Perhaps you are hoping to form a Massachusetts LLC. People assume that starting an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in Massachusetts.
Massachusetts LLC Cost of Filing
Here are the costs involved in forming an LLC in Massachusetts.
Cost of Filing Formation Certificates
The Massachusetts Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the Massachusetts Secretary of State.
Massachusetts Domestic LLC
- Online Filing costs $500
- Annual Report filing costs $500
- Name Reservation costs $30
- By mail: Fill out the Application Form PDF, and submit it to the address, The Commonwealth of Massachusetts, Secretary of the Commonwealth, One Ashburton Place, Room 1717, Boston, Massachusetts 02108-1512
Massachusetts Foreign LLC
- Online filing: not available
- Annual Report filing costs $500
- Name Reservation costs $30
- By mail: Fill out the Application Form PDF, and submit it to the address, The Commonwealth of Massachusetts, Secretary of the Commonwealth, One Ashburton Place, Room 1717, Boston, Massachusetts 02108-1512
You can visit the Secretary of Commonwealth of Massachusetts website to learn more about the forms and fees.
Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.
Massachusetts LLC Formation Service or Registered Agent Fee
You need a registered agent to form an LLC in Massachusetts, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.
Business Permits and Licenses
The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the Massachusetts Department of Revenue for regulatory boards or agencies requiring licensing.
Massachusetts LLC taxes to be Paid
The business LLCs in the State of Massachusetts are subject to different State tax filing obligations. Though the fees may vary from county to county.
Massachusetts State Income tax
This is the State Tax levied on any income you pay to yourself. The State has a standard tax rate of 5% levied on the total amount of taxable income.
Massachusetts Sales tax
The standard rate of sales tax applicable is at the rate of 6.25%. Though the taxes may vary depending on the county and city.
Massachusetts Federal Self-Employment Tax
Any profit that Massachusetts LLC Business members draw out from the business is liable to pay self-employment tax. The standard tax rate is 15.3%.
Massachusetts Payroll Tax Withholding
If you hire employees in Massachusetts, you must withhold payroll tax from their salaries. The standard rate of withholding is 7.65% of the taxable salary of the employees.
Cost Comparison Among States
Every state has different costs of filing for an LLC to their respective State Authorities. If you wish to gain a better understanding of the costs of opening an LLC in a different state in comparison to Massachusetts, read the table below:
State | Filing Fee | Annual Fee/ Biennial Fee | Sales Tax |
Massachusetts LLC | $500 | $500 | 6.25% |
Connecticut LLC | $120 | $80 | 6.35% |
Rhode Island LLC | $150 | $50 | 7.00% |
New Hampshire LLC | $100 | $100 | 0% |
Vermont LLC | $125 | $35 | 6.00% |
Massachusetts is the wealthiest state in the US. Its economy is largely reliant on technological research and development, the service sector, and tourism.
Other Costs
- Massachusetts Name Reservation: $30 for online filing or by mail
- Doing Business As (DBA): $50 per class for online filing or by mail
- Certified Document Copies: $7 + $2 per page.
- Certified of Good Standing: $12
- Business Domain Name and Website: depend on your preference, but domain name could be as low as $2.99/yr at NameCheap, and web hosting is at least $30/mo at Kinsta.
- Online workspace: at least $4.20/mo for GSuite.
- Business Insurance: would vary depending on insurance type–whether general liability insurance or professional liability insurance–and coverage.
- Dissolution of Massachusetts LLC: $100
F.A.Qs
It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.
It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.
The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.
How Much Does It Cost to Maintain an LLC in Massachusetts
To maintain an LLC in Massachusetts you will need to pay an annual fee of $500 along with sales tax at 6.25%, income tax at 5% and federal taxes.
One of the primary costs of maintaining an LLC in Massachusetts is the annual report fee. Each year, LLCs are required to file an annual report with the Secretary of the Commonwealth, which includes information about the company’s principal place of business, registered agent, and members or managers. Failing to file this report in a timely manner can result in penalties or even the dissolution of the LLC.
Another cost to consider is the annual fee for a registered agent. A registered agent is an individual or entity designated to receive legal documents and correspondence on behalf of the LLC. While business owners can serve as their own registered agent, many choose to hire a professional service to ensure that important documents are received promptly and securely.
Additionally, LLCs in Massachusetts may need to obtain business licenses or permits depending on the nature of their operations. These licenses can vary in cost and may need to be renewed periodically, adding to the overall maintenance expenses of the LLC.
Legal and accounting fees are another factor to consider when calculating the cost of operating an LLC in Massachusetts. While some businesses may be able to handle legal and accounting tasks internally, many choose to work with professionals to ensure compliance with state regulations and tax laws.
It’s also important to budget for ongoing operational costs such as business insurance, marketing expenses, and office rent or utilities. These are necessary expenses that all businesses incur, regardless of their legal structure.
While the costs of maintaining an LLC in Massachusetts can add up, it’s important for business owners to consider the benefits of this legal structure. An LLC provides limited liability protection for its members, meaning that personal assets are generally shielded from business debts and liabilities. This can provide peace of mind to business owners who want to protect their personal finances from potential risks associated with operating a business.
In conclusion, while there are costs associated with maintaining an LLC in Massachusetts, the benefits of this legal structure can outweigh the expenses. Business owners should carefully consider their budget and needs when determining whether an LLC is the right choice for their business. By staying informed about the costs and requirements of maintaining an LLC, businesses can ensure their compliance with state regulations and focus on growing their operations.
In Conclusion
The cost of Massachusetts is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.