An LLC agreement may provide that a membership interest cannot be assigned. The Massachusetts LLC Act protects membership interests from members’ creditors. This gives members certainty in business planning and the ability to take advantage of mutually beneficial opportunities. The Act states that “xcept as provided in a written operating agreement, a member or manager may lend money to, borrow money from, act as a surety, guarantor or endorser for, guarantee or assume one or more specific obligations of, provide collateral for, and transact other business” with an LLC, and that they have the same rights and obligations as third parties. In addition, the Act allows members to specify in an LLC agreement whether, and under what conditions, to allow contracts and transactions between an LLC and one or more of its managers or members. The Act expressly states that any fiduciary duties a member or manager has “may be expanded or restricted” by an LLC agreement. The Massachusetts LLC Act gives members contractual freedom to customize the duties each party to an LLC’s operating agreement owes to the other parties. An LLC’s members may therefore have an entity or person who is not a member file the LLC’s certificate of organization with the Massachusetts Secretary of State. A “person” may organize an LLC, and the person does not need to be a member of the LLC. The Massachusetts LLC Act does not require LLC members to be listed with the Department of State. This facilitates everything from complex, multi-million dollar business deals to succession planning in family businesses and estate planning by gifts of non-voting interests. Likewise, an LLC agreement may establish classes of managers with different rights, powers, and duties, including voting and non-voting powers. In addition, an LLC agreement may establish classes of membership interests with different rights, powers, and duties, including voting and non-voting interests. This gives members contractual flexibility to tailor their income and risks of loss to further their big-picture asset management plans. An LLC’s members can specify a method for allocating profits and losses in an LLC agreement that is greater or lesser than their portion of capital contributions. The Massachusetts LLC Act gives LLC members contractual freedom to customize their capital contributions and their shares of profits and losses. Advantages of Forming a Massachusetts LLC Massachusetts is second in academic research and development intensity, and sixth in share of high-tech businesses. Chamber of Commerce ranks Massachusetts third in median family income. The Benefits and Advantages of Creating a Massachusetts LLC Introduction This can be done directly, or a service like Incnow can make it easier by doing it for you.Īnnual Report: Per the Secretary of State, “an annual report shall contain all of the information as a Certificate of Organization with the filer adding any necessary changes.” This is accompanied by a $500 annual filing fee. Continued Good StandingĮIN: Multi-member LLCs and LLCs with employees will need an EIN from the I.R.S. We would recommend a written operating agreement, executed by all members. Massachusetts allows operating agreements to be written or verbal agreements that will regulate “the affairs of a limited liability company and the conduct of its business.” Otherwise, there are very few statutory requirements for operating agreements in Massachusetts. You can also include a latest date of dissolution or any other provisions you deem necessary. The certificate of organization is executed by an “authorized person” and must contain: the name of the LLC, the MA street address where the LLC’s records will be maintained, the general character of its business, the name and address of the registered agent, the signature of the registered agent indicating acceptance of their job and the name and address of each manager and person authorized to execute documents for the LLC. LLCs come into existence by filing a certificate of organization with the Secretary of State and paying a $500 filing fee. The name of every Massachusetts LLC must contain one of the following: “L.C.,” “L.L.C.,” “LC,” “LLC,” “limited company,” or “limited liability company.” The name cannot be “the same as, or deceptively similar to,” the name of any domestic business entity, or any foreign entity that has qualified to do business in Massachusetts. SIMPLE STEPS TO FORM YOUR MASSACHUSETTS LLC Choose a Name
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