Massachusetts Business License

Starting a business in Massachusetts comes with its own unique set of rules and requirements. Rather than offering a one-size-fits-all business license, the state takes a more specialized approach, often requiring various occupational licenses tailored to your industry.

Both state and local agencies oversee this licensing process, making it crucial for you to understand the specific regulations that affect your business.

This Massachusetts Business License guide is designed to simplify the business licensing landscape for you, helping you pinpoint exactly which licenses or permits you’ll need to operate legally in the state, as well as how to go about obtaining them.

Do I Need a Business License in Massachusetts

In Massachusetts, businesses are required to obtain various licenses and permits at the local, state, and federal levels. Here’s a general breakdown:

Type of Business

Below, we’ve detailed common ways in which your business type can dictate the licenses you’ll be required to obtain, as well as specific examples of these:

• Business Privilege Licenses: Local regulations often require specific occupational licenses. For example, in the Town of Belmont, businesses operating before 6 a.m. or after 11 p.m. require an Extended Hours Permit, which is issued by the Select Board
• Business Tax Registration: Almost all new businesses in Massachusetts will need to register with the Massachusetts Department of Revenue in order to legally operate in the commonwealth. This is essential for tax compliance and may also apply to certain local government requirements
• Professional Licenses: Certain professions such as engineering, nursing, and social work require specialized licensing in Massachusetts. You’ll need to consult with the Division of Occupational Licensure or specific boards like the Board of State Examiners of Electricians for requirements tailored to your industry
• Environmental Permits: If your business could have an environmental impact — such as pesticide use or commercial fishing — you will need specific permits regulated by the Massachusetts Department of Environmental Protection. Permits may cover areas like Water Resources Permitting and Wetlands & Rare Species protection

However, this is not the only factor influencing the exact combination of licenses you’ll need — the location of your business within Massachusetts plays an important role as well.

Location

In this section, we’ve provided a succinct overview of the potential licenses and permits that your business may need due to local, state, and federal requirements:

• Local: At the local level, towns and cities in Massachusetts have their own sets of rules for business licenses and permits. For example, in Cambridge, businesses looking to offer outdoor dining on public sidewalks must obtain an “Outdoor Dining Permit.” This is typically part of the Common Victualler License application process (if your business also serves food)
• State: For businesses operating within Massachusetts, state-level licensing requirements are determined by the nature of the business and are often sector-specific. For instance, if you’re in the healthcare industry, you’d need to comply with licenses issued by the Massachusetts Board of Registration in Medicine. Engineers, on the other hand, must secure licenses from the state’s Board of Professional Engineers. The focus here is on ensuring that businesses align with state-level regulations and standards, which may vary depending on the industry you are in
• Federal: If your business operates in a federally regulated sector such as aviation or pharmaceuticals, you’ll need to comply with federal licenses and permits. For instance, pharmaceutical companies must register with the US Food and Drug Administration (FDA)

Since the exact permits and licenses your business will need are entirely unique to your situation, you’ll have to conduct thorough research into your own local, state, and federal regulations to smoothly launch your business.

Alternatively, many entrepreneurs opt to leverage the expertise of third-party services to handle this on their behalf.

How to Get a Business License in Massachusetts

In order to get your business license(s) in Massachusetts, you will need to complete the following steps:

• Form Your Business
• Obtain an Employer Identification Number (EIN)
• Apply for the Required Licenses and Permits

Let’s take a look at each step in more detail below.

Step 1: Form Your Business

Before setting out to obtain a business license in Massachusetts, it’s pivotal that you first choose an appropriate structure for your business. Sole proprietorships, general partnerships, and corporations are all common choices, however it’s often seen as the most advantageous for small businesses in Massachusetts to register as a Limited Liability Company (LLC). Here are a few reasons for why:

• Limited Liability: Members are protected from personal liability for business debts, safeguarding personal assets
• Tax Benefits: LLCs typically enjoy a pass-through tax treatment, avoiding the double taxation that corporations are subjected to
• Management Flexibility: LLCs allow for flexibility in management structure, either being member-managed or manager-managed based on the preferences outlined in the certificate of formation
• Ease of Formation: With the Massachusetts Secretary of State providing forms that meet the minimum state law requirements and the option to file online, setting up an LLC is relatively straightforward

Many small business owners opt to avoid the tricky process of forming an LLC by instead leveraging the help of third-party LLC formation services.

Step 2: Obtain an EIN

The second step you’ll need to complete before applying for your business license is to obtain your EIN. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses in the United States so that their financial transactions can be identified and tracked.

An EIN is often necessitated when applying for various permits and licenses as it allows local and state governments to ensure your business is operating within the confines of the law. You can obtain it in a number of ways:

• Online: You can apply for your EIN on the IRS’s official website by using the EIN Assistant. You should be granted your EIN shortly after completing this application
• By Fax/Mail: After completing Form SS-4, you can apply for an EIN by submitting it to the IRS via mail or fax
• By Phone: International applicants and businesses located outside US Territories are required to call the IRS at (267) 941-1099 to obtain their EIN — which they should receive during this call

Note: If you are a sole proprietor, you will be able to use your Social Security Number (SSN) instead (as long as you do not have employees).

Step 3: Apply for Licenses and Permits

After settling on the appropriate structure for your business and initiating the application for your EIN, the next step is to focus on securing the necessary licenses and permits to operate legally within your locale and industry.

• Local Licenses: In Massachusetts, each municipality has its own specific guidelines for business registration. This means that you will need to visit your city’s or town’s official website or contact your local government offices in order to get information that relates to the local licenses that you may need
• Statewide Licenses: Businesses in Massachusetts can use the state’s Starting a New Business page (an interactive guide) in order to identify the state-specific licenses or permits that they may need to obtain
• Federal Licenses: While the federal government doesn’t mandate licenses for general business operations, if your business falls under any government-regulated category, such as agriculture, fishing, firearms, and alcohol sales, it may be required to obtain an additional federal business license or permits

Note: If you’re planning to operate a business in Boston, we recommend consulting with the Boston Permits and Licensing page for specialized guidance. Boston has a detailed digital interface that’s designed to help you find and apply for all of the correct local licenses and permits.

Step 4: Renewal of Licenses and Permits

The validity period for Massachusetts business licenses and permits varies depending on the issuing authority and the type of license. Typically, many state-level licenses need to be renewed every one to three years.

You may also be subject to local-level renewals. For example, a food establishment permit issued by the Boston Public Health Commission generally requires annual renewal. If you plan to handle this process independently, we recommend checking with your local city or town hall for specific details that relate to your licenses’ renewal cycles.

Alternatively, you can use a third-party service or a professional attorney for this process. This can be a good choice if you want to ensure that you avoid potential fines, as well as if you want to be as time-efficient as possible.

How Much Is a Business License in Massachusetts

The Massachusetts business license cost can vary widely depending on the type and scope of the business, as well as depending on its location.

Generally speaking, there is no one-size-fits-all filing fee structure, which makes it imperative for business owners to research all of the specific licenses that they’ll need.

For example, a food establishment permit issued by the Boston Public Health Commission may cost around $100 to $200 annually. Professional licensing, like those for healthcare providers or engineers, can range anywhere between $150 to $700, depending on the profession and issuing authority.

Knowing what you will be expected to pay in business licensing fees is important as it will allow you to budget accordingly, as well as to avoid potential fines and/or penalties. If you believe that you will struggle to independently carry out all of the necessary research, you can choose to hire a business attorney or a professional service instead.