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The Massachusetts LLC operating agreement is a recommended legal document that limited liability companies use to help organize their business. The document often outlines the formation, operation, and goal of the LLC, as well as the roles each member plays. In this agreement, members may be assigned rights or responsibilities to avoid conflict later.

From MA Gen L ch 156c § 2 (2019):

(9) ”Operating agreement”, any written or oral agreement of the members as to the affairs of a limited liability company and the conduct of its business.

Massachusetts Operating Agreement Law

Per MA Gen L ch 156c § 21 (2019):

(a) An operating agreement may provide for classes or groups of members having such relative rights, powers and duties as the operating agreement may provide, and may make provision for the future creation in the manner provided in the operating agreement of additional classes or groups of members having such relative rights, powers and duties as may from time to time be established, including rights, powers and duties senior to existing classes and groups of members. An operating agreement may provide for the taking of an action, including the amendment of the operating agreement, without the vote or approval of any member or class or group of members, including an action to create under the provisions of the operating agreement a class or group of limited liability company interests that was not previously outstanding.
(b) An operating agreement may grant to all or certain identified members or a specified class or group of the members the right to vote separately or with all or any class or group of the members or managers, on any matter. Voting by members may be on a per capita, number, financial interest, class group or any other basis.
(c) An operating agreement which grants members a right to vote may set forth provisions relating to notice of the time, place or purpose of any meeting at which any matter is to be voted on by any members, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy, or any other matter with respect to the exercise of any such right to vote.
(d) If an operating agreement does not provide for the voting rights of members, the decision of members who own more than fifty percent of the unreturned contributions to the limited liability company determined in accordance with section twenty-nine shall be controlling.

Per MA Gen L ch 156c § 26 (2019):

(a) An operating agreement may provide for classes or groups of managers having such relative rights, powers and duties as the operating agreement may provide, and may make provision for the future creation in the manner provided in the operating agreement of additional classes or groups of managers having such relative rights, powers and duties as may from time to time be established, including rights, powers and duties senior to existing classes and groups of managers. An operating agreement may provide for the taking of an action, including the amendment of the operating agreement, without the vote or approval of any manager or class or group of managers.
(b) The operating agreement may grant to all or certain identified managers or a specified class or group of the managers the right to vote, separately or with all or any class or group of managers or members, on any matter. Voting by managers may be on a per capita, number, financial interest, class, group or any other basis.
(c) An operating agreement which grants managers a right to vote may set forth provisions relating to notice of the time, place or purpose of any meeting at which any matter is to be voted on by any manager or class or group of managers, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy, or any other matter with respect to the exercise of any such right to vote.
(d) If an operating agreement does not provide for the voting rights of managers, the decision of a majority in number of the managers shall be controlling.

Forming an LLC in Massachusetts

  1. Conduct a name search
  2. Get an EIN
  3. Choose a registered agent
  4. File formation articles
  5. Draft an operating agreement

Massachusetts LLCs must decide on a unique name to register with the state. The chosen name should be dissimilar to all other businesses in the state, both phonetically and in likeness.

The name must include one of:

  • LLC
  • L.L.C.
  • Limited Liability Company

It may NOT include any other business designators (“corp” or “inc”), nor may it be similar to government entities or their acronyms (FBI or CIA).

Practitioners looking to use their title in their LLC name may be required to complete additional verification and must be part of the LLC to be eligible.

To conduct the name search, use the Massachusetts Secretary of State Business Entity Search website.

Optional:
Once the chosen name has been verified to be available, it is a good idea to file a name reservation. Massachusetts requires an EIN number to complete the formation articles, which means a business name will have to be provided to the IRS. If the chosen name is filed with the IRS but becomes unavailable before the formation articles are filed, a new EIN will be required.

To avoid wasting time, complete a Name Reservation form and submit it, along with the $30 fee, to:

    • William Francis Galvin

 

    • Secretary of the Commonwealth

 

    • One Ashburton Place, Room 1717

 

    Boston, MA 02108-1512

A reserved name is held for 60 days, which can be renewed for another 60 days for $30.

Step 2: Get an EIN

Once a name has been chosen and reserved, the next step is to file for an EIN with the IRS. Using the formation’s title and information, an EIN will be issued that is required for the Certificate of Organization. This can be completed online, and in many cases will result in an EIN the same day.

Step 3: Choose Your Registered Agent

Massachusetts LLCs must appoint a registered agent to act as the point of contact for all legal documentation, including tax forms and service of process.

The agent may be an individual within the company, a family member, or unrelated third party. If choosing to elect an individual agent, they should:

  • Be 18 years or older
  • Be available during business hours (9am – 5pm local time)
  • Be a resident of the state
  • Have a physical (not a P.O. Box) address in Massachusetts

If electing a registered agent service, the agent assigned to the company must be authorized to do business in Massachusetts.

Step 4: File Your Formation Articles

Massachusetts Domestic LLC formations (in-state) are required to complete and submit a Certificate of Organization as their formation article, which can be done online, by mail, by fax, or in-person.

Online Filing (Domestic):

  • $500 filing fee, plus $20 expedited online filing fee
  • Turnaround time: Same day
  • Create an account and submit online

Mailed Filing (Domestic):

  • $500 filing fee
  • Turnaround time: 2-3 business days upon receipt
  • Fill out the form online or after printing and mail to:

William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Room 1717
Boston, MA 02108-1512

In-Person Filing (Domestic):

  • $500 filing fee
  • Turnaround time: 2-3 business days
  • Fill out the form online or after printing and deliver to:

William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Room 1717
Boston, MA 02108-1512

Fax Filing (Domestic):

617-624-3891

Foreign LLCs filing to do business in Massachusetts must complete an Application for Registration, which should include a Certificate of Existence from the original formative state of the business.

Online Filing (Foreign):

  • $500 filing fee, plus $20 online filing expedited fee
  • Turnaround time: Same day
  • Create an account and submit online

Mailed Filing (Foreign):

  • $500 filing fee
  • Turnaround time: 2-3 business days upon receipt
  • Fill out the form and mail to:

William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Room 1717
Boston, MA 02108-1512

In-Person Filing (Foreign):

  • $500 filing fee
  • Turnaround time: 2-3 business days
  • Fill out the form, print, and deliver to:

William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Room 1717
Boston, MA 02108-1512

Fax Filing (Foreign):

617-624-3891

Step 5: Draft a Massachusetts Operating Agreement

A Massachusetts operating agreement is highly recommended (but not required) for all LLCs in the state. In addition to setting the framework for how the business will operate, it also separates personal and business finances, which prevents legal liability in the case of a lawsuit and protects members from financial loss.

The agreement may also dictate procedures for organizational concerns like voting, dissolution, and more so that if the need arises, there are agreed upon terms to reference.