” Equally important, it must be distinguishable and not “deceivingly similar” to any other business names reserved or registered with the Secretary of the Commonwealth. Unsure if your name is taken? Perform a name search to find out.
Once you’ve found your perfect name, include it on your Certificate of Organization to automatically register it. In the event that you’re not quite ready to file an LLC, you can place a 60-day hold on your name by submitting a name reservation request.
Choosing a Massachusetts Resident Agent
A resident agent is your LLC’s liaison to the commonwealth, the mediator who takes care of all your important legal, tax, and compliance documents, keeping your business in good standing. When filing the Certificate of Organization, you must include your resident agent’s name, address, and signature of consent, so make sure you’ve made this arrangement before sitting down to form your LLC.
A valid resident agent falls into one of two broad categories: individuals and business entities. An individual agent must be a Massachusetts resident with a physical address in the commonwealth, and a business entity agent, like a resident agent service, must be authorized to do business in the commonwealth
Quick Note: If your first choice doesn’t work out, don’t worry. You can always change your resident agent in the future.
Preparing to File Your Massachusetts Certificate of Organization
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Now for the main event: the Certificate of Organization. Here’s your opportunity to get your LLC officially on record and authorized to conduct business in Massachusetts.
When it comes to LLC formation, the Certificate of Organization is supreme, the fulcrum on which your business balances. But even as a critical document, it’s pretty short and sweet. Collect all the necessary information beforehand and you can complete it in one brief sitting. Here’s what you’ll need:
- EIN or federal tax ID number (if applicable)
- The LLC name
- The LLC address
- A business purpose
- Date of dissolution (if applicable)
- Resident agent name and address
- Name and business address (if different from LLC address) for each manager (if applicable)
- Name and business address of each person “authorized to execute documents filed with the Corporations Division”
- If your business has managers, list each additional person with this authorization
- If your business does not have managers, you must list at least one person in this section
- Names and addresses for any person authorized to “execute, acknowledge, deliver and record any recordable instrument purporting to affect an interest in real property recorded with a registry of deeds or district office of the land court”
- Resident agent signature
- LLC organizer signature
- LLC contact information (including phone number and email address)
Not bad at all. In fact, the most difficult part of the Certificate of Organization will be paying for it. Mailed and in-person submissions cost $500 while electronic and faxed submissions cost $520, so write this cost into your LLC budget.
On the plus side, the processing time is fairly quick – 24 to 48 hours.
Gathered your information? Prepared your payment? It’s time to file. The commonwealth is flexible about how you submit your document, offering four different options.
Get started by accessing the Corporation Online Filing System and clicking the link at the top, next to “If you are forming a new entity.” On the next page, select “Certificate of Organization” under “Domestic Limited Liability Company,” and you’ll be directed to input your information.
Filing by Mail
Download and fill out the paper application. Once finished, include a check for your $500 payment and mail it to:
Secretary of the Commonwealth, Corporations Division
One Ashburton Place, 17th floor
Boston, MA 02108-1512
If you’re local to Boston, feel free to hand-deliver your form at the same address if you’d like.
Faxed documents require the inclusion of a Fax Voucher Cover Sheet. When you’ve completed the forms, fax them to (617) 624-3891.
What About Foreign LLCs?
The process outlined above works for domestic LLCs (those formed in Massachusetts), but what if your business is expanding to Massachusetts from another state? In this case, you won’t need the Certificate of Organization. Instead, you’ll follow the requirements for foreign LLCs.
All out-of-state LLCs who want to do business in Massachusetts must foreign qualify by filing an Application for Registration via mail, fax, or hand-delivery. Oddly enough, Massachusetts does not allow entrepreneurs to file the Application for Registration through its online portal. Don’t attempt to conduct business activities in the commonwealth without having successfully filed this form, because this could result in serious fines and penalties. The $500 filing fee is steep, but it’s much easier than dealing with the legal consequences of operating without a foreign qualification.
Want Help Filing Your Certificate of Organization?
Let’s be honest: you’ve got a lot on your plate. Filing paperwork can take time away from your other tasks, ones more focused on setting your budding LLC up for success.
The good news is that you don’t need to file the Certificate of Organization yourself. But if an attorney is out of your price range, hiring an LLC creation service is a great option.
There’s no shortage of business incorporation services out there, but not all of them are equal. Each one offers different packages, costs, and processing times, so it’s important to find the right fit for your LLC.
While each service has optional upgrades and feature packages, on the most basic level, they will review your business information, prepare your formation documents, and submit them to the Massachusetts Secretary of the Commonwealth. They will complete everything outlined in this guide and notify you when your Certificate of Organization has been filed. You won’t have to lift a finger.
There are other benefits too. Some services will include a year of free resident agent service when you hire them. Other services offer order tracking, notifications on future documents (like annual reports), assistance drafting your operating agreement, or coverage of certain LLC formation costs.
Important Post-Formation Compliance Issues
Once you’ve successfully filed your Certificate of Organization, your LLC is an official business entity in the state of Massachusetts. However, this doesn’t mean that your responsibilities have come to an end. There are several other steps you’ll need to take if you want to operate a compliant LLC for years to come.
Acquire a Federal Tax ID Number (EIN)
While an EIN isn’t a requirement for Massachusetts LLCs, we strongly recommend that every entrepreneur obtains one. An EIN enables your LLC to hire employees, open business bank accounts, file taxes, and take care of several other important aspects of LLC maintenance. Even if you operate a single-member LLC with no employees, you should still have an EIN for your business.
Set Up a Financial Infrastructure
One other crucial step is to solidify the financial aspects of your LLC, first by opening a business bank account. You must have separate bank accounts for your personal use and for business purposes, as this will help you keep your personal and business assets separate, a vitally important consideration for any entrepreneur. If you commingle these assets, you leave yourself wide open for lawsuits, as it would be easy for someone to claim that your business is simply an extension of your own personality and not a separate entity from you as a person.
The other portion of this step is to set up an accounting system. This can either mean that you hire an accountant to take care of your LLC’s bookkeeping, or you could acquire high-quality accounting software like QuickBooks. Either way, you need a reliable means of keeping detailed records for each financial transaction your LLC executes. This is another vital part of keeping your personal and business assets separated, and it will also be enormously helpful come tax time.
Acquire Licenses and Permits
The next step involves obtaining any industry-specific licenses and permits your LLC may need to operate in compliance with state laws. Depending on the nature of your LLC’s business, you may require several permits or you may be able to operate your LLC without any state-level licenses.
Thankfully, Massachusetts makes it very easy to figure out your business’ licensing needs. All you need to do is visit the state’s Business Licenses and Permits page and you’ll find the license and permit applications you require. Make sure to check with your county and locality as well, as there may also be licensing requirements for your business on these levels.
Obtain Business Insurance
This step isn’t a requirement, but it is a strong recommendation. The exact insurance policies your business needs will vary based on the type of products and services you offer, but most LLCs should at least have a general liability insurance policy to protect against common perils like slip-and-fall accidents. In some industries, you might need several different insurance policies to cover all of your financial bases, so do your research ahead of time to determine which types of insurance you should purchase.
File Your Annual Reports
Each year, every LLC in Massachusetts must file an annual report. This report includes some basic information about your business and keeps the state updated regarding any important changes to your LLC’s structure. The information you’ll need to file this report typically includes your LLC’s federal tax ID number (if applicable), the year, your LLC’s name, principal office address, street address, business purpose, dissolution date (if applicable), resident agent name and address, names and addresses of each manager (if applicable), names and addresses of each person authorized to execute LLC documents, name and business address for each person authorized to “execute, acknowledge, deliver and record any recordable instrument purporting to affect an interest in real property,” and the filer’s contact information.
Frequently Asked Questions
About Filing the Massachusetts LLC Certificate of Organization
How long does it take Massachusetts to form an LLC?
Massachusetts typically processes online business filings within just one business day. If you choose to file your Certificate of Organization on a paper form, you can expect it to take roughly 2-3 business days.
Should I file my own Certificate of Organization, hire an attorney, or use an online service?
This question largely comes down to personal preferences, but we do have some general insights. The DIY route can be quite a bit of work, as you’ll need to complete each step of the formation process on your own with no assistance. As for hiring an attorney, this can be prohibitively expensive for new businesses, as a lawyer can charge hundreds or even thousands of dollars to form your LLC.
You can think of business services companies as a middle ground between these options. While most of these companies charge a fee to form your LLC, that fee will be significantly less expensive than an attorney’s fee. At the same time, you still aren’t going it alone. Instead, you have an experienced professional guiding you through the entire process.
What does Massachusetts require for LLC formations other than the Certificate of Organization?
Unlike some states, Massachusetts doesn’t require any related filings other than your formation articles. However, we still strongly recommend obtaining a federal tax ID number (EIN). An EIN allows your LLC to file taxes, hire employees, open business bank accounts, and more. Every LLC should have one, whether your state requires it or not.
How many small businesses are there in Massachusetts?
Today, Massachusetts has more than 700,000 small businesses. Clearly, entrepreneurs in many different fields find Massachusetts to be a great place to own and operate a business entity.
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