Business entities in Massachusetts

Different Massachusetts business entities

Healy Consultants will assist our Clients with the choosing the optimal corporate structure for Massachusetts business setup. There are several ways of doing business in the state, the most common being the setting up of an LLC or a corporation. Alternatively, foreign entrepreneurs may also opt to set up a branch office.

The Massachusetts limited liability company (LLC)

Setup LLC in Massachusetts

  • The LLC can be incorporated by 1 director and 1 shareholder who may be of any nationality and may not be resident in the United States. However, such an entity will require the appointment of a corporate agent, who can be an individual or entity resident in Massachusetts. Furthermore, there is no requirement to deposit any specific amount of share capital;
  • An LLC (with 2 or more shareholders), by default, will be taxed as a partnership. Hence, there will be no tax paid at the corporate level. Instead, all members of the LLC will be taxed on their share of income annually, even if the income is not distributed;
  • A Massachusetts LLC will not be required to go through an annual audit.

The Massachusetts corporation

  • This Massachusetts business setup may either be public or private. A public corporation is one in which the shares are offered and sold to the public on the stock exchange. A private corporation has relatively few shareholders, and the shares of a private corporation may not be transferred as freely. A corporation is required to appoint a minimum of one director and one shareholders of any nationality in order to complete the incorporation successfully;
  • The minimum paid-up capital required is US$1 and a registered agent must also be appointed. Also, like an LLC, an auditor will not be required.

The Massachusetts branch of a foreign company

  • Foreign LLCs will be allowed to setup branch offices in Massachusetts. The scope of business of the branch office will be defined by the parent company and will be provided to the company registrar prior to registration;
  • Like an LLC, a branch entity must also have a local address along with resident registered agent. However, unlike an LLC, all the liabilities of the branch will be assumed by the parent company;

Table of comparison between Massachusetts entities

 LLCCorporationBranch office
How long to set the company up?1 week1 week2 weeks
How long to open company bank account?4 weeks4 weeks4 weeks
Legal liability?LimitedLimitedUnlimited
Wholly foreign owned?YesYesYes
Minimum paid - up share capital?US$1US$1US$1
File annual tax return?YesYesYes
Tax registration certificate required?YesYesYes
Recommended corporate bank account?CitibankBank of AmericaSantander Bank
Does our Client need to travel?NoNoNo
Resident director required?NoNoNo
Resident shareholder required?NoNoNo
Minimum directors allowed?111
Minimum shareholders?111
Tax identification code needed?YesYesYes
Registered agent required?YesYesYes
Corporate shareholders allowed?YesYesYes
Corporate director(s) allowed?YesYesYes
Statutory audit required?NoNoNo
Massachusetts tax payable?5%8%5%
Annual financial statements required?YesYesYes
Regulated by?Secretary of the Commonwealth of MassachusettsSecretary of the Commonwealth of MassachusettsSecretary of the Commonwealth of Massachusetts
Allowed to issue sales invoices?YesYesYes
Allowed to sign contracts?YesYesYes
Allowed to import and export goods?YesYesYes
Can rent an office space in Massachusetts?YesYesYes
Can buy Massachusetts property?YesYesYes
Total Massachusetts business setup costs in yr. 1?US$6,532US$6,732US$6,643
Subsequent annual costs (incl. accounting and tax fee)?US$4,500US$4,600US$4,500
Sample engagement invoice?HK LLC setup costMA corporation setup costMassachusetts branch setup cost

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Contact us

For additional information on our business setup services in Massachusetts, please email us at Alternatively please contact our in-house country expert, Ms. Grace Odhiambo, directly:
client relationship officer - Grace