- [Narrator] How to for an LLLC in Massachusetts.
Massachusetts is an excellent place to from a new LLC
with a high business survival rate
and some of the best access to funding in the country.
Every state has slightly different requirements
for forming an LLC.
Follow along closely to learn the required steps
for creating your own limited liability company
in the state of Massachusetts.
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There are two ways to form an LLC in Massachusetts.
You can form one yourself or you can hire a service
to do it for you.
Let's start by looking at the five basic requirements
to form an LLC in Massachusetts on your own.
You can also find these steps in more detail
on our website linked in the description below.
One, name your LLC.
Every state has its own rules about what kind of names
are allowed for LLCs.
In general, you will need
to observe these naming guidelines.
Your name must include the phrase, limited liability Company
or one of its abbreviations,
LLC or L.L.C. with a period following each letter.
Restricted words such as bank, attorney, law office,
et cetera, may require additional paperwork
and may also need a licensed professional
to be part of the LLC.
Your name cannot include words that could confuse your LLC
with a government agency, such as FBI, Treasury,
State Department, et cetera.
You cannot use a name that has already been registered.
To see if your name is available in your state,
you will need to do a name search.
This free service is available on your state
secretary of state website.
Check out our free guide for finding the direct link
to your state.
We also recommend that you check to see
if your business name is available as a web domain.
Even if you don't plan to make a business website today,
you may want to buy the URL in order
to prevent others from acquiring it.
Two, choose a resident agent.
Massachusetts requires that you nominate a resident agent
more commonly known as a registered agent for your LLC
who is your business' point of contact with the state.
The registered agent can be an individual
within the company including yourself.
Or you can hire a professional service
authorized to do business in Massachusetts.
They will send and receive legal papers on your behalf.
These documents include official correspondence
like legal summons and document filings,
which a registered agent will receive and forward to you.
Your registered agent will hep remind you
to file the necessary reports.
Failure to properly maintain your LLC can result in fines
and dissolution.
So, this assistance is valuable.
Three, obtain an EIN.
You'll need to get an employer identification number
or EIN from the IRS.
Also known as a federal tax identification number,
your EIN is like a social security number for your LLC
and is how the IRS tracks your business for tax purposes.
An EIN is also necessary to open a business banking account
and legally hire employees.
EINs are free of charge and can be obtained
from the IRS online or through the mail.
Four, file the certificate of organization.
To register your Massachusetts LLC,
you will need to file the Certificate of Organization
with the state of Massachusetts.
This can be done online or by mail.
You'll need to state whether your LLC will be
member managed or manager managed.
Member managed means all members of the LLC
manage the company.
This is good for small organizations where everyone
is involved in the day to day operations.
The second option is manager managed,
where individuals are appointed to manage the LLC.
This is appropriate for larger organizations
where not everyone is involved in the day to day
affairs of the business.
Five ,create and Operating Agreement.
Although not every state requires it,
you should always create an operating agreement
to establish ownership terms and member roles for your LLC.
This foundational document is the core of your LLC
and will help you maintain your organization
as well as further your LLC as a separate legal entity.
There are six main sections of an operating agreement.
Organization outlines when
and where the company was created,
who the members are and how the ownership is structured.
Management and voting address how the company is managed
as well as how the members vote.
Capital contributions covers which members
financially support the LLC and how more funds
will be raised in the future.
Distributions outlines how the company's profits and losses
are shared among members.
Membership changes describes the process
for adding or removing members
as well as if and when members can transfer their
ownership shares.
And Dissolution, which explains the circumstances
in which the LLC may be dissolved.
An Operating Agreement is an internal document.
It does not need to be filed with the state.
However, it should be updated every time
there's a change in membership or management
at the company.
You can download a free sample Operating Agreement
or create a custom one using our free
Operating Agreement tool at howtostartanLLC.com
and with that, you will have formed a Massachusetts LLC
on your own.
Option two, hire a professional service.
The second way to create a Massachusetts LLC
is to hire a professional service
to create your LLC for you.
Hiring a profession service to file your forms
and act as your registered agent for the LLC
will cost you an additional 50 to $150.
However, there are several benefits to working with a pro.
A hired registered agent helps with getting your reports
filed on time, helps you stay organized
by keeping your business mail separate
and is available at all regular business hours
to accept official mail and legal papers
on your LLC's behalf.
A final and important additional benefit
of using a service is privacy.
A professional service will provide a level of privacy
by withholding your personal name and home address
from the LLC's contact information.
There are many reasons why you might not want
your personal information easily accessible
and associated with your business.
Hiring a professional LLC formation service
is an easy way to accomplish this.
Now that you have seen the different requirements
and ways you can form an LLC in Massachusetts,
visit our site and take some time to research your options
and establish a solid foundation
for your business activities.
Click on the links in the description below
to research the top five professional formation services
or get more information on how to form
a Massachusetts LLC on your own.
Now, you know all the steps to form an LLC in your state.
For a more detailed guide, go to howtostartanllc.com.
You can also create an Operating Agreement
and use our business plan tool free of charge.
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And if you have questions or encounter any roadblocks,
leave a comment below.
Good luck on starting your small business.
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