If you are starting a business in the Treasure State, the first thing you will need to do is learn how to form an LLC in Montana.
A Montana LLC will legitimize your business in the eyes of your potential clients. It will also protect and separate your personal assets from business assets.
If you’re wondering how to start an LLC in Montana, then this guide will help. We’ll explain exactly what you need to do, which forms you must fill in and how you can speed up the process using third-party companies. By the end of it, you’ll know everything you need to get your Montana business off the ground.
Give Your Montana LLC a Name
The first and most important step in forming an LLC in Montana is choosing a business name. Be sure that the chosen LLC name complies with the Montana naming requirements and guidelines:
- The name for your Montana LLC must be unique
- Your Montana LLC name must not confuse your business with government agencies (State Department, Treasury, FBI, etc.) or other business names.
- The name of your Montana LLC must include the words “Limited Liability Company” or its abbreviations “L.L.C.” or “LLC.”
- Restricted LLC names may require a licensed person, such as a doctor or lawyer, to be part of the Montana LLC. You may also need additional paperwork.
Your company name should also be easy to remember, easy to pronounce and be related to your business activities where possible.
Next, make sure the name you choose for your Montana LLC is available and is not already taken by any other business entity. You can do this by doing a name search through the Montana Secretary of State website.
You should also check if the chosen name for your Montana LLC is available as a web domain. Even if you don’t have plans to create a website for your business, you may want to reserve a URL for your Montana LLC name to prevent others from acquiring it.
Appoint or Hire a Registered Agent
All LLCs formed in Montana are legally required to hire or appoint a registered agent.
The Montana registered agent is responsible for accepting and forwarding all state and legal documents so that your business can comply with state rules and regulations. A registered agent for your Montana LLC must possess a physical stress address in Montana (not a P.O. Box address). They must also be available during regular working hours to receive legal documents.
While you can appoint yourself or a member of your LLC to act as a registered agent for your business, you may want to consider hiring one of the following reputable registered agent service providers:
IncFile is a registered agent service provider serving over 800,000 business owners over the last 20 years. They offer the following comprehensive registered agent services for only $119 per year:
- Automatic mail forwarding
- Custom SMS and email notification
- Access to all your correspondence on a custom dashboard.
You will also get a complimentary full year of registered agent services if you use IncFile to form your Montana LLC. This makes IncFile a perfect choice for newer businesses.
Other than the registered agent services, IncFile also offers LLC formation services, such as a certificate of good standing, tax consultations, trademarking, amendment, business licenses and permits, and foreign qualification.
Northwest is another popular company that offers all the tools and features your LLC needs to remain compliant. Once you hire them, you will enjoy the following services for only $125 per year:
- Mail forwarding
- Document storage
- Pre-filled state forms
- Annual report reminders
- Compliance alerts
- Scanned documents
You will also get access to their comprehensive Corporate Guides and free compliance during your first year with the Northwest registered agent. Northwest also offers LLC formation services like trademarking, virtual office, annual report filings, foreign qualification, and payment processing.
ZenBusiness is a #1-rated LLC formation company that offers the following registered agent services for only $199 per year:
- Fast turnaround
- Access to a custom dashboard
- Mail forwarding
- Document scanning
- Email notification
You can also upgrade their registered agent service to include annual support notifications and two free filing amendments annually. ZenBusiness also offers LLC formation services like worry-free compliance, operating agreements, EIN, annual reports, taxes and accounting, incorporation, banking and finances, and domain name and website.
File Articles of Organization
The Article of Organization is one of the most crucial legal documents you must file for LLC formation. The Montana Article of Organization officially registers your business with the state and makes it a separate legal entity.
Some of the details you must include in your Montana Article of Organization include the following:
- The physical address, the mailing address, and the name of the LLC
- The reason for forming your Montana LLC
- The duration of your Montana LLC
- The name and address of the hired registered agents
- Whether your Montana LLC is manager-managed or member-managed
- Physical addresses, names, and signatures of members, managers, and organizers
You’ll need to pay a fee when filing an Article of Organization for your Montana LLC. If you file your Article of Organization online, you will be expected to pay a filing fee of $35. Likewise, if you file an Article of Organization for your Montana LLC by post, you will be required to pay a filing fee of $70. The filing fee for a foreign LLC in Montana is $70.
Consider Drawing Up an Operating Agreement
Montana state laws do not require LLC owners to have an Operating Agreement for their business. However, it is a good practice to create a comprehensive Operating Agreement.
Your Montana LLC Operating Agreement outlines the operating procedures of your business, helping you overcome possible disputes. Include the following information in your Montana LLC Operating Agreement:
- The rules for the management structure
- The protocols for admitting and removing members
- Standard procedures for resolving disputes
- Rules for distribution of losses and profits
- Rules for transfer of ownership
- Ownership rules, including responsibilities, voting rights, and shares
You can customize the Operating Agreement for your Montana LLC to have more control over how your business operates.
Purchase Licenses and Permits
Unlike other states, Montana does not require business owners to obtain a general state business license. What’s more, Montana has no sales tax, meaning you will not need a seller’s permit in Montana.
However, depending on the nature of your profession or type of business, you may be required to obtain a specialty license and permit. For example, if your business deals with health and food services, you may need to acquire a health license.
Moreover, Montana cities and counties may need you to obtain additional licenses and permits in compliance with the law. Therefore, we recommend checking with your local authority for any other licenses or permits you may be legally obliged to obtain in Montana.
Get Federal and State Tax IDs
A federal and State Tax ID is like a Social Security Number for your Montana business. It is used to identify your LLC for tax purposes.
However, not all Montana business entities are required to obtain a Federal and State Tax ID. For instance, you are legally obliged to acquire one if your business is taxed as a separate limited liability or if you plan to hire employees for your business.
Even if your business is not obliged by law to get a Federal and State Tax ID, getting one helps open a business bank and credit account and file tax returns.
Acquiring a Federal and State Tax ID is straightforward and free. You only need to visit the IRS website, apply for it, and you will get it in no time!
Open a Business Bank and Credit Account
Opening a business bank and credit account is vital when forming your Montana LLC and helps to separate your business finances from your personal ones.
To open a business bank and credit account in Montana, you will need to provide the bank with the following documents:
- The Operating Agreement of your Montana LLC
- The Federal and State Tax Identification Number
- The Article of Organization of your Montana LLC
If you don’t have a bank account already, one of the following Montana banks may be able to help:
Obtain Montana Business Insurance
Once your LLC is up and running, you will require relevant insurance coverage for your Montana business. Some insurance policies will be required by your landlord, while others will be needed by the Montana Secretary of State if you have employees. Other insurance coverages are optional.
Some of the common business insurance coverages in Montana are:
- General liability insurance coverage
- Workers’ compensation insurance coverage
- Commercial property insurance policy
- Business income insurance policy
- Professional or occupational liability insurance policy
- Commercial automobile insurance policy
Get a competitive quote for all relevant policies by visiting a comparison website like Insureon.
Buy an LLC Formation Package
If you need help to speed up the process of forming your Montana LLC, you can often hire a professional LLC formation company to do everything for you.
For example, LegalZoom has a free basic LLC formation plan with amazing perks, such as an Article of Organization, a name search, and a digital welcome packet. You will only need to pay for the state filing fee.
LegalZoom also has a Pro and Premium LLC formation package that costs $249 and $299, respectively, plus the state filing fee. This package will give you access to everything you need to form your Montana LLC as fast as possible.
If you want more affordable LLC formation packages, you can consider Northwest, ZenBusiness, and IncFile. The good thing with these companies is that their packages include registered agent services at no extra cost.
FAQs About Forming an LLC in Montana
How Long Will It Take to Form My Montana LLC?
Forming your Montana LLC can take 5-7 business days after the state receives the paperwork. However, you can speed up the process by paying an additional fee for expedited processing. A one-hour expedited processing of your Montana LLC formation documents costs $170, and a 24-hour expedited processing costs $90.
How Much Does It Cost to Set Up an LLC in Montana?
The cost of forming an LLC in Montana is $35, which is a filing fee for the Article of Organization. If you are starting a series LLC, you must pay an extra $50 for every LLC in the series. Moreover, you will be required to pay an annual report filing fee of $20.
Can I Act as my Own Registered Agent in Montana?
Yes. You can appoint yourself as a registered agent for your Montana LLC if you are a Montana resident and are over 18 years of age. You must also be available during the regular Montana business hours to receive and forward legal and business compliance documents.
Can I Form a Single-Member LLC in Montana?
Yes. Montana laws allow business enthusiasts to form single-member LLCs. You only need to follow the steps discussed in this guide.
Make Montana the Home of Your Business
Forming an LLC in Montana is an economical and easy way to join the ranks of top business owners in this thriving community.
Fortunately, as you have seen in this article, starting your Montana LLC is reasonably straightforward. However, if you find the process time-consuming and challenging, you can hire a reputable LLC formation company to speed up the process. Best of luck!