In Massachusetts, businesses are allowed to incorporate, thereby becoming their own legal entities. When an incorporated business acts, whether it is to buy and sell property, assent to contracts or exercise legal rights, the process is then attributable to the business itself and not its owners. To incorporate in Massachusetts, a business must file with the Secretary of State in compliance with particular guidelines.

Benefits of Incorporation in Massachusetts

A corporation enjoys benefits that unincorporated companies do not. Primarily, it cannot be held accountable for an amount of debt greater than the value of the assets that the owners have invested in it. Had the business remained unincorporated, owners risk losing their personal property should the business become unable to satisfy its liabilities. A corporation also allows creditors in the Millis area to assess the credit worthiness of the business as a whole rather than that of its owners, allowing the business to receive loans more easily. Lastly, a corporation's ownership stake is divided into equal slices or "shares" of stock, which make investments in the business much easier to transfer.

Costs of Incorporation

Incorporation comes at a price. First, Massachusetts may charge a filing fee to process applications for incorporation. Also, the corporation will pay taxes as its own entity. In other words, the profits a corporation makes are now taxed separately, while any disbursements to shareholders are taxed as individual income. This is called double taxation. However, a business may avoid this disadvantage with proper planning and assistance from a local Millis lawyer.