How to Form a Single-Member LLC in Massachusetts

To form an SMLLC in Massachusetts, here's everything you need to know.

These are the steps to form a single-member limited liability company (SMLLC) in Massachusetts. Remember: For most formation purposes, a Massachusetts SMLLC is considered the same as a multi-member limited liability company (LLC).

1. Name Your SMLLC

The name of a Massachusetts SMLLC name must contain the words “limited liability company,” “limited company,” or the abbreviation “L.L.C.,” “L.C.,” “LLC,” or “LC.” The SMLLC’s name may contain the name of an SMLLC member or manager. The name may not be the same as, or deceptively similar to, the name of any business entity already on file with the Corporations Division of the Massachusetts Secretary of State (SOS).

You can check to make sure the name you want is available by doing a search for reserved business names on the SOS website. For a fee of $30, you can reserve a name for an initial 60 days by filing an Application for Reservation of Name with the Corporations Division. You can also extend the reservation for another 60 days if you pay any additional $30 fee before the original reservation expires. The application must be filed by mail or in person.

2. File a Certificate of Organization

You create a Massachusetts SMLLC by filing a Limited Liability Company Certificate of Organization with the Corporations Division. To complete the certificate you’ll need to provide the name and official street address of your new SMLLC, the name and address of the SMLLC's resident agent, a brief statement of the SMLLC's purpose or character, information about SMLLC managers (if any), and a few other basic details. The current filing fee for the certificate of organization is $500 by mail and $520 for online filing.

Every Massachusetts SMLLC must have a resident agent (some states call this a registered agent). The resident agent is an individual or business entity that agrees to accept legal papers on behalf of the SMLLC. The resident agent may be either a Massachusetts resident or a corporation authorized to do business in Massachusetts. The resident agent must have a physical street address in Massachusetts.

All of the paperwork and procedural steps to start a single-member limited liability company in Massachusetts can be done online using Nolo's Massachusetts Online LLC Formation application.

3. Prepare an Operating Agreement

Massachusetts does not require an SMLLC to have an operating agreement. However, even though an SMLLC has just one member, an operating agreement is highly recommended. An SMLLC operating agreement does not need to be filed with the state.

The operating agreement is usually made between the single member and the LLC itself. The agreement typically covers the member’s rights, duties, and obligations, as well as the SMLLC’s management structure. Having an agreement in place can help with liability protection by separating your business from you personally. It also can be useful with lenders and other businesses when entering into business transactions.

In most states, if you don’t state that your SMLLC will be manager-managed when you first register with the state, then your SMLLC will be treated by default as member-managed. The distinction between member-managed and manager-managed can be important so be sure to consider both options before you decide which type of management structure you want for your SMLLC.

For more information and help creating an SMLLC operating agreement, see Nolo's Guide to Single-Member LLCs, by David M. Steingold (Nolo), or you can use Nolo’s Online LLC.

4. Do You Need an EIN?

An SMLLC that keeps its default tax status of disregarded entity (same as a sole proprietorship) and does not have employees is not required to obtain a federal Employer Identification Number (EIN). Instead, owners of these SMLLCs can report their business profits and losses on their personal tax returns using their own Social Security number or tax identification number.

If your SMLLC has employees or if you choose to have your SMLLC taxed as a corporation rather than as a disregarded entity, you must obtain a federal Employer Identification Number (EIN) from the IRS. Even if you are not required to obtain an EIN for your SMLLC, there are often business reasons for doing so. Banks often require an EIN to open an account in the business’s name and other companies you do business with may require an EIN to process payments. In many cases it makes sense to obtain an EIN for your SMLLC even if it is not required for federal tax purposes.

You can get an EIN by completing an online application on the IRS website. There is no filing fee.

5. Register With the Department of Revenue

In some cases, for example if you have employees or will be selling goods and collecting sales tax, you’ll need to register with the Massachusetts Department of Revenue (DOR). You can register online using the DOR’s WebFile for Business application. For more information on state LLC tax registration, see Nolo's article LLC Annual Report and Tax Filing Requirements: A 50-State Guide.

6. Obtain Business Licenses

Depending on what kind of business you’re running and where it’s located, you may need to obtain local or state business licenses for your SMLLC. Among other possibilities, these might include licenses related to:

  • your profession or occupation
  • specific goods or services you’ll sell or provide
  • an assumed or fictitious name for your business, or
  • health and safety matters.

7. File Your Annual Report

The State of Massachusetts requires all domestic and foreign SMLLCs to file an annual report. Domestic SMLLCs file a Limited Liability Annual Report. Foreign SMLLCs file a Foreign Limited Liability Annual Report. You can mail in the report or complete it online at the Corporations Division website. You'll need a customer ID number and PIN to access the online form. Only a few pieces of information, such as the SMLLC's official name, the location of its principal office, and the name and street address of the resident agent, are required to complete the report.

The annual report must be filed each year on or before the anniversary date of the filing of the original certificate of organization. The annual report filing fee for a Massachusetts SMLLC is $500.

For more information on SMLLCs, see the Single-Member LLCs section of Nolo's website or Nolo's Guide to Single-Member LLCs, by David M. Steingold.