How to Start a Massachusetts Corporation


Steve Goldstein
Steve Goldstein
Business Formation Expert
Steve Goldstein runs LLCBuddy, helping entrepreneurs set up their LLCs easily. He offers clear guides, articles, and FAQs to simplify the process. His team keeps everything accurate and current, focusing on state rules, registered agents, and compliance. Steve’s passion for helping businesses grow makes LLCBuddy a go-to resource for starting and managing an LLC.

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Start a Massachusetts Corporation

When you plan to start a business in Massachusetts, you must decide on the appropriate structure. Starting a corporation may be more complicated than creating an LLC in Massachusetts or a sole proprietorship. However, it is not that difficult as well. There are a few guidelines that you should be aware of when it comes to creating Massachusetts corporation. Starting a corporation involves a legal process, that is, the process of incorporation.

In this article, I will share a step-by-step guide to start a corporation in Massachusetts. I will also enlighten you on the advantages and disadvantages of having a corporation. Some people consider starting a corporation in Massachusetts more than other business structures since it has many advantages over other forms.

What is a Corporation in Massachusetts

In definition, a corporation is a formal organization established by stockholders, shareholders, or other people to make a profit. Like individuals, corporations can undertake contracts, own assets, sue and be sued, pay taxes, limit state and federal taxes, and loan funds from banking institutions.

Common Types of Corporations

Before you start with the process of forming a corporation, you should know what type of corporation you will form. There are several different forms of corporations you can take into consideration, depending on your corporation’s objectives and ownership structure.

  • C-Corporation: C-Corporation is the most known type of incorporation. They have almost all corporate distinguishing characteristics. Profits are distributed to corporate owners who are taxed at an individual level. The corporation is taxed similarly to a business unit.
  • S-Corporation: An S-Corporation is set up similarly to a C-corporation but has different tax implications and owner limits. S-corps have no more than 100 stockholders and are not taxed separately. These business units must also file paperwork with the Internal Revenue Service (IRS) to obtain their status.
  • Non-profit Corporation: Nonprofit businesses are frequently used by religious, educational, and charity institutions to run their operations without making a profit. Thus, a nonprofit corporation is exempt from paying taxes. The nonprofit organization’s gifts, contributions, or cash are reinvested in the company to fund its growth, future endeavors, or operations. Read how to start a nonprofit corp in Massachusetts to learn about nonprofit corporations.

If you have a small business, it is recommended that you form an LLC instead of a corporation in Massachusetts. LLCs have more tax benefits than other structures. Besides, LLCs protect your personal assets. However, it is wise to consult a legal expert before you start setting up your business in Massachusetts.

LLCBuddy Editorial Team

How to Start a Corporation in Massachusetts

To start a corporation in Massachusetts, you must follow the below steps that, include forming a corporation name, appointing a board of directors, filing for Articles of Incorporation, drafting corporate bylaws, meeting with the board of directors, issuing stocks, creating a shareholders agreement, requesting for an EIN, and getting a license and permit. All these steps are basic ones. It can be changed depending on the type of corporation you form and the nature of your business.

Step 1: Choose a Corporation Name in Massachusetts

Naming your business is one of the most crucial activities during the startup phase. Your corporation name serves as the foundation for your brand. Legal procedures should be taken into account when choosing your corporation name. Choose a corporation name that will enable you to develop a strong brand identity without being hampered by irrelevant factors.

If you are forming an LLC, there is a complete guide on Massachusetts LLC name guidelines for a proper LLC name. Here are some guidelines you must follow while naming your corporation in Massachusetts-

  • Your business name must contain entity identifiers, such as “Incorporated,” “Limited,” “Corporation,” or “Company,” or an abbreviation, such as “Inc.,” “Co.,” or “Ltd.”
  • Exclude any words in your business name, such as “Trust,” “Bank,” “Credit Union,” or “Trustee,” or words related to a government agency, such as “FBI,” “State Department,” or “Treasury.”

Step 2: Board of Directors Initial Appointment

To form a corporation in Massachusetts, you must appoint an initial board of directors before making them permanent once the corporation is formed. In Massachusetts, you may appoint at least One board of directors. The initial board of directors is in charge of guiding the overall strategy of your business. The structure, responsibilities, and powers given to a board of directors are determined by the bylaws of a company or organization. So, appointing your corporation’s initial board of directors in Massachusetts is a big step in forming a corporation.

Step 3: Filing the Articles of Incorporation in Massachusetts

After you appoint the initial board of directors in your Massachusetts corporation, the next step is to write and file a Articles of Incorporation. In writing, the Massachusetts Articles of Incorporation, the corporation name, principal place of business, the purpose of business, Massachusetts Resident Agent contact information, and the names and addresses of incorporators and/or initial board members, should be written.

Filing a Articles of Incorporation in Massachusetts may be done with four ways, online, by mail, fax, and in person. The Articles of Incorporation fee may vary from different states. However, in Massachusetts, it costs $275 for filing online, in-person, or by mail.

  • Online Filing: Get the online form from Secretary of State, fill it up, and submit. Don’t refresh the page during the process. It will erase everything.
  • Offline filing: Send the form by mail or drop it off in person to William Francis Galvin, Secretary of the Commonwealth, One Ashburton Place, Room 1717, Boston, MA 02108.

Step 4: Draft Corporate Bylaws

Now you are done filing a Articles of Incorporation in Massachusetts, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

In creating corporate bylaws, you should include the following on how the decisions will be made-

  • The responsibilities are given to each officer.
  • How will judgments in business be made?
  • Where and when are the annual shareholder meetings?
  • The minimum number of shareholders required for decision-making.
  • Location and timing of dividend payments.

Step 5: Hold the First Board of Directors’ Meeting

After drafting the corporate bylaws, gather all the board of directors for the first meeting. This meeting will be finalized by appointing directors to manage the company’s daily operations, approve the bylaws, choose the corporation’s accounting year, and approve the stock issue. All board meetings should have minutes taken and stored with the company’s records.

Step 6: Issuing Stock in a Corporation

After starting your Massachusetts corporation, one of the first official corporate actions is issuing stock to the shareholders. Keep track of the number of shares issued to each shareholder and the purchase price. A corporation in Massachusetts is managed by its shareholders, who contribute to the business in exchange for ownership shares.

Step 7: Draft and Finalize a Shareholders Agreement

Even though drafting and finalizing a shareholders agreement is unnecessary, I suggest you still comply since it will benefit your corporation and its shareholders. A small business’s shareholders enter into a shareholder agreement contract. It establishes how ownership will be handled in unexpected situations, like a shareholder passes away, retires, becomes disabled, or quits the corporation. Early on in the life of your Massachusetts corporation, signing a shareholders’ agreement can help maintain corporate continuity and prevent future disputes.

Step 8: Request an EIN in Massachusetts

After everything is in place, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your Massachusetts corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Massachusetts can be through the following:

  • Apply Online- The EIN online application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in a number of ways. It will give your corporation the final advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 9: Get Licenses and Permits for your Corporation in Massachusetts

Before your corporation operates in Massachusetts, you must have a business license. A business license is a document issued by a government agency that permits you to operate your business in the geographic region that that agency governs. To legally operate your corporation, you’ll need a business license. Numerous corporate licenses need to be filed and renewed regularly. Check out how to get business licenses and permits in Massachusetts to know more.

You must also register a DBA name if you intend to conduct business using a name other than your corporation’s legal name. The DBA name is sometimes known as “doing business as” or a “fictitious business name.” Depending on your location, you may need to register the DBA with your state, city, and county. You can skip this step if your business solely uses your legal company name.

Important Information

Paying your Taxes in Massachusetts

Even if you have established your corporation in Massachusetts, pay your taxes and keep everything up to date so you won’t pay any penalty. Unlike an LLC, there is a corporate tax that every corporation in Massachusetts has to pay. On the other hand, they must pay income taxes based on their business income. Some other types of taxes in Massachusetts are sales tax, franchise tax (not applicable to all the states), and other state taxes.

Cost of Forming a Corporation in Massachusetts

A filing and annual fee must be paid to form a corporation in Massachusetts. Without it, your corporation won’t operate. The initial filing fee for a corporation may vary depending on the state. However, in Massachusetts, it costs $275 for filing online, in-person, or by mail. The corporation in Massachusetts also has to file an annual report (though it might not be mandatory, it is recommended to file one). Ensure you comply with all the necessary fees and costs so your corporation will run successfully and smoothly. If, in the future, you make any changes to your corporation, you must file the Massachusetts Amendment. It costs $100 to file an amendment in Massachusetts.

Advantages of Starting a Corporation in Massachusetts

  1. Limited Liability: The biggest advantage of setting up a Massachusetts corporation is that the shareholders are not personally responsible for the debts of the company. As a result, when you incorporate as a corporation, personal assets like homes, vehicles, and other possessions are prohibited. One of the main benefits of setting up a corporation over a general partnership or sole proprietorship business structure is that neither the business nor the owners are held legally responsible for the obligations of the business, even if it means giving up their personal assets.
  1. Limitless Corporation: The fact that a corporation’s existence is independent of its owners is another significant benefit of incorporation. In other words, a corporation has an endless life and will continue operating normally even if the owner dies or decides to sell their ownership.
  1. Advantages in Tax: The deduction of health insurance premium payments made on behalf of an owner-employee is one of the many financial benefits to which corporations are entitled. Corporations also save on self-employment taxes since their revenue is not subject to workers’ compensation, Social Security, or medical taxes. Tax rates on corporate profits are lower than those on individual income.

FAQs

What type of corporation may I form in Massachusetts?
The most common type of corporation in Massachusetts is the C corporation. However, you may also form an S corporation, limited liability company (LLC), or other type of entity.
What are the filing requirements to form a corporation in Massachusetts?
To form a corporation in Massachusetts, you must file Articles of Organization with the Secretary of the Commonwealth. You will also need to register with the Department of Revenue, obtain any necessary licenses and permits, and obtain an employer identification number (EIN).
What information is needed to file Articles of Organization in Massachusetts?
When filing Articles of Organization in Massachusetts, you will need to provide the name and address of the corporation, the names and addresses of the initial directors, the date the corporation will begin, and the name and address of the corporation’s registered agent.
How much does it cost to form a corporation in Massachusetts?
The filing fee for Articles of Organization in Massachusetts is $275.
How long will it take to form a corporation in Massachusetts?
The processing time for Articles of Organization in Massachusetts is typically 1-2 weeks.
Does Massachusetts require corporations to hold annual meetings?
Yes, Massachusetts requires corporations to hold an annual meeting of shareholders.
Does Massachusetts have a corporate income tax?
Yes, Massachusetts has a corporate income tax of 8.8%.
Does Massachusetts require corporations to pay franchise taxes?
Yes, Massachusetts requires corporations to pay an annual franchise tax, which is based on the corporation’s net worth.
Does Massachusetts require corporations to register with the Department of Revenue?
Yes, all corporations doing business in Massachusetts must register with the Department of Revenue.
Does Massachusetts require corporations to have a registered agent?
Yes, all corporations doing business in Massachusetts must have a registered agent.
Does Massachusetts impose any special requirements for foreign corporations?
Yes, foreign corporations doing business in Massachusetts must register with the Secretary of the Commonwealth and obtain a Certificate of Authority.
Does Massachusetts require corporations to file an annual report?
Yes, all corporations doing business in Massachusetts must file an annual report each year.
What is the process for forming a Corporation in Massachusetts?
To form a corporation in Massachusetts, you must file Articles of Organization with the Massachusetts Secretary of State. Along with the Articles of Organization, you must pay the required filing fee, which is currently $275.
What information is required in Articles of Organization?
The Articles of Organization must include the name of the corporation, its address, the name and address of the registered agent, the name and address of the incorporator, the type of business the corporation will conduct, and the duration of the corporation.
Do I need to register a DBA in Massachusetts?
It depends on the type of business you are starting. If you are operating a sole proprietorship or a partnership and using a name other than your own, you must register a DBA (“doing business as”) name with the Massachusetts Secretary of State.
Are there any restrictions on the name of my corporation?
Yes, the name of the Corporation must be distinguishable from all other corporations, limited liability companies, limited partnerships, and limited liability partnerships registered with the Massachusetts Secretary of State.
What are the fees associated with forming a Corporation in Massachusetts?
The current filing fee for filing Articles of Organization with the Massachusetts Secretary of State is $275.
What is the Massachusetts annual report requirement?
All corporations registered in Massachusetts must file an annual report with the Secretary of State. The annual report must include the name and address of the corporation and the name and address of the registered agent. The fee for filing an annual report is currently $500.
What are the filing requirements for foreign corporations doing business in Massachusetts?
Foreign corporations must register with the Massachusetts Secretary of State before they can conduct business in the state. To register, foreign corporations must file an Application for Authority with the Massachusetts Secretary of State, along with the required filing fee, which is currently $500.
Do I need a Massachusetts business license to start a Corporation?
Yes, corporations must obtain the necessary business licenses before they can conduct business in Massachusetts. The types of licenses required depend on the type of business you are starting.
What are the tax requirements for Massachusetts Corporations?
Massachusetts corporations must register for a federal employer identification number (EIN) and must pay the appropriate taxes, including income tax, unemployment tax, and sales and use tax. Additionally, Massachusetts corporations may be subject to personal property tax and corporate excise taxes.
What are the corporate governance requirements for Massachusetts Corporations?
The corporate governance requirements for Massachusetts corporations include the formation of a board of directors, the establishment of bylaws, the holding of annual shareholder meetings, the filing of annual reports, and the compliance with the state’s laws and regulations.
What are the steps to start a corporation in Massachusetts?
To start a corporation in Massachusetts, you will need to file articles of organization with the Massachusetts Secretary of State, register with the Massachusetts Department of Revenue, obtain a business license or permit, register with the IRS, create a corporate governance structure, and choose a registered agent.
How much does it cost to start a corporation in Massachusetts?
The cost to start a corporation in Massachusetts will vary depending on the type of corporation, the number of shares issued, the state filing fees, and other related costs. Generally, the total cost to start a corporation in Massachusetts is around $200.
What is the filing fee for forming a corporation in Massachusetts?
The filing fee for forming a corporation in Massachusetts is $280.
Is there a minimum capital requirement for forming a corporation in Massachusetts?
No, there is no minimum capital requirement for forming a corporation in Massachusetts.
Do I need to register with the Massachusetts Department of Revenue when forming a corporation?
Yes, you will need to register with the Massachusetts Department of Revenue when forming a corporation in Massachusetts.
How long does it take to form a corporation in Massachusetts?
It typically takes between two to five business days to form a corporation in Massachusetts.
What are the benefits of forming a corporation in Massachusetts?
There are several benefits of forming a corporation in Massachusetts, including personal asset protection, tax benefits, and the ability to raise capital more easily.
Is it possible to form a corporation online in Massachusetts?
Yes, it is possible to form a corporation online in Massachusetts.
What documents do I need to form a corporation in Massachusetts?
To form a corporation in Massachusetts, you will need to file the articles of organization with the Massachusetts Secretary of State.
Does Massachusetts require corporations to have a board of directors?
Yes, Massachusetts requires corporations to have a board of directors.

Also Read

Why Massachusetts Corporation is So Important

First and foremost, the Massachusetts Corporation benefits from its strategic location in the New England region. With easy access to major metropolitan areas such as New York City and Washington, D.C., as well as international markets, companies headquartered in Massachusetts enjoy convenient transportation and communication networks that facilitate business transactions and collaborations. Furthermore, the state’s proximity to prestigious educational institutions like Harvard University and MIT provides a steady flow of talent and expertise for companies looking to innovate and stay ahead of the curve.

In addition to its strategic location, the Massachusetts Corporation benefits from a business-friendly environment that encourages investment and growth. The state’s regulatory climate is conducive to business success, with policies that support entrepreneurship, innovation, and economic development. From tax incentives to streamlined permit processes, Massachusetts offers a range of benefits that make it an attractive destination for companies looking to establish or expand their operations.

Moreover, the Massachusetts Corporation thrives on a culture of collaboration and cooperation. The state’s vibrant ecosystem of business associations, industry clusters, and networking events creates opportunities for companies to connect, learn, and grow together. Whether through mentorship programs, industry conferences, or collaborative partnerships, businesses in Massachusetts have access to a wealth of resources and support that foster creativity, innovation, and success.

Furthermore, the Massachusetts Corporation stands out for its commitment to sustainability and social responsibility. As businesses increasingly recognize the importance of corporate citizenship and environmental stewardship, Massachusetts is leading the way with progressive policies and initiatives that promote sustainable practices and ethical conduct. Companies headquartered in Massachusetts are not only driving economic growth and generating wealth but also contributing to the well-being of their communities and the planet.

Ultimately, the Massachusetts Corporation is a testament to the power of collaboration, innovation, and commitment to excellence. By harnessing the state’s strategic advantages, business-friendly environment, collaborative culture, and emphasis on sustainability, companies in Massachusetts are paving the way for a brighter future for themselves and the communities they serve. As a beacon of entrepreneurship and innovation, the Massachusetts Corporation is poised to continue driving economic growth, creating jobs, and fostering prosperity for years to come.

In conclusion, the Massachusetts Corporation is not just an economic entity but a force for positive change and progress. With its strategic location, supportive business environment, collaborative culture, and focus on sustainability, Massachusetts is an ideal destination for companies looking to thrive and make a difference. As the state continues to attract and nurture businesses in a wide range of industries, the Massachusetts Corporation will remain a vital and dynamic player in the global economy.

Conclusion

When determining which corporate form is best for you, be selective. You must know which business structure is bet-fitted for your product/service in Massachusetts. Consult a legal professional before you take the first step while setting up your business. Finding the ideal ratio of corporate advantages and legal protection that meets your unique needs is very important. In forming a corporation in Massachusetts, you need to ensure that every detail is well-formed so that your corporation will be successful. And if you have any questions, share them in the comment section below.

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