How Much Does an LLC Cost in Massachusetts?

Massachusetts LLC costs: summary

Item	Cost
State Filing Fee	$500
Online Filing Fee	$20 (the state calls it an expedited fee; charged on online and fax filings, not on mail filings)
Annual Report	$500, plus a $20 fee when you file online ($520 total)
Business Name Reservation (Optional)	$30 for 60 days
Business Certificate (DBA, Optional)	Varies by city or town (Boston: $65)
Business License (e.g., Alcohol, Food Service, etc.)	Varies by license and town
Registered Agent Services (Third Party)	$50 to $300 per year
Creating an Operating Agreement	$0 (DIY) to about $1,000 for attorney fees

If you’re an entrepreneur in Massachusetts, you may have wondered what it takes to start a business. First, you must know which entity type you’re going to form, such as a corporation, limited liability company (LLC), or sole proprietorship. While an LLC often makes the most sense for small businesses, how much does it cost to set one up?

The costs are higher than in many states, but forming an LLC is relatively straightforward. You can handle everything yourself or rely on a third-party formation service to make it easier and faster. Either way, you don’t have to break the bank to get your business off the ground, and many of these expenses are tax write-offs.

So, if you’re trying to get your business off the ground, here’s everything you need to know about the costs associated when you start an LLC in Massachusetts.

General steps and costs when forming a Massachusetts LLC

Naming your Massachusetts LLC

Before you can file any paperwork, you need a business name. To ensure that your name is unique, you need to conduct a Massachusetts business search. You can adjust your search for exact matches or companies with similar names to be safe. If you want to reserve your name (because you’re not ready to form your LLC yet), you can file a name reservation form with a filing fee of $30. A reservation lasts 60 days, and you can extend it once for another 60 days for $30.

If you’re going to use a DBA (doing business as) name, you must file a business certificate with the clerk of each city or town where your LLC has an office. Fees vary (Boston charges $65, plus $35 for non-residents), and certificates must be renewed every 4 years.

Filing the Certificate of Organization

In Massachusetts, your LLC is not officially recognized until you file a Certificate of Organization with the Secretary of the Commonwealth, Corporations Division. This form comes with a $500 state filing fee, plus a $20 fee when you file online ($520 total). Your LLC exists once the Corporations Division files your certificate.

Appointing a registered agent

Massachusetts requires all LLCs to have a registered agent. This person is responsible for receiving legal documents and notices from the state on behalf of the company. A registered agent in Massachusetts (called a resident agent) must have a Massachusetts street address and accept legal documents there.

Technically, you can be your own registered agent, but most LLC owners choose to outsource this responsibility to avoid any legal or administrative headaches in the future. Typically, registered agent services in Massachusetts can cost around $50 to $300 per year, depending on which entity you use.

Creating an operating agreement

You don’t have to create an operating agreement in Massachusetts, but it’s always a good idea to do so, especially if you have a multi-member LLC. If you’re the only founder of the company, you don’t necessarily have to worry about how your business operates and how it’s organized. However, if you have multiple founders and employees, an operating agreement is essential to determine things like founder responsibilities, what to do if a founder dies (or leaves), and more.

Although you can create an operating agreement yourself, it’s usually best to consult with a lawyer or paralegal. This way, you can make sure the agreement is legally binding and won’t create any complications later on. The cost can vary greatly, from $0 if you write it yourself to about $1,000 for attorney fees. The more complicated your business structure, the higher the expense.

Other annual and additional Massachusetts LLC costs

Depending on the type of business you’re forming, you may need to get additional licenses, permits, and paperwork. Many of these also come with annual renewal fees, so you must plan accordingly. Here are some of the most common additional LLC costs you might encounter when forming a Massachusetts LLC.

Business licenses & permits

You don’t have to pay anything to register your business to collect sales tax, so if you’re a standard retailer, you shouldn’t have to pay anything to start selling products to your customers (but you must be registered to do so). Here are some other common licenses and their costs:

Food service permit

Each city and town sets its own requirements for serving food to the public. For example, in the City of Gardner, the costs can vary based on the type of business (e.g., a bakery vs. a caterer). In Boston, the fee depends on the size of your business and whether you offer take-out or not. For example, a sit-down restaurant (no take-out) costs $200 for up to 100 seats, and an additional $1 for each extra seat beyond 100.

Alcohol license

Restaurants and stores get alcohol licenses from their city or town, and fees vary locally. Wholesalers are licensed by the state Alcoholic Beverages Control Commission (ABCC): $10,000 for all alcohol, $3,500 to $5,000 for wine and malt depending on gallons, and $3,000 for sacramental wine.

Contractor license

You must be registered and approved by the state to be a licensed contractor in Massachusetts. Home improvement contractors pay a $150 registration fee plus a Guaranty Fund payment of $100 (0 to 3 employees) to $500 (more than 30 employees), renewed every 2 years.

You may also need permits for other types of businesses, such as hairstyling, massage therapy, healthcare, tattooing, and more. Many cities and towns set their own regulations and fees, so you’ll need to look those up when forming your LLC.

Annual report

To keep your LLC valid with the state, you must file an MA LLC annual report. Even if you don’t make any changes to your LLC, you still must file the report by the anniversary of your filing date and pay a $500 filing fee, plus a $20 fee when you file online ($520 total).

What expenses you can write off

As you can see, you may have to spend several hundred or several thousand dollars to form your LLC in Massachusetts. Fortunately, most of these expenses can be written off your taxes. You can deduct up to $5,000 of organizational costs (such as state filing and legal fees) and, separately, up to $5,000 of start-up costs in your first year, with the rest amortized. Ordinary operating expenses like payroll are deducted normally.

Here’s a breakdown of the costs we’ve discussed that are deductible from your business revenue.

• Filing Fees: The filing fee for forming an LLC in Massachusetts is $500, plus a $20 fee when you file online ($520 total). If you use a consultant or third party to help you fill out the paperwork, you can deduct those expenses too.
• Business Certificate (DBA) Fees: If you choose to use a DBA, you file a business certificate with your city or town clerk, and fees vary by town. If you need to reserve the name first, that costs an additional $30 per 60 days.
• Operating Agreement Costs: If you create your own operating agreement, you can’t deduct anything because you didn’t have to pay a third party. However, if you work with a law firm or LLC formation service, you can expect to pay up to about $1,000, depending on the size and scope of your business.
• Registered Agent Costs: If you act as your own registered agent, you can’t deduct anything. However, third-party registered agents may charge anywhere from $50 to $300 annually, and you can write those expenses off.
• Attorney Fees: If your business is complex or contains multiple founding members, it may make sense to work with an attorney to polish your paperwork and operating agreement. Most business lawyers charge by the hour, or you may be able to pay a flat rate per service (e.g., $400 for creating an operating agreement).

Massachusetts LLC fees

The following fees come from the Secretary of the Commonwealth’s Corporations Division. See the full Corporations Division filing fee list.

Item	Cost
Certificate of Organization	$500.00
Expedited fee (online or fax filings)	$20.00 on a $500 filing (not charged on mail filings)
Annual Report	$500.00 (plus $20.00 when filed online)
Name Reservation	$30.00
Foreign / Domestic Change of Resident Agent / Office	Paper or Fax: $25.00 (no fee if filed electronically)
Foreign / Domestic Change of Resident Agent Office by Resident Agent	Paper or Fax: $25.00 (no fee if filed electronically)
Foreign / Domestic Resignation of Resident Agent	Paper or Fax: $25.00 (no fee if filed electronically)
Amendment	$100.00
Restated Certificate	$100.00
Certificate of Merger / Consolidation	$100.00
Certificate of Cancellation	$100.00
Reinstatement Following Administrative Dissolution	$100.00
Foreign Registration	$500.00
Foreign Amendment	$100.00
Foreign Annual Report	$500.00
Foreign Cancellation	$100.00
Foreign Withdrawal	$100.00
Reinstatement Following Administrative Revocation	$100.00
Certificate of Good Standing	$25.00
Certificate of Existence	$12.00
Certificate of Registration	$12.00
Legal Existence w/Amendments	$25.00
Special Certificates	$25.00

Conclusion

Overall, forming an LLC in Massachusetts can be somewhat pricey, depending on the type of business you’re creating. For example, if you’re opening a retail storefront, you’ll file your LLC paperwork and register for state tax collection, and you may also need local permits. Alcohol licenses for stores and restaurants are issued by your city or town, and fees vary.

Also, keep in mind that there are benefits to utilizing third-party providers for elements like registered agents and operating agreements. Although you can technically handle these pieces yourself, you may make a mistake that could cost your business a lot later on. Instead, it’s often better to rely on professionals to help you avoid mistakes.

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