Starting a Corporation in Massachusetts | What You Need to Know

Steve Bennett
Business Formation Expert  |   Fact Checked by Editorial Team
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Start a Corporation in Massachusetts

In Massachusetts, starting a corporation can benefit entrepreneurs looking to establish a separate legal entity for their business. Incorporating your business provides liability protection for its owners and offers potential tax benefits and a professional image. This comprehensive guide will walk you through Starting a Corporation in Massachusetts, from choosing a corporate name to fulfilling ongoing compliance requirements. Some people consider starting a corporation since it has advantages and benefits rather than Starting an LLC in Massachusetts.

Webinarcare Editorial Team will help you gain knowledge in starting a corporation with thorough research and market study. It would be best to cross-check all the factors in this article before forming a corporation.

What is a Corporation in Massachusetts?

A corporation in Massachusetts is a business organization recognized as a separate legal entity from its owners, also known as shareholders. When a corporation is formed, shareholders invest capital by purchasing shares of stock and, in return, become partial company owners. The corporation is managed by a board of directors elected by the shareholders to oversee the company’s operations and make important decisions. Corporations in Massachusetts are required to have at least One directors. One of the main advantages of a corporation in Massachusetts is that it provides limited liability protection to its shareholders, meaning their assets are not at risk if the corporation incurs debt or is legally sued.

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Common Types of Corporations

Before you start with 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

S-Corporation in Massachusetts is set up similarly to a C-corporation but has different tax implications and owner limits. An S-Corporation has no more than 100 stockholders and is not taxed separately. These business units must also file paperwork with the Internal Revenue Service (IRS) to obtain their status.

Nonprofit Corporation

Religious, educational, and charity institutions frequently use nonprofit businesses 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.

It is recommended to Start a Corporation in Massachusetts if you would like to provide limited liability protection to your shareholders rather than Massachusetts LLC. However, you may want to consult to LegalZoom’s Business Attorney before starting a business.

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How to Start a Corporation in Massachusetts

To start a corporation in Massachusetts, you must follow the below steps that, include choosing a corporate name, hiring a Resident Agent, appointing directors, filing for Articles of Incorporation, creating corporate bylaws, holding the initial board of directors, issuing stock, obtaining required licenses and permits, registering with state tax agencies, and annual reporting and ongoing compliance. 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: Choosing a Corporate Name

The first step in starting a corporation is choosing an available name that complies with Massachusetts naming rules. Most states require that the name of a corporation be distinguishable from other registered business names and include a corporate designator such as “Corporation,” “Incorporated,” “Company,” or an abbreviation thereof.

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.”

To check the availability of your desired corporate name, you can search the Massachusetts Secretary of State‘s business name database and Business Name Search in Massachusetts. If the name is available, you may choose to reserve it for a specific period of 60 days by filing a name reservation application and paying the online name reservation fee of Not available and mail name reservation fee of $30. If your corporation plans to operate under a name other than its legal name, you may also need to register a fictitious or “doing business as” (DBA) name.

The DBA filing can be done by two methods, by mail and in person., which costs around $65 Filing fee and $35 Additional fee if a non-Massachusetts resident. In addition, the DBA’s validity in Massachusetts is four years, which you can file in Massachusetts Secretary of State.

You can check out How to File a DBA in Massachusetts for clearer understanding.

Step 2: Hire a Resident Agent

Hiring a Resident Agent is essential in starting a corporation. Resident Agent is a person or company responsible for receiving important legal documents, tax notices, and other correspondence on behalf of your corporation. They ensure that your corporation remains compliant with state regulations and requirements. There are Massachusetts Resident Agent Services to check in forming Massachusetts Corporation. We reviewed some of the best-registered agent services and provided features as an add-on with their packages.

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Step 3: Appointing Directors

Corporations in Massachusetts are required to have at least One directors, though some states may require more. Directors are responsible for overseeing the corporation’s management and making major decisions on behalf of the company. In Massachusetts, directors must be at least 18 years old and do not need to be state residents.

When appointing directors, it is essential to consider individuals who are knowledgeable, trustworthy, and capable of making sound business decisions. Maintaining a record of appointed directors, including their names, addresses, and terms of service, is also a good idea.

Step 4: Preparing and Filing Articles of Incorporation

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, Resident Agent contact information, and the names and addresses of incorporators and initial board members, should be written.

To officially form your Massachusetts corporation, you must prepare and file Articles of Incorporation with the Massachusetts Secretary of State. The Articles of Incorporation is a legal document that outlines essential information about your corporation, such as its name, address, purpose, and details about its stock.

The specific requirements for Articles of Incorporation vary by state, but generally, the document must include the following:

  • The corporate name
  • The purpose of the corporation
  • The name and address of the registered agent
  • The names and addresses of the initial directors
  • The number of authorized shares and their par value
  • The name and address of the incorporator(s)

Once the Articles of Incorporation are complete, please submit them to the Massachusetts Secretary of State’s office, along with the required filing fee. Fees vary by state, but in Massachusetts, the Articles of Incorporation filing fee costs around $275 for filing online, in-person, or by mail. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

  • 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 5: Creating Corporate Bylaws

Now you are done filing Articles of Incorporation in Massachusetts, the next step is to draft corporate bylaws. While not always required by law, creating corporate bylaws is essential in establishing Massachusetts corporation. Bylaws are the internal rules and regulations that govern the corporation’s operations and management. They outline the rights and responsibilities of directors, officers, and shareholders and provide guidelines for holding meetings and making decisions.

Key provisions to include in your corporate bylaws may include:

  • The corporation’s purpose and principal place of business
  • The roles and responsibilities of directors, officers, and shareholders
  • The process for appointing and removing directors and officers
  • The procedures for holding annual and special meetings
  • The methods for amending the bylaws and Articles of Incorporation
  • The procedures for issuing stock and maintaining shareholder records

Once the bylaws are drafted, they must be adopted by the corporation’s board of directors. Keeping a copy of the bylaws with your corporate records and updating them to reflect changes in the corporation or applicable laws is essential.

Step 6: Holding the Initial Board of Directors Meeting

The initial board of directors meeting is a crucial milestone for your Massachusetts corporation. During this meeting, the directors will adopt the corporate bylaws, elect officers, and make other key decisions to set the foundation for the corporation’s operations.

The agenda for the initial board meeting may include the following:

  • Adopting the corporate bylaws
  • Ratifying any pre-incorporation actions taken by the incorporator(s)
  • Electing corporate officers (e.g., president, vice president, secretary, treasurer)
  • Designating a corporate bank account
  • Authorizing the issuance of stock
  • Approving necessary licenses, permits, and tax registrations

It is essential to keep detailed minutes of the initial board meeting, documenting the decisions made and actions taken. These minutes should be stored with your corporate records.

Step 7: Issuing Stock

Corporations in Massachusetts are required to issue stock to their owners, also known as shareholders. When preparing to issue stock, you must determine the number of authorized shares and their par value, as outlined in your Articles of Incorporation. You may choose to issue different classes of stock, each with its rights and privileges, such as voting rights and dividend preferences.

The process for issuing stock typically involves the board of directors approving a stock issuance resolution, determining the price per share, and recording the issuance in the corporation’s stock ledger. Maintaining accurate and up-to-date records of all stock transactions, including transfers and cancellations, is crucial to ensure proper ownership tracking and compliance with securities laws.

Step 8: Obtaining Required Licenses and Permits

Depending on the nature of your corporation’s activities and location, you may need to obtain various licenses and permits to operate legally. These may include federal, state, and local requirements, such as:

  • A Federal Employer Identification Number (EIN) for tax reporting and employee withholding purposes.
  • State sales and use tax registration, if your corporation sells taxable goods or services
  • Professional or occupational licenses for specific industries (e.g., healthcare, construction, food service)
  • Massachusetts Business Licenses, zoning permits, and health department approvals

Researching and obtaining all required Massachusetts licenses and permits before commencing operations and maintaining compliance with any ongoing renewal or reporting requirements is essential.

Step 10: Registering with State Tax Agencies

In addition to obtaining licenses and permits, your Massachusetts corporation may also need to register with various tax agencies. This may include registering for sales and use tax, obtaining an Employer Identification Number (EIN) in Massachusetts for payroll tax purposes, and filing state income tax and franchise tax returns.

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 online EIN 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 four 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.

Each state has tax requirements, so consult a tax professional or Massachusetts Department of Revenue for guidance on your specific obligations.

Step 11: Annual Reporting and Ongoing Compliance

Once your Massachusetts corporation is up and running, you must fulfill ongoing reporting and compliance requirements to maintain good standing. This may include filing Annual Report with the Massachusetts Secretary of State, updating your corporate records to reflect changes in directors or officers, and staying current on any required licenses or permits.

In addition, it is essential to stay informed about changes in corporate laws and regulations that may impact your business and to seek professional advice when needed.

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

In forming a corporation in Massachusetts, a filing and Annual fee must be paid. Without it, your corporation won’t operate. A corporation’s initial filing fee may vary from state to 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.

FAQs

How do I incorporate a business in Massachusetts?
To incorporate a business in Massachusetts, you must file articles of incorporation with the state’s Secretary of the Commonwealth.
What is the fee to incorporate in Massachusetts?
The filing fee for incorporating in Massachusetts is $275.
Can I file articles of incorporation online in Massachusetts?
Yes, you can file articles of incorporation online in Massachusetts.
How long does it take to incorporate a business in Massachusetts?
It typically takes about 5-10 business days for the Massachusetts Secretary of the Commonwealth to process your articles of incorporation.
What types of corporations can I form in Massachusetts?
You can form a C Corporation, S Corporation, nonprofit corporation, or benefit corporation in Massachusetts.
What is a benefit corporation in Massachusetts?
A benefit corporation is a for-profit entity that has a social or environmental purpose in addition to making a profit.
Do I need a lawyer to incorporate in Massachusetts?
No, you do not need a lawyer to incorporate in Massachusetts, but it can be helpful to consult with one.
What is a registered agent in Massachusetts?
A registered agent is a person or company that is designated to receive legal documents on behalf of your corporation.
Can I be my own registered agent in Massachusetts?
Yes, you can be your own registered agent in Massachusetts.
Do I need a business license to incorporate in Massachusetts?
You may need to obtain a state or local business license or permit to operate your business in Massachusetts, depending on the type of business you are starting.
Are there annual requirements for corporations in Massachusetts?
Yes, corporations in Massachusetts must file an annual report each year and pay a fee.
What is the Massachusetts corporate tax rate?
The Massachusetts corporate tax rate is currently 8%.
Are there any tax incentives for businesses in Massachusetts?
Yes, there are tax incentives available for businesses in Massachusetts, such as the Economic Development Incentive Program.
Can I file articles of incorporation for a foreign corporation in Massachusetts?
Yes, you can file articles of incorporation for a foreign corporation in Massachusetts.
What is the Massachusetts Corporations Division?
The Massachusetts Corporations Division is the state agency responsible for overseeing corporate filings.
Can I change the name of my Massachusetts corporation after it has been formed?
Yes, you can change the name of your Massachusetts corporation after it has been formed, but you will need to file an amendment with the state.
Can I choose any name for my Massachusetts corporation?
No, the name must be distinguishable from all other business names already on file with the Massachusetts Corporations Division.
Do I need to file for a trademark if I incorporate in Massachusetts?
No, but it can be helpful to file for a trademark to protect your brand.
Can I file articles of incorporation myself or do I need to use a service provider?
You can file articles of incorporation yourself or use a service provider.
What documentation is required to incorporate a business in Massachusetts?
You need to submit articles of incorporation that include the business name, purpose, registered agent, and other relevant information.
What is the minimum number of directors required for a Massachusetts corporation?
A Massachusetts corporation must have at least one director.
Can I have a corporation with just one owner in Massachusetts?
Yes, you can have a corporation with just one owner in Massachusetts, but it is still subject to the same requirements as other corporations.
Are there residency requirements for directors or officers in Massachusetts corporations?
There are no residency requirements for directors or officers in Massachusetts corporations.
Can I have a sole proprietorship and incorporate in Massachusetts later?
Yes, you can incorporate in Massachusetts later, but you will need to follow the requirements for incorporating.
Can I merge two corporations in Massachusetts?
Yes, you can merge two or more corporations in Massachusetts.
What is the difference between a C Corporation and an S Corporation in Massachusetts?
The main difference is that C Corporations are subject to double taxation, while S Corporations are pass-through entities.
Can I convert my Massachusetts corporation to an LLC?
Yes, you can convert your Massachusetts corporation to an LLC.
What are the benefits of incorporating in Massachusetts?
Benefits of incorporating in Massachusetts include limited liability protection and greater business credibility.
Do I need to have bylaws for my Massachusetts corporation?
Yes, every Massachusetts corporation must have bylaws that govern its operation.
What is required to file articles of incorporation in Massachusetts?
The required information includes the corporation’s name and address, purpose, number of shares and their classes, and the name and address of each incorporator.
How long does it take to file for incorporation in Massachusetts?
The filing process typically takes around five to ten business days.
What is the fee for filing articles of incorporation in Massachusetts?
The fee varies depending on the number of shares authorized, but it typically ranges between $275 and $500.
How many directors must a corporation have in Massachusetts?
At least one, but there is no maximum number.
Can non-residents be directors of a Massachusetts corporation?
Yes, there are no residency requirements.
What is the registered agent requirement for Massachusetts corporations?
Every corporation must have a registered agent that is physically located in Massachusetts.
Can a corporation have its principal place of business outside of Massachusetts?
Yes, but it must still have a registered agent located in the state.
Are there any special requirements for naming a Massachusetts corporation?
The corporation’s name must be distinct from any other corporations doing business in Massachusetts, and it must include a corporate suffix (e.g., “Inc.” or “Corp.”).
Are corporations in Massachusetts required to issue stock?
Corporations may issue stock, but it’s not required.
What is the minimum number of shares a corporation can issue in Massachusetts?
There is no minimum number of shares required.
Is an annual report required for Massachusetts corporations?
Yes, every corporation must file an annual report with the Secretary of State’s office.
What is the fee for filing an annual report in Massachusetts?
The fee is $125.
Is a corporate seal required in Massachusetts?
No, it’s not required.
What is the corporate income tax rate in Massachusetts?
The corporate income tax rate in Massachusetts is 8%.
Are there any tax incentives for corporations in Massachusetts?
Yes, Massachusetts offers several tax incentives for corporations such as tax credits for job creation and investment in research and development.
Can Massachusetts corporations be ‘S’ corporations for tax purposes?
Yes, Massachusetts recognizes ‘S’ corporations and follows the same guidelines as the federal government.
Does Massachusetts require corporations to carry workers’ compensation insurance?
Yes, corporations are required to carry workers’ compensation insurance.
Are corporations in Massachusetts required to hold annual shareholder meetings?
There is no requirement for corporations to hold annual shareholder meetings in Massachusetts, but it’s considered a best practice.
What is the process for amending the articles of incorporation in Massachusetts?
The corporation must file a certificate of amendment and pay the appropriate fee.
Are there any special provisions for nonprofit corporations in Massachusetts?
Yes, there are specific state laws and regulations governing the formation and operation of nonprofit corporations.
Are there any special licenses required for specific types of corporations in Massachusetts?
Some businesses, like certain professions (for example, lawyers, doctors), require licenses to operate in Massachusetts, but it’s not specific for corporations.
Can a corporation’s name be changed in Massachusetts?
Yes, the corporation must file a certificate of amendment with the state.
Is forming a LLC a better idea than forming a corporation in Massachusetts?
It depends on the needs and goals of the owners, as well as the nature of the business.
Must corporations file informational returns with the Massachusetts Department of Revenue (DOR)?
Yes, corporations must file annual reports and additional periodic reports with the DOR, depending on their activity level.
What is the personal liability of the Massachusetts corporation’s owners?
Owners of a corporation are typically not personally liable for the corporation’s debts and liabilities that exceed their personal contributions and ownership.
Are there industries prohibited from operating as corporations in Massachusetts?
Typically, no, unless the industry is regulated by a specific state agency prohibiting it.
Can a small business owner or an individual work as a registered Commonwealth resident or Agent for a corporation?
Yes, an individual can perform this role.
Does your corporation require to have a Notice of Statutory Exclusion from Corporate Excise in Massachusetts?
No, if your corporation has less than $10,000 of Massachusetts gross income, or assets during the taxable period incurred from conducting a trade or business inside and outside Massachusetts.

Also Read

How to Save Money While Forming Your Massachusetts Corporation

One of the initial steps in forming your corporation is to decide whether you need the assistance of an attorney or if you can navigate the process on your own. Hiring legal counsel might be necessary for complex businesses or if you are unfamiliar with the legal requirements. However, for simple structures, certain online platforms and resources provide self-help tools and guidance that can help streamline the process and reduce legal costs.

Another way to save money is by selecting an appropriate business structure for your corporation. In Massachusetts, you have several options, including a sole proprietorship, a limited liability company (LLC), a partnership, or a corporation itself. Each structure has its advantages and disadvantages in terms of liability protection, tax implications, and operating flexibility. Conducting thorough research on these different options and consulting with professionals may help you select a structure that suits your needs while minimizing future expenses.

Opting for a lean approach is crucial during the early stages of your corporation. Instead of leasing a fancy office space, consider starting your business from home or using shared co-working spaces. These alternatives are often more cost-effective and can provide the necessary environment for your operations. Virtual tools and software can often replace the need for extensive hardware and office supplies, reducing upfront expenses significantly.

Another opportunity to save money lies in utilizing interns or hiring part-time employees initially instead of rushing into full-time staffing. Interns are often eager to gain experience and can contribute valuable skills to your organization. Upon evaluating their potential, you may have an opportunity to build a cost-effective workforce. Additionally, outsourcing certain tasks such as accounting, IT support, or marketing to specialized agencies or freelancers can save money compared to hiring full-time employees with benefits and training expenses.

One area that should not be compromised to save money is professional advice and compliance. Partnering with a trusted accountant can ensure that you understand your financial obligations, save money on taxes, and establish transparent financial records. Ensuring proper compliance with local, state, and federal regulations is essential to prevent potential legal issues and costly penalties down the road.

Creating a detailed business plan that outlines your financial projections, marketing strategies, and operational objectives is vital for guiding your company’s growth while remaining on budget. Consider using templates or seeking mentoring services from local entrepreneurship organizations, such as the Massachusetts Small Business Development Center (MSBDC). Utilizing available resources can help you avoid costly mistakes and set realistic goals for managing your finances effectively.

When it comes to funding your corporation, explore various options before committing to high-interest loans or expensive financing alternatives. Look into local grants, small business loans backed by government programs, or consider seeking investments from family, friends, or angel investors who believe in your business idea. By remaining open-minded and creative, you might find cost-effective ways of securing the necessary capital to fuel your corporation’s growth.

In conclusion, forming a corporation in Massachusetts can be a feasible and economical process if you carefully consider your options and make informed decisions every step of the way. By investing time in research, skipping unnecessary expenses, and seeking affordable alternatives, you can save significant amounts of money during the early stages of your business. Embrace a prudent and diligent approach, and you’ll lay a strong foundation for your corporation’s future success.

Conclusion

Starting a corporation in Massachusetts involves several critical steps, from choosing a corporate name to fulfilling ongoing compliance requirements. Following the steps outlined in this guide and seeking professional advice when needed, you can successfully establish your Massachusetts corporation and enjoy the benefits of limited liability, potential tax savings, and a professional business image.

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