Business Acquisition Lawyer in Massachusetts

Non-Compete Agreements

Restricted with 12-month cap and garden leave requirement. Sale-of-business exception.

Restricted under the Massachusetts Noncompetition Agreement Act (effective October 1, 2018). Non-competes are limited to 12 months (or 2 years if the employee breached a fiduciary duty or unlawfully took the employer's property). Prohibited for nonexempt employees, employees terminated without cause or laid off, employees age 18 or younger, and undergraduate/graduate students in internships. The employer must provide "garden leave" (at least 50% of the employee's highest annualized base salary within the 2 years before termination) or other mutually agreed consideration. Non-competes in connection with the sale of a business are exempt from these restrictions.

Tax Considerations

Massachusetts imposes a flat 8% corporate excise tax on net income, plus a non-income measure (either net worth or tangible property). The state recently enacted a 4% surtax on personal income over $1 million (the "Fair Share Amendment"), which affects high-income sellers and pass-through entity owners.

Filing Requirements

Entity mergers and conversions require filing with the Massachusetts Secretary of the Commonwealth, Corporations Division. The Department of Revenue requires tax waivers for asset purchases. Professional corporations require additional filings with the relevant licensing board.

Bulk Sales / Asset Purchases

Massachusetts has repealed UCC Article 6 (Bulk Sales). However, Massachusetts General Laws Chapter 62C, Section 51 imposes successor liability on asset purchasers for the seller's unpaid taxes. Buyers must request a tax waiver from the Department of Revenue before closing.