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How to Start a New Business in Massachusetts

Reviewed by Ty Crandall

November 15, 2023


New Business In Massachusetts Credit Suite

How to Start a New Business in Massachusetts

A new business in Massachusetts can be yours. Have you been wondering: precisely how do I start a business in Massachusetts? And more importantly, can I do so no matter what the economic conditions are? Can I start a new business in Massachusetts during a recession?

New Business in Massachusetts: Pros and Cons

Massachusetts is in the second highest set of ten states to start a new business in. And this is for the whole country, according to a 2016 article by Business Insider. But the Bay State scores average in the business tax climate category. And its startup activity score is not great.

Still, the state has a very high per capita GDP ($62,918). It also has the nation’s third highest education level of potential employees.

A large number of colleges in the area mean companies might do their best recruiting on campuses. Plus Massachusetts is close to other states in the area. The pool of potential employees easily extends to New Hampshire, Rhode Island, or Connecticut.

Recent Surge

In 2019, Dollar Sprout placed the Bay State at number seven for the best states to start a business in. keep in mind, of course, that the methods of Dollar Sprout and Business Insider differ.

Why the sudden change? Dollar Sprout says it’s the tight labor market with well-educated workers. And it’s also the very high 10-year business survival rate. In addition, Massachusetts boasts the third-highest annual income level for sole proprietorships.

However, the commonwealth still has high business filing fees.

New Business in Massachusetts: Initiatives

A new commitment to renewing the Bay State’s aging infrastructure will provide a wealth of construction and trades jobs in coming years.

Investments in infrastructure, which includes broadband and Wi-Fi, allows Massachusetts to create immediate employment opportunities. Plus the state has reduced its corporate tax rate from 8.75% in 2010 to a current rate of 8.25%.

Massachusetts Programs

The state’s Economic Development Incentive Program (EDIP) allows participating companies to get state and local tax incentives. This is in exchange for job creation, manufacturing job retention and private investment commitments.

At the same time, the Massachusetts Investment Tax Credit (ITC) offers a 3% credit for qualifying businesses. This is meant to enable the purchase or lease of qualified properties.

Start a New Business in Massachusetts – Massachusetts Top Industries

Per the Commonwealth’s official government website, the top industries in the Bay State are renewable energy, defense, life sciences, and finance. They are also information technology, manufacturing, creative, and maritime.

Massachusetts defines the creative industries as including “without limitation the many interlocking industry sectors that center on providing creative services such as advertising, architecture or creating and promoting intellectual property products such as arts, film, computer games, multimedia, or design.”

Smart business owners can take find new opportunities and advantage of the bigger industries in the area by offering goods or services such as data and other computer work. Another option is trucking for any industry. More options include design, and hospitality and catering.

Here is precisely how to start a new business in Massachusetts.

Start a New Business in Massachusetts – Massachusetts New Business Secretary of State Requirements

Register a Business NameStart a New Business in Massachusetts Credit Suite

Reserve a business name on the Secretary of the Commonwealth’s website.

A business owner needs a unique name for their corporation. To find out if the name chosen for a corporation is unique, do a thorough search. Start by searching online records and government databases to see if the name chosen is available. To search the Massachusetts Corporate Database, go to Massachusetts Corporation information on the Secretary of State website.

A business owner can reserve the corporate name that they have chosen until ready to file Articles of Incorporation. This is by submitting an application to the Corporations Division. Download the form online at Reserve a Massachusetts Corporate Name. The filing fee is $30.00 and then the name will be reserved filing fee is $30.00 and then the name will be reserved for 60 days.


Business Permits and Licenses

Check at the Massachusetts Division of Professional Licensure. Be sure to look at the License Types, Forms, and Requirements page.

Local Permits and Licenses

Check with your local municipality, city or county office or website. See if there may be any local licensing or permit requirements.

For example, in Boston, go to the Small Business Permitting Guides page on the city of Boston website.

Start a New Business in Massachusetts – Massachusetts Business Registration

Let the Massachusetts Secretary of State Corporations Division get you the forms to complete and register a business in MA.

Tax Registration

The best bet is the state online portal, MassTax Connect.

Start a New Business in Massachusetts – Virtual Offices

Alliance Virtual Offices offers Massachusetts virtual business office space.

For Somerville virtual business offices, go to Regus.

DaVinci has Massachusetts virtual office spaces in the following cities.

Eastern Massachusetts (including the Cape and Islands)

Alliance covers Beverly, Boston, Burlington, Cambridge, and Hyannis. DaVinci covers Beverly, Braintree, Canton, and Needham. They also have space in Hingham, Mansfield, and Newton. DaVinci also covers North Andover, Quincy, and Woburn.

The only space on Cape Cod appears to be Alliance’s space in Hyannis.

Central Massachusetts

DaVinci covers Boxborough, Framingham, Marlborough, and Westborough.

None of the bigger providers have space in western Massachusetts, or even in Worcester.

Business owners looking for Massachusetts virtual offices in Pittsfield or Springfield, or elsewhere in the state, can try local business owners. They might also ask computer groups for leads in this area. Other options may be to seek virtual business office space in nearby states. These are Connecticut, New Hampshire, New York, Rhode Island, and Vermont. But keep in mind that a business is more fundable if the main office is in the same state as where the business is incorporated.

Start a New Business in Massachusetts – Establish Business Credit

Company credit is credit in a small business’s name. It doesn’t link to a business owner’s consumer credit, not even when the owner is a sole proprietor and the sole employee of the business. Yes, this is true for a sole proprietorship Massachusetts.

Because of this, a business owner’s business and personal credit scores can be very different.

The Benefits

Since small business credit is distinct from consumer, it helps to secure an entrepreneur’s personal assets, in the event of court action or business insolvency.

Also, with two distinct credit scores, an entrepreneur can get two separate cards from the same merchant. This effectively doubles purchasing power.

Another advantage is that even startup companies can do this. Going to a bank for a business loan can be a formula for disappointment. But building small business credit, when done the right way, is a plan for success.

Consumer credit scores depend on payments but also various other considerations like credit usage percentages.

But for business credit, the scores really only depend on if a company pays its bills on time.

Information on how you can Discover 7 Easy Vendors to Start Building Business Credit Immediately - without a Personal Credit Check or Guarantee via Credit Suite

Start a New Business in Massachusetts – Small Business Fundability™

Establishing company credit is a process, and it does not occur without effort.  A small business needs to be Fundable to credit issuers and merchants.

Consequently, a business will need a professional-looking website and email address. And it needs to have website hosting from a merchant like GoDaddy.

Additionally, company telephone numbers should have a listing via ListYourself.net.

Likewise, the business phone number should be toll-free (800 exchange or comparable).A business will also need a bank account devoted solely to it, and it needs to have all of the licenses essential for operating.

Information on how you can Discover 7 Easy Vendors to Start Building Business Credit Immediately - without a Personal Credit Check or Guarantee via Credit Suite

Dealing with the Internal Revenue Service

Visit the Internal Revenue Service website and get an EIN for the business. They’re free of charge. Select a business entity like corporation, LLC, etc. A company can begin as a sole proprietor. But they will more than likely want to change to a kind of corporation or an LLC. This is in order to limit risk. And it will optimize tax benefits.

A business entity will matter when it concerns tax obligations and liability in case of a lawsuit. A sole proprietorship means the entrepreneur is it when it comes to liability and tax obligations. Nobody else is responsible.

Starting Off the Business Credit Reporting Process

Begin at the D&B website and get a free D-U-N-S number. A D-U-N-S number is how D&B gets a small business into their system, to produce a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s websites for the small business. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process.

By doing this, Experian and Equifax will have activity to report on.

Vendor Credit

First you should build trade lines that report. This is also called vendor credit. Then you’ll have an established credit profile, and you’ll get a business credit score.

And with an established business credit profile and score you can start to get retail and cash credit .

These kinds of accounts tend to be for the things bought all the time, like marketing materials, shipping boxes, ink and toner, and office furniture.

But first off, what is trade credit? These trade lines are credit issuers who will give you starter credit when you have none now. Terms are often Net 30, rather than revolving.

Hence, if you get an approval for $1,000 in vendor credit and use all of it, you will need to pay that money back in a set term, like within 30 days on a Net 30 account.

Vendor Credit – It Helps

Not every vendor can help like true starter credit can. These are merchants that will grant an approval with marginal effort. You also want them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.

You want 3 of these to move onto the next step.

Information on how you can Discover 7 Easy Vendors to Start Building Business Credit Immediately - without a Personal Credit Check or Guarantee via Credit Suite

Start a New Business in Massachusetts – Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and fix any errors ASAP. Get in the practice of taking a look at credit reports. And dig into the details, not just the scores.

We can help you monitor business credit at Experian, Equifax, and D&B for 90% less.

Update Your Records

Update the data if there are inaccuracies or the info is incomplete.

Fix Your Business Credit

So, what’s all this monitoring for? It’s to challenge any errors in your records. Mistakes in your credit report(s) can be taken care of. But the CRAs typically want you to dispute in a particular way. Disputing credit report mistakes means you precisely itemize any charges you challenge.

A Word about Building Business Credit and Starting a Small Business in Massachusetts

Always use credit responsibly! Don’t borrow beyond what you can pay off. Monitor balances and deadlines for repayments. Paying off promptly and fully will do more to increase business credit scores than almost anything else.

Growing company credit pays. Great business credit scores help a small business get loans. Your loan provider knows the company can pay its debts. They recognize the business is for real.

The business’s EIN links to high scores and lending institutions won’t feel the need to ask for a personal guarantee.

Business credit is an asset which can help your small business for years to come.

Massachusetts Business Loans and Grants

Get startup money for business and really see your Bay State business take off.

Learn more here and get started toward opening a new business in Massachusetts.

Want to start a new business someplace else in America? Then check out our handy guide to starting a business in any state in the country.

Massachusetts’s Response to COVID-19

On March 16, Governor Charlie Baker announced a $10 million small business recovery loan fund to help companies struggling because of efforts to slow the coronavirus.

The fund will provide emergency capital up to $75,000 to Massachusetts-based businesses with under 50 full- and part-time employees.  This includes nonprofit groups. Loans are immediately available to eligible businesses. No payments are due for the first six months.

Some cities are providing grants to small businesses to help get through this. Boston has established the Small Business Financial Relief Fund.

On April 9, Governor Baker announced the commonwealth had received CARES Act money for unemployment assistance.

On May 5, State Senator Sonia Chang-Diaz testified in support of a bill (S 2643) that would create a Massachusetts Paycheck Protection Program for businesses ineligible for the federal program, like businesses in the cannabis industry. Unlike in most of the rest of the United States, cannabis is fully legal in the Bay State.

About the author 

Janet Gershen-Siegel

Janet Gershen-Siegel is the seasoned Finance Writer and a former content manager at Credit Suite. She has been admitted to practice law for over 30 years, with a focus on litigation and product liability, and is a published author, with writing credits at Entrepreneur, FedSmith.com and BusinessingMag.com.

She has a BA in Philosophy from Boston University, a JD from the Delaware Law School of Widener University, and a MS in Interactive Media (Social Media) from Quinnipiac University.

She regularly writes for Credit Suite, which helps businesses improve Fundability™, build credit, and get approved for loans and credit lines.

Her specialties: business credit, business credit cards, business funding, crowdfunding, and law

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