Formally registering a new or existing business in the Commonwealth of Massachusetts can be a difficult task, and may seem unnecessary to many entrepreneurs or small business owners. However, registering a business provides owners with significant benefits and protections. The most important advantages involve tax implications and protection from personal liability for business debts. But click here for some very important information regarding personal liability and business ownership.
This video explains 5 key things to consider when starting a new business.
Registering a Business Entity
Prior to registering a business, an owner must decide which form of business entity to establish and what state to register (or domicile) the business in. Of course, Delaware has become a ‘trendy’ state to register in, but in reality it is not the best option for all businesses and can unnecessarily increase set-up and annual maintenance costs.
Choosing a Type of Business Entity
The choice of business entity is an important decision that has a lasting effect on your business, and should be made with the advice of a Business Lawyer. The most common forms of business entities in Massachusetts are the Corporation, S-Corporation, Limited Liability Company, Partnership and Limited Liability Partnership – each having its own pros and cons, its own tax implications, annual set-up and maintenance costs, levels of liability protection, and management structures.
Massachusetts recognizes Sole Proprietorships, C-Corporations / S-Corporations / Benefit Corporations / Non-Profit Corporations (INC) and Professional Corporations (PC), Limited Liability Companies (LLC), Limited Liability Partnerships (LLP), Professional Limited Liability Company (PLLC) and Limited Partnership (LP).
Each business entity has its own requirements, characteristics, advantages and disadvantages with respect to issues of filings, business purpose, personal liability, taxation, ease of management and maintenance and cost.
Business Registration Filings
Different types of business entities require different forms of initial filings and information.
For example, to formally register a Limited Liability Company (LLC) you must complete and file a Certificate of of Organization with the Massachusetts Secretary of the Commonwealth and for a Corporation (INC) you must complete and file Articles of Organization. Limited Liability Partnerships, also require initial filings. Some types of entities such as a Benefit Corporation, Non-Profit Corporation and S-Corporation all require specific filings or additional filings required to obtain the desired status.
However, if you are a professional such as a doctor, lawyer or an accountant or render “professional services and services ancillary thereto within a single profession” in Massachusetts, and you want to register a Corporation or an LLC, you must also file a certificate from the appropriate regulatory board that certifies that you and the other owners/shareholders/members are duly licensed and admitted to the profession in the Commonwealth of Massachusetts.
The failure to do so will result in rejection of your Professional Limited liability Company (PLLC) or Professional Corporation (PC).
The Business Lawyers at The Jacobs Law LLC can review the specific circumstances of your business with you and assist in choosing the type of business entity that best fits your needs.
Our experienced Boston Business Formation Attorneys at The Jacobs Law will advise new or existing business owners (a) in choosing the state to register in and (b) in selecting the appropriate type of business entity to register (or convert to), whether it be a Corporation, S-Corporation, Limited Liability Company, Partnership, Limited Liability Partnership, etc., the specific tax implications of each business entity, and (c) will draft all required documents to properly form and register a business with the Secretary of the Commonwealth of Massachusetts (or other state).
Our Boston Business Formation Attorneys will provide all of the legal services listed below at rates that are highly competitive with those online non-lawyer options. However, unlike most online options, a Business Attorney at The Jacobs Law, will provide personalized, quality legal advice and document customization specific to your needs and the type of business you plan to start that non-lawyer online options simply cannot do. If we had a nickel for every time a client has run into trouble with a standard document obtained from one of those online services…