A business entity is the structure under which a business chooses to be formed. These include a limited liability company (LLC) or a corporation. Business entities get their own tax identification number and are created to reduce the personal liability that a business owner has when running a business.
Starting a Business in Massachusetts
There are a variety of business types you can select from when you start your business, but a corporation and an LLC are the most common.
Forming a Corporation in Massachusetts
To start a corporation in Massachusetts, you must file articles of organization with the Secretary of the Commonwealth of Massachusetts. These articles must contain the company name and address, the corporation’s purpose, number of authorized shares, restrictions or limitations on shares, the name and address of the registered agent, the names of the officers, the date of formation and an incorporator’s signature. It costs $275 to file articles of organization, plus an additional $100 for every additional 100,000 shares issued over 275,000.
Once the articles are filed, you will obtain a federal tax identification number, also known as an employer identification number (EIN) from the IRS. This number will then help you open bank accounts and credit accounts so that you may operate as a business and is also necessary for tax purposes. Be sure to consult with an insurance agent about insurance you may need as a new business.
Forming an LLC in Massachusetts
LLCs are formed by filing a certificate of organization with the Secretary of the Commonwealth of Massachusetts. Complete the online form and submit it. You’ll then be asked to pay the $500 registration fee. Allow one to two weeks to process the form.