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Massachusetts Foreign Corporation

Business License Requirements for

Flejter LLC

____________ __, 2016

DISCLAIMER

The information contained in this report does not constitute legal advice. We have investigated your business requirements and have determined that your permitting and licensing requirements are those included in this report. There may be other requirements which we did not identify in this report.

State of MASSACHUSETTS

Registering your llc

Your New York company, Flejter LLC, has been registered with the state of Massachusetts as a Foreign LLC. Your Massachusetts (MA) Secretary of State Business Entity ID Number is ________ and your effective filing date is ________ ___, 2016.

Every MA foreign LLC is required to file an Annual Report with the MA Secretary of State EACH year. Your reports are by the anniversary of your effective filing date. The current Annual Report fee is $500.

You can file your Annual Reports on the Massachusetts Secretary of State's web site or we can file any Annual Report for you at:



The Massachusetts Secretary of State does not have any Initial Annual Report requirements for new Massachusetts Foreign LLCs.

FEDERAL TAX ID (EIN)

You will need a Federal Tax ID (EIN) in order to register for state taxes and local business licenses , to open a business bank account or if you hire employees.

You can get your EIN online at the US Internal Revenue Service (IRS) web site, or, we can get it for you on this web page:



TAXATION

The tax that you will pay for your MA Foreign LLC depends on two factors:

1. How many members are in your LLC

2. How you have decided that your LLC will be taxed at the federal level by the IRS.

MA follows the income tax classification determined by the IRS.  No separate forms are required to be filed in order to establish the tax classification of an LLC for MA income tax purposes.

By default a one member LLC is classified as a "disregarded entity" by the IRS for income tax purposes. A disregarded entity is a business that is separate from the owner for liability purposes, but it is the same as the owner for tax purposes.  A disregarded entity pays taxes through the personal income tax return of the business owner. 

An LLC with more than one member is classified by default as a partnership by the IRS.

LLCs, by default, are "pass-through" entities and, as such, are not required to pay income tax to either the federal government or the state of MA. Instead, income from the business is distributed to individual LLC members, who then pay federal and state taxes on the amounts allocated to them on their individual tax returns. MA taxes most personal income at a flat rate of 5.1%.

While by default LLCs are classified as disregarded entities or partnerships for tax purposes, it is possible to elect to have your LLC classified as a either a C Corporation or an S Corporation. (The C and S refer to sections of the IRS tax laws.)

If you elect to be taxed as a C Corporation, the LLC would also be subject to MA’s 8.0% corporate income tax which is part of the MA corporation's total tax obligation.

MA has a Corporate Excise Tax which is based both on income and net worth. This tax applies to C corporations and may apply to some S corporations. There is no entity-level tax that applies to LLCs which are not classified as corporations. There is a minimum excise tax for corporations of $456.

If you elect to be taxed as an S Corporation you will not be subject to the 8.0% MA corporate income tax and any other corporate taxes. However, an S corporation may be required to withhold personal income tax on amounts paid to nonresident shareholders.

You can elect to be taxed as a C-Corporation by filing federal IRS Form 8832 with the IRS; or you can elect to be taxed an S-Corporation by filing federal Form 2553 with the IRS. Copies of both forms are attached to this report.

For LLCs which have NOT elected to be taxed as a corporation by the IRS, all members will have some kind of tax obligation to the MA DOR for any income derived in the state of MA. This includes both MA-resident and non-resident LLC members.

Massachusetts also allows a partnership or an S corporation to file an electronic composite return on Form MA NRCR and make estimated tax payments as an agent on behalf of two or more qualified electing nonresident members.

Depending on your tax situation you may be required to register your business with DOR. You can do this at the MassTaxConnect web site:



Once you submit your request, you will receive an e-mail with the authentication code which you will need when you log in to MassTaxConnect for the first time.

The MA DOR web site includes a lot of pertinent information regarding tax issues for businesses:



You should consult your accountant to make sure that you make the best tax decisions for all of your LLC members.

SALES TAX

If you sell any tangible goods in the state of MA you are liable for the state sales tax of 6.25% on those items.

If you buy any tangible goods for resale or use in the conduct of your business, and did not pay the MA sales tax on those items, then you are obligated to pay the MA 6.25% Use Tax on those goods.

If you plan to make any sales as part of your business you must register for Sales and Use Tax accounts on DOR's MassTaxConnect web site:



BUSINESS LICENSES

State of Massachusetts

The state of MA does not require a general business license. Business licenses are issued by the 351 towns and cities in MA.

There are two main phases to your business - instruction and performance - which may require some kind of local approval.

Most towns in MA issue some kind of Business License (BL) to anyone who wants to sell goods or services in that town. You will probably need a BL in the towns in which you maintain a location for instruction. A separate BL is usually, but not always, required for each separate location in which you will conduct business. License requirements, timing and fees vary from town to town.

Performances may require zoning approval or occupancy permits depending on the size and location of the venue and the nature of the performance. If you are responsible for the venue you should contact the local Zoning Department to confirm exactly what approvals are needed. If your business is the only one selling tickets to a venture then you should definitely contact the local zoning department.

If you plan to sell all the tickets yourself then you may also be required to obtain an entertainment license for the venue. If you are performing at an existing venue then, in most cases, the owners of the venue are responsible for all licensing requirements.

Some towns have some kind of short term entertainment license for one time performances. However, if you plan to perform at the same location more than once a year it may be more cost effective to obtain a yearly entertainment license.

If you perform in cafes and similar establishments then the owner of the cafe is most likely responsible for any zoning approval for dance performances. However, if you ever plan to be the responsible party for a public venue then you should contact the local zoning department to make sure that you have the proper approvals. The sooner that you notify the zoning department ahead of the planned performance the better as the approval process may take over a month in some cases.

City of Revere

You will need a Business Certificate from the City Clerk's office because your registered address is within the town of Revere. The fee for a Business Certificate is $40 and the certificate is good for four years. Signatures on the application must be notarized.

A copy of the Business Certificate application, along with instructions, is included with this report.

If you plan to conduct any one-time performance in Revere you may have to obtain a Special One Day License from the Licensing Department. A copy of the One day License application is included with this report.

If you have any questions regarding licensing requirements for a performance in the town of Revere you can contact the Licensing Department:

City of Revere

License Commission

Maggie Haney

tel: 781-286-8165

email: mhaney@

City of Somerville

You will need a Business Certificate from the City Clerk. The fee for filing a Business Certificate application is $60.00. The certificate is valid for four years and must be renewed every four years as long as your business is open. Note that the fee for renewing or adding an owner to a Business Certificate is $60.00.

A copy of a Business Certificate application, along with instructions, is included with this report.

DO THEY NEED ONE FOR EACH LOCATION

SIGNS??

Somerville City Clerk contact information:

93 Highland Avenue

Somerville, MA 02143

tel: 617-625-6600 ext. 4100

If you are the responsible party for any performance you should contact the Zoning Department well in advance of the scheduled performance date to verify if any approvals are needed.

Somerville Zoning Department contact information is:

93 Highland Avenue

Somerville, MA 02143

tel: 617-625-6600 ext. 2500

email: planning@

Town of Marblehead

If you conduct business in the town of Marblehead you will need to obtain a Business Certificate from the Town Clerk's office. There are no forms available for the application. You have to appear in person at the Clerk's office with a photo ID. The Clerk will notarize the signature on the application.

The fee for the Business Certificate is $40 and it is good for four years. If you are going to hold classes at more than one location you will NOT need a separate certificate for each location as long as you use the same name for your business activities at all locations.

The Town Clerk's contact information is:

188 Washington Street

Marblehead, MA  01945

tel: 781-631-0528

fax: 781-631-0561

If you are going to be the responsible party for any performance venues then you should contact the Town Building Department to verify if any occupational permits are needed for the location at which the performance will be held.

Contact information for the Building Department is:

7 Widger Rd

Marblehead, MA  01945

tel: 781-631-2220

fax: 781-631-2617

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