If you want to create your own business, you have a lot of different options in deciding how you want to structure that business. For instance, you can set up a corporation, a limited partnership (LP), or a sole proprietorship. An LP offers an advantage over a general partnership because it contains two types of partners: limited partners and general partners. The limited partner may not be able to be as involved in the daily operations of a company, but they are only financially liable in relation to the company up to the amount of money they personally invested in the business. To form an LP in Massachusetts, you have to register the business as an LP with the Massachusetts Corporations Division.
You cannot have an LP unless there are at least two owners, known as partners, in the LP. One of the partners must be a limited partner, while another must be a general partner. Massachusetts law also requires you to choose a name that includes the words “limited partnership,” and these words cannot be abbreviated. The LP also must have an agent for service of process that agrees in writing to be served legal documents on behalf of the LP, and the agent must either reside in the state or be authorized to do business there.
If you are attempting to form an LP in Massachusetts, you will need to file a Limited Partnership Certificate with the Massachusetts Corporation Division. You can file either online or by mailing in the required form. When filling out the form, you have to state the name, address, and general purpose of the LP. You also need to include the name, address, and signature of the agent for service of process. Finally, you will be required to list the names and addresses of all of the general partners.
Massachusetts has become increasingly business-friendly by offering several tax incentives to businesses. The Economic Development Incentive Program (EDIP) provides incentives, such as tax credits and exemption from certain taxes, to businesses that provide jobs to employees within Massachusetts. The Life Sciences Investment Program provides tax incentive awards up to hundreds of thousands of dollars per company to companies that are involved in life sciences, such as developing medical devices or health-related research.
Every LP is required to file an annual report with the state, which is quite expensive to file. If you file online, the cost is $450. However, if you file by mail, the cost is $500. Additionally, if you do not file reports for two consecutive years, then the Massachusetts Secretary of State has the power to administratively dissolve your LP and will likely dissolve it.
Starting a business is difficult, and having help from a lawyer can make all the difference. Fortunately, we have made it easier for you to find a Massachusetts business lawyer who can help setup your business.