1. General guidance for starting a business
Explore these resources before starting your business in Massachusetts.
- Get free training and counseling. You can find organizations offering business counseling and services to help you. Look for the program that best suits your business type or industry to get the support you need.
- Conduct market research. Conduct a competitive analysis to set your business apart from the competition. This means studying your competitors to understand their strengths, weaknesses, and what they offer to attract customers. Visit the U.S. Small Business Administration for market information, statistics, and data about small businesses in your area.
- Write a business plan. You can find business plan templates on the U.S. Small Business Association's website.
- Learn about professional licenses. Check with licensing boards in your city or town to see if your business needs a license to operate.
2. Find funding, financing, tax credits, and grant opportunities
Many private, nonprofit, and government agencies offer small business loans, regional grants, and other special financing programs. Review common questions about starting and financing a new business published by the Massachusetts Small Business Development Center Network.
In Massachusetts, employers can take advantage of various tax credits, deductions, and incentives when hiring from specific groups, such as:
3. Tax obligations and business structures
Your tax obligations depend on the type of business you choose (LLC, sole proprietorship, or corporation, for example), the services or goods you offer, and how many employees you’ll have. This means you need to choose a business structure before you can understand your tax obligations.
Choosing a business structure
The type of business you choose affects your tax obligations. Business types (LLCs, sole proprietorships, corporations, partnerships, etc.) are sometimes called “business structures” or “business subjects.” Choose the business type that gives you the right balance of legal protections and benefits.
Learn about your business tax responsibilities
The income and excise taxes you pay depend on your business structure. Review filing details about your business type including differences in tax structures and when to pay business taxes.
Businesses with employees have specific responsibilities, such as:
- Reporting new hires
- Paying minimum wage
- Withholding tax on wages
- Paying workers' compensation insurance and paid family medical leave taxes
Other common business tax obligations include:
4. Get a business certificate (DBA) from your city or town
If your company name is different than your legal business name, you need to apply for a business certificate (also called DBA or “doing business as”) with the town or city where your business is located (M.G.L. ch.110 §5). A business certificate creates a public record of the name and address of the owner(s) of a business.
The legal name for a partnership or corporation is the official name used when incorporating your business. If you’re a sole proprietor, your legal name is your legal business name.
Partnership or corporation
The owners of “Smith & Sons Accounting Services LLC" filed a business certificate so they can operate under the DBA name "FastTax Solutions" for branding and marketing.
John Smith doesn’t need to file a business certificate to operate “John Smith Designs.” He will have to file a business certificate if he wants to operate under the DBA name “Creative Design Services.”
A business certificate is not a license to do business within the town or city you’re located in. Check your town or city’s website for more details about filing a business certificate and any other required local licenses.
5. Apply for an Employer Identification Number (EIN)
An Employer Identification Number (EIN) is used to identify a business and is issued by the Internal Revenue Service (IRS). It's also called a Federal Tax Identification Number.
A sole proprietorship with no employees is the only kind of business that does not have to get an EIN.
6. Register your business with MassTaxConnect
If your business is responsible for collecting and paying taxes to the state, you'll need to create a MassTaxConnect account. You can pay business taxes to the Department of Revenue through MassTaxConnect.
7. File with the Secretary of the Commonwealth
First, choose how you will file (online, fax, mail, or in person) with the Sec. of the Commonwealth's Corporations Division.
Next, find your business structure on the Filing by Subject page and follow the listed steps to complete your filing.
Note: The Sec. of the Commonwealth's website refers to business types or structures as "subjects."
|September 29, 2023
|September 29, 2023