Setting up a business is a serious decision, and it might seem quite a tricky task for a common person at first sight. Yet, things are not as bad as they seem especially if you have a good DIY guide at hand.
In this article, you’ll find detailed info on how to start an LLC in the state of Montana. Along with step-by-step instructions and all associated LLC costs, you’ll be given helpful advice and tips on how to complete the whole process fast and with minimum effort from your side. At the same time, if initiating a limited liability company in Montana by yourself looks too intimidating to you, you can always resort to a professional legal service to help. And if you choose a DIY route, keep on reading.
Name Your Montana LLC
- Name Your Montana LLC
- Designate a Montana Registered Agent
- Draw up and File the Articles of Organization
- Obtain an EIN
- Write Down an LLC Operating Agreement
- Maintain Your LLC Business in Montana
- LLC Formation Services: Valuable Legal Help
While creativity is welcomed when naming your business, there are specific state regulations to follow for your company to lawfully operate in Montana. Thus, before inventing the company name, check Section 44.5.131 of Montana’s Administrative Rules outlining what makes a Montana business name distinguishable. The main ones are:
- Use the entity type identifier:
- Limited Liability Company;
- Limited Liability Co.
Thus, while the entity type identifier (such as LLC and other appropriate words and abbreviations) is a must, there are some minor elements that won’t make the company name unique. They are the following:
- The articles “a,” “an,” or “the”;
- Punctuation marks;
- Business type identifiers like LLC or Ltd;
- Special characters like @, #, $, and %;
- Arabic vs. Roman numerals (4 vs. IV);
- Singular vs. plural nouns;
- Find out core words that make your chosen name visually distinct in the Secretary of State’s records from other existing Montana business names.
Once you come up with the idea, do a name search via an official Montana Secretary of State’s website that will track the registered names database. If your chosen name is available and needs no identifications, you can reserve an LLC name (at quite a fair cost). Though this move is optional, it will put your business name on hold for about 120 days until you are ready to file the Articles of Organization. At this stage, we also recommend booking a domain name as well that will be of great use once the formation process is finished.
- The name must not include words that can confuse people, alluding to the company’s connection with the state. In addition, the use of such words as “university,” “insurance,” etc. requires a license and a licensed person on the staff.
Designate a Montana Registered Agent
Running LLCs in the US calls for appointing a registered agent that will act as an intermediary and maintain the due level of communication between the business entity and the state. It’s an obligatory requirement for any limited liability company, no matter the state. So, if you are going to conduct business in Montana, you should stick to this rule too.
- Maintenance requirements, etc.
Though a registered agent is compulsory for all Montana LLCs, it’s very convenient too, especially if your physical office is in some other state and you need a legal company representative in Montana.
To designate a company agent, you just need to mention them in your Articles of Organization that will become a part of your business public records after registration. Basically, you have two options to go for and select either an individual or legal entity to be your Montana registered agent.
Individual Registered Agent
By and large, any Montana resident with a physical presence in the state can function as a registered agent. More than that, you don’t have to choose an experienced professional for that. Your registered agent can be:
- Tax specialist;
- Financial expert;
- You, your friends or family members;
Registered Agent Service
Today, you can find a lot of companies providing professional registered agent services. Along with that, they can also help you with your formation process overall. In fact, they will do all the work for you. And their assistance won’t cost you a fortune. In return, though, you’ll get complete peace of mind about all organizational issues being handled with due diligence. Our best recommendations here are Northwest Registered Agent (the name speaks for itself) and IncFile (offering amazing flexibility and a wide range of add-ons).
Draw up and File the Articles of Organization
Once you’ve ticked a business name and registered agent boxes on your formation list, it’s time to write down the Articles of Organization and file it with the Secretary of State. This is a key LLC formation document that serves as a sort of your company passport containing such important issues:
- LLC’s name;
- Mailing address of LLC’s principal office;
- Registered agent’s name;
- Managerial and ownership organization;
- Name and address of at least one member or manager;
- Signature of applicant, etc.
Submitting Articles of Organization to the state finalizes official company registration and to get an LLC in Montana, you should submit the document online. No paper filing is accepted in this state but actually, online application is a breeze. You can do it in several easy steps via the ePass Montana filing portal by following helpful tips.
Speaking of the filing cost, in Montana, you’ll have to pay a state fee of $70 to get your formation docs processed within about 5 working days. In case you need it urgently, by paying an extra $20 or $100, you can cut down the turnaround time to a single day or an hour accordingly.
As soon as your Articles of Organization are accepted by the Secretary of State, your business is considered legally launched.
Obtain an EIN
Everyone pays taxes, right? LLCs are not an exception. EIN or an Employer Identification Number is your business identifier for tax purposes. Though LLCs don’t pay federal taxes unless they are qualified as corporations, most companies will need an EIN to pay state taxes, lawfully hire employers, and even open a bank account doing business in Montana or any other state.
The only reason why you might skip securing an EIN is when you are the only LLC member with no employees. And if you are still not sure whether you should obtain an EIN, you can check it on this page.
To get an EIN when opening a Montana LLC, you need to file an application to the IRS. You can do it:
Submit an online form on the IRS website to get your number within mere minutes.
You can send a paper version via fax number (855) 641-6935 to receive your number within 4 working days. Just print out the Form SS-4 to be filled.
In this case, be ready to receive a response within about a month. Just send a paper Form SS-4 form via mail to the address:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
Whatever option you choose, there will be no filing fee. Taking this into account, online filing is obviously the easiest and fastest way to follow.
Write Down an LLC Operating Agreement
In most states, an Operating Agreement is not a must and to commence an LLC in Montana, you don’t have to draft it as well. At the same time, having it at hand will be of great use when running your business. For a limited liability company, an Operating Agreement is a sort of internal company guidebook that regulates the company operation at all levels:
- Outlays the managing rules;
- Describes the voting structure;
- Gives the opportunity to avoid Montana default laws, which are made for a wide range of businesses and do not take into account their individual peculiarities, etc.;
- Prevents possible managerial conflicts by determining the rights and responsibilities of the participants;
- Separates business entity finances from your personal assets;
- Creates a trustworthy company image for governmental authorities and private financial organizations.
Therefore, whether you are a sole LLC member or work with a partner, running an LLC with an Operating Agreement is a safer path.
When it comes to making up an Operating Agreement in Montana, you can either draft it on your own or hire a specialist for that. To get a free Operating Agreement, check for online templates available in numbers.
Besides, many LLC services such as ZenBusiness, for example, make Operating Agreement a free add-on to their formation packages. In the meantime, if you are a newbie and not sure you’ll cope with the task on your own, an attorney could write this document for you. This way, you’ll obtain a customized document created with an eye on your business needs and state laws.
Maintain Your LLC Business in Montana
By registering an LLC, you get a solid legal base for running your business in a lawful manner. Yet, it’s only a starting point and a part of success. To maintain your company’s operation, you need to keep it in compliance with the state laws and meet common maintenance requirements. For this purpose, below, we provide information on some other steps you might need to take to duly operate your business.
Reports and Taxes
Coming down to the taxes in Montana, they are provided at 3 levels:
- Federal: More often than not, LLCs do not pay federal income tax because they are treated as “pass-through” tax units. This means that business profits and losses pass through the company to its owners, who put them on personal tax returns and Schedule C. However, if the owners want, they can choose a corporate LLC tax structure under which the company will file its own return. Besides, some single-owner LLCs are required to send an annual Montana Disregarded Entity Information Return to be exempted from federal taxes;
- State: As for State LLC Taxes, the general rule is that LLCs are not subject to income tax. The good news also is that there is no “franchise” or “privilege” tax in Montana. Note that Single member LLC owners may be required to file an Information Return each year. Click “learn more” to see if your company is on this list;
- Local: Some cities, counties and municipalities impose taxes on LLCs operating within their areas. Visit the local government’s website for more information on this.
Standard tax payments aside, there are added LLC taxes in Montana you might have to pay, depending on your business structure. Those are a Withholding Tax and Unemployment Insurance Tax, must be paid by registering with the Montana Department of Revenue online, for hired workers and some local taxes you can discover on the local government’s website. In addition, there is no Sales Tax or Use Tax in this state.
Permits and Licenses
Subject to the type of business you establish, you may need some business licenses and permits to eligibly run your Montana LLC. To keep up with local business requirements and find out if your company needs any license, visit Montana’s Small Business Development Center’s web page. On top of that, it’s advisable to contact the city or county government for any area-specific licenses.
LLC Bank Account
Think it’s redundant and plan to run an LLC in Montana using your personal bank account? It’s not the best idea overall, though a viable one. It can result in confusion when distinguishing between business and personal transactions for tax payments and will be misleading for the records on the company revenues.
Opening a business account is a much better alternative that will ensure your personal asset protection and differentiate your company as an independent entity both legally and financially.
In addition to separating business and personal transactions to protect your LLC status, opening a bank account provides a number of additional benefits. It simplifies bookkeeping, makes it easier to file Montana LLC taxes and expands your ability to raise financing.
It is easy to get a commercial bank account. After setting up an LLC in Montana, all you have to do is go to any local bank branch and provide the following documents:
- LLC’s EIN;
- A copy of the Articles of Organization;
- Operating agreement.
LLC Formation Services: Valuable Legal Help
Starting an LLC is a multi-stage process that needs close attention, scrupulousness, and time. With that, it is still feasible and you can do it yourself. However, if you are eager to delegate that work to somebody else, LLC formation services will come to help. They’ll handle all preparation and formation stages from naming your LLC to providing a free registered agent to filing your LLC papers online. On top of that, many legal providers also offer solid support in further LLC maintenance to let you focus on business development without stuffing your head with legal routines. Here, you’ll find the 7 best LLC services we swear for.