The procedure for incorporation in Massachusetts is defined by state rather than federal law. You must comply with the laws of Massachusetts, as administered by the office of the Secretary of the Commonwealth of Massachusetts (the secretary), to incorporate in that state. However, federal law, as administered by the Internal Revenue Service, determines how a Massachusetts corporation will be treated for federal tax purposes.
Check Name Availability
The name you have chosen for your corporation, or a name confusingly similar to it, may already be in use. The secretary maintains searchable, online databases of corporate names that are already in use and of names that have been reserved for future use. Search the secretary’s databases for previous use or reservation of the corporate name you have chosen. If your first choice is already in use or is reserved, select another name and check its availability.
Reserve Your Corporate Name
Once you have settled on an available name, reserve that name by completing and filing the Application of Reservation of Name available from the secretary. This form must be filed with the secretary's office either in person or by mail, accompanied by a filing fee in the amount identified on the application form.
Articles of Incorporation
The document that creates, defines and organizes your corporation is its "articles of incorporation." These articles must: state the name of the corporation; identify the purpose for which the corporation is formed; declare the number of shares and the preferences, limitations and relative rights of each class of shares; state any restrictions imposed on the transfer of shares of stock; identify the effective date of creation of the corporation; name the initial corporate registered office and agent within that office; and identify the individuals who are forming the corporation. The secretary provides model forms for articles of incorporation.
Filing the Articles of Incorporation
File the printed, signed articles with the secretary and pay all appropriate filing fees. The secretary currently offers the option of preparing, signing and filing the articles electronically as well. Upon filing of the articles and payment of appropriate fees, the secretary will issue a charter of incorporation, which document serves as evidence of the existence of your corporation.
ID and Corporate Tax Structure
You will need a number to identify your corporation on tax filings, called an Employer ID Number (EIN). You may apply online for an EIN. You will also need to select the corporate tax structure that best serves your particular circumstances: a traditional C corporation or an S corporation. C corporations are taxed separately, while S or “pass-through” corporations pass profits and losses through to the shareholders for reporting on their personal tax returns. The IRS offers resources to assist in determining which tax structure is optimum for you. Prepare and file IRS Form 2553 if you elect the S-corporation tax option. Form 2553 must be signed by all shareholders.
Your corporate records should also include written bylaws that set forth the rules for conducting the corporation's internal business, such as how directors and officers are elected. Unlike the articles, these bylaws are not filed with the state secretary, but are maintained internally by the secretary of the corporation.
Other Licences, Permits and Registrations
After forming your corporation by filing articles with the secretary, you may also be required to apply for licenses, permits and registrations from various jurisdictions as necessitated by the circumstances of your particular business and the locations of its assets, employees or offices.
- Corporations and Other Business Organizations; Melvin Aron Eisenberg
- Internal Revenue Service: Small Business, Federal Tax Responsibilities
- Internal Revenue Service: Publication 583
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