Frequently Asked Questions
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Where can I get federal and state tax identification numbers?
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What are the laws regarding wages/hours/benefits for employees?
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How do I find out if anyone else is using the name I chose for my business?
Where can I get federal and state tax identification numbers?
Sole proprietorships without employees can use the proprietor's social security number as a business identification number. It may, however, be advantageous for a sole proprietorship to have an EIN number. Partnerships and corporations with or without employees, and sole proprietors with employees, must obtain an Employer Identification Number (EIN) (Form SS-4) from the IRS. The form can be obtained from the IRS at www.irs.gov or 800-392-6089. Partnerships and corporations with or without employees, and sole proprietors with employees, must register their business with the Department of Revenue. This can only be done online by going to www.mass.gov and registering as a new business. Further information can be obtained at Massachusetts Department of Revenue's website at www.mass.gov/dor.
What is considered a small business?
The Small Business Act states that a small business concern is "one that is independently owned and operated and which is not dominant in its field of operation." The law also states that in determining what constitutes a small business, the definition will vary from industry to industry to reflect industry differences accurately. In general, according the U.S. Small Business Administration, the following are considered small business: Wholesale Trade: 100 employees or less Manufacturing and Mining Industry: 500 employees or less Retail/Service Industry: $6 million or less in sales General and Heavy Duty Construction Industry: $28.5 million or less in sales Special Trade Contractors: $12 million or less in sales Agriculture Industry: $.75 million or less in sales
What is a DBA Certificate and where do I get one?
A business certificate is the registration of a business. It is commonly referred to as a "DBA" or "Doing Business As" certificate. Its purpose is primarily for consumer protection and public information. Essentially, it creates a public record of the name and address of the owner of a business. Massachusetts General Laws Chapter 110, §5 states that any person conducting business under any title or business name other than the real name of the person conducting the business must file a certificate. A person is defined as an individual, a partnership, or a corporation. Forms for filing are available in the town clerk’s office where the business is to be located.
What taxes are required for my business?
Once you start your business, you will have to start paying certain taxes to both the federal government and the Commonwealth of Massachusetts. The specific taxes you are required to pay or remit depend on your type of business. The Massachusetts Department of Revenue provides a comprehensive online guide, Guide to Massachusetts Tax and Employer Obligations, and also offers small business workshops.
How do I become a federal and/or state government vendor?
Through the MSBDC APEX Accelerator Program (formerly PTAC), clients subscribe to a free bid-matching service, which informs them daily of federal, state and municipal bidding opportunities matching their specific product and service profiles. After identifying a specific bid, clients may draw on a wealth of technical assistance to prepare their proposals. If successful, PTAC provides assistance in post-award contract administration. Visit PTAC's website at www.msbdc.org/ptac. Please note: To be eligible for Massachusetts APEX Accelerator services, companies must have been in business for at least two years. Otherwise, seek business assistance from a MSBDC regional office by completing a Request for Counseling (under the services tab).
How do I register my business name?
An individual or entity may register the business name, trademark or service mark with the Massachusetts Secretary of State's Office. A form may be obtained by calling 617-727-2850 or visiting the Secretary of State's website at www.sec.state.ma.us. The completed form, along with the filing fee, should be sent to the Secretary of State’s Office in Boston. Trademarks and service marks are renewable every ten years.
Once I’ve chosen the name for my business, how do I find out if anyone else is using it?
The Secretary of State’s office will do a name search for Massachusetts only. Visit the Secretary of State's Corporation's Division to do a name search or call 617-727-2850. You can also contact the librarian for Research & Learning Services at the University of Massachusetts Amherst at 413-545-7891.
A corporation is a separate legal entity that exists under the authority granted by state law. A corporation has substantially all of the legal rights of an individual and is responsible for its own debts. It must also file income tax returns and pay taxes on income it derives from its operations. Typically, the owners or shareholders of a corporation are protected from the liabilities of the business. However, when a corporation is small, creditors often require personal guarantees of the principal owners before extending credit. The legal protection afforded the owners of a corporation can far outweigh the additional expense of starting and administering a corporation.
Will the MSBDC write my business plan for me?
While the MSBDC will not write your business plan for you, we will provide the guidance needed to write the plan and can help fine-tune your plan.
How do I obtain health insurance?
Health Care Reform for Employers - If you are an employer, there are several things you need to know about health care reform. Under the Affordable Care Act, employers are responsible for making sure that health insurance is available to as many people as possible. To learn more about the Affordable Care Act, how it affects employers, and how it has been aligned with state health reform policies, see the ACA Employer’s Guide. If you're self-employed and can afford to buy a health insurance plan but don't, you will be penalized for each month you don't have insurance. However, you can appeal the penalty if a hardship prevented you from buying insurance.
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Massachusetts Health Connector for Business is a state-based health insurance marketplace that works to provide small businesses with 1-50 employees with affordable health insurance coverage for employees. Offering plans from the state's leading insurers that have been awarded the state's Seal of Approval, you can be sure the plan you choose meets both state and national coverage standards. • 877-623-6765
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Associated Industries of Massachusetts • 800-470-6277
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Chambers of Commerce may provide group health insurance for members
How much money will I need to start a business?
Writing the business plan is a good way to determine the answer to this question. The detailed analysis of expenses and income will enable you to test the feasibility of the business, the breakeven point, and the potential profitability of the business before making a financial commitment.
What insurance should I carry for my business?
An important aspect of your business is a well-planned insurance program. Types of insurance you should consider are: property, liability, product liability, automobile, Workers’ Compensation, disability, business, interruption, health and life.
Can you help me obtain small business grants?
Unfortunately, for most companies in Massachusetts, there are no small business grants. That is, there are no grants available for start up costs, operating or other typical small business expenses for companies which are not "non-profit" or charitable organizations. Most grants are given by foundations or government agencies to provide money for charitable or social purposes and they are typically only given to organizations which have specific “non-profit” status [typically 501(c)(3)]. This automatically excludes the majority of businesses which are operated for a profit, regardless of race or gender.
However, there are two exceptions for specific grants for which a small business could be eligible. The first is called an SBIR or Small Business Innovative Research grant. To qualify for this type of grant, a small business needs to have a unique technology which an agency of the government has an interest in developing through advanced research. This program requires a company to have qualified academic researchers and industry experts on its staff. Additional information on SBIR can be found at www.sbir.gov.
The second type of grant is a Workforce Training Grant. This grant is available to existing small businesses that need to train their workforce to better perform their jobs. It is a fifty-fifty match between funds that the company puts up and funds that are available from the Commonwealth of Massachusetts. Additional information on Workforce Training grants can be found at www.mass.gov/wtfp.
There are other agencies that also offer grants. For federal grant information, visit www.grants.gov. For Massachusetts grants, go to www.mass.gov and type 'grants' in the search field. For non-profit organizations, grant information is available in the library section of the Associated Grant Makers' website at www.agmconnect.org.
The U.S. Small Business Administration's website at www.sba.gov/funding-programs/grants has information on loans & grants, though SBA does not offer grants or free money to start or expand small businesses. Although there are some grants available, they generally are targeted towards specific groups, types of organizations or activities. SBA does offer a wide variety of loan programs (visit www.sba.gov/funding-programs/loans for more information).
Financing for a small business can often be a confusing and difficult process. The MSBDC can provide valuable information that will dispel many of the myths about free money and grants, and help individuals position themselves to start or grow a successful small business in Massachusetts. For additional information on the process of financing, contact the nearest MSBDC office to schedule an appointment.
What are the laws regarding wages/hours/benefits for employees?
Most Massachusetts employers are subject to both the federal and state minimum wage and overtime laws. In an effort to ensure fair competition and to ensure workers' rights are protected, the Attorney General both enforces the law and works to help Massachusetts employers understand their rights and responsibilities. Visit www.mass.gov/orgs/office-of-attorney-general-maura-healey for further information or visit the Attorney General's Fair Labor Division at www.mass.gov/orgs/the-attorney-generals-fair-labor-division.
For information about federal minimum wage and overtime laws, visit the U.S. Department of Labor's website at www.dol.gov.
Get copies of the seller's tax records for the last three years, details of the sale and meet with an MSBDC counselor as soon as possible. The business advisor can help you value the business and look at how the expenses may change under your management.