Massachusetts Small Business Development Center (MSBDC)
     

 

 

Frequently Asked Questions

link bullet What are my legal business obligations?
link bullet Where can I get federal and state tax identification numbers?
link bullet What is a DBA and how do I get one?
link bullet What are the laws regarding wages/hours/benefits for employees?
link bullet Where can I find assistance for a non-profit business?
link bullet Will you help me obtain grants and other free money?
link bullet How much money will I need to start a business?
link bullet How do I become a federal/state government vendor?
link bullet How do I obtain health insurance for my business?
link bullet What insurance should I carry for my business?
link bullet Will you write my business plan?
link bullet How do I register my business name?
link bullet

Where can I find the laws, requirements and regulations for Workers' Comp Insurance?

link bullet How do I find out if anyone else is using the name I chose for my business?
link bullet What taxes are required for my business?
link bullet Is the business that I want to purchase overpriced?
link bullet Where can I find an attorney?
link bullet What qualifies a business as a "small business"?
link bullet What is a corporation?

 


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 Employer Identification Number (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.

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Where can I find an attorney?

The Massachusetts Bar Association Lawyer Referral Service (LRS) is one of the largest referral services of its kind in the nation. Since its inception in 1974, the MBA LRS has helped thousands of people find the resources they need to solve their legal problems. Unlike for-profit referral agencies, the LRS is a public service program dedicated to directing callers to the most appropriate resources. Visit their website at www.massbar.org/lawhelp/need_lawyer.

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Where can I find the laws, requirements and regulations for Workers' Comp Insurance?

All Massachusetts employers are required by state law to carry workers' compensation insurance covering their employees, including themselves if they are an employee of their company. This requirement applies regardless of the number of hours worked in any given week, except that domestic service employees must work a minimum of 16 hours per week in order to require coverage.

For further information, contact the Massachusetts Department of Industrial Accidents at www.state.ma.us/dia or call 617-727-4900.

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What qualifies a business as 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 Industr
y: $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

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What are the laws regarding wages/hours/benefits for employees?

Contact the Massachusetts Department of Occupational Safety at www.mass.gov/dos/mw/mw_faq.htm. Most Massachusetts employers are subject to both the federal and state minimum wage and overtime laws. For information about federal minimum wage and overtime laws, visit the Department of Labor's website at www.dol.gov/esa/whd.

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.ago.state.ma.us for further information or contact the AGO Fair Labor and Business Practices Hotline Phone Numbers 617-727-3465.

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Where can I find assistance for a non-profit business?

The SBDC does not provide services to nonprofit organizations, but the following resources can provide assistance.

The Executive Service Corp of New England (ESC) works with nonprofit organizations to improve their effectiveness by providing affordable management consulting and related services. ESC works with the nonprofit community on a variety of issues ranging from board development to strategic planning. Visit their website at www.escne.org or call 617-357-5550

Information is available from Associated Grant Makers' website at www.agmconnect.org or call 617-426-2606.

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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. 

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How do I become a federal/state government vendor?

Through the Procurement Technical Assistance Center (PTAC), a specialty counseling center of the Massachusetts Small Business Development Center Network, 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 this program, companies must have been in business for at least two years.

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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. Visit www.mass.gov/dor for further information.

For information on federal IRS regulations, visit the Small Business and Self-Employed Tax Center.

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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 visiting www.mass.gov/sec/cor or calling 617-727-2850.

The completed form, along with the $50 filing fee, should be sent to the Secretary of State’s Office in Boston. Trademarks and service marks are renewable every ten years.

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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. For further information, visit www.mass.gov/sec/cor or call 617-727-2850.

The University of Massachusetts Amherst Physical Sciences & Engineering Library will do searches for federal trademarks. Call 413-545-1370 and ask for a reference librarian.

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What is a corporation?

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.

The owners and employees also pay taxes separately from the corporation. For more information, visit www.mass.gov/sec/cor.

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How do I obtain health insurance?

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Will the SBDC write my business plan for me?

While the SBDC 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.

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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.

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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 Insurance
    Liability Insurance
    Product Liability Insurance
    Automobile Insurance
    Workers’ Compensation
Disability Insurance
Business Interruption Insurance
Health Insurance
Life Insurance
 

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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/wtf.

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 has information on 'loans & grants'.

The U.S. Small Business Administration (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/financing for more information).

Non-profits can contact Associated Grant Makers at www.agmconnect.org for information on grants.

Financing for a small business can often be a confusing and difficult process. The SBDC 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.

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I'm thinking of buying a business. How do I know if it's overpriced and if I can earn a living at this?

Get copies of the seller's tax records for the last three years, details of the sale and meet with an SBDC business advisor as soon as possible. The advisor  can help you value the business and look at how the expenses may change under your management.

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