• An Operating Agreement – Form D – This form establishes the operating agreement of the company.
• An Annual Report – Form E – This report provides information about the financial activities of the company during the fiscal year.
The filing requirements for each type of report vary depending on whether the entity is a corporation, partnership, unincorporated association, foreign corporation, etc. In addition, some states require additional filings, including tax returns, shareholder reports, etc.
Fees for filing annual reports are $100 per year for corporations and partnerships, $50 per year for unincorporated associations, and $25 per year for foreign corporations. These fees are nonrefunded.
Forms are available online or through NASAA.
There is no Institutional Buyers exemption in Massachusetts.
The course begins with information about each of the different types of entities, including sole proprietorships, partnerships, corporations, limited liability companies, general partnerships, and unincorporated associations. Next, you’ll learn how to determine whether you are eligible to form an LLC, and how to decide where to incorporate. Finally, you’ll find out how to complete the LLC formation documents, such as articles of organization, operating agreement, and certificate of good standing.
Certificate of Organization
The Certificate of Organization is the very first step in forming an LLC. This document confirms the formation of the entity and provides a number of important legal protections to the members. In addition, it serves as proof that you are indeed the owner of the corporation.
A certificate of organization is required for both domestic and international entities. The cost varies depending on whether you file electronically or by mail. If you choose to do it by mail, there is no charge. However, if you decide to file electronically, you must pay a $500 filing fee via check or money order.
You can obtain a certificate of the organization from most local county clerks’ offices. Some counties offer electronic filing, while others require you to submit a hard copy of the form. Others still may allow you to submit the form online.
Once you receive your certificate, keep it safe because you’ll need it later. You’ll use it to register your newly formed entity with the state and federal governments
An annual report must include certain financial data and company operations information. An annual report does not require a specific format; however, it must contain the following items:
• A statement of purpose
• Information about the company’ s name, address, principal place of business, registered office, date incorporated, number of directors and shareholders
• A list of the board of directors
• Information about the management structure
• Financial statements
• A balance sheet
• A profit and loss account
• A cash flow statement
• Statement of changes in equity
• Notes to the financial statements
• List of subsidiaries
• List of associates
• List of employees
• List of executive officers
• List of directors
• List of shareholders
• List of owners
• List of auditors
• List of legal advisers
• List of related parties
• Other information
The annual report is filed with the Ministry of Justice.
State Business Tax
Most states do not require an entity to pay state income tax if it conducts business inside the state. This is called the “state business tax exemption.” However, some states choose to impose a state income tax on entities doing business inside the state. For example, New York imposes a corporate income tax on businesses located in New York. If you operate a business in New York, you must pay New York
An LLC does not pay any income tax unless the state chooses to impose one. You cannot deduct federal income taxes paid to another jurisdiction against your state income taxes. In addition, most states allow you to deduct certain costs associated with running your business, such as rent, utilities, insurance, etc., against your state income taxes, but many states limit how much you can deduct.
Some states charge additional fees just for operating in that state. These include franchise taxes, real estate transfer taxes, sales and use taxes, personal property taxes, motor vehicle registration taxes, and others. Some states charge a flat fee per employee while others charge based on payroll.
State Employer Tax
The Internal Revenue Service requires businesses to file Form SS-4, Application for Employer Identification Number, every three years. This form must be filed even if the business does not employ anyone. In addition, the state of residence must be listed on the application. If a business changes locations, it must submit a new application.
For Massachusetts employers, you’ll want to check out the Department of Unemployment Assistance’s Web site for information about filing your annual employer tax report. You can do so online here.
Sales and Use Taxes
A sales tax is imposed on all retail transactions in the state of Massachusetts. Retailers must collect sales tax for purchases sold to consumers and remit it to the state. Each retailer is responsible for collecting and reporting the tax to the state.
There are two ways to report the sale of goods and services: online or paper filing. If you make a purchase in Massachusetts, you will pay sales tax unless you file a return. You can do either online or via mail.
Online Reporting
You can use our online system to report sales and use tax payments. After completing your transaction, you will receive a confirmation email. Please print out the receipt and attach it to your return.
Mail Filing
If you prefer to mail a return, please download the form here. Mail the completed form along with payment to the address listed below:
Massachusetts Division of Taxation in the Other States
If you plan to operate a small business in multiple states, forming an LLC in every state where you want to do business makes sense. You’re probably familiar with the process of forming an LLC in one state and operating it there, but what happens if you decide to expand into another state? In most cases, you’ll need to file articles of organization in both jurisdictions. This isn’t always true, however. Some states allow businesses to incorporate in just one location.
The good news is that you don’t necessarily need to hire a lawyer to help you register your LLC. Many companies offer free or low-cost services to assist you in filing documents with either the Secretary of State or local government. For example, LegalZoom offers a free LLC kit that includes forms and instructions for filing an LLC in Texas.
You might think that you’d need to pay a fee to register your LLC in another state, but that’s not always the case. Some states require you to pay a nominal fee to register your LLC, while others waive the registration fees entirely. Check with your state’s Secretary of State to determine whether you’ll need to pay a fee.
In some states, you must register your LLC within 30 days of formation. Others let you wait up to three months. Once you’ve registered your LLC, you’ll need to submit annual filings with the appropriate authorities in each jurisdiction.
Frequently Asked Questions
How is an online filing different from a paper filing?
An online filing is similar to a paper filing, except that you won’t have to send any hard copies of documents to the state. Instead, you’ll be able to access them through the Internet.
When should I start my LLC?
It depends on how many states you intend to operate in. If you plan to operate only in Massachusetts, you may want to consider starting your LLC now.
What happens if I start a filing but don’t finish?
If you haven’t filed by the deadline, you’ll lose your ability to conduct business in that state. However, you can still continue to operate your LLC in other states until you complete your filing in Massachusetts.
James Rourke is a business and legal writer. He has written extensively on subjects such as contract law, company law, and intellectual property. His work has been featured in publications such as The Times, The Guardian, and Forbes. When he’s not writing, James enjoys spending time with his family and playing golf.
