How Do I Register My Business As A Sole Proprietorship
Get The Necessary Licenses And Permits
Depending on the type of business you are opening, you may need to apply for a number of permits and licenses to operate legally. For example, a restaurant will need a liquor license, and a pawn shop will need a resellers license. The paperwork may prove a hassle, but its a necessary ordeal that will protect you from fines, lawsuits, and other legal hazards.
Massachusetts lacks a general business license, but you may need to acquire one or more specialty licenses to operate, depending on the nature of your business. Visit the Mass.gov Professional Licenses & Permits portal for information and guidance on how to get the licenses or permits youll need to operate in the state.
How To Register A Business Name In Massachusetts
Registering a business name in Massachusetts is done when you form your business entity with the state. You must first choose your business structure, then do a business name search to ensure name availability. Afterward, you must form your entity with your business name with the state. Some businesses may also prefer to just register a DBA. Follow our step-by-step instructions and read our FAQs to get started.
How to Register a Business Name in Massachusetts
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What Is A Massachusetts Doing Business As Name
A DBA name enables your business to operate under a different name than its formal business name or your personal name. However, it is not considered a separate business entity. For this reason, there are no additional taxes after youve registered the DBA name.
If a business operates under another name that isnt registered, they could face repercussions. In fact, any violations are punishable by a fine of no more than $300 for every month that the violation continues.
There are two categories of businesses that typically seek DBA names:
- Sole proprietorships and partnerships: By registering a DBA name, these business types can have a legal business name that isnt the owners legal name. Without a DBA name, businesses with these structures must go by the owners legal name.
- Corporations and limited liability company : By registering a DBA name, these business types can operate under a name that drops entity designators, such as LLC or Corp. In addition, a DBA name allows these businesses to have more flexible branding when releasing new product lines.
Aside from the legal compliance standpoint, registering a DBA name in Massachusetts offers small businesses additional benefits:
Do I Need To Register A Sole Proprietorship In Massachusetts
There are few to no formalities required to establish one, and the business has no legal existence separate from its owner. As a sole proprietor in Massachusetts, you do not need to register with the state unless your business designation is not the same as your legal, personal name.
You don’t need to register with city or county governments to start a business. If your business is an limited liability company, partnership, or nonprofit corporation, you need to file for licenses and permits from the city or county.
Every limited liability company in California has to pay an annual tax of $800. Even if you don’t conduct business, you will still have to pay the yearly tax. You have until the 15th day of the 4th month to pay your first-year tax.
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Ready To Officially Form Your Business
Making an informed decision regarding the ideal structure for your business ensures youre launching on the right foot. With Swyft Filings, you can file your business online and apply for your S corp election in just a short few minutes, or you can speak with one of our friendly account managers to walk you through the process.
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Ease Of Setup And Maintenance
The primary advantage of a Sole Proprietorship is how easy they are to set up and to maintain.
In fact, there is no form to file in order to create one. If youre doing business by yourself, youre operating as a Sole Proprietorship.
Think of it this way: once you engage in business activities, with the goal of eventually making money, you are operating as a Sole Proprietorship.
For example, if you want to start a wedding planning business, the moment you begin doing business research, calling potential customers, or building your website, youre operating as a Sole Proprietorship.
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Decide On A Legal Business Entity
The form of business entity you choose will affect many factors going forward. There are 3 main options to decide from:
- Sole proprietorship The name for running a business by yourself. Legally, you and your business are one and the same, with no separate legal entity for your business.
- Partnership It is legally identical to a sole proprietorship, except that it comprises two or more people.
- Corporation A complex legal structure that is a separate entity from the owner and comprises directors, officers, and shareholders.
- LLC AKA Limited Liability Company, this is a hybrid entity between a sole proprietorship and a corporation that possesses advantages of both. An LLCs provides the liability protection of a corporation, yet isnt subject to double taxation as the profits go through your personal tax return.
You may want to consult with an attorney to help decide which entity works best for your business.
What You Need For Register Your Business With Masstaxconnect
MassTaxConnect is the Department of Revenue’s web-based application for filing and paying taxes. To register a business with MassTaxConnect, you will need the following documents and information:
- Your Social Security number – Sole proprietors have the option to register with either their Social Security Number or an Employer Identification number.
- Your Employer Identification Number – If you don’t have an EIN, please apply for an EIN with the IRS.
- Your legal name
- Starting date of your business
Corporations will need the above information along with:
- Contact information for business officer, including title and social security number.
Non Profit Organizations will need:
- IRS Determination Letter recognizing an organization as a 501 – If you don’t have a copy of a Determination Letter, kindly request a copy with IRS
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Sole Proprietorship In Massachusetts
Sole means one. And Proprietor means owner. Put them together and you have a Sole Proprietor, or Sole Proprietorship. A Sole Proprietor is the person. A Sole Proprietorship is the business entity.
A Sole Proprietorship in Massachusetts is an informal structure with one business owner. Often, it is the easiest and simplest form of business structure to create. However, that doesnt always mean they are the best choice for small business owners.
While Sole Proprietorships have some advantages, there are also disadvantages you should be aware of.
Weve explained these below, as well as provide step-by-step instructions if you decide to start a Sole Proprietorship in Massachusetts.
Pro tip: Sole Proprietorships dont protect your personal assets. On the other hand, if you form an LLC, your personal assets are protected in the event of a lawsuit. Check out Sole Proprietorship vs LLC for more information.
Who Needs To Register For A Massachusetts Dba
The requirements and need to register for a Trade Name vary, depending on the type of business entity.
Sole proprietorships and general partnerships are the most common entities to register for a DBA.
The legal name of a sole proprietor or partnership can be the owners full first and last name, which can be used without registering. For example, if John Smith starts a business repairing computers but doesnt use a business name, he doesnt have to register. If John decides to name his business Johns Computer Repair, he will need to register.
Corporations and Limited Liability Companies wont typically register a fictitious name since a unique entity name is created during the formation process. Some will file for a DBA if they have another business they want to operate under their corporate/LLC umbrella to keep the liability protection without forming another entity.
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Choose A Business Name
The next step will be to decide on a name for your business. Be sure to choose a name that is memorable and unique, easy to understand and pronounce, and accurately represents the products or services you plan to offer. In the State of Massachusetts, no two businesses can register the same or “confusingly similar” names. Before you file any paperwork with the Massachusetts Secretary of State, remember to conduct a business name search to determine availability. Jot down one or two alternatives, in case the name you settle on is not available for registration.
If your name is available but you are not ready to register with the state, you can file for a business name reservation to prevent another business from taking the name before you file.
Thereof How Do I Start A Sole Proprietorship In Massachusetts
To establish a sole proprietorship in Massachusetts, here’s everything you need to know. Choose a business name. File a business certificate with city or town clerk’s office. Obtain licenses, permits, and zoning clearance. Obtain an Employer Identification Number. In respect to this, how do i look up a business license in massachusetts? To find a business license in Massachusetts may help you MA business license lookup. Or, you can visit the Massachusetts Secretary of State website and do the Corporation and Business Entity Search.
No other business can use the company name that you register at Companies House. If someone wanted to register your trading name as a limited company, they could also demand that you stop using it, because trading names don’t receive this protection.
How much does it cost to form an limited liability company in Oregon? The Secretary of State in Oregon charges a fee to file the Articles of Organization. Each year, the Secretary of State requires Oregon companies to file an annual report. The filing fee for domestic limited liability companies is $100, while the fee for foreign limited liability companies is $275.
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How Do I Register A Massachusetts Dba Name
In Massachusetts, you must register your DBA name at the local level. For this reason, the exact guidelines for registering your businesss DBA name can vary. The steps below are a general guideline for registering a Massachusetts DBA name.
Remember, you are required to register a DBA name in every town or city in which you conduct business in Massachusetts. This means that if you conduct business in multiple towns, you will need to complete and file your DBA name certificate in each of the cities or towns you operate. Additionally, you must pay the filing fee and renew your DBA name in each city or town every four years.
Massachusetts Small Business Resources
- Secretary of the Commonwealth of Massachusetts Perform an entity name search, register your LLC or corporation, and find other forms and applications on this website.
- MassTaxConnect A web-based application that allows you to register your business and file state taxes.
- Mass.gov: Professional Licenses & Permits Find out what licenses youll need to operate your business, and connect with the agencies that issue them.
- Massachusetts Small Business Development Center A statewide organization that provides advice and education to small business owners at little-to-no cost.
- SBA: Massachusetts The Massachusetts District Office of the U.S. Small Business Administration, with branches in Boston and Springfield.
- Built in Boston The online hub of the Boston startup community.
- Mass Tech: Incubators and Accelerators A huge directory of incubators and accelerator programs located throughout the state.
- EforAll An organization founded in Massachusetts dedicated to ensuring that everyone has an equal opportunity to make their small business dream a reality.
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Get An Ein From The Irs
However, a Sole Proprietor also has the option of getting an EIN Number from the IRS.
Notes: Whether or not you get an EIN for your Sole Proprietorship will not impact your taxes. Your taxes will be filed the same either way.
An EIN is also called a Federal Tax ID Number, Federal Employer Identification Number, Employer Identification Number, or FEIN. They all mean the same thing.
Getting an EIN for your Sole Proprietorship may be a good idea for a few reasons:
Without an EIN, you may need to use your SSN when dealing with vendors and clients. For example, if a client pays you more than $600 per year, youll need to provide them with IRS Form W9.
Instead of using your SSN, you can list your EIN instead on Form W9.
The same thing can also apply to online account setups and other places you may do business with.
In this case, an EIN isnt optional its required. If you want to hire employees for your business, you will need to obtain an EIN first. This is because an EIN is required in order to pay payroll taxes for your employees.
Note: As a Sole Proprietor, while you are considered self-employed, you are technically not an employee.
Business Certificate Application Process
This form is also known as a Doing Business As or a Fictitious Name registration. Business certificates are required under MGL Chapter 110 Section 5 as part of the Consumer Protection Laws. This is not a license to do business. A business certificate is required for listing the business name and owner with the Town if the business is a sole proprietor, a partnership or a corporation doing business in a different name as the corporate name. Even a corporation doing business under the corporate name may be requested to file with the Town by an attorney, accountant or a bank.
The owners signature or corporate officers signature must be notarized on the application form. If this is done in the office the signatures will be notarized for no charge as part of the process. There are three pages to this application. The second page is only filled in when a change is being requested. Retain page 2 for your records. Please fill out and return page 1 and 3 if doing this by mail.
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Second Decision: Llc Vs Inc
Now that you know your business will need to be more than a sole proprietorship, youll need to decide whether to form an LLC or an Inc. .
LLC vs. Inc.: What they have in common
Both LLCs and corporations provide personal asset and legal protection for their owners or shareholders and are also both formed by filing paperwork with the state.
LLC vs. Inc.: How they differ
Ownership LLCs are owned by members, who own a percentage of the business. Its difficult to transfer the percentage of ownership from one member to another. Membership details and rules, including how membership interest is transferred, are usually organized in the LLCs operating agreement.
C corps have the most flexible ownership structures, in that they can sell stock in their company to anyone by going public. As a result, this gives the C corp many more funding and financing options than any other type of business. Venture capitalists typically prefer to deal with C corps. There are no restrictions on the number of owners that they can have, and they can be owned by individuals from any country. This makes them prime candidates for quick exit strategies, and rapid growth models.
Taxation LLCs have somewhat flexible tax structures. Single-member LLCs are taxed like a sole proprietorship. Multi-member LLCs, on the other hand, are taxed like a partnership, which means all profits and losses pass through to the owners.
Less Paperwork And Fees
To register most business structures, the state requires you to file your business name for inclusions on their directory and pay a fee. A sole proprietorship does not have to do this. There will be some paperwork and fees involved if you require licenses or permits, or you plan to operate under a fictitious name.
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How Do I Choose A Massachusetts Dba Name
A DBA name should inform customers about what you do and clearly communicate the purpose of your business. In short, a good DBA name should help your business define its brand and form a public image that matches your values and business identity. Once youve picked a DBA name that helps curate your brand identity, you should register a domain name.
Luckily, its easy to find any businesses operating under your preferred DBA name. Massachusetts provides businesses with a lookup tool to check if anyone is using your preferred business name. Its important to perform a name search to check if your DBA name is unique to your business before you go through the process of registering your DBA name.
Additionally, it should be noted that DBA names do not protect your business against trademark infringement. At the federal level, trademarks protect the name, goods, and services of your business across the nation. You can use the United States Patent and Trademark Office website to determine if your preferred DBA name infringes on any federal trademarks. You should also use the Massachusetts trademark search tool to ensure that your DBA name does not infringe on any trademarks at the state level.
To register a DBA name in Massachusetts, you will need to file with the office of the clerk in every city or town in which your business operates. Massachusetts does not require businesses to register DBA names with the Secretary of State.