How to Start a Business in Massachusetts

Plan your Massachusetts business

Now it’s time to start planning. This means coming up with a business plan, naming your business, researching locations, and more. There’s a lot to cover here, so let’s break it down:

Select a business name

Now it’s time to research and decide on a business name for your new company. You should take your time with this step, as it’s important to choose an appropriate name. Your company name should be relevant to your business, memorable for your clients, and a name that you genuinely like.

Equally important is to choose a name that is unique. New business names in Massachusetts must be distinguishable from other businesses already registered in the state. You can use the Massachusetts business entity name search online to determine whether or not a name is available. 

It’s important to choose a unique name for your business, but this is not the only MA business name rule to be aware of: 

• The business name must be unique from other businesses already registered in the state
• Names for LLCs need to contain “limited liability company”, or approved abbreviations like “LLC” or “L.L.C.”
• Names for corporations need to contain “corporation”, “incorporated”, or approved abbreviations like “corp” or “inc”
• To use certain financial words in your business name, such as “bank” or “trust”, you may be required to obtain written permission first
• Other rules may apply. See the Massachusetts business name rules page for details. 

Once you find a good business name that fits your new company and is available, you can move on to the next step.

Alternatively, if you’re not yet ready to move on, you can reserve the business name for 60 days. This gives you some time to think about it while reserving the name so nobody else can register it. You must file the Application of Reservation of Name and pay a $30 filing fee. 

Massachusetts trade names

Massachusetts allows businesses registered in the state to also register additional trade names, otherwise known as doing business as (DBA) names. These are like secondary names that you can add to your business registration, and can then legally do business under. This provides some flexibility in how you brand and market your company. More information here.

Register a domain name

Once you choose a name, you should immediately register a domain name for your new business. In most cases, getting a .com domain name is ideal, but there are many other extensions (.biz, .net, etc.) that are worth considering. 

You can use a tool like Namechk to search for an available domain name and find a great deal on the registration cost. You may find that your desired names are taken, so you may need to get creative. 

Complete market research

Once you have an idea, you’ll want to do some market research. You want to gain a better understanding of who your customers – and competitors – are. You can achieve this by conducting online research, running focus groups, sending out surveys, and more. There are also companies that can help you complete market research, for a fee. 

Select a business location

Unless you plan to run a remote/virtual business, you will need to find a physical location for your company. Research commercial property in your area, and take note of typical costs. For customer-facing businesses (retail and some services), location is very important, so take your time in selecting the right area for your business. 

Create a business plan

You will now need to create a detailed business plan for your new venture. This plan is helpful for your own purposes, and will also be necessary in order to obtain funding from a bank. A good business plan should contain these elements:

• Finances: How much funding does the business need to get started? How many sales does it need each month to break even on expenses?
• Product: What do you plan to sell? Is it a product or a service? What problem does your business solve, and how is it distinct from your competitors?
• Marketing: How will you drive sales? What marketing and sales efforts do you plan to employ? How much money will you set aside to fund marketing efforts?
• Staff & Partnerships: How many people will you need to hire, and what skill sets do they need to have? Will you have any partnerships or arrangements with other local businesses? 

If you need help, you can find business plan templates online that will help walk you through the steps you need to take to draft a detailed business plan. If you plan to seek funding, you may also wish to call your bank to see what they require in terms of business plans. 

Register your business in Massachusetts

Now, it’s time to formally register your business with the state of Massachusetts. To do this, you will need to work with the Secretary of the Commonwealth’s office (Secretary of State). You’ll need to file some paperwork, which can be submitted either online or through the mail. 

When forming a MA business, entrepreneurs have two basic options to complete the required steps:

• Doing the work themselves
• Using a professional business formation service

For those who wish to complete the necessary steps on their own, the guidelines below will help. But for many entrepreneurs, using a service is well worth the cost. 

Services like Northwest Registered Agent, ZenBusiness, and Bizee can all help you start a new business more efficiently and accurately. These services walk you through every step of the process, ensuring that everything is done properly. And everything is handled online, through the services’ advanced online portals. 

These services can also be the Resident Agent for your company (and you’re required to appoint a Resident Agent for LLCs and corporations). If you want to save time and hassle, using a service is worthwhile.

If you do end up completing the work on your own, the basic steps include:

1. Choosing a name for your Massachusetts business
2. Choosing a Massachusetts Resident Agent (aka Registered Agent) for your business. The registered agent is tasked with receiving legal documents on behalf of your company. 
3. Filing formation documents with the Massachusetts Secretary of the Commonwealth
4. Applying for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS)
5. Applying for other necessary permits or licenses

There are slightly different steps needed, depending on the type of business entity you plan to form. Here are the specifics: 

Form a Massachusetts sole proprietorship

Follow these steps:

1. Decide if you will operate under your legal name, or use a trade name
2. If you use a name other than your own, you may need to register a trade name
3. Apply for a business license and/or other necessary permits from local governments (city/county)
4. More information here

Form a Massachusetts LLC

Follow these steps:

1. Name your new LLC 
2. Choose a Massachusetts Resident Agent (or use a service such as Northwest Registered Agent)
3. File the LLC Certificate of Organization online, and pay the $500 filing fee. You can also choose to file this form by mail, with the same $500 filing fee
4. Draft an LLC operating agreement
5. Apply for an EIN with the IRS

Form a Massachusetts corporation

Follow these steps:

1. Decide on your desired corporate tax structure (S corp or C corp) 
2. Name your new corporation 
3. Choose a Resident Agent
4. Hold an organizational meeting and appoint directors
5. File the Massachusetts Articles of Incorporation online, and pay the $145 filing fee. You can also choose to file this form by mail
6. Apply for an EIN from the IRS

Apply for business licenses and permits

Registering your business and forming an LLC or corporation is an important part of starting your business – but in order to operate legally, you will likely also need to obtain certain permits and/or business licenses. 

The specifics vary depending on the type of business you are running, as well as your location. For example, restaurants will need health permits, bars will need liquor licenses, and medical service providers will need various professional licenses and federal permits. You will need to research the specifics that relate to your business type.

There are different requirements at each level of government:

• Local: Cities and counties may require certain business licenses or permits. Contact your county clerk for details.
• State: Massachusetts may require additional permits and/or licenses in order to operate legally in the state. Check the Massachusetts Business License & Permit page for details. 
• Federal: Federal permits/licenses may be required for certain regulated industries, such as construction, medicine and legal services. Check the Small Business Administration (SBA) guide for more details. 

At this time, you should also apply for an Employer Identification Number (EIN). An EIN is a federal tax ID that is required to hire employees. You can apply for an EIN online with the IRS – the application is free and quick. 

Set up your business finances

Beyond securing funding, there are other routine tasks that you need to take care of to get your business’ finances in order. This includes:

• Opening a business checking account. You should have a separate business bank account that you use solely for business purposes. You can open this account at most banks, credit unions and financial institutions. Call ahead to see what documents will be required to open this account.

• Open a business credit card or line of credit. This is not strictly necessary, but most businesses can benefit from having a business credit card, and/or a business line of credit. This can be used for day-to-day expenses and purchases, and may also earn you some rewards. 

• Set up your accounting system. As a business owner, you will need to keep very detailed records about all revenue and expenses. To do this, you’ll want to set up the proper foundation from day one. This could be investing in an account software such as QuickBooks or Xero, hiring a bookkeeper, or at the very least establishing a spreadsheet to track everything. If you do not have any accounting experience, it’s wise to hire a professional to help.

• Purchase business insurance. Most businesses should have some form of liability insurance, and potentially other forms of business insurance as well. Insurance policies can help protect your equipment and buildings from costly damage, and help shield your company from liability if a worker or customer is injured or otherwise harmed. Speak with a local business insurance provider to get started.

Hire employees

Unless you plan to operate a solo business (with you as the only worker), you will likely need to hire employees. To do this, you will need a federal employer identification number (EIN), which is a free tax ID number issued by the Internal Revenue Service (IRS).  

When you have obtained an EIN, you’ll then need to satisfy state-level requirements for hiring employees. For example, whenever you hire someone new, you will need to report the new hire to the state of Massachusetts within the first 14 days of the employee beginning work. 

You will also need to ensure that anyone you hire is legally able to work in the state, and holds all the appropriate licenses and/or permits for their role. For instance, businesses hiring for restaurant roles will need to ensure that employees have valid health permits with the state or county. 

There are also a few employer taxes to be aware of. This includes unemployment insurance tax, as well as withholding tax. There will likely be other requirements, as well; check with your CPA for details.  

At this point, you also should look into setting up your payroll system – whether you handle it yourself, or use a payroll service. 

Massachusetts business FAQs

Still have questions about running a business in Massachusetts? Here are some answers to frequently asked questions.