Fact checked for accuracy by Billie Anne Grigg, a bookkeeper and Mastery Level Certified Profit First Professional.
When you’re starting your business, there are a few things you need to do to get it off the ground. One of these is forming a legal entity for your business. This will protect your business from liability and help you manage your finances and taxes more effectively. In Montana, one of the most common legal entities for businesses is the LLC or limited liability company.
An LLC is a business structure that offers limited liability protection to its owners. This means that if your LLC is sued or incurs debts, the owners’ assets will not be at risk.
Forming an LLC is a relatively simple process, and you can do it entirely online. If you are still apprehensive, this detailed step-by-step guide on forming an LLC in Montana will help you get started.
Step 1: Choose a business name for your LLC
Your business name should reflect what your LLC does and be easy for customers to remember. It’s a good idea to do a quick search online to make sure the name you want is available. Make sure to check with the Montana Secretary of State’s office to see if your desired name is available and not already in use.
Essential guidelines to follow when naming your LLC
- Your business name must include “Limited Liability Company,” “L.L.C.,” “LLC,” or “LC”.
- Your business name cannot be the same as any other business name already registered with the state of Montana.
- Your business name cannot include any restricted words or phrases that would require a special license or permit to use.
Step 2: Appoint a registered agent for your LLC
A registered agent is someone who will receive official legal and tax documents on behalf of your LLC. This person can be you, another member of your LLC, or a professional service. The registered agent must have a physical address in Montana and be available during business hours.
Step 3: File the Articles of Organization with the Montana Secretary of State
The Articles of Organization is a simple document that must be filed with the state to form your LLC. The filing fee is $70, and it must be filed online. You must include the following information:
- The name and address of your LLC
- The name and address of your registered agent
- The date you plan to dissolve your LLC, if applicable
- Whether your LLC will be managed by its members or by managers
Step 4: Create an operating agreement for your LLC
An operating agreement is a document that outlines your LLC’s ownership and management structure. It’s not required by the state of Montana, but it’s a good idea to have one in place. You can work on drafting an LLC agreement with your fellow LLC members.
Step 5: Get an Employer Identification Number (EIN) from the IRS
The EIN is a distinctive nine-digit number that is issued by the IRS to identify your LLC for tax purposes. You will require this number when you file your taxes and open a business bank account. You can apply for an EIN online, by fax, or by mail. An EIN benefits you because it:
- Helps you open a business bank account
- Allows you to hire employees
- Protects the LLC member’s SSN
Step 6: Open a business bank account
Once you have your LLC formed, you’ll need to open a business bank account. With an EIN, you can open a business account in the name of your LLC. This will help you keep your personal and business finances separate. It’s a good idea to bring your Articles of Organization and your operating agreement when you open your account.
Step 7: File an annual report with the state of Montana
All LLCs in Montana must file an annual report with the state. The report is due on the first day of the LLC’s fiscal year. The report must include the following information:
- The LLC’s name and address
- The name and address of the LLC’s registered agent
- The LLC’s principal place of business
- The names and addresses of the LLC’s governors
- The LLC’s federal tax identification number
Step 8: Comply with Montana’s business licenses and permit requirements
Depending on the type of business you’re running, you may need to obtain special licenses and permits. The best way to find out is to contact your local county clerk or the Montana Department of Labor and Industry.
Step 9: Understand Montana’s taxation requirements
All LLCs in Montana are required to pay state and federal taxes. You will also need to pay taxes on any income you earn from your LLC. Contact the Montana Department of Revenue for more information on Montana’s taxation requirements.
Step 10: Stay up to date on Montana’s business laws
The state of Montana may make changes to its business laws from time to time. It’s vital to stay corrected on these changes, as they may affect your LLC. The best way to do this is to contact the Montana Secretary of State or the Small Business Development Center.
Congratulations! You’ve successfully formed your LLC in Montana. Now you can get to work on starting and running your business.
Cost to Start an LLC in Montana
The cost to start an LLC in Montana is $70. This fee is for filing the Articles of Organization with the state, which you can do online. If you expedite, you will need to pay an extra $20 for 24-hour processing, or $100 for 1-hour processing. You will also need to pay an annual report fee of $20. You can submit this report online to the Montana Secretary of State.
If you are hiring a registered agent, you will need to pay their annual fee, typically around $100. You may also need to pay for a business license, depending on the type of business you have.
What To Do After Forming Your LLC in Montana
Now that you’ve successfully formed your LLC in Montana, make sure to follow these steps to keep your business running smoothly.
Set up a business plan
A business plan outlines your business goals and how you plan on achieving them. It’s a good idea to have a business plan in place before you start operating your LLC. This will help you stay on track and ensure your business is successful. You can create a business plan on your own or hire a professional to help you.
Get a professional accountant
It’s a good idea to get a professional accountant to help you with the financial side of your business. They can help you keep track of your finances and make sure you are compliant with all the tax laws. This will save you a lot of time and stress in the long run. You can either hire a third-party accountant or put one on your payroll.
Get professional liability insurance
Professional liability insurance, also known as errors and omissions insurance, protects your business from lawsuits alleging that you made a mistake or were negligent in your work. If you’re providing a service, it’s a good idea to get this type of insurance. You can get a quote from an insurance agent or broker.
Stay up-to-date on changes to Montana’s business laws
The business laws in Montana can change from time to time. It’s important to stay updated on these changes, as they can impact how you operate your business. You can do this by subscribing to the Montana Secretary of State’s email updates or following them on the internet.
Comply with regulations
All businesses in Montana must comply with state and federal business regulations. These regulations can include things like:
- Occupational safety and health regulations
- Environmental regulations
- Labor laws
- Immigration laws
Renew your business license every year
If your LLC is required to have a business license, you must take care to renew the license every year by paying a variable renewal fee. You can renew your license online, by mail, or in person.
Forming an LLC in Montana is a relatively simple process. By following these steps, you’ll be on your way to running a successful LLC in Montana.
How to Keep Your LLC Compliant in Montana
Once you’ve formed your LLC in Montana, it’s important to keep it in good standing with the state. This means complying with all the state’s rules and regulations. Following are some points to consider in order to keep your LLC compliant in Montana:
- File an annual report with the state.
- Pay your annual report fee.
- Renew your business license every year, if applicable.
- Comply with Montana’s business regulations.
- Stay up to date on changes to the state of Montana’s business laws.
By following these steps, you can ensure that your LLC remains in good standing with the state of Montana.
Tax Filing Requirements for LLCs in Montana
All LLCs in Montana are mandated to file an annual report with the state. You can file the report online, by mail, or in person. In addition to the annual report, some LLCs in Montana are also required to file a tax return with the state.
The tax return is due quarterly. Most LLCs are pass-through entities, which means that the LLC itself is not taxed. Instead, the taxes are passed through to the LLC’s members. However, there are some LLCs that are taxed as corporations. If your LLC is taxed as a corporation, you will need to file a corporate tax return.
Frequently Asked Questions
How Long Does it Take to Register an LLC in Montana?
Registering an LLC in Montana usually takes about 7 to 10 business days, but you can pay extra to have everything processed sooner. You can get your LLC registered within 24 hours or even 1 hour, depending on how much extra you pay for the expedited service.
What Tax Structure Should I Choose for an LLC in Montana?
The most common tax structure for an LLC in Montana is the pass-through entity meaning that the taxes are passed through to the members of the LLC. The members will then report the income on their tax returns. In some cases, LLCs may be taxed as corporations. LLCs that are taxed as corporations need to file corporate tax returns. To decide what tax structure you should choose for your particular business, consult your attorney or accountant.
Should You Hire an LLC Formation Service in Montana?
While you are not required to hire an LLC formation service in Montana, it can be helpful. An LLC formation service can help you with the paperwork and filing requirements. They can also answer any questions you may have about forming an LLC in Montana.
Filed under: Montana Business Guides