State Processing Times and Fees
Nearly every state has standard processing times for corporations, but not all provide expedited processing. Check the average wait times for both standard and expedited filings for all states.
Massachusetts charges a filing fee for incorporating. Visit “compare pricing” in our incorporation center to see all state fees for Massachusetts.
Deciding Between a Massachusetts C Corp or S Corp Tax Designation
There are similarities between Massachusetts S Corps and C Corps regarding personal liability, management, structure and compliance. The differences come down to the following:
- Ownership Rules: A C Corp is taxed as a separate entity from its shareholders, then shareholders report and pay taxes on what the corporation pays them. An S Corp is taxed like a partnership with a “pass-through” tax structure. It's not doubly taxed because the corporation passes corporate income, losses, deductions and credits to its shareholders. Corporate owners pay taxes on their share of the corporation’s profits, and they're taxed at their individual tax rates. To qualify as an S Corp, your business must be a domestic corporation, provide only one class of shares, have no more than 100 shareholders, and your shareholders can include only individuals, certain trusts, and estates.
- Documents: If you want to form an S Corp, you must file IRS Form 2553 to elect this status.
Every state has its own personnel requirements for incorporating. In Massachusetts, they include the following:
- Age requirement: There are no age requirements.
- Number of directors: Corporations must have three or more directors if there are three or more shareholders. Otherwise, the number of directors is the same as the number of shareholders.
- Residency: There is no requirement that directors must live in Massachusetts.
- Officer positions: Massachusetts requires that the names and addresses of officers and directors be listed in the Articles Of Organization.
Other Requirements for Your Articles of Organization
In addition to personnel requirements, your Massachusetts Articles of Incorporation must also include the following.
Your corporation must appoint a registered agent. A registered agent is a person or business who receives important tax, government and legal documents, including service of process of lawsuits, for your corporation. Your agent must be available during normal business hours.The agent's name and address must be included in your Articles Of Organization. Your agent must have a physical address in the state, not a post office box. We can help you designate your agent when you incorporate with us.
You must also include the following in your Articles of Incorporation in Massachusetts:
- The number of shares authorized to be issued.
- The par value of each share or class of shares and series, along with their designation, or a statement that there is no par value.
- The street address of the corporation’s principal place of business.
- The street address where corporate records are kept.
- A brief description of the nature of your business.
Other Required Paperwork
Massachusetts requires that corporations file additional paperwork with their Articles Of Organization. You must file an annual report with the Massachusetts Secretary of State two and a half months after the close of your fiscal year.Failure to provide this report could result in your company losing its ability to operate in Massachusetts.
Guidelines for Your Name
Your corporate name must be unique, and it should make a statement about your business. Make sure it complies with the following Massachusetts requirements:
- Your name should be distinguishable from that of all other registered businesses in Massachusetts. It must end with “Company,” “Incorporated,” “Corporation,” “Limited,” or an abbreviation of one of these terms.
- Your name cannot be deceptive. If you're selling fried oysters, don't name your company "Ted’s Massachusetts Dry Goods."
- Ensure that your name is distinguishable from that of any other existing corporate name.
- Your name cannot include any words that might mislead the public into thinking your corporation is a bank or an insurer unless you obtain special approval from the state.
Massachusetts Corporate Taxes & Reports
Yes, you do have to pay taxes for your new corporation. Before beginning business, apply to the IRS for an employer identification number, or EIN. All corporations with employees require an EIN. An EIN is similar to your Social Security number, but it's for businesses. You'll also need an EIN to open a corporate bank account.
Many businesses choose an S-Corp because it is generally exempt from federal corporate income taxes. The company can pass profits or losses directly to its shareholders. With a C-Corp, you can have different classes of shareholders with different voting rights, but this has tax implications.
Keeping Corporate Records and Ongoing Filing Requirements
Different states have varying requirements for corporate records like bylaws and recording and keeping corporate meeting minutes. Massachusetts requires that your corporation adopt bylaws. Bylaws set forth your company’s operating rules, the responsibilities of its directors, the rights and powers of shareholders, and other corporate matters. Although you don't have to file your bylaws with the state, you'll need them to demonstrate to banks, lending institutions, creditors, the IRS and the courts that your corporation is valid and legitimate. Bylaws also help to establish rules so you can keep your corporate assets and debts separate from your personal ones.
Keeping minutes of your director and shareholder meetings is also mandated by Massachusetts. Your minutes should be maintained at your corporate office, along with your other company records, or with your designated agent. Your corporate minutes are a historical record of your corporation’s decisions. They keep track of all votes on important business decisions and they help secure your limited liability status.
Best of luck with your new Massachusetts corporation! We have all the legal documents, filing and tax information you'll need to get started.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.