How to Start an LLC in Montana: If you’re looking to start a Montana LLC for $0, you’ve come to the right page. Setting up an LLC is easy and cost-effective. To form an LLC, you must follow a few steps that include naming your LLC, hiring a registered agent, filing your formation documents, doing the operating agreement, and finally obtaining the EIN. You can easily set up your LLC for free in Montana. However, you must pay the mandatory state filing fee. These fees and charges can be tax deductible, making the LLC formation cost $0.
On this page, You’ll find all the steps that must be taken to ensure that your Montana LLC has been correctly formed. We recommend you read the whole article very carefully, word by word, don’t miss anything 🙂
On this page, you’ll learn about the following:
- How to Start an LLC in Montana
- After Starting Your Montana LLC
- Montana Foreign LLC
- Montana LLC Formation Review
How to Start an LLC in Montana
An LLC (aka 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. For an LLC, members’ personal assets are not affected by business debts. However, in some cases, if the LLC is sued for business debts, courts might pierce the corporate veil and use the owner’s personal assets to meet their corporate liabilities.
If you wish to start an LLC, you must file your Articles of Organization with the State and pay a filing fee of $70. While it’s the most important step, it’s not the only one. There are 4 other crucial steps to follow to get your LLC formed in Montana. Below mentioned all 5 steps that explain everything you need to do to start a Montana LLC in 2022. Let’s get started! You can always hire a professional LLC formation service in Montana to set up your LLC instead of doing it alone; a Pro service will ensure everything is done properly.
Step 1: Decide a Name for Your Montana LLC
The first step while forming a limited liability company in Montana is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
LLC Naming Guidelines in Montana
There are a few specific requirements all the LLCs in Montana have to follow while naming their Company. Some of the most important requirements are as follows:
- Your business name should be available, and no other existing business in Montana can have the same name. TailorBrands offers unlimited business name searches at $0.
- “Limited Liability Company”, “Limited Liability”, “LC”, “L.C.”, “Ltd”, “LLC”, and “L.L.C.” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Montana State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
|Important Links –|
|Montana Business Entity Search – Online Name Search|
Name Reservation Form – Online
Montana LLC Name Search – Instructions
Reserve Business Name for Future
If you do not wish to file your LLC right now, but want to hold the name you have decided, then you can reserve your LLC name for 120 days. To keep the name, you must file a name reservation application and pay $10 (Expedited Fee: $20 within 24 hours of filing, $100 within 1-hour filing) to reserve your name with the Montana Secretary of State.
Doing Business As (DBA) or Trade Name
Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the Montana Secretary of State by submitting an Application to Register Assumed Business Name in Montana along with the filing fee of $20.
Recommended: You can do name search, get company logo, business domain, website, emails, and a lot more in one place by hiring a professional service. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
Apart from LLC formation, TailorBrands offer DIY website templates and incredible logo designs at a very reasonable price. If you plan to get a website, then it is wise to have a “.com” domain for your business, but these days you can also use other TLDs like “.io”, “.company”, “.xyz,” etc. Here you can get everything you need for your business in one dashboard.
It is not legally mandatory to use the word LLC in your domain name or email. If you want, you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Registered Agent in Montana
The second step to forming an LLC in Montana is to appoint a Registered Agent. A registered agent is a person or business entity working on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Montana. Hence, hiring a competent Montana Registered Agent for your LLC is necessary.
Make sure your registered agent is a resident of Montana or has a physical street address. This address will be used as the principal address of your LLC to receive any legal documents. Most LLC formation companies also provide registered agent services. Below are two great LLC formation services; even if you buy their cheapest plan (normally $49/year), you also get registered agent service and other services at a very reasonable price.
These two are our top recommendations for registered agent service, as they are competent and authorized to conduct business in Montana. Some LLC formation services also offer standalone Montana registered agent services. You can purchase only Registered Agent services without purchasing any other LLC formation services. This standalone service might become handy if you are doing it yourself and don’t want to disclose your home address or you don’t want to pierce the corporate veil.
A person above 18 years of age and has a physical address in the state of Montana can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One is responsible for handling all the legal documents on the LLCs behalf.
Yes, you can be your own registered agent for service of process if you are a resident of the state of Montana and you are above 18 years of age. To become a registered agent, you must have the authority to conduct any type of business in Montana.
There are a few reasons why you shouldn’t be your own registered agent. The address of the registered agent is used to communicate with the SOS or for any legal activities. If you are your own registered agent, you might have to upload your personal address to the public forum. Besides, the registered agent must be at the address during business hours. It won’t be easy for you as you also have to take care of other things in your LLC. Hence, it is wiser to appoint a separate entity as your registered agent.
If an LLC is sued in Montana, in some cases, courts might decide to lift the corporate veil, which means the owners of the LLC will be personally liable for their business debts. They might have to forgo their personal assets to repay their business debts. This is called piercing the corporate veil, where personal and business assets are not separated anymore. Your personal assets can be protected if you have enough capital and all your LLC documents are properly filed.
Step 3: File Articles of Organization in Montana
The third and most important step in forming an LLC is to file the Certificate of Formation. This Montana Articles of Organization is a legal document needed to officially register your business with the Secretary of State. It costs $70 to file your formation certificate in Montana. (Read more on LLC cost in Montana).
The articles of organization include details like the name of the LLC, the registered agent’s name, address, employees’ details, and the company’s structure (member-managed or manager-managed). Before hiring employees in Montana LLC, one should know about the rules and regulations thoroughly. Also if you are expanding your existing business (an LLC) in other states to Montana, you must register as a Montana Foreign LLC.
How to File Online
Go to the Secretary of State Online Service. You will get the online service page. If you are already a user, click on the “log in to EPass Account” option and log in with your credentials. If you’re not subscribed, then you can create your account by clicking on the “Online Filing” button below. Read more about the Montana Articles of Organization for online registration.
Processing Time: Normally, it takes around 5-6 business hours (approx) to get your LLC formed in Montana. With an additional cost, you can get expedited filing as well. However, the document processing time can be changed due to various factors.
Recommended: Online LLC Formation service can provide all these documents way faster than usual time with lifetime customer support and 100% accuracy. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
Every LLC owner has to pay the filing fees to register their business in Montana. This fee is mandatory but also tax deductible. If you’re doing it yourself (filing on your own), it will not cost you any additional service fee. However, it is not feasible to do that as the DIY process might be delayed, complicated, and messy, especially if you’re a novice entrepreneur. Hence, it is recommended to get professional guidance to get your LLC formed in Montana.
Step 4: Create Your LLC Operating Agreement in Montana
Moving on to the fourth step, filing your operating agreement. An operating agreement is an internal 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 filing a Montana LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation that helps in taking future business decisions, especially if you decide to dissolve Montana LLC later. Hence, having an operating agreement may not be necessary, but it is surely ideal. You can get the operating agreement guide to know how to create it.
Recommended: You can get a professionally made operating agreement for very less cost with TailorBrands. You don’t need to worry about drafting it as they will take care of it on your behalf. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
The operating agreement draft can be created for free if you don’t hire a professional. However, there is an advantage to appointing a proficient person/service. You will get a businesslike quality operating agreement at a very cheap fee, which will help you in the future. Hiring a professional service means you can sleep well at night 🙂
Step 5: Filing an LLC EIN in Montana
The Employer Identification Number or EIN is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business, for that matter.
EIN is needed when the LLC hires employees. Hiring employees in Montana LLC requires following specific rules and regulations. On the other side, EIN for Montana foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN), one must fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally, complete the form and send it to the address given. You can also get an EIN Assistant to help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Recommended: This hassle will be reduced when you hire an LLC formation service. They take care of obtaining EIN and all other things for your LLC. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
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.
Congratulation, you are now done with all the necessary steps to form your Limited Liability Company in Montana. If you do it yourself, it should take you a long time to understand and do all the steps properly.
However, if you use TailorBrands, it should be way faster. You will always have a live chat option and phone support with experts for any help you need. Their worry-free service will make things easier for you.
After Starting Your Montana LLC
After forming your LLC, there are still some things that you will need. The most important thing is to separate your business and personal assets. LLCs have limited liability protection that protects your personal assets from business liability. This is called a corporate veil. However, the corporate veil can be lifted or pierced by the court if the LLC is sued. In that case, the owners of the LLC become personally liable for their corporate debts. A few things like appointing a legit registered agent, having enough capital, and filing all the major documents with the state can save the LLCs from being pierced into the corporate veil.
Apart from that, there are a few things you need to take note of,
- Get a company business bank account.
- File Montana business permits & licenses
- Get general liability insurance and professional liability insurance with coverage for employees.
- File a Montana LLC annual report or biennial report
This page has provided you with basic 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.
Cost of Starting an LLC in the State of Montana
LLCs can be formed for $0. Apart from the mandatory state filing fees, you don’t have to bear additional service charges if you do it yourself. Following are the fees and taxes LLCs in Montana must pay to register and run a business in the state. Forming an LLC is no doubt cost-effective compared to other business structures. However, the fees and charges (tax-deductible) that you must pay to the state, such as name reservation fee, name filing fee, LLC filing fee, and Franchise Tax & Sales Tax (If applicable). Here are the main fees and taxes you must pay while forming your limited liability company in Montana,
|Fees/Tax||Amount to be Paid|
|Name Reservation Fee (online)||$10|
|Articles of Organization Fee||$70|
|LLC Annual Fee||$20|
In Montana, an LLC name reservation is not mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, you can do that online. Your LLC name will be reserved for 120 days without registering your LLC. It can be done by paying $10. It cannot be renewed.
In Montana, an Annual Report has to be produced every year. It costs $20. Also, the State of Montana does not require to pay any sales tax. Read our guide on LLC costs in Montana for more information.
Montana Foreign LLC
If you are interested in forming a Foreign LLC in the state of Montana, then you need to file the Certificate of Foreign LLC to the Montana Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents, like the Certificate of Good Standing, etc., to the Montana SOS to form your foreign LLC in the state of Montana. To know more in detail, check out our guide on Montana Foreign LLC.
Reasons to Start an LLC in Montana
Montana is one of the most demanding states when it comes to setting up an LLC. Especially for startups and self-employed individuals, there are various business funding options and fewer tax liabilities. Business owners do not have to pay any additional taxes to start an LLC. Owners/members are liable to pay federal taxes and personal taxes. Read more on Montana’s classification of LLC tax. Other than tax benefits, a few types of businesses, like tribal businesses or woman-owned businesses, get incentives to encourage their successful business in Montana.
Montana is one of those states where a first-time entrepreneur gets a lot of advantages. Not only first-time entrepreneurs but woman-owned businesses, start-ups, and small businesses can get loans easily. Also, it is important to get a business credit card if you’re setting up a business. It helps you to up-to-date your business credit score. In Montana, it is easy to get all of these for any small or medium LLC.
New industrial property benefit programs
Under this scheme, the new LLCs that are thinking of starting an LLC in the business will be given a discount of around three percent on the industrial property they want to buy. This will continue for 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 in Montana that is particularly made for those who want to start an LLC. 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 LLCs that 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 for an 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
If you’re starting your LLC in the state of Montana, 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. Get a professional Registered Agent from LLC formation services to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming a Limited Liability Company in Montana. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in Montana but something encouraged when you start an LLC to avoid future conflicts.
- 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.
Things to Consider While Starting Your Montana LLC
This article has explained almost all the essential steps to forming a Montana LLC. However, there are a few more things one has to consider when setting up their business. The most common yet important thing is a solid business plan. Before you register your LLC, make sure you have a business plan that includes everything related to your company and the nature of your business.
After drafting your plan, it is time to give a proper name to your LLC. You can go to the business name search page on the official government agency website to search for the name availability. If you hire a company that provides professional services, you might get the business name reservation service with their LLC formation packages. You can get the names available, locations, and LLC dissolutions (as in if there is any LLC that is already dissolved and the name is available or not). You will get a list of naming options if you are using any professional service. They help you decide on a suitable name.
After the name, when you appoint a registered agent, make sure he/she is available during working hours on business days at the registered agent address. LLCs with employees need more official government documents, like coverage for employees, to be filed than LLCs without employees. The registered agent will be responsible for handling such paperwork. Apart from this, you need to check with banking payments, client payments, regular withholding payments, and other types of payments once your business is set.
One of the biggest business challenges is the tax burden. If you fail to comply with the tax requirements, then it can lead to heavy penalties. Hence, your business credit score will be compromised. It is important to estimate business finances at tax time and update the business tax accounts. LLCs tax flexibility is something that can save a lot of your money. At the time of business filing, you can choose from the tax classification options. So, it will make your tax filing easy. Tax classification options are available for all LLC owners at the time of registering your formation documents. Depending on that, your tax requirements will be fulfilled. LLCs have to file personal tax returns and pay federal income taxes based on their personal income. There is no direct business tax on business income to be paid.
There are some important business accounts, such as business accounting tools, business accounting software, and other tools to manage business finances needed to check all types of business expenses. Montana is one of the states where LLCs have flexible rules to get business funding to cover business expenses.
The next thing you need is business licenses to conduct business with ease. It depends on the type of product or service you’re selling. All legitimate businesses need to have licenses. Before applying for any license, make sure to get all details of business licenses, including the required fees for business licenses. This must be included in your business formation plan.
After that, business insurance must be required. There are business insurance companies that offer various types of insurance to support your LLC. You can explore all and hire the best-fitted business insurance provider for your company. With the best business insurance provider, you will be able to do your business with ease. Just like the details of business licenses, it is mandatory to check all the details of your business insurance to avoid any business errors. Business insurance companies provide all types of insurance, however, as your LLC is a simple business structure, you might not need many coverages.
You can set up your LLC for free if you don’t hire any professionals. On the other hand, if you hire a professional service, matters like late filings or delays in tax filing will not take place. You will not miss government filings, amendment filings, or upcoming filing deadlines. Hence, you don’t have to bear the late filing fees. LLC filing fee, Tax filing fee, and other government filings fee should be paid on time.
How Fast Can I Form an LLC in Montana
Montana LLC filings can be completed online within 5 hours once the payment is done. Filing through mail is not available in Montana.
Whether you are looking to start your own business or you have an existing business that you wish to restructure, forming an LLC in Montana can be a fairly straightforward process. However, depending on your specific business needs, the time it takes to form may vary. There are several factors that can affect the time it takes to complete the process, including your business’s location, the number of applications you are competing against, and the state’s processing office. The time it takes to form an LLC in Montana can range from several days to several weeks.
The best way to answer the question “how fast can I form an LLC in Montana” is to look at the state’s current fee schedule. Depending on the state, you may be charged a flat rate of $70 for the filing fee, or you may have to pay state fees for expedited or rush processing services. This service will reduce the time it takes to form a business to two to three business days in states where it is available.
The state’s website can also help you figure out the exact process to follow. It contains industry-specific information on taxes, including what types of taxes are required for different types of businesses. The site also offers a handy tool to verify whether your business’s name is available. The site also lists the most important things to know when forming a Montana LLC.
In a nutshell, a limited liability company is a business entity that combines the advantages of a corporation and a sole proprietorship. This includes the ability to shield personal assets from business liabilities and to limit the tax burden on the business. To protect personal assets, a business owner may want to seek out a good business insurance policy. It may also be helpful to seek out a business loan.
The Montana Secretary of State’s website has a plethora of useful information, including a handy tool to verify whether your business’s names is available. Using this site can save you time and money. Using a service like TotalLegal to form a Montana LLC can also save you from having to deal with the state’s bureaucracy.
The state’s ePass system can help you file your LLC’s Articles of Organization online. This system can save you a lot of time and hassle by allowing you to file your documents electronically. The process is also a lot more convenient than having to physically deliver your documents to the state. Once your documents have been received, you will receive a certificate of filing. The Secretary of State will also provide you with a copy of the filing.
The process to form an LLC in Montana will likely take several days, depending on the state’s processing office and the number of applications you are competing against. The state’s business-friendly tax environment makes Montana a good choice for a new business. While the state does not levy sales tax, the corporate tax rate is 6.75%. This rate is lower than many other states, making it a good choice for businesses that do not sell goods and services.
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. If you hire a professional LLC service, then it might take less than that. We recommend TailorBrands, which has an impeccable turnaround time.
Every year all the LLCs 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 LLCs, it is a default tax structure. Once you obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the Montana Classification of LLC Tax.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start their LLCs in Montana at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, and leave a comment below.