Closing a Massachusetts business requires filing dissolution documents with the Massachusetts Secretary of the Commonwealth to end your entity's legal existence. You’ll also have to wrap up business affairs appropriately and cancel your tax accounts with the Massachusetts Department of Revenue (DOR). The required forms, fees, and sequence differ by entity type.
Corporations face a Massachusetts-specific annual report prerequisite that can block the filing entirely. This guide covers the necessary procedures for LLCs, corporations, and partnerships, in the correct order.
Business dissolution in Massachusetts at a glance
- LLCs file a certificate of cancellation, corporations file articles of voluntary dissolution, and limited partnerships file a certificate of cancellation.
- Dissolution paperwork is filed with the Massachusetts Secretary of the Commonwealth, Corporations Division.
- Before filing, corporations must be in compliance with annual reports for at least the past 10 years.
- Standard filing fees are $100 for LLCs and corporations. Expedited processing is available for an additional fee.
- In addition to filing dissolution documents, the business must wind up business affairs.
- Every business must close accounts with the Massachusetts Department of Revenue (DOR), notify the Department of Unemployment Assistance (DUA), and notify the IRS.
Which dissolution document does your Massachusetts business need?
| Entity type | Form | Filing fee |
|---|---|---|
| Domestic LLC | Certificate of Cancellation | $100 |
| Foreign LLC | Certificate of Withdrawal | $100 |
| Domestic corporation | Articles of Voluntary Dissolution | $100 |
| Foreign corporation | Certificate of Withdrawal | $100 |
What are the three types of dissolution in Massachusetts?
- Voluntary dissolution. The business owners initiate closure by filing dissolution documents with the Secretary of the Commonwealth. This is the process covered in this guide.
- Administrative (involuntary) dissolution. The state initiates dissolution when a business fails to meet its ongoing obligations, such as filing annual reports or paying required fees. This can complicate reinstatement and affect your ability to form new entities in Massachusetts.
- Judicial dissolution. A court orders dissolution, typically due to owner disputes, fraud, or other legal conflicts.
How to dissolve an LLC in Massachusetts
Step 1: Vote to dissolve
The LLC’s members must approve dissolution. Your operating agreement controls how that approval works. If the operating agreement is silent on dissolution, Massachusetts law requires the written consent of all members. Document the decision with a written resolution or signed written consents.
Step 2: File a certificate of cancellation with the Massachusetts Secretary of the Commonwealth
The certificate of cancellation is the filing that formally cancels registration with the state and ends the business’ legal existence. You can file this online through the Corporations Division website. You must include:
- Federal employer identification number (EIN)
- The name of the LLC
- The date of filing of the original certificate of organization
- The reason for filing the certificate of cancellation;
- The effective date of cancellation if it is not effective upon filing
The filing fee is $100.
Step 3: Wind up affairs
Winding up means settling every remaining obligation before the LLC fully closes.
- Notify creditors in writing that the LLC is dissolving
- Pay all outstanding debts and liabilities, or make reasonable provision for payment
- Distribute remaining assets in the correct order
- Cancel all business licenses, permits, and local registrations
- Close business bank accounts
Massachusetts law requires the LLC to pay or provide for debts before distributing assets to members. Members who distribute assets first and leave creditors unpaid can face personal liability.
If your LLC has outstanding debts, you can still file the certificate of cancellation, but you must still address debts during wind up before you distribute any assets.
Step 4: Close Massachusetts tax accounts
Close tax accounts on MassTaxConnect or file Form AI-1, then address the following as applicable.
- If the LLC collected sales tax, file a final sales tax return.
- If the LLC had employees, file a final withholding return and notify the DOR of the official closing date.
- If the LLC has or had employees, notify the Department of Unemployment Assistance (DUA) to close your unemployment insurance account.
How to dissolve a corporation in Massachusetts
Step 1: Get board and shareholder approval
The board of directors must adopt a resolution to dissolve. Shareholders must then approve dissolution by the threshold required under the Massachusetts Business Corporation Act. Your bylaws may set a higher threshold than the statutory default. Check both before the vote.
Record everything in written minutes or a signed consent resolution.
Step 2: Confirm annual reports are current
The Secretary of the Commonwealth requires all annual reports for the last ten fiscal years to be filed and current before accepting Articles of Voluntary Dissolution. If any are missing, the dissolution filing will be rejected outright.
Log into the Secretary of the Commonwealth's online portal and review your corporation's filing history before doing anything else in this step. Gaps appear more often than you'd expect. If you find overdue reports, file them separately through the Corporations Division portal, with the applicable fee for each year, before submitting your articles of dissolution.
Step 3: File articles of voluntary dissolution with the Massachusetts Secretary of the Commonwealth
Most corporations can file their articles of voluntary dissolution form with the Corporations Division online. You may also file the paper dissolution form by mail, fax, or in person at:
One Ashburton Place
17th Floor
Boston, MA 02108
The base filing fee is $100, with a $10 expedited surcharge for fax or online filings.
Corporations that have not issued shares or commenced business may file a simplified form.
Step 4: Wind up the corporation's affairs
Filing the Articles of Voluntary Dissolution begins the winding-up period. It does not immediately end the corporation's obligations.
- Notify creditors in writing that the corporation is dissolving
- Pay all outstanding debts, or set aside adequate funds to cover them
- Liquidate remaining assets and distribute proceeds to shareholders after debts are satisfied
- Cancel all business licenses, permits, and local registrations
- Close business bank accounts
Shareholders who receive distributions before creditors are paid can face personal liability under Massachusetts law.
Step 5: Close Massachusetts tax accounts and notify the IRS
On the state side, log in to MassTaxConnect to close the corporation's tax accounts and file any final returns, entering the official closing date when closing each account. File a final corporate excise tax return through MassTaxConnect, checking the "final return" box.
Separately, send a letter on corporate letterhead, signed by an officer, to the DOR notifying the commissioner of the formal dissolution and attaching a certified copy of the vote authorizing the dissolution. Mail it to:
Department of Revenue
Attn: Corporate Dissolutions
P.O. Box 7010
Boston, MA 02204
If the corporation had employees, close the unemployment insurance account through Unemployment Services for Employers. Choose “Account Maintenance,” then “Suspend Employer Account.” An open employer account keeps generating quarterly wage report obligations.
Common mistakes when closing a business in Massachusetts
- Skipping the annual report catch-up. Corporations that file articles of voluntary dissolution without first filing any overdue annual reports will have their filing rejected. Check your filing history before you submit anything.
- Closing tax accounts before filing dissolution documents. Follow the correct order: dissolve first, then close tax accounts.
- Distributing assets before paying creditors. Massachusetts law requires outstanding debts to be paid, or adequately provided for, before any assets go to members or shareholders. Doing this out of order can expose owners to personal liability.
- Forgetting the DUA. If your business ever had employees, notify the Department of Unemployment Assistance (DUA) to close your unemployment insurance account. An open account continues to generate reporting obligations and fees even after your last employee is gone.
- Assuming inactivity equals dissolution. An inactive Massachusetts business is not a dissolved one. Annual report obligations and fees continue to accrue until you file and the state accepts your formal dissolution documents.
How LegalZoom can help
LegalZoom’s Standard Dissolution is a structured DIY process that helps you go through every step of paperwork filing and ensures you’re filing correctly with the state. For a more holistic approach, our Business Dissolution Manager will help you assess where your business is and what it needs to properly dissolve, then helps you make a game plan. Regular check-ins with your Business Manager help keep you on track to help ensure nothing falls through the cracks.
FAQs about business dissolution in Massachusetts
How much does it cost to dissolve an LLC in Massachusetts?
The standard state filing fee is $100. Your total costs will run higher if you have overdue annual reports ($500 per year, which the LLC must bring current before the certificate of cancellation can be filed) or owe final state taxes.
What is the difference between dissolving and terminating a business?
"Dissolution" is the precise statutory term for filing the legal documents that end your entity's existence. Filing dissolution documents is only half the job. You must also close tax accounts with the DOR.
Do I need to notify the IRS if I close my business?
Yes. File a final federal income tax return and check the "final return" box. If you skip this step, the IRS will continue to expect annual returns from an entity that no longer legally exists.
What is the difference between dissolving a domestic LLC and withdrawing a foreign LLC in Massachusetts?
A domestic LLC (formed in Massachusetts) files a certificate of cancellation to permanently end its legal existence. A foreign LLC (formed in another state) files a certificate of withdrawal, which ends only its Massachusetts registration. The entity continues to exist in its home state.
'%20/%3e%3c/svg%3e)
'%3e%3cpath%20fill-rule='evenodd'%20clip-rule='evenodd'%20d='M9.31239%2025.5316H13.0679V14.1032H9.31239V25.5316ZM11.1913%208.46875C9.93945%208.46875%209%209.25086%209%2010.505C9%2011.5995%209.78211%2012.5389%2011.1913%2012.5389C12.6005%2012.5389%2013.3826%2011.5995%2013.3826%2010.505C13.3826%209.4082%2012.6005%208.46875%2011.1913%208.46875ZM27%2018.9577V25.5316H23.2445V19.4275C23.2445%2017.8609%2022.6174%2016.7664%2021.3679%2016.7664C20.2711%2016.7664%2019.644%2017.5463%2019.3316%2018.1756C19.1743%2018.488%2019.1743%2018.8004%2019.1743%2019.1128V25.5316H15.4165V13.9458H19.1743V15.5123C19.644%2014.7302%2020.5835%2013.6357%2022.6174%2013.6357C25.1234%2013.7908%2027%2015.3573%2027%2018.9577Z'%20fill='white'/%3e%3c/g%3e%3cdefs%3e%3cclipPath%20id='clip0_952_9489'%3e%3crect%20width='18'%20height='18'%20fill='white'%20transform='translate(9%208)'/%3e%3c/clipPath%3e%3c/defs%3e%3c/svg%3e)
