By Fernando Berrocal

Here's all you need to know about forming a corporation in the northeastern state of Massachusetts.

Massachusetts is the most populous state in the New England region of the United States of America with almost a population of 7 million people (2019) and its capital is the city of Boston which is the home to the Greater Boston metropolitan area, a region influential upon American history, academia, and industry. 

To form a corporation in the vigorous state of Massachusetts, you must follow the following procedures.

1. Select a Business Name

The words "Incorporation," "Incorporated," or "Limited" (or an abbreviation thereof) must appear at the end of your company's name.

The name of your corporation must be distinguishable from the names of other businesses on file with the Secretary of the Commonwealth Corporations Division. The Massachusetts business name database and the Name Reservations database may both be searched to see if a name is available. By submitting an Application for Reservation of Name, you can reserve a name for 60 days. The cost of filing is $30. Before the original 60-day term expires, an extra $30 charge can be paid to extend the reservation for another 60 days. The application must be mailed to the Commonwealth Corporations Division's Secretary.

2. Complete and file the Articles of Incorporation

By submitting Articles of Organization with the Secretary of the Commonwealth Corporations Division, your organization becomes legally formed. The name of the startup, its purpose, the number of shares the corporation is permitted to issue and their par value, the classes of shares and minimum consideration, any limitations on share transfers, and the effective date must all be included in the articles. 

There is also, the initial registered agent's name and street address for service of process; the names and addresses of the corporation's initial directors, president, treasurer, and secretary; the fiscal year-end; the type of startup; the street address of the corporation's principal office; and the street address in the state where corporate records will be kept.

Articles can be submitted either online or by mail. The filing fee is $275 for up to 275,000 shares and $100 for every 100,000 shares or part thereof after that.

3. Appoint a Registered Agent

Every Massachusetts corporation is required to have a service of process agent. This is a person or business who undertakes to accept legal documents on behalf of the startup if it is issued. A registered agent might be a Massachusetts resident or a domestic or international corporation allowed to conduct business in the state. Before designation, the agent should agree to accept service of process on your startup's behalf.

4. Prepare Corporate Bylaws

Bylaws are a type of internal corporate document that lays out the fundamental guidelines for running your startup. They haven't been registered with the state. Although corporate bylaws are not needed by law, you should adopt them since they (1) define your corporation's operational procedures and (2) assist in demonstrating your legitimacy to banks, creditors, the Internal Revenue Service (IRS), and others.

5. Initial Directors are Appointed, and the First Board Meeting is Held

The incorporator, or the person who signed the articles of incorporation, must designate the first corporate directors, who will serve on the board until the first annual meeting of shareholders (when the board members who will serve for the next term are elected by the shareholders). The incorporator must complete an "Incorporator's Statement" that includes the first directors' names and addresses. The statement must be signed by the incorporator, and a copy must be kept in the corporate records book. It is not necessary to file the statement with the state.

The directors designate corporate officials, enact bylaws, choose a corporate bank, establish the corporation's fiscal year, approve the issuance of stock, and adopt an official stock certificate form and corporate seal during the first board meeting. Small privately owned corporations' share issuances are typically free from federal and state securities regulations. Incorporate minutes provided by the incorporator or any of the directors should be used to record the acts of the directors.

6. Submit an Annual Report

Every corporation licensed to do business in the commonwealth is required to file an annual report with the Corporations Division within two and a half (2 1/2) months after the end of its fiscal year. The report can be submitted electronically or by mail. The cost of submitting is $125.

7. Obtain an Employer Identification Number (EIN)

A federal employer identification number is required for your startup (EIN). An EIN may be obtained by filling out an online application on the IRS website. For these identification numbers, there is no charge for filing.

Are you ready to bring your startup to the next level? Apply to MassLight’s next batch. MassLight supplies capital and a dedicated tech team. We take equity in return. Have questions? Refer to our FAQ page.

‍

‍