Our work is reader-supported, meaning that we may earn a commission from the products and services mentioned.

Massachusetts Business License Basics

Massachusetts Business License Basics

Advertising Disclosure

Advertising
Disclosure

Massachusetts Business License Basics

Starting a small business in Massachusetts often means registering with several federal, state, and local agencies. Let’s review common Massachusetts business license registrations so your business starts off right.

Related: Guide to starting a business in Massachusetts 

Setting Up the Business

Sole proprietorship: In Massachusetts, a sole proprietorship is an unincorporated business owned by a single individual. The owner has complete control over the business but is personally liable for all debts and obligations. No formal registration is required, making it the simplest and most common form of business structure.

General partnership: A general partnership in Massachusetts is an unincorporated business owned by two or more individuals who share management responsibilities, profits, and losses. Partners have unlimited personal liability for the partnership’s debts and obligations. No formal registration is required, but a partnership agreement is recommended to outline the partners’ roles and responsibilities

Corporation: A corporation in Massachusetts is a legal entity separate from its owners, providing the owner’s (shareholders) limited liability protection. Corporations are the most complex business structure to set up and have specific administrative requirements. 

Limited Liability Company (LLC): An LLC in Massachusetts combines aspects of sole proprietorships and corporations, offering flexibility in management and taxation. Owners, called members, have limited personal liability for the LLC’s debts and obligations, but they aren’t as complex as corporations. 

Related: Comparison of Business Structures

What Licenses Do Massachusetts Businesses Need?

With the business structure out of the way, we can begin looking at the different types of registrations businesses in Massachusetts may need. There isn’t a standard business license, as requirements vary depending on where the business is located and what it does. Here is a general overview of the different registrations your business may need.

General Business Licenses

There is no general state of Massachusetts business license; however, many cities require businesses to be licensed in order to operate. Rules for business registration vary depending on location and the business’s activities. Below are a few cities that have licensing requirements.

  • Boston: All businesses in city limits need to apply for a Business Certificate with the Boston City Clerk’s Office. This certificate needs to be renewed every four years.
  • Worcester: The City of Worcester requires a Business Certificate for any business operating within the city limits.
  • Springfield: All businesses operating in Springfield’s city limits need to register with the Springfield City Clerk for a Business Certificate.
  • Lowell: A Business Certificate is required for any company operating in the city limits of Lowell. In addition to the Business Certificate, businesses with employees will also need to file a Workers’ Compensation Insurance Affidavit.
  • New Bedford: The City Clerk’s Office issues Business Certificates for all businesses operating within the New Bedford City limits.
Take the guesswork out of figuring out what licenses and permits are required to start your business with license research packages from Bizee and LegalZoom.

For as little as $99, you can save a lot of time and know your business is in compliance with local, state, and federal requirements. 

Doing Business As (DBA) Registration

While not a business license, it’s common for sole proprietorships and partnerships in Massachusetts who are operating under a name that is different from the full name of the owner(s) to register for a Massachusetts Business Certificate (commonly called a DBA) with the Town Clerk’s Office in the county where the business is located.

Building & Zoning Permits

  • Zoning: In Massachusetts, zoning laws dictate the use of land and buildings. Contact your local municipality’s zoning board to find out if your home-based or commercial business fits local zoning rules. They will inform you of any specific requirements or restrictions for your business location.
  • Building Permit: In Massachusetts, a building permit is necessary for new construction, renovations, or extensions. You obtain this permit by submitting detailed plans to your city or town’s building department to make sure your plans meet state building codes.
  • Signage Permit: In Massachusetts, a signage permit is required to regulate the size, location, and lighting of business signage. Apply through your local city or town hall, providing details of your sign’s design and placement. This ensures your business signage adheres to local bylaws and zoning regulations.

Massachusetts Sales Tax Vendor Registration

Businesses selling products and some services will register for a Massachusetts Sales Tax Permit with the Massachusetts Department of Revenue.

Resale Certificate

Small businesses purchasing merchandise to resell will usually want to obtain a Massachusetts Resale Certificate in order to not pay sales tax for inventory they will be reselling to their customers.

Occupational License

 A variety of occupations in the state are regulated and need to be registered before offering certain services. A few common professions that require licensing in Massachusetts include; plumbers, cosmetologists, electricians, home inspectors, and many more. Additional information, fees, and licensing requirements for professions are available from the Massachusetts Division of Professional Licensure.

In addition to professional licenses, various types of businesses such as food establishments, daycares, and others require licensing.

Employer Identification Number (EIN)

The Massachusetts Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses operating in Massachusetts. It is used for tax filing and reporting purposes, similar to how an individual uses a Social Security number. Companies can apply for an EIN through the IRS website or by submitting a paper form.

Next Steps

These are some of the most common business licenses a new business in Massachusetts will need to register for. Be advised that while it’s a good start, there are so many different licenses that may be needed, be sure to double-check with the City Clerk’s Office, Chamber of Commerce, and/or Economic Development office in your area before opening your doors.

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

Massachusetts Business License Basics

Massachusetts Business License Basics

4 Responses

  1. Soon and very soon I will be starting a T shirt business from my apartment here in Massachusetts. I will be selling them on line . Do I need a Permit or
    a license to do this ? And do I have to pay State and Federal tax ? Please contact me soon and let me know just what I need to do

    1. Hi Basil

      First off, you will need to form your business entity. The sole proprietorship is the easiest and least expensive, but if the business is sued, the owner is personally liable. I’m not an attorney, nor giving legal advice, but it would seem your legal risk could be pretty low selling shirts online. Learn about the different entities here – https://startup101.com/comparison-of-business-entities/

      Next, looking at licenses, typically, an online business requires fewer licenses than one with a physical storefront. The types of licenses will vary depending on your location, but to start with, I would look at:
      – Local business license – Not all cities require one for a home-based business, so check with City Hall, County Clerk, Chamber of Commerce, and/or Economic Developer in your area to get more information regarding business licensing.
      – Sales tax permit – Since you are selling a taxable product you will need to get a Sales Tax Permit from the Department of Revenue. Learn how to register – https://startup101.com/how-to-register-for-a-sales-tax-permit-in-massachusetts/.

      Be aware that a business may have to register for a sales tax permit in each state. Requirements vary, but most require registration once exceeding 200 transactions or $100k in sales per year to their residents.

      Regarding taxes, you will need to pay state and federal tax on the profits of the business. The complicating factor is what legal structure you go with. This article may help give you some answers – https://startup101.com/home-business-taxes/

      Hope this helps. Let me know if you have any other questions!

  2. I want to start a home improvement business ,I do work on the weekends because i work full time. I’am a union carpenter
    and i don’t know what license i need
    thank you for your help Carlos R

    1. Hi Carlos – In addition to the general steps to starting a business in Massachusetts – https://startup101.com/massachusetts/, a home improvement contractor will need to be registered through the state – https://www.mass.gov/home-improvement-contractor-registration-and-renewal. In addition, many cities also require a permit before making alterations to a building. Depending on the work you are doing, you would want to check with the city where the homeowner’s house is located before starting work.

      Hope this helps! Let me know if you have any other questions.

      Greg

Leave a Reply

Your email address will not be published. Required fields are marked *

Some (but not all) of the links on StartUp101.com are affiliate links. This means that a special tracking code is used and that we may make a small commission on the sale of an item if you purchase through one of these links. The price of the item is the same for you whether it is an affiliate link or not, and using affiliate links helps us to maintain this website.

StartUp101.com is also a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

Our mission is to help businesses start and promoting inferior products and services doesn’t serve that mission. We keep the opinions fair and balanced and not let the commissions influence our opinions.