Starting a service business in Massachusetts

Form your business in Massachusetts

You form a Massachusetts LLC by filing a Certificate of Organization with the Secretary of the Commonwealth. The filing fee is $500 as listed by the state's starting an LLC page on Mass.gov in October 2026, and the same $500 appears in the Secretary's fee regulation, 950 CMR 112.29. The company exists only once the state approves that certificate. Before you file, run your proposed name through the Secretary's business entity search so you are not paying $500 for a name that is already taken. The fee regulation allows card payment for electronic and fax filings; the state does not publish a standard turnaround on the pages we read.

Ongoing state filings

Every Massachusetts LLC files an annual report with the Secretary of the Commonwealth on or before the anniversary date of its original certificate, per 950 CMR 112.14. The fee is set in the statute itself: M.G.L. c. 156C, § 12(d) says five hundred dollars, and Mass.gov listed the same $500 in October 2026. Put the anniversary on your calendar the day the certificate comes back. A crew of two that forms an LLC is budgeting $1,000 across the first year and a renewal, before any license or insurance.

Using a business name (DBA)

A Massachusetts DBA is called a business certificate, and it is filed with the clerk of the city or town where your business is located, not with the state. The requirement comes from M.G.L. c. 110, § 5, which also says the certificate lasts four years and must be renewed every four years after that. An LLC operating under its exact registered name is exempt under section 6; one that markets under a different name files. Each town sets its own fee and process, so use the clerk directory on Mass.gov's business certificates page to find yours. Keep a digital copy, because the HIC application asks for it if you register under a trade name.

Not sure whether you need an LLC at all? Read LLC vs sole proprietor for contractors, then get your free EIN from the IRS.

Licensing for service trades

Three separate state credentials matter for most home-service work here. First, the Home Improvement Contractor (HIC) registration, run by the Office of Consumer Affairs and Business Regulation: anyone who solicits, bids on or performs contracting work on an existing, owner-occupied home of one to four units must register. A new registration costs $150 plus a Guaranty Fund payment of $100 for zero to three employees ($200 for four to ten, $300 for eleven to thirty, $500 above thirty), renews every two years for $100, and is handled online through the MA Contractor Hub; all of these figures are as listed by OCABR in October 2026. Second, the Construction Supervisor License from the Division of Occupational Licensure: the state says a licensed construction supervisor or registered design professional must oversee construction on one and two family homes and on most existing one to four family owner-occupied homes, and that an HIC and a CSL are not interchangeable. Third, electricians, plumbers and gas fitters are licensed by their own state boards. Mass.gov also notes that the state does not recognize out-of-state contractor licenses. Your city or town building official may add requirements on top of these, so call before you pull a permit.

• Office of Consumer Affairs and Business Regulation: Home Improvement Contractor Program: HIC registration for contractors working on existing owner-occupied homes of one to four units
• Division of Occupational Licensure: Construction Supervisor Licensing: Construction Supervisor Licenses for building work regulated by the state building code (780 CMR)
• Board of State Examiners of Electricians: Electrician licensing
• Board of State Examiners of Plumbers and Gas Fitters: Journeyman and master plumbers and gas fitters, apprentice registration, corporate and partnership certificates

Workers' compensation

The Department of Industrial Accidents says all employers operating in Massachusetts must carry workers' compensation for their employees, and that the rule applies no matter how many hours are worked or how many people are on payroll. That means your first part-time helper triggers it. LLC members, LLP partners and sole proprietors are not required to cover themselves, though any employee who is not a member must be covered; corporate officers owning at least 25% can request an exemption. The DIA does not set premiums or class codes; it sends employers to the Workers' Compensation Rating and Inspection Bureau of Massachusetts and the Division of Insurance for rate information. Skipping it is expensive: the DIA issues stop work orders with fines starting at $100 per day, rising to $250 per day if you appeal and keep working, as listed by the DIA in October 2026.

More on coverage: business insurance for contractors.

Sales tax on services

Massachusetts sales tax is 6.25% on sales and rentals of tangible personal property and telecommunications services, according to the Department of Revenue's sales and use tax guide. The DOR lists personal and professional services among the exempt categories and says installation charges are not taxed when stated separately from the item. Contractors who repair or improve real property pay the tax when they buy materials. The exception: a contractor who installs a complete standard item and does nothing beyond installing or connecting it is treated as a retailer and must collect tax from the customer. If you sell goods, register through MassTaxConnect; service providers unsure about a specific charge can check the Services Enterprises regulation, 830 CMR 64H.1.1, or write to DOR's Rulings and Regulations Bureau.

Recording business calls in Massachusetts

Massachusetts makes it a crime to secretly record a phone call or in-person conversation unless every party gave prior authority, under M.G.L. c. 272, § 99, with penalties up to five years in state prison or a $10,000 fine. If your phones record calls, announce it at the start of every call (including outbound calls to customers) so no one is recorded in secret. Our guide on recording business calls covers how to set that up.

See our guide to recording business calls before you turn on call recording or an AI receptionist.

How the seasons shape the work

Massachusetts work swings hard with the calendar. Nor'easters keep plow and shoveling crews on call from December into March, and a coastal storm can bury a whole week of scheduled jobs. Exterior painting, roofing, gutters and pressure washing pack into the stretch from April through October. The Cape and Islands run on a summer-home cycle, with spring openings and fall closings, and older housing stock in towns like Worcester, Lowell and Springfield means steady demand for repair work on triple-deckers and century-old frames.

Home improvement contracts over $1,000 must be in writing

Under M.G.L. c. 142A, § 2, any residential contracting agreement above $1,000 has to be a written contract. It must include start and completion dates, your HIC registration number, a payment schedule, and notice of the owner's three-day cancellation rights. The deposit you collect before work starts cannot exceed the greater of one-third of the contract price or the actual cost of special-order or custom materials. Build these fields into your estimate template so every signed quote already complies.

The Guaranty Fund protects homeowners, not you

The Guaranty Fund payment you make at registration funds a program that can compensate eligible homeowners up to $25,000 for unpaid judgments against registered contractors, per the HIC program page. The same program runs complaint handling and arbitration between homeowners and contractors. Homeowners can look up your registration online, so keep it current; if it lapses, you reapply at the full new-registrant price and may have trouble pulling municipal permits.

Then set up the back end that gets you hired

The paperwork makes you legal. Customers still have to find you, reach you and pay you. Before your first job, set up a business phone number, email on your own domain, a Google Business Profile, a simple website, and a way to send quotes and take card payments. The launch checklist lays out the order.

Massachusetts questions