Should you form your corporation in Massachusetts? We've collected the relevant information that will help you make this decision.
Pros
Personal income tax rate of 5.3%
Home to one of the top 20 metro areas in US
Qualified workforce
Cons
Flat tax rate of 8%
Competitive market
Cost of doing business
$265 filing fee / $109 annual statement
Privacy
Owners disclosure in original filing
Forming your corporation in Massachusetts
The name
In order to communicate to the public that your new business is incorporated, its official name will need to end with one of the following signifiers (or a relevant abbreviation): “incorporated”, “Company”, or “corporation.” In addition, it is required that the name of your business is not intentionally misleading to consumers, for any reason. Your company’s new name must also be completely unique, and not deceptively similar to any other organizations name or trademarks. Do a FREE name search now.
Board of directors requirements
You will need to form an official board of directors when incorporating in Massachusetts. Here are the states explicit regulations regarding these directors:
Required number of directors
Massachusetts corporations must have at least three directors unless there are only one or two shareholders. If this is the case, they may only have one or two directors.
Age restrictions
Directors of corporations located in Massachusetts must be at least 18 years of age.
Residence restrictions
There are no residence restrictions imposed on the directors of C corporations in Massachusetts. However, S corporations are only allowed to have directors located in the United States.
What information needs to be included in the Articles of Incorporation?
Massachusetts does not require the names or addresses of directors to be disclosed in incorporation documents.
Requirements for the Articles of Incorporation
The Articles of Incorporation is a document that must be filed during the incorporation process in every state. Here is the information that must be included in this document when filing in Massachusetts:
Stock information
Massachusetts requires the number of initial shares outstanding, and their par value, to be disclosed during the incorporation process. The number of outstanding shares does not affect initial state filing fees.
Officer information
The state of Massachusetts does require officer information to be disclosed during the filing process.
Registered agent information
All Massachusetts corporations must have a registered agent on file, and submit their name and address (which cannot be a PO box). This agent will be required to be accessible during standard business hours, and act as the state’s point of contact with the company. Learn more about registered agents.
Additional Massachusetts filing requirements
If your business is a professional practice
Professional service corporations are permitted to form under the professional corporation (PC) structure.
Corporate record keeping requirements
Corporations in Massachusetts are required to keep formal documentation of all major company decisions, financial documents, and shareholder information.
Massachusetts corporate taxation and fee requirements
There are several tax and fee requirements that must be addressed by corporations in Massachusetts. They are as follows:
Taxation
All states have complex taxation requirements. For more information regarding taxes in Massachusetts, it is advised that you visit the state’s official business related website.
Annual report requirements
Corporations in Massachusetts are required to file an annual report within 3 ½ months of the close of each fiscal year. The filing fee associated with this process is $125. Learn more about annual reports.
Tax identification numbers
Massachusetts requires an EIN (employee identification number) for all corporations that will have employees, and most banks will require one to open accounts. Massachusetts does not require corporations to obtain state tax ID numbers. Learn more about EINs.
Business license requirements
The business licenses and permits required in Massachusetts vary wildly depending on the county or municipality in which your new corporation is located. If you would like to see more in-depth information on licenses and permits, please feel free to visit the content in our learning library that covers business licenses and permits.
S corporation election
Massachusetts does not require a state-level S corp election, as they recognize any elections held at the federal level.
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