How to Start a Business in Massachusetts
Everything you need to form your Massachusetts LLC, corporation, or sole proprietorship, with exact fees, timelines, and step-by-step instructions.
Massachusetts offers a business-friendly environment with an affordable LLC filing fee of $500 by mail or $520 if filed electronically. The state's personal income tax is a flat 5 percent on most income, with a corporate excise of 8.0 percent for businesses choosing that structure. With the 12th-largest state economy and leadership in biotechnology, software, and health care, Massachusetts provides strong opportunities for new ventures.
This guide covers every step from choosing your business structure to obtaining licenses.
Choosing Your Massachusetts Business Structure
This is the first decision and it affects everything: taxes, liability, paperwork. If you are unsure, an LLC is the right default for most Massachusetts small businesses.
| Entity Type | Liability Protection | Taxation | Massachusetts Filing Fee | Annual Cost | Best For |
|---|---|---|---|---|---|
| LLC | Yes | Pass-through | $520 | $520 LLC Annual Report | Most small businesses |
| Corporation | Yes | Double (C-Corp) or pass-through (S-Corp) | $265 | $110 Annual Report for Domestic and Foreign... | Raising investment, stock options |
| Sole Proprietorship | No | Pass-through | $0 | $0 | Freelancers, side hustles |
| Partnership | No | Pass-through | $0 | $0 | 2+ owners (consider an LLC instead) |
8 Steps to Start Your Massachusetts Business
- 1
Choose your business structure
LLC, corporation, or sole proprietorship. Each has different costs, tax treatment, and liability protection.
- 2
Pick and reserve your business name
Search the Massachusetts Secretary of the Commonwealth, Corporations Division database. Reserve for $30 (60 days, extendable one time for another 60 days on written request (M.G.L. c. 156D, sec. 4.02)).
- 3
Appoint a registered agent
Must have a physical Massachusetts street address. Can be yourself (free) or a service ($100 to $300 per year).
- 4
File your formation documents
Certificate of Organization (M.G.L. c. 156C, sec. 12) ($520) or Articles of Organization (M.G.L. c. 156D) ($265) with the Massachusetts Secretary of the Commonwealth, Corporations Division.
- 5
Get your EIN from the IRS
Free, online, takes about 5 minutes. Do not pay anyone for this.
- 6
Register for a sales tax permit if you sell goods
Through the Massachusetts Department of Revenue. State sales tax rate: 6.25%.
- 7
Get required licenses and permits
Massachusetts issues no single general statewide business license. Requirements are industry specific (professional boards, food service, alcohol, contractors) and municipal.
- 8
Register for Massachusetts taxes
Personal income tax: Flat rate on most income, currently 5.00 percent, plus an additional 4 percent surtax on the portion of annual taxable income above...
How Much Does It Cost to Start a Business in Massachusetts?
| Item | Cost | Notes |
|---|---|---|
| LLC filing fee (Massachusetts Secretary of the Commonwealth, Corporations Division) Required | $520 | The Corporations Division does not publish a standard turnaround. |
| Corporation filing fee Required | $265 | If forming a corporation instead |
| LLC Annual Report Required | $520 | On or before the anniversary date of organization each year ($500 by mail, $500 plus a $20 expedite fee filed... |
| Name reservation | $30 | 60 days, extendable one time for another 60 days on written request (M.G.L. c. 156D, sec. 4.02) |
| Registered agent service | $0 to $300/yr | Free if you serve as your own |
| EIN (IRS) Required | $0 | Always free |
| Business license | Varies | Massachusetts issues no single general statewide business license. |
| Operating agreement | $0 to $500+ | Free template or attorney-drafted |
| Realistic LLC total (year 1) | $520 to $1,340 |
Start a Specific Business in Massachusetts
Massachusetts Business Guides
- How to Start an LLC in Massachusetts
- How to Start a Corporation in Massachusetts
- Sole Proprietorship in Massachusetts: How to Start One
- Massachusetts Business License: What You Need and How to Get It
- Massachusetts Home-Based Business Laws: Zoning, Permits and Rules
- How to Get an EIN in Massachusetts
- Massachusetts Business Name Search: How to Check and Reserve a Name
- How to Get a Resale Certificate in Massachusetts
- Massachusetts Registered Agent: Requirements and How to Choose One
- Best LLC Services in Massachusetts
- Massachusetts Business Taxes Explained for New Owners
- How Much Does It Cost to Start a Business in Massachusetts
Why Start a Business in Massachusetts?
- Massachusetts produced $849.1 billion in current dollar GDP at an annual rate in the first quarter of 2026, the 12th largest state economy in the country.
- The state population was 7,136,171 as of July 1, 2024, with Boston at 673,458 residents and four other municipalities above 100,000.
- The statewide sales and use tax is a single 6.25 percent rate set by M.G.L. c. 64H, sec. 2.
- Personal income is taxed at one flat rate, currently 5.00 percent, with a 4 percent surtax only on taxable income above an inflation adjusted $1,000,000 threshold.
- Forming an LLC costs $500 by mail or $520 online, and the LLC annual report costs the same $500 every year on the anniversary of organization.
- Incorporating is cheaper than an LLC: $250 plus a $15 expedite fee online for up to 275,000 authorized shares, with a $110 annual report filed electronically, though corporations pay the 8.0 percent corporate excise with a $456 minimum.
Massachusetts Business Resources
Frequently Asked Questions
- How long does it take to form an LLC in Massachusetts?
- The Corporations Division does not publish a standard processing time. Electronic and fax filings with a $20 expedite fee are prioritized ahead of mail and walk-in filings, and documents are accepted 8:45 a.m. to 4:00 p.m., Monday through Friday.
- What does it cost to start and operate an LLC in year one?
- The LLC formation fee is $500 by mail or $520 if filed electronically. On the anniversary of your organization each year, you must file an annual report for $500.
- Can a non-resident form an LLC in Massachusetts?
- The facts provided do not specify whether residency is required or restricted for LLC formation in Massachusetts.
- What's the cheapest way to start a business in Massachusetts?
- Incorporating is cheaper than an LLC. Form a corporation online for $265 total (the $250 filing fee plus a $15 expedite fee) for up to 275,000 authorized shares, with a $110 annual report filed electronically.
- Is an operating agreement required for a Massachusetts LLC?
- The facts provided do not specify whether an operating agreement is required.