A Montana Limited Liability Company (LLC) is a legal business structure that combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship.
This type of business structure can be used to protect your personal assets such as your home, car, and even bank account in the event your business is sued.
An LLC can also be used to operate a business and hold assets such as real estate, vehicles, boats, or aircraft. Forming an limited liability company in Montana is pretty simple and you’ll need to file the Articles of Organization with the Montana Secretary of State to start an limited liability company in Montana. Follow the step-by-step guide below to form an LLC in Montana today and to get your business up and running.
Steps to Start an LLC in Montana in 2023
Step 1: Name your Montana LLC
If you want to start a Montana LLC, you should probably already know what you want to name your LLC business. However, choosing a company name is not only the first and most important step of creating an limited liability company in Montana, but you also need to make sure you choose a name that complies with the Montana naming requirements and is easily searchable by potential clients.
1. Follow the naming guidelines for a Montana LLC:
To form a Missouri LLC, you must choose a name that’s unique and it cannot be too similar to an existing name registered in the Missouri Secretary of State records, and cannot be misleading to the public.
You can check for name availability on the Secretary of State’s business name database and an available name can be reserved for up to 60 days by filing a Name Reservation Request form which can be postal mailed or hand-delivered to the Secretary of State’s office.
- Your company name must include the phrase “limited liability company”, or one of its abbreviations or words: “LLC, L.L.C., Limited, Ltd., Company or Co.”
- Your name cannot include words that could confuse your LLC with a government agency such as FBI, Treasury, State of Department, etc.).
- Restricted words such as Bank, Attorney, University may require additional paperwork and a licensed individual, such as a doctor or a lawyer, to be part of your LLC formation.
- You can read Montanna’s Code of Regulations for a complete list of naming rules in Montana.
2. Is the name available in Montana?
The next thing you want to check is to make sure the name you want isn’t already taken by someone else. You can do this by doing a name search on the State of Montana’s website.
3. Is the URL available?
In the world of internet banking and online transactions, having an online presence will have a big impact on your business. We recommend that you check online to see if your business name is available as a web domain. Even if you don’t plan to create a business website anytime soon, you may want to consider buying the URL to prevent others from acquiring it. This will prevent any future confusion when other people surf the net to find an URL with your company name but with a different business nature.
After registering a domain name, you can also consider setting up a professional email account (@yourcompany.coom).
FAQ: Naming a Montana LLC
What is an LLC?
LLC stands for Limited Liability Company. LLC is a simple business structure that offers business owners more flexibility compared to a traditional corporation while still providing many of the same benefits. An LLC is one of several business structures including sole proprietorship, partnership, and corporation (C corp and S corp).
Step 2: Choose a Registered Agent in Montana
If you’re starting an limited liability company in Montana, you’re required to nominate a Montana registered agent. A registered agent is also known as an agent for service of process in other states.
A registered agent is a person or business entity that is responsible for receiving important tax forms, legal documents, a notice of lawsuits, and official government correspondence on behalf of your business. You can simply think of your registered agent as your business’s point of contact with the state.
A Montana LLC may not serve as its own registered agent for service of process. The registered agent should agree to accept service of process on behalf of the LLC prior to designation. However, the registered agent may be a member, manager, or officer of the LLC, but doesn’t need to be affiliated with the LLC.
There are also a few guidelines that you will need to follow on who you can appoint as the Registered Agent. A Registered Agent must be a full-time resident of Montana or a corporation authorized to conduct business in the state of Montana. You may also elect an individual within the company including yourself to be your LLC’s registered agent.
FAQ: Nominating a Montana Registered Agent
Can I be my own registered agent in Montana?
Yes, You or anyone else in your company can serve as the registered agent for your LLC. However, there are also other requirements that you will need to meet.
Is a professional agent service worth it?
Professional registered agent service is an affordable way for business owners to manage government filings for their Montana LLC. The advantages of using a professional service often significantly outweigh the annual costs.
Step 3: File the Montana LLC Articles of Organization
To register your Montana LLC, you’ll need to file your Articles of Organization with the Montana Secretary of State. The articles must include your Montana LLC name, its purpose, information on how it will be managed, its address, and the name and address of its registered agent. Now is also a good time for you to determine whether your LLC will be member-managed or manager-managed.
Most small multi-member LLCs choose to be managed directly by their members, but LLCs have the option to appoint a manager or a small group of managers to take on the management role in the LLC – somewhat like a board of directors that oversee a corporation. Managers can vote on key issues such as taking out a loan, purchasing real estate, or changing strategic plans.
What you decide should 100 percent be based on your own business and not how other businesses are structured. You may consider these factors when deciding on your business structure:
- Any member can bind the company to obligations and third parties
- For LLCs with a small number of members
- Members are involved in day-to-day operations
- A vote is required for major business decisions
- “Decentralized Management” where the administrative power is equal among all members instead of just one manager.
- A large number of members in the limited liability company
- Members are not involved in day-to-day operations
- Allocates administrative power to one or more specific managers instead of all the members.
- Does not require all members to vote on business decisions, just the specific managers.
FILE THE ARTICLES OF ORGANIZATION
File Online with the State of Montana
Fee: $70 payable to the Montana Secretary of State (Non-refundable)
Do note that there’s an additional $50 fee for each series member named in a series LLC.
Instructions: Log on, create an ePass, fill out the form, then select “form a domestic limited liability company” on your dashboard.
FAQ: Filing Montana LLC Documents
What is the processing time to form my Montana LLC?
You can expect your Montana LLC to take approximately 1 to 5 hours to process online.
What is the difference between a domestic Montana LLC and a foreign LLC?
An LLC is commonly referred to as a “domestic LLC” when it conducts business in the same state where it was formed. A foreign LLC must be formed when an existing LLC wishes to expand its business to another state.
How much does it cost to start a Montana LLC?
It costs $70 to start an limited liability company in Montana.
Step 4: Create a Montana LLC Operating Agreement
Although an operating agreement is not required for an limited liability company in Montana, it’s a good practice and highly recommended for a Montana LLC to have one. An operating agreement is a legal document that outlines the ownership as well as the operating procedures of an LLC.
Operating agreements are very important as a comprehensive agreement will ensure that all business owners are on the same page and will help to reduce the risk of future conflict.
FAQ: Creating a Montana LLC Operating Agreement
Do I need to file my operating agreement with the state of Montana?
No, you do not need to file your LLC’s operating agreement as it’s an internal document that you should have for future reference. However, some states do legally require LLCs to have an operating agreement in place.
Step 5: Get a Missouri LLC EIN
An Employer Identification Number (EIN) is also known as the Federal Employer Identification Number (FEIN), or Federal Tax Identification Number (FTIN).
This is a nine-digit number issued by the Internal Revenue System (IRS); an Employer ID Number is used to identify a business entity and keep track of all the business’ tax reporting. It can essentially be considered as a Social Security number (SSN) for the company.
You may wonder why you need an EIN. An EIN number is required for the following:
- To open a business bank account for the company
- For Federal and State tax purposes
- To hire employees for the company
Take note that sole proprietorships are required to get a new EIN when converting to an LLC. An EIN can be obtained from the IRS free of charge by any of the business owners after forming the company. This process can also be done online or by mail.
GET AN EIN
Option 1: Request an EIN from the IRS
Option 2: Apply for an EIN by Mail or Fax
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
FAQ: Getting a Montana LLC EIN
How do I get an EIN if I don’t have a social security number?
You don’t need a social security number (SSN) to get an EIN for your LLC in Montana. You can simply fill out IRS Form SS-4 and leave section 7b blank. Give the IRS a call at (267) 941-1099 to complete your application.
What tax structure should I choose for my LLC?
When you obtain an EIN, you will be informed of the different tax classification options available for your company. Most LLCs elect the default tax status.
However, some LLCs can reduce their federal tax obligation by choosing the S corporation status. For this, we recommend consulting with a local accountant to find out which option is the best for you.
Do I need an EIN for my LLC?
All LLCs with employees, or any LLC with more than one member, must have an EIN. This is a requirement by the IRS.
Important Steps After Forming your LLC in Montana
Separate Your Personal and Business Assets
Your personal assets like your home, car, and other valuables are at risk in the event your Missouri LLC gets sued if your personal and business accounts are mixed. In business law, this is often referred to as piercing the corporate veil. Here are a few steps you can take to protect your Montana LLC.
1. Opening a business bank account
Separating your personal assets from your company’s assets is an important step that is necessary for personal asset protection. It also makes accounting and tax filing easier.
2. Getting a business credit card
This is also a good habit to practice as it helps you separate personal and business expenses. This can also be used to build your company’s credit history, which can be useful to raise capital.
3. Hiring a business accountant
Yes, you certainly can handle your business books yourself. However, it is also a good idea to consider hiring a business accountant as they are experts in this field.
They will help prevent your business from overpaying on taxes while helping you avoid penalties, fines, and other costly tax errors that you might miss out on.
Getting an accountant also makes bookkeeping and payroll easier, leaving you with more time to focus on plans and strategies to grow your business. They can also help you manage your business funding more effectively such as discovering areas of unforeseen loss or extra profit.
Get Business Insurance for your LLC in Montana
Getting business insurance is just as important as getting personal insurance. Business insurance helps you manage risk and focus on growing your LLC in Montana. The most common types of business insurance available include:
General Liability Insurance – This is a pretty broad insurance policy that protects your business from lawsuits. Most small businesses will get general liability insurance.
Professional Liability Insurance – This is an insurance that’s catered for professional service providers such as consultants, accountants, etc that covers claims of malpractice and other business errors.
Workers’ Compensation Insurance – This is a type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths. Businesses with one or more employees, excluding LLC members and corporate officers in Montana, are required by law to have workers’ compensation insurance.
Create Your Website
In a world of digitalization, creating a website is a big step towards legitimizing your business. Almost every business will need a website now. Even if you think that your business is too small or if you’re focused on an offline industry, you could still be potentially missing out on a large percentage of customers and revenue simply because you don’t have a website.
Some business owners may fear that creating a business website is out of their reach since they do not have any website-building experience.
While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that make the life of small business owners much simpler!
Here are a few main reasons why you should seriously consider building your own business website:
- All legitimate businesses have websites. The size or industry of your business does not matter when it comes to setting up your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles simply do not act as a replacement for a complete business website that you own and control.
- There are many website builder tools online like GoDaddy Website Builder that have made it their mission to create a website extremely simple. With this, you don’t even need to worry about hiring a web developer or designer just to create a website you can be proud of.
Send Out a Press Release
Though it’s not a requirement in the Montana Secretary of State to form your LLC, press releases are among the easiest and best ways to promote your business. They’re also one of the most cost-effective strategies that provide the following benefits:
- Provides publicity
- Establish your brand presence on the web
- Improves your website’s SEO, thus driving more customers to your website
- A one-time cost in terms of effort and money
- Have long-lasting benefits
- Keep your Company Compliant
Montana LLC Business Permits & Licenses
Does my Montana LLC need business licenses and permits?
To operate an LLC in Montana, you must comply with federal, state, and local government regulations. If you’re opening a restaurant, you’re likely to have health permits, building permits, signage permits, etc.
The details of business licenses and permits will vary from state to state. So you need to make sure to read carefully. Don’t be surprised if there are short classes required as well.
Fees for various business licenses and permits will vary depending on what sort of license you are seeking to obtain.
Below are a few methods or easy ways you can obtain necessary Montana business licenses and permits for your LLC. Alternatively, you can also hire a professional service to do it for you
- Federal: Use the U.S. Small Business Administration (SBA) guide to get federal business licenses and permits.
- State: Apply for or learn more about licenses, permits, and registration with Missouri’s Business Portal.
- Local: Contact your local county clerk and ask about local business licenses and permits.
It is recommended for first-time entrepreneurs to consider having professional service research your business’s licensing requirements.
Montana LLC Tax Filing Requirements
Depending on the nature of your business, you may be required to register for one or more forms of state tax. Here are the types of tax that you may encounter:
Montana Sales Tax
Montana is one of the five states in the United States of America that does not impose a sales tax on taxable goods or services. Sales tax is also known as “Sales and Use Tax” is a tax levied by states, counties, and municipalities on business transactions that involve the exchange of certain taxable goods or services.
Montana Employer Taxes
If your business involves hiring employees, you will need to register for Unemployment Insurance Tax through the Montana Department of Labor & Industry. You will also need to sign up for Employee Withholding Tax with the Montana Department of Revenue.
Federal LLC Tax Filing Requirements
Most LLCs will need to report their income to the IRS each year. And you can report them via:
- Form 1065 Partnership Return (most multi-member LLCs use this form)
- Form 1040 Schedule C (most single-member LLCs use this form)
Just to note, how you decide to pay yourself as the company owner will also play an important role in your federal taxes.
File Your Montana LLC Annual Report
Montana requires LLCs to file an annual report with the Montana Secretary of State.
FILE YOUR ANNUAL REPORT
File Online with the Montana Secretary of State
Fee: $20 (non-refundable)
Due Date: April 15th
Late Filings: Montana fines LLCs $15 for late filings. In addition, Montana may even choose to dissolve the LLCs at any time after December 1 of each year for failure to file an annual report.
Avoid Automatic Dissolution
LLC in Montana may face fines and even automatic dissolution if they miss one or more state filings. When this happens, the LLC owners risk the loss of limited liability protection.
This is where a quality registered agent service can help LLC in Missouri to prevent this outcome by notifying you of upcoming filing deadlines and even submitting the necessary reports on your behalf for an additional fee.
Hiring Employees in Montana
If you have an LLC in Montana and plan on hiring employees, you need to stay compliant with the law by following these steps:
- Verify that new employees are able to work in the US with a valid working pass
- Report employees as “new hires” to the State
- Provide workers’ compensation insurance for employees
- Withhold employee taxes
- Print compliance posters and place them in visible areas of your workspace
FAQ [Hiring Employees in Montana]
What is the minimum wage in Montana?
The statewide minimum wage in Missouri is $8.75per hour.
How often do I need to pay employees?
In Montana, employee wages are required to be paid semi-monthly, unless you establish otherwise.
Frequently Asked Questions (FAQs)
Should I form an LLC?
If you’re just started your business or have been operating as a sole proprietor, you should consider starting an LLC in Montana. LLCs limit an owner’s personal liability for business debts and lawsuits and offer a lot of flexibility when it comes to business ownership, management, and taxation.
How do I know if my LLC name is available?
LLCs in Montana needs to have a unique name that is distinguishable from the names of other existing businesses on file. You can conduct a name search for free on the Business Search on the Montana Secretary of State website to make sure your proposed name is still available.
How much does LLC formation cost in Montana?
The Montana Secretary of State charges a $70 filing fee for the article of organization online. Filing these documents on your own is often the cheapest option, but completing all of the forms and filing them yourself can quickly get complicated.
Hiring a lawyer is another option but that will cost you hundreds, if not thousands of dollars in the process. Another option is to hire a registered agent service to help you with all the paperwork and filings for you.
Do I need an operating agreement for my LLC in Montana?
Montana state does not require LLCs to have operating agreements, but it is highly advisable to have one as the operating agreement will help protect your limited liability status, prevent financial and managerial misunderstandings, and ensure that you decide on the rules governing your business instead of state law.
Can a foreign LLC do business in Montana?
All LLCs organized outside of the Montana State must register with the Montana Secretary of state to conduct business in Montana.
Can I form a single-member LLC in Montana?
For most formation purposes, a Montana single-member LLC is considered the same as a multi-member LLC with the same steps required to start an LLC as those listed above.
How do I dissolve an LLC when I’m done?
If you reach a point where it is time to close your business and cease all operations, then you will want to properly dissolve your LLC to limit your liability for lawsuits and government fees.
Do I need to get a DBA or Fictitious Name for my business?
Most LLCs do not need a DBA since the name of the LLC can already serve as your company’s brand name and you can even accept checks and other payments under that name as well.
However, you may also wish to register a DBA if you would like to conduct business under another name.
Starting a business correctly doesn’t have to be difficult. With over 15 years of experience consulting new businesses and start ups, Matthew is probably the best person to help you set a strong foundation for your business.