If you're interested in establishing a limited liability company (LLC), you may want to consider opening one in Montana. This Western state is a great place for starting a business because it has low filing files, no sales tax, and no income tax requirements for LLCs.
In 2023, there were 130,563 small businesses in Montana, making up 99.3 percent of businesses within the state. Are you ready to join those numbers? Learn how to start an LLC in Montana.
How to get a Montana LLC in 6 steps
Starting a Montana LLC isn't complicated as long as you complete these simple steps.
Since the application process is entirely online, begin by setting up an account with the Montana Secretary of State Online Filing Portal. While ePass was once the requirement, it has since been decommissioned, and the state now uses Okta, which is a secure login platform.
1. Name your Montana LLC
Before registering your limited liability company with the Montana Secretary of State's Office, you must select an appropriate name for your business that complies with state regulations.
The following are some examples of Montana business naming requirements:
- Your business name must include the words limited liability company, LLC, or L.L.C.
- Your name must be different from an existing business in the state.
- The business name cannot contain words used to name a government agency (i.e., State Department, CIA, FBI, Treasury, etc.)
- Certain restricted words (bank, lawyer, attorney, credit union, etc.) may require additional documentation and licensure paperwork.
To ensure your business name doesn't already exist, conduct a Montana LLC lookup using the Montana Business Name Search tool. This lets you browse and see the names of already registered Montana businesses so that you choose a name that is unique and distinguishable.
If you've picked a compliant business name but you're not ready to register with the state yet, you can reserve the name for 120 days. Fill out the name reservation application with the Secretary of State and pay the $10 filing fee.
2. Choose your registered agent
Montana requires every new business entity to appoint a registered agent. A registered agent is the person or legal entity authorized to oversee legal documents on behalf of your LLC.
Your Montana registered agent must meet the following criteria:
- They must have a physical address in Montana.
- Their address cannot be a P.O. Box.
- They must be at least 18 years old.
- They must be available to accept documents during regular business hours.
When selecting your LLC's registered agent, you can appoint yourself or hire a professional. You can also go with a registered agent service that will manage all your official correspondence. At LegalZoom, we offer affordable and reliable registered agent services.
3. Prepare and file articles of organization
The next step involves filing LLC formation paperwork, known as the articles of organization, with the Montana Secretary of State's office. Once the state approves your articles of organization, they'll send you a certificate confirming your limited liability company's legal status.
To prepare your articles, you'll fill out the form on the Secretary of State's online system and pay the $35 filing fee. You'll include the following information in the articles of organization:
- Your LLC business name
- Your business mailing address
- The name and address of your registered agent
- The names of the LLC's members
- The reason for forming your limited liability company
- The LLC's duration, or time period over which the LLC will exist
- The management structure
- The signature of the person forming the LLC
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4. Create an operating agreement
The next step in the LLC formation process involves drafting an LLC operating agreement. Although Montana does not require your business to create one, having one can benefit your LLC as it can help settle disputes and avoid litigation. Without an LLC operating agreement in place, the courts make determinations based on Montana state law, not necessarily what is in the best interest of the LLC and its members.
When drafting your operating agreement for your Montana LLC, be sure to address the following:
- Name and address of your LLC
- Duration of the LLC
- Name and address of your registered agent
- Purpose of the business
- Montana LLC members and their contributions
- Instructions for dividing profits and losses
- Voting rights and decision-making procedures
- Procedure for admitting new members and exiting members
- Management structure
- Tax structure
- Indemnification and liability clauses
- Dissolution instructions
If you need help drafting your operating agreement, LegalZoom can create one for your LLC.
5. Get an employer identification number and open a business bank account
Now, you're all set to obtain an employer identification number (EIN), also known as a federal tax identification number, from the Internal Revenue Service (IRS). Your Montana LLC will need this nine-digit number when filing taxes, hiring employees, and opening a business bank account.
To acquire your own EIN, submit Form SS-4 online at the IRS website, by mail, or by fax for free (there is no filing fee). Alternatively, if you'd like someone to take care of it for you, use LegalZoom's EIN services to simplify the process.
Once you have your employer identification number squared away, you can open a business bank account. This is an important step to help separate your business assets from your personal assets and establish personal liability protection. Visit your financial institution to open an account in person or apply for one online.
6. Register for state taxes and get business licenses
The next step is to register for state taxes. To get started, create a business income tax account with the Montana Department of Revenue.
Then, you can move on to business licenses and permits. Although Montana does not have a statewide business license requirement, your LLC may still need to obtain local and federal licenses and permits to legally operate. For example, your county may have special permit requirements, or the federal government may have certain occupational licenses required for your specific business operations.
The Montana Department of Revenue has established the eStop Business Licenses Program to help you obtain the necessary business licenses and permits. To learn more about what licenses and permits pertain to your business, use the Montana License Search tool. It's important to note that each license and permit will have its own required fee.
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Now that you've established your business entity in Montana, there are a few more steps to consider to ensure your LLC is in good shape.
Register a domain name
Even if you don't think you'll need a webpage, you might want one down the road. At the very least, you should reserve the option of having one in the future by buying your domain name now. Having a domain name that matches your business name helps establish your online presence, making it easier for your customers to navigate to your website.
After you've purchased a domain name, we recommend signing up for social media platforms, such as LinkedIn and Instagram, with your business name, too.
Obtain a certificate of good standing
Just because Montana doesn't require a certificate of good standing or certificate of existence doesn't mean you shouldn't obtain one. A certificate of good standing is an important document as it proves your Montana LLC is legally registered and allowed to conduct business with the state.
To request one, navigate to the Secretary of State's office online portal and pay the $5 fee.
Consider a foreign LLC
If you want to expand your business to another state, you'll need to establish your business entity with that specific state. Just as you need to submit the articles of organization in Montana to form a domestic limited liability, you'll must file a certificate of authority in that state to form a foreign limited liability company.
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Annual filing requirements for Montana LLCs
Montana requires all businesses to file annual reports. The Montana annual report should include the most up-to-date information about your business entity. To remain in good standing, you must file an annual report by April 15 of each year. If you fail to file by Dec. 1, your LLC will be involuntarily dissolved.
You can submit your Montana annual report online through the Secretary of State's online portal. The filing fee is $20 before the deadline and $35 for late filings.
To finalize your LLC formation, be sure to consider these additional steps:
- Pay taxes
- Apply for a business credit card
- Acquire insurance for your business
- Protect your name and logo with a trademark or service mark
- Determine if you want to register for an assumed business name
The cost of forming an LLC in Montana
The good news is that in Montana, forming an LLC is actually quite affordable. The following are some costs you can expect to pay when forming your Montana LLC.
- Name reservation cost: $10
- Formation cost: $35 to file the articles of organization
- Annual report cost: $20 if filed on time, $35 for late filings
- Certificate of good standing: $5
- Additional costs: Registered agent services, operating agreement drafting services, domain name, licenses, and permits
While the cost of forming your Montana limited liability company may vary depending on what services and licenses you need, the simple cost of establishing your business and filing your annual report on time is just $55.
How to start your Montana LLC with LegalZoom
Forming a Montana LLC isn't rocket science, but there are a lot of moving parts to keep track of. If you want to ensure your business is compliant, turn to our LegalZoom LLC formation services. We'll file articles of organization, acquire an EIN, draft your operating agreement, and more, so you can spend more time focusing on growing your business and less time filing paperwork.
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FAQs
What are the benefits of registering a Montana LLC?
Registering your LLC gives you a legal foundation to conduct business. Many LLC owners choose to establish their small businesses in Montana because the state has affordable formation fees and no income taxes, meaning small businesses are taxed at the individual level rather than the corporate level.
How long does it take to form an LLC in Montana?
After you file your articles of organization, it usually takes the Montana Secretary of State five to six business days to establish your business.
How do I correct filing errors in Montana?
To correct a filing error, submit the Articles of Amendment for Domestic Limited Liability Company form to the Secretary of State's office and pay the $15 filing fee.
How do I dissolve an LLC in Montana?
When you're ready to dissolve your Montana LLC, you can file the Articles of Termination form with the Secretary of State. There is no filing fee.
However, if you'd like some more guidance when dissolving your business, check out LegalZoom's dissolution services.
Rudri Bhatt Patel contributed to this article.
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