Having a Montana LLC is a better and cheaper option than having other business structures. A limited liability company (LLC) reduces the owners’ personal liability and protects their personal assets. One can start an LLC in two ways, domestic LLCs or foreign LLCs (LLCs in more than one state). By following some basic steps, you can easily form an LLC in Montana.
On this page, you’ll learn about the following:
- How to Start an LLC in Montana
- After Starting your Montana LLC
- Montana Foreign LLC
- Why an LLC in Montana
- Best Businesses in Montana
- Montana LLC Formation Review
How to Start an LLC in Montana
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. This section gives you a step-by-step guide on how to start an LLC in Montana.
Step 1: Decide a Name for Your LLC
Deciding on a business name is the first step to start an LLC. In Montana, before you name your LLC, it is important to note a few things. Firstly, make sure the name is available to use. If the name is available, then check if the name complies with all the Montana business naming requirements. Once you pass through them, you can successfully name your business.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.
Because of this, here are some of the major benefits of choosing the best LLC corporate names.
- To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
- After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
- You can only get the EIN number when you have your name registration certificate with you.
Requirements when deciding a name for your LLC
LLC Name Search: A business name search is required to check if the desired name is available or not. If the name is available then the business owner has to fill up a name reservation form and send it to the Secretary of State, Montana. To do the name search, one has to visit the Business Entity Search page on the official Secretary of State website. To reserve your LLC name in Montana, fill up the online form and submit it. The cost of a name reservation is $10. Additional charges may apply to speed up the reservation.
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Step 2: Assign a Registered Agent in Montana
A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will receive significant tax forms, legal forms, formation documents, any internal document, a notice of lawsuits, and other official government correspondence in Montana. Choosing a Montana registered agent for service of process for your LLC is required.
Make sure your registered agents are residents of Montana. It could also be a separate business entity with a permanent business address. Here are the recommended agents and employees for you:
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Note that availing of the services of professional registered agents would be your best option since you are guaranteed that whoever is handling your legal affairs knows their stuff well. You will enjoy peace of mind and focus only on running your business, as the ‘professionals’ take care of all legal matters.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Montana. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years.
Step 3: File Articles of Organization in Montana
A Certificate of Name Reservation is needed to file Articles of Organization, as other states call it. You need to make reports of this certificate with the Montana Secretary of State, which costs $70. You may file them online or by mail.
This Montana Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in Montana, like if it is a member-managed or managers-managed. There is a list of regulations for LLCs with employees. Insurance for employees, working periods for employees, etc are some of the points to be noted before LLCs hire employees.
Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Montana LLC will offer.
How to File Online
Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county. To know more about online filing, visit the Montana Certificate of Formation.
Step 4: Create Your Montana LLC Operating Agreement
A comprehensive operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to an LLC operating agreement Montana does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all your details of business operation. This document would be useful if you decide to dissolve Montana LLC later.
Step 5: Filing a Montana LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes and taxes in general. It is like a Social Security number dedicated to a business’ taxes. The EIN is necessary for any active business or any form of business for that matter.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Before sending the form, ask for EIN Assistant. Enter details of your LLC, and finally complete the form and send it to the address given.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
And that’s all! Congratulation, you are now done with all the necessary steps to form your Montana LLC. If you still haven’t used a professional service from here, I strongly recommend having one to handle the remaining tasks.
After Starting your Montana LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File Montana business permits & licenses
- Get liability for business and professional liability insurance with coverage for employees
- File a Montana LLC annual report or biennial report
- Already existing LLCs that wish to operate in Montana must register as Montana foreign LLC.
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Montana Foreign LLC
To register a Montana foreign LLC, one has to file the foreign LLC formation certificate with the Secretary of State, Montana. Forming a foreign LLC allows you to operate your business in more than one state in the USA as a single business entity. Check Montana Foreign LLC to know more about having a foreign LLC.
Why an LLC in Montana
When a person is thinking of opening an LLC in Montana, then by default, they are choosing to be a part of the best economic zone of the states in terms of business growth. Any business can be leveraged here very well. The main reason for that is the diverse business funding options, like business loans and a reduction in tax liabilities. Moreover, the benefits and incentives offered are lucrative that are attracting many people around. To know in detail the benefits, you should go through the information mentioned below.
New industrial property benefit programs
Under this scheme, the new LLCs that are thinking of starting a Montana LLC in the business will be given a discount of around three percent on the industrial property they want to buy. This will continue till three years which will help in the proper establishment of the company. Companies based in a niche like mining or warehousing in which land requirement is more have been added to the list of industries that are about to benefit from this scheme.
Montana State Small Business Credit Initiative
The MT SSBCI is a credit and lending program that is particularly made for those who want to start an LLC in Montana. All the small businesses that want investment or take a loan for a small period of time will be covered under this scheme by the government of Montana. According to the records under this scheme, a loan of more than $1 million has been given to small business LLC who have started up in the state.
New Industry Credit
When a new industry is opened up in Montana, it is sure that new job opportunities are also credited. Now when you hire new staff, it will directly devote to the better economic status of the state. That is why as a rebate, the government offers back credit of 1 percent to all the new industries of the amount they pay as salary to the employees.
For example, if the employee’s wholesome salary is $500,000, then a return of $5,000 will be given to the industry. This scheme is valid for 3 years after the incorporation or start of operations in the state.
Empowerment Zone Credit
There is some special empowerment zone that is available in Montana LLC. If a person goes and establishes their business in such zones, they are provided with a credit of $500 against the income tax of employees that they have to pay for their employees.
Best Businesses in Montana
Are you willing to form an LLC in Montana? If yes, you must have complete knowledge of Montana’s top industries and their contribution to the state. If you don’t have it, then you must go through the below-mentioned information.
Construction Business and Real Estate Business
The increasing demand and population have also raised the demand for property and construction businesses. With 11.8% of the contribution to the GDP of Montana State, the construction business is considered the best business. This industry is employing around 101,868 jobs in the state. This sector’s revenue generation is $9.1 billion, which is enormous for a small state like Montana.
The fertile land present in Montana State is considered the best agriculture. There are large-sized farms in the state on which barley and wheat are grown. The agricultural products that are exported by the state are wheat, hay, barley, and cattle. Out of 59.7 million acre farms in the state, half are owned by the state.
The agricultural sector generates more than 141,600 jobs in the state, which is the maximum for any other industry. With the help of huge jobs and export businesses, the turnover of the agriculture sector is $6.9 billion.
Health Care Sector
The healthcare sector of the Montana state is providing jobs to around 68,000 people, out of which 1,300 are medical professionals. With the increasing population of the state, the demand for the healthcare sector is increasing continuously. The healthcare sector’s contribution to the industry is around $6.8 billion, which is about 9% of the state’s total GDP.
The small businesses which are most liked and opted by the new-age entrepreneurs in Montana are:-
- Coal exporting business
- Selling medical equipment
- Hotel Business
- Oil and gas-based business
Montana LLC Formation Review
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Montana. Click on the steps in this list to read the full detail.
- Name your Montana LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a registered agent
In Montana, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
If you are a resident of Montana, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $70 (domestic LLC) and $70 (foreign LLC), LLC costs in Montana include $20 for Annual Reports every year. LLCs are liable to pay sales tax of 0% every year
It takes 1 to 5 hours to get a Montana LLC if you file it online.
Every year all the LLC have to submit an Annual Report and pay $20 to the Montana Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens.
Having an LLC is easier than other forms of business. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. On the other side, the formation of LLCs requires less paperwork and fewer legal complexities. If you have any questions, leave a comment below.