How to Start an LLC in Montana | 2024 Guide

Start a LLC in Montana

How to Start an LLC in Montana: If you’re looking to launch a business in Montana, starting a Limited Liability Company (LLC) may be the right choice for you. An LLC provides personal liability protection for its owners while giving them flexibility in managing and taxing the business. This guide provides a step-by-step process for starting an LLC in Montana. From choosing a unique name to registering with the state and obtaining necessary licenses and permits, Webinarcare Editorial Team will walk you through setting up your new business entity. So grab a pen and paper, and let’s get started!

What is a Limited Liability Company?

A Limited Liability Company (LLC) is a type of business entity that combines a corporation’s limited liability protection with a partnership’s tax benefits. LLCs are popular among small business owners for their flexibility and ease of formation. In Montana, an LLC must have a unique name and file Articles of Organization with the Secretary of State. Depending on their business needs, LLCs may also elect to be taxed as a corporation or an S-corp. Owners of an LLC, called members, are not personally liable for the company’s debts and losses, and the company’s profits and losses are passed through to the member’s personal tax returns. This makes an LLC an attractive option for those seeking personal liability protection and simplified taxation.

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Steps on How to Start an LLC in Montana

To form an LLC for your business, you must follow the guidelines that include naming your LLC, hiring a Registered Agent, filing your Articles of Organization, creating your LLC operating agreement, getting an employer identification number, opening a bank account and getting business licenses and permits.

Step 1: Name your LLC in Montana

After you have decided on the idea to form an LLC in Montana, deciding the name for your LLC is significant. There is a complete guide on LLC name guidelines for you to have a proper LLC business name. Here are some regulations you must follow while naming your LLC,

  • The name should not be confused with a government entity.
  • The name should be unique.
  • The name should be available to use.
  • Any other business does not use the name.
  • The new name must include “LLC” if it is a limited liability company.

In Montana, if you do not wish to file your LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for 120 days. You must file a name reservation application in Montana Secretary of State to keep the name.

Recommended: We recommend a professional service that can offer you unlimited name search, trademark and copyright registration at a reasonable price. We recommend using –

LegalZoom($0 + State Fees for LLC Formation)

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for filing Montana DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA, you can file it in one method, online. However, before filing a DBA, you should know that you need to renew your DBA from up to five years, which costs around $20.

Step 2: Hire a Registered Agent in Montana

Hiring a Registered Agent in Montana is a must since a Registered Agent is a person or business entity responsible for receiving important legal documents on behalf of your Montana LLC. Most states require you to designate a Registered Agent when forming your LLC.

The qualifications of a Registered Agent vary depending on the jurisdiction. Still, generally, a Registered Agent must meet the following criteria:

  • Availability: A Registered Agent must be available during regular business hours to receive and process legal documents and official correspondence.
  • Physical Address: A Registered Agent must have a physical street address within the state where the LLC is registered. This address, known as the registered office, cannot be a P.O. Box.
  • Residency or Authorization: For individuals serving as Registered Agent, they must be residents of the Montana where the LLC was formed. A business entity acting as a Registered Agent must be authorized to do business within that state.
  • Age: A Registered Agent must be at least 18 years old.
  • Good standing: A Registered Agent should not have any legal or financial issues that impede their ability to fulfill their duties.

Choosing a reliable and responsible Registered Agent is essential, as failure to receive and respond to legal documents can seriously affect your business. Some businesses use professional Registered Agent services to ensure compliance and proper handling of legal matters.

However, if you would like to have an easier process in filing the necessary documents, you can get Montana Registered Agent Services.

Step 3: File your Articles of Organization in Montana

The Articles of Organization for an LLC is an important document to start your limited liability company (LLC). Montana Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization.

Here are the guidelines and specific requirements in filing your Articles of Organization in Montana.

1. Obtain the Necessary Forms: Visit the Montana’s business filing office website, usually the Montana Secretary of State’s office, to download the required forms or file online.

2. Provide the Required Information: Fill in the necessary details in the form, which typically include:

  • The name of your LLC (must include an LLC designator such as “LLC,” “L.L.C.,” or “Limited Liability Company”)
  • The purpose of your LLC (a general statement or specific business activities)
  • The address of your LLC’s principal place of business
  • The name and address of your registered agent (the person or business entity responsible for receiving legal documents on behalf of your LLC)
  • The management structure of your LLC (member-managed or manager-managed)
  • The duration of your LLC, if not perpetual
  • The names and addresses of the LLC’s organizers or members

3. Sign and File the Form: Submit the completed form in the {state} state office, either by mail, in person, or online. You may mail it at State Capitol, Room 260 ~ PO Box 202801 Helena, Montana 59620-2801.

4. Pay the Filing Fee: When you submit your Articles of Organization, you’ll need to pay a filing fee of $70. Make sure to check and include the correct payment with your submission.

5. Receive Confirmation: After your Articles of Organization have been filed and processed, you’ll receive a confirmation from Montana, typically a stamped and approved copy of the document or a Articles of Organization.

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Once you have successfully filed your Articles of Organization and it has been approved, your Montana LLC is officially formed. However, remember to complete additional steps, such as creating an Operating Agreement, obtaining an EIN, and registering for any required licenses and permits.

Step 4: Create Your Montana Operating Agreement

An operating agreement is a document that contains all of your company’s organizational details. Drafting an operating agreement in most states is not required. Yet, having one as an internal document is strongly advised. An operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

To understand how an operating agreement works, you should check out how to create an operating agreement in Montana.

Recommended: Get oprating agreement drafts ready on your table with a help of a professional service. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 5: Get an EIN

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN) in Montana. An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Montana can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

In obtaining an EIN for your LLC, you should be aware to ensure that your LLC is eligible for an EIN. You need an EIN if you have employees, operate as a corporation or partnership, or meet other specific IRS criteria. Before applying, gather the required information, including your LLC’s name, mailing address, and the responsible party’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Also, you can apply for an EIN through various methods, including online, by fax, mail, or telephone (for international applicants).

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 6: Open a Bank Account and Prepare for Taxes

After you have filed for and received your Employer Identification Number, you should open a bank account because you will use this account for yourself, your clients, and your employees.

Your business dealings in Montana might be simpler with a US business bank account because it boosts your company’s legitimacy and liquidity. Most banks demand an EIN to create a business bank account for firms other than sole proprietorships. Also, having an EIN makes tax preparation easier. You can anticipate paying employment and corporate taxes with Montana LLC.

Opening a bank account is necessary for Montana business. If you are still wondering where to open an account in your Montana, you should check the Best Bank for Small Business in Montana.

Step 7: Get a Business and License Permit

You must get a business license in Montana before establishing your LLC. A business license is a legal document granted by a state government body that permits you to conduct business within the area under its jurisdiction. The price of business licenses and permits in Montana ranges from $50 – $300. If there is a requirement for a specific license or city-based permit, you must inquire with the Montana Secretary of State.

Cost to Form an LLC in Montana

Even if you have a business name and structure in mind, you should consider whether you can afford the costs of forming an LLC in Montana. Articles of Organization costs around $70. The initial filing fee is $70, and the annual fee is $20.

If you forget to pay the annual fee for your Montana LLC, you will have a penalty of $15. However, you can check the Montana LLC Cost for additional information.

Advantages of Creating Montana LLC

Even though some people decide on what to do with their businesses, some choose to put it in their own individual name, while others still choose to set it up via LLC in Montana. Important benefits will help you set up an LLC in Montana.

  • Pass-Through Taxation: The pass-through structure will make the company not pay twice the tax. Most start-ups and entrepreneurs in Montana apply for an LLC because of this structure. Pass-through taxation refers to how income and losses from an LLC (Limited Liability Company) are passed through to its members (owners) for tax purposes rather than being taxed at the business entity level. This means the LLC does not pay federal income taxes; the members’ profits and losses are allocated based on their interests. Each member then reports their share of the LLC’s income or losses on their personal tax returns and pays taxes at their individual tax rates.
  • Ownership Flexibility: If you need sole and primary control over your company’s operations, a sole proprietorship will allow you to do so. If you apply for an LLC in Montana with flexibility, you will have default rules set by law and need an operating agreement.
  • Personal Liability Protection: Personal Liability Protection protects your business from damage, debts, or legal obligations. In personal liability protection, the company’s profits and earnings will stay as is even if your company is about to be sued. This protection of having an LLC in Montana can also be extended to the company’s properties and assets. Many start-up companies will benefit from this since most are starting to build a company. Even if liability exists, the LLC in Montana will protect its assets.

FAQs

What is an LLC?
An LLC, or Limited Liability Company, is a type of business structure that combines the liability protection of a corporation with the flexibility of a partnership.
Can I form an LLC in Montana?
Yes, Montana allows the formation of LLCs.
What are the benefits of forming an LLC in Montana?
Montana’s LLC law is considered to be business-friendly, with relatively low fees and minimal paperwork requirements.
How much does it cost to form an LLC in Montana?
The filing fee for articles of organization in Montana is $70.
Do I need a lawyer to form an LLC in Montana?
No, Montana allows you to form an LLC without a lawyer.
Can I form an LLC in Montana if I’m not from Montana?
Yes, anyone can form an LLC in Montana.
Can I form an LLC in Montana online?
Yes, you can file your articles of organization online on the Montana Secretary of State’s website.
Do I need a registered agent in Montana?
Yes, Montana requires all LLCs to have a registered agent.
What is a registered agent in Montana?
A registered agent is a person or entity that is designated to receive legal and tax documents on behalf of an LLC.
Can I be my own registered agent in Montana?
Yes, you can be your own registered agent in Montana if you have a physical address in the state.
What other legal requirements are there for forming an LLC in Montana?
In Montana, you must file your company’s Articles of Organization and create an Operating Agreement.
How long does it take to form an LLC in Montana?
It typically takes 1-2 weeks to process your LLC paperwork in Montana.
Can I reserve a name for my LLC in Montana?
Yes, Montana allows you to reserve a name for your LLC with the Secretary of State for a period of 120 days.
Do I need to file an annual report for my Montana LLC?
Yes, Montana requires all LLCs to file annual reports with the Secretary of State.
How much does it cost to file an annual report for my Montana LLC?
The fee for filing an annual report for a Montana LLC is $20.
What happens if I don’t file an annual report for my Montana LLC?
If you fail to file an annual report for your Montana LLC, you may be charged a late fee and your LLC may be administratively dissolved.
Can I change the name of my Montana LLC after it’s been formed?
Yes, you can change the name of your Montana LLC by filing an amendment with the Secretary of State.
Can I change the members of my Montana LLC after it’s been formed?
Yes, you can change the members of your Montana LLC by filing an amendment with the Secretary of State.
Do Montana LLCs pay state income tax?
No, Montana LLCs are not subject to state income tax.
How are Montana LLCs taxed?
Montana LLCs are pass-through entities, which means that the income and expenses of the LLC are reported on the personal tax returns of the LLC’s owners.
Can a Montana LLC choose to be taxed as an S-corporation?
Yes, a Montana LLC can elect to be taxed as an S-corporation.
How many members can a Montana LLC have?
A Montana LLC can have one or more members.
Can a Montana LLC be owned by another LLC?
Yes, a Montana LLC can be owned by another LLC.
Can a Montana LLC be owned by a corporation?
Yes, a Montana LLC can be owned by a corporation.
Can a Montana LLC have a foreign owner?
Yes, a Montana LLC can have a foreign owner.
What is the difference between member-managed and manager-managed LLCs in Montana?
In a member-managed LLC, all members have equal control and decision-making power, while in a manager-managed LLC, one or more designated managers control the operations and decisions of the LLC.
Can I convert my sole proprietorship to an LLC in Montana?
Yes, you can convert your sole proprietorship to an LLC in Montana.
Can I dissolve my Montana LLC?
Yes, you can dissolve your Montana LLC by filing Articles of Dissolution with the Secretary of State.
How much does it cost to dissolve a Montana LLC?
The fee for filing Articles of Dissolution in Montana is $15.
What is an LLC in Montana?
An LLC, or Limited Liability Company, is a legal business entity in Montana that provides owners with limited personal liability for the business’s debts and actions.
How do I register my LLC in Montana?
To register your LLC in Montana, you need to file Articles of Organization with the Montana Secretary of State.
How much does it cost to register an LLC in Montana?
It costs $70 to file the Articles of Organization for your Montana LLC.
How long does it take to register my LLC in Montana?
It typically takes 1-2 business days for the Secretary of State to process your Montana LLC filing.
Can I register my LLC online in Montana?
Yes, you can file the Articles of Organization online with the Montana Secretary of State.
Do I need to publish a notice of my LLC formation in Montana?
No, Montana does not require LLCs to publish a notice of their formation.
What is a Registered Agent in Montana?
A Registered Agent is a person or company that accepts legal documents on behalf of your Montana LLC.
Do I need a Registered Agent for my Montana LLC?
Yes, Montana requires all LLCs to have a Registered Agent.
Can I be my own Registered Agent in Montana?
Yes, you can be your own Registered Agent for your Montana LLC as long as you have a physical address in Montana where legal documents can be served.
Can a non-resident form an LLC in Montana?
Yes, non-residents can form an LLC in Montana.
Does Montana have a minimum capital requirement to form an LLC?
No, Montana does not have a minimum capital requirement.
Can my Montana LLC be taxed as an S-Corporation?
Yes, your Montana LLC can choose to be taxed as an S-Corporation by filing Form 2553 with the IRS.
Do I need to get a business license for my Montana LLC?
It depends on the type of business you have and which city/county you are located in. Some cities and counties in Montana require business licenses.
How often do I need to renew my Montana LLC registration?
Montana requires LLCs to file an annual report and pay a $15 fee to renew their registration each year.
Can I change the name of my Montana LLC?
Yes, you can change the name of your Montana LLC by filing an Amended Articles of Organization with the Montana Secretary of State.
Can I add members to my Montana LLC after formation?
Yes, you can add members to your Montana LLC by filing an Amended Articles of Organization with the Montana Secretary of State.
Can I take money out of my Montana LLC as a salary or wage?
Yes, you can take money out of your Montana LLC as a salary or wage if you are actively working in the business.
Can I have a single-member LLC in Montana?
Yes, Montana allows single-member LLCs.
Do I need an Operating Agreement for my Montana LLC?
While not required by law, having an Operating Agreement is recommended for all LLCs in Montana.
Can I file my Montana LLC’s annual report online?
Yes, Montana LLC annual reports can be filed online with the Montana Secretary of State.
Can I form a Series LLC in Montana?
No, Montana does not allow for the formation of Series LLCs.
How many members can my LLC have in Montana?
There is no limit to how many members an LLC in Montana can have.
Can I have a foreign LLC in Montana?
Yes, you can register your foreign LLC to do business in Montana by filing an Application for Registration with the Montana Secretary of State.
Does Montana tax LLCs?
Montana taxes LLCs on their profits through the state’s corporate income tax.
Can I convert my Montana LLC into a corporation or vice versa?
Yes, you can convert your Montana LLC into a corporation or vice versa by filing the appropriate paperwork with the Montana Secretary of State.
Can I dissolve my Montana LLC if it is not meeting my needs?
Yes, you can dissolve your Montana LLC by filing Articles of Dissolution with the Montana Secretary of State.
Can I reinstate my Montana LLC if I dissolve it by mistake?
Yes, you can reinstate your Montana LLC by filing an Application for Reinstatement with the Montana Secretary of State. However, there are additional fees and requirements in this case.
What is a Professional LLC in Montana?
A Professional LLC, or PLLC, is a legal business entity for professionals in certain fields, such as lawyers, doctors, and accountants, who want to limit their liability in Montana.
Do I need a lawyer to form my Montana LLC?
No, you do not need a lawyer to form your Montana LLC. However, it is recommended that you seek professional legal advice when forming your business.

Also Read

How Fast Can I Form an LLC in Montana

One of the key factors that can impact the speed of forming an LLC in Montana is the preparation and completeness of the necessary documents. Before beginning the registration process, it is essential to gather all the required information and documentation to ensure a smooth and efficient application process. This may include selecting a business name that complies with Montana’s regulations, drafting an operating agreement, and obtaining any necessary licenses or permits.

Additionally, the method by which you choose to submit your LLC formation documents can also affect the speed of the process. In Montana, you have the option to file your paperwork online, by mail, or in person. Filing online is generally the quickest method, as it allows for immediate submission and processing of your documents. If you choose to file by mail or in person, it may take longer for your documents to be processed and approved.

Another factor that can impact the speed of forming an LLC in Montana is the workload of the state’s filing office. During peak filing seasons or times of high demand, there may be delays in processing applications. It is important to check the current processing times and plan accordingly to avoid any unnecessary delays in forming your LLC.

Furthermore, the complexity of your LLC structure and the number of members involved can also impact the speed of forming an LLC in Montana. If your business has multiple members or a complex ownership structure, it may take longer to draft and finalize the necessary legal documents, such as the operating agreement. Taking the time to carefully plan and organize your business structure can help expedite the formation process.

Overall, while forming an LLC in Montana can be a relatively quick and straightforward process, it is essential to consider the various factors that can impact the speed of the process. By preparing the necessary documents, choosing the most efficient filing method, and understanding the current processing times, entrepreneurs can expedite the formation of their LLC and focus on getting their business up and running.

Conclusion

In conclusion, starting an LLC in Montana is a strategic choice for entrepreneurs seeking a flexible, straightforward business structure with limited liability protection. By following the essential steps, including choosing a business name, filing Articles of Organization, appointing a Registered Agent, creating an Operating Agreement, obtaining an EIN, and securing the necessary licenses and permits, you can successfully establish your LLC. This business structure offers numerous advantages, such as pass-through taxation and ownership flexibility, making it an attractive option for small business owners looking to grow and protect their ventures. As always, consult legal and business professionals for guidance specific to your situation and state requirements.

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