Once you finally realize that you are ready to form an LLC in Montana, you will have to face multiple responsibilities. At the same time, you also need to ensure that you are making the right decisions.
Opening a Business
An important factor you need to consider is the business structure. What you will choose will have long-term repercussions for your company. That is why you need to be careful about what to select.
The business entity structure you choose will govern your personal liability, regulations, and even tax treatment. One efficient way of starting a company is to form an LLC in Montana.
Generally, it is a newer structure compared to other forms of business entities. Most people refer to it as a hybrid structure. It has certain features of a partnership and corporation.
As an LLC owner, you will benefit from pass-through taxation and have flexibility in management and operation. At the same time, you will have limited liability like a corporation.
Each state has its laws governing LLCs. So, the requirements, processes, and fees vary. In Montana, you will have to register your company with the Secretary of State.
If you want to form an LLC in Montana, you will have to go through the registration process. You will have to file Articles of Organization with the Secretary of State. So, you have to include important information:
- Name of your LLC
- Its principal office address
- The duration of your LLC, if it is not perpetual
- The type of management you want, member-managed or manager-managed
- A list of names and addresses of all members and managers
- A list of liable members
- The name, title, address, contact information, and signature of the organizer
All document filings come with corresponding filing fees. When you file your Articles of Organization, you will have to pay $70. The state takes approximately 10 business days upon the receipt of your documents to complete the registration. You can request expedited processing for an additional fee. If you choose 24-hour processing, you will have to pay another $20. You can also opt for one-hour processing for an additional $100.
The name of your company plays an important role in your business. You will have to make sure it is distinguishable. Make sure no other business entity uses it. You can check this by doing a name availability search on the database of the Secretary of State. If you want to protect it from other companies, you can reserve it for up to 120 days. To do this, file a Reservation of Business Name and pay the $10 filing fee.
You can also use an assumed business name or do business as (DBA), which is different from the official legal name of your LLC written in the Articles of Organization. If you choose to do this, you will have to register the assumed name to the Secretary of State. You can do it online and pay the $20 filing fee.
Additionally, you also have to follow the naming guidelines under Montana law. You will have to include the words Limited Liability Company, Limited Company, or an abbreviation, such as LLC or L.L.C. You also cannot use a name that can confuse you with a government agency.
Your LLC Members
Owners of LLCs are also known as members. You have to choose who the members are and their ownership percentage. Each member has to comply with tax filing and other reporting requirements. Under Montana law, you can also form a single-member LLC.
State laws require all LLCs to have a registered agent. It can be an individual or another company that will accept all legal papers and communications from the state on behalf of the LLC. If you choose an individual, s/he has to be a Montana resident. If it is a business entity, it must be authorized to transact in the state. Registered agents have to have a physical street address in Montana.
Montana does not require LLCs to submit an operating agreement. However, it is highly advisable for you to have one. It is helpful, especially for an LLC with multiple members.
With this internal document, you can set the rights and responsibilities of all LLC members and managers. You can also include how you plan on managing the company, whether member-managed or manager-managed. Another advantage of having an operating agreement is that it will outline the ownership, as well as the operating procedures of your LLC.
Taxation and Other Requirements
There may be other regulatory requirements that you need to comply with to ensure the legality of your operations. Here are some of the things you may need:
- Employer Identification Number (EIN) from the IRS – You may need an EIN, especially if you have multiple members. If you have a single-member LLC, you might need it if you plan on having employees or if you choose to be taxed as a corporation. You can get one on the website of the Internal Revenue Service (IRS) for free. It may also help you when you open a bank account under the name of your company.
- Business Licenses – Depending on the type of business and where your LLC is located, you may have to secure local and state business licenses. You can check with your city clerk for local licenses. Meanwhile, the Office of Economic Development of the Montana Governor has a business checklist that has information on state licenses.
- Department of Revenue – Another place you need to check for required licenses is the Department of Revenue. This is typically applicable for companies with employees.
Choosing to form an LLC in Montana can provide you with protection, flexibility, and tax benefits. This business structure is a popular choice for startups due to less complexity. However, consulting a reliable third-party organization like DoMyLLC may be necessary to help you comply with all requirements without hassle.
Business Filing Section