Whether you’re relocating your business to Massachusetts for its top-ranked business environment, a change in your target market or for personal reasons, there are a few basic steps you’ll need to take to move your business based on whether it’s a sole proprietorship, partnership, corporation or LLC.
Why Relocate Your Business to Massachusetts
According to both the U.S. News & World Report and WalletHub, Massachusetts is a top-ten ranked state for businesses. In some cases, it vastly outranks neighboring states of New Hampshire, New York, Connecticut and Rhode Island, the last two of which are ranked 49th and 48th in the WalletHub report.
If your current state has become less business-friendly – with higher business taxes and regulations, or rising real estate costs – Massachusetts offers many benefits to small business owners, including access to skilled workers and affordable office space, a strong economy, and plenty of funding and financing options.
Of course, you may have personal reasons for your business move. Perhaps it’s for access to better schools, to be closer to extended family, or because your spouse accepted a new job opportunity. Regardless of why you’ve chosen to relocate your business to Massachusetts, here are the basic steps you’ll need to take to move your business to the Bay state, based on its legal structure.
Relocating Sole Proprietorships & Partnerships to Massachusetts
As a sole proprietorship or partnership, you do not need to register with the state. However, you will need to apply for new business licenses and permits in Massachusetts and cancel the ones in your original state. Find more information about Massachusetts State Permits and Licenses.
If you are using a DBA, you’ll need to withdraw the name from your Secretary of State’s office and register your DBA in each city or town in which you will conduct business in Massachusetts by filing a DBA certificate with each individual city or town clerk’s office.
Inform the IRS of your move, so your Federal Tax ID number, or EIN, has the correct address. You do not need to apply for a new EIN, you just need to change the address associated with it.
Pay any outstanding fees, sales tax and employment taxes in your current state. And remember, if you move mid-year, you’ll need to submit tax returns for both states in that year.
Relocating Corporations & LLCs to Massachusetts
By law, corporations and LLCs must register with the state to operate legally. When moving your business to Massachusetts, you can either file a foreign qualification, which involves registering your business in Massachusetts in addition to your home state, or you can a file for a redomestification, thereby dissolving the business in your home state and effectively moving it to Massachusetts.
Since both options have legal, financial and tax ramifications, according to this Denver property management company it’s best to consult with an accountant, tax professional and business attorney before making a decision. However, there are a few basic steps you can expect depending on the path you choose.
Filing for Redomestication in Massachusetts
Complete, but do not yet file, a “Certificate of Termination” or “Articles of Dissolution” for your current state.
Apply for domestication in Massachusetts by filing “Articles of Domestication” and providing a Certificate of Good Standing from the current home state and a copy of the completed, but not yet filed, “Certificate of Termination” or “Articles of Dissolution”.
After receiving approval for redomestication from Massachusetts, dissolve the business in the state where it was originally formed.
Inform the IRS of your move, so your Federal Tax ID number, or EIN, has the correct address.
Again, the dissolution process varies state-by-state, so it’s best to consult with your Secretary of State’s office for the specific procedure, and seek the assistance of a trusted advisor. In most cases, you’ll need to file the “Certificate of Termination” or “Articles of Dissolution” with your Secretary of State’s office, and file all outstanding state fees, reports and taxes.
Filing for Foreign Qualification in Massachusetts
Designate a registered agent in Massachusetts for the purpose of receiving legal documents and government notices on behalf of your business. Owners, employees and members of an LLC can serve as registered agents in Massachusetts as long as they are at least 18 years old and have a Massachusetts street address. You can also use a professional registered agent office.
File a Foreign Corporation Certificate of Registration and a Certificate of Good Standing from your home state with the Secretary of the Commonwealth of Massachusetts.
Expect to provide details about your company, such as the name of your corporation, list of corporate officers, your domestic state, stock information, the principle location or address you’ll be using in Massachusetts, and your registered agent.
More About Moving Your Business to Massachusetts
In addition to the above steps, a couple of additional things to keep in mind when moving your business include banking and hiring in your new state. If your business bank is not nationwide, you’ll want to close your account and open a new one in Massachusetts. And if you plan to hire employees in Massachusetts, you’ll need to learn about reporting and paying state income tax and state unemployment insurance tax.