The key to making the most of Massachusetts corporation and partnership law is the decision to incorporate your business. A corporation affects your ability to gain capital, controls the amount of debt you assume and determines your tax obligations. However, these advantages must be balanced against the additional taxes your business will incur.

Massachusetts partnership law makes a partnership subject only to personal income tax, unlike a corporation. On the other hand, business partners may be held responsible for business debts.

There are several options for forming a company under corporation law in Massachusetts. These include:

1. Massachusetts incorporation as a profit or non-profit corporation. An S corporation (S-corp) is taxed under Subchapter S of the Internal Revenue Code which generally does not include income taxes.

2. A Massachusetts limited liability company (LLC). This is a hybrid business entity that shares the characteristics of both a corporation and partnership. It pays incomes taxes and is more suitable for a small business with one owner.

3. A Massachusetts limited partnership. This type of partnership has limited partners in addition to general partners when you incorporate in Massachusetts.

Action Steps
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Determine the structure that best suits your business under corporation laws in Massachusetts

The most important factors to consider are the personal liability obligations and tax implications. You should also familiarize yourself with the operating requirements and reporting regulations.

I recommend: The Executive Office of Housing and Economic Development describes and compares the various business entities available in Massachusetts. Score provides business resources for small businesses in Massachusetts to help you select a business structure.

Find an attorney that specializes in corporation laws in Massachusetts

Incorporating in Massachusetts must comply with the disclosure, operating and reporting requirements. Massachusetts corporation law specifies these requirements in detail.

I recommend: Conn Kavanaugh Rosenthal Peisch & Ford in Boston practices corporate law and publishes a client advisory on an annual basis. Hanify & King includes business law in its practice area and also publishes a newsletter with legal updates.

Seek out sites to help you incorporate in Massachusetts

You must file the registration forms and pay the associated fees as required by Massachusetts corporation law in order to perform Massachusetts LLC registration. You may also need to file Articles of Incorporation, depending on the type of corporation you decide to register.

I recommend: LimitedLiabilityCompanyCenter.com provides specific information on creating various business organizations in Massachusetts. myVBI is a filing service that answers a variety of questions concerning business formation in Massachusetts.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Pay any required fees and make any needed filings when incorporating a business in Massachusetts. Corporations are automatically C-corps unless they specifically register as S-corps with the primary difference being the way they are taxed. One person may frequently hold more than one position in these corporations and many if not all shareholders are also directors in a small corporation.

Massachusetts corporation law offers a variety of corporate entity structures from which to chose. Before you incorporate in Massachusetts, evaluate your goals to determine the best corporate structure for you.

Once you know what you want, incorporation in Massachusetts is easy through the online Secretary of the State's site. Ask yourself these key questions:

1. Do you plan on having other people own stock in your business, or do you plan on growing your business to sell?

2. Will you be able to keep complex minutes and paperwork, or are you looking for simplicity?

3. Do you prefer your business taxes to be separate from your personal income taxes?

4. How much liability are you willing to take on to incorporate in Massachusetts?

Chose a traditional corporation to allow for investors, and to provide the most protection from liability, or if you start small but have big plans to grow and sell the business.

For more flexibility, go with a partnership or sole proprietorship, which allow for simple incorporation and upkeep of the business. For simplicity coupled with liability protection, start a limited liability company in Massachusetts.

Action Steps
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Evaluate the best structure when incorporating in Massachusetts

When choosing how to incorporate in Massachusetts, assess personal liability associated with each entity, understand the tax implications, become aware of operating formality requirements, and familiarize yourself with any related registration or reporting regulations.

I recommend: Review the Small Business Administration Massachusetts Guide's concise explanation of incorporating a business in Massachusetts, or find a summary of incorporation entities on a local law firm like the Law Office of Bernard J. Hamill website. You'll be able to make an informed decision after researching the pros and cons of each type of entity.

Formalize your business with corporation laws in Massachusetts

File paperwork carefully and don't miss any details. Incorporation in Massachusetts requires that certain paperwork be initialed, as well as fees paid. Understand the requirements of incorporating the entity you have chosen, as well as ongoing obligations beyond the first year.

I recommend: File your paperwork through the Massachusetts Secretary of the State's Corporation Division website. Make sure you understand the filing fees necessary for Massachusetts corporation and partnership law.

Understand Massachusetts corporation and partnership law

Although it is always prudent to seek legal advice, read the statutes and regulations carefully to understand your obligations. You will be better armed to ask intelligent questions and understand the context of your attorney's advice.

I recommend: Review the corporation laws in Massachusetts carefully. The statutes are clearly written and will provide you with an understanding of the requirements for the entity you choose.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Think about what you will name your business. Massachusetts corporation law requires a unique business name. The Massachusetts Secretary of the State site allows you to review business names already registered and check availability of your chosen business name.

Massachusetts corporation and partnership law education and training will teach you how to create business entities such as a Massachusetts incorporation or limited liability company (LLC). It is especially important for attorneys who specialize in corporation and partnership law to understand the tax implications for a Massachusetts LLC and corporation.

The requirements needed to practice Massachusetts partnership laws is determined by the state and may depend on the specific type of corporation law you wish to practice. A legal education in corporate law has three general phases:

1. The practice of advising clients on incorporating in Massachusetts requires a law degree. Practicing attorneys will generally require a Juris Doctor (J.D.) degree from a law school approved by the state of Massachusetts.
2. An aspiring lawyer will need to pass a bar exam that is administered by the state. A background check will also be performed along with a character and fitness evaluation.
3. The lawyer must apply to Massachusetts’s licensing authority and pay the required fees. The admittee then takes an oath to comply the rules regarding the practice of law in Massachusetts.
   

Action Steps
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Complete the formal education needed to learn about partnership laws in Massachusetts

There are a variety of universities in Massachusetts that grant J.D. degrees recognized by the state of Massachusetts. The required courses must be updated to keep up with changes in corporate law.

I recommend: Graduates of the Massachusetts School of Law at Andover are eligible to take the state bar examination immediately after graduation. Boston University School of Law is a charter member of the American Bar Association and a member of the Association of American Law Schools.

Gain admission to the bar in order to form an incorporation in Massachusetts

As a Massachusetts corporate lawyer, your clients will frequently wish to form corporations or partnerships with their businesses. Massachusetts has specific bar exam requirements and also allows lawyers licensed in other states to practice law in Massachusetts through reciprocity agreements.

I recommend: McLaughlin Bar Review offers a detailed description of the bar exam for Massachusetts. AmeriBar Bar Review provides a summary of the Massachusetts bar examination process.

Obtain the additional requirements needed to practice partnership law in Massachusetts

Get licensing information necessary for a career in Massachusetts corporation law. An attorney in Massachusetts must also meet that state's continuing education requirements in order to renew a license to practice law.

I recommend: The Massachusetts Board of Bar Examiners provides complete information on the process for getting admitted to the Massachusetts bar. New England Law offers information on applying to take the bar and obtaining a law school certificate.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Consider a Master of Laws (LLM) degree as a means of distinguishing yourself from other attorneys who practice Massachusetts partnership law. An LLM is a postgraduate law degree that generally requires an additional year of study at a law school. Graduates from regional schools frequently obtain an LLM in order to compete with graduates from more highly ranked law schools. This is also an excellent opportunity to begin specializing in corporate law.