Question 1

What are Massachusetts' non-compete agreement rules?

Accepted Answer

Massachusetts enacted significant restrictions on non-compete agreements effective October 2018 (M.G.L. c. 149, § 24L). Non-competes are limited to 12 months duration and must include a "garden leave" provision (50% of the employee's highest base salary during the restricted period) or other mutually agreed-upon consideration. Non-competes cannot be imposed on non-exempt employees, undergraduate or graduate students, employees terminated without cause, or employees under 18. The agreement must be supported by independent consideration if signed after the start of employment and must be provided at least 10 business days before the employment start date.

Question 2

What are the security deposit rules in Massachusetts?

Accepted Answer

Massachusetts has some of the strictest security deposit laws in the country (M.G.L. c. 186, § 15B). Security deposits are limited to one month's rent, and landlords must hold them in a separate, interest-bearing account at a Massachusetts bank. Landlords must provide tenants with a receipt, the bank account details, and pay 5% annual interest on the deposit. The deposit must be returned within 30 days after the tenant vacates, with an itemized list of deductions. Violations of the security deposit law can result in the tenant recovering three times the deposit amount plus attorney fees and court costs.

Question 3

How do I form an LLC in Massachusetts?

Accepted Answer

To form an LLC in Massachusetts, file a Certificate of Organization with the Secretary of the Commonwealth and pay a $500 filing fee — one of the highest in the nation. You must designate a registered agent with a Massachusetts address. Massachusetts LLCs must file an annual report with a $500 fee. An operating agreement is not required to be filed but is strongly recommended. The high formation and annual costs in Massachusetts lead some businesses to consider incorporating in other states while qualifying to do business in Massachusetts as a foreign entity.

Question 4

Does Massachusetts have an estate tax?

Accepted Answer

Yes, Massachusetts imposes a state estate tax on estates exceeding $2 million in value — one of the lowest thresholds in the country. Importantly, the Massachusetts estate tax is a "cliff" tax, meaning that once an estate exceeds $2 million, the entire estate is subject to tax (not just the amount over $2 million), though a credit is applied. Estate tax rates range from 0.8% to 16%. This low threshold makes estate planning particularly important for Massachusetts residents, especially homeowners in high-value real estate markets. Strategies such as irrevocable trusts, lifetime gifts, and charitable giving should be considered.

Question 5

What is the Massachusetts Land Court?

Accepted Answer

The Massachusetts Land Court is a specialized trial court that handles disputes involving real property. It has jurisdiction over cases involving title disputes, zoning appeals, land registration, tax lien foreclosures, and other real property matters. Massachusetts maintains a dual land registration system: the traditional recording system (used for most properties) and the Torrens registration system (registered land, overseen by the Land Court). For registered land, the Land Court issues certificates of title that provide conclusive evidence of ownership. When purchasing property in Massachusetts, it is important to determine whether the property is registered or recorded land, as the title examination process differs significantly.

Property Division	Equitable Distribution
At-Will Employment	Yes (with extensive statutory exceptions)
State Income Tax Rate	5% (9% surtax on income over $1M)
Statewide Rent Control	No (banned by 1994 ballot initiative)
LLC Formation Filing Fee	$500
Minimum Wage	$15.00/hr
Online Notarization	Allowed
State Bar Association	https://www.massbar.org

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