Choosing to structure a business entity as a corporation provides liability protection. Since Montana incorporation is a separate legal entity, the assets of the owners will not be at risk even if the company ends up incurring debts. That is one of the reasons why many companies opt for it.
Aside from the business entity structure, the state where the company is organized is also important. It will determine taxation, reporting obligations, and fees.
Montana is a state that offers a business-friendly environment. Additionally, forming a corporation in Montana gives a company access to various incentives and programs. Here are some of them:
- Tax Incentives
- Energy Conservation Installation Credit
- Energy Conservation Investments Deduction
- Infrastructure Users Fee Credit
- Mineral and Coal Exploration Incentive Credit
- New Market Tax Credits
- New or Expanding Industry Wage Credit
- Property Tax Abatement
- Qualified Endowment Credit
- Business Incentive Programs
- Empowerment Zone Tax Credit
- Growth Through Agriculture Program
- Micro-Business Loans
- New Industrial Property Benefit Program
- New or Expanded Industry Credit
- Primary Sector Workforce Training Grant Program
- Research and Development Firms Tax Exemptions
To further understand these incentives and know more about the qualifications, check with state and local government agencies.
Understanding the Business Formation Process
Before going through Montana incorporation, it is best to research state laws and regulations first. That is because the filing requirements and maintenance obligations vary from state to state.
Generally, the business formation process in Montana is affordable and easy. It involves the submission of formal paperwork and payment of corresponding fees.
Here is a simple step-by-step guide:
Step 1: Come up with an appropriate company name.
Having a creative name can help a company catch the attention of consumers. However, it is also necessary to make sure that it abides by the rules of the state.
Like other states, Montana also has naming requirements for corporations. The company name needs to have the proper designator, which is the word Corporation, Company, Incorporated, or Limited. The use of an abbreviation of any of these words or any term or abbreviation of similar meaning in a different language is allowed. For example: LLC, L.L.C, LC, or L.C.
It is also crucial to ensure that it is distinguishable. If another business entity in the state already uses the name, then a new company can not use it. A business name search on the database of the Secretary of State can help check if it is still available.
In some cases, a company may already have a name in mind but is not yet ready to register the business. The state gives an option to reserve a business name. File a Name Reservation form with the Secretary of State and pay $10 to reserve the name for four months.
Step 2: Appoint a registered agent.
Montana requires all registered business entities to appoint and maintain a registered agent. It can be a person or a third-party organization like DoMyLLC that will receive tax documents, legal mail, and other government correspondence on behalf of the corporation. To put it simply, the registered agent is the point of contact between the corporation and the state. Read the Five Traits Of A Good LLC Registered Agent For Your Business to know more about what to look for.
If the corporation opts for an individual registered agent, they should:
- be at least 18 years old,
- be a resident of Montana,
- have a valid street address in the state (a P.O. Box will not do), and
- be available at the listed address during regular business hours.
If the corporation decides on hiring a third-party organization, they should:
- be authorized to do business in Montana,
- have a valid street address in the state, and
- be open during regular business hours.
Step 3: Select the initial directors of the company.
The company should have at least one director to oversee the corporation until it conducts its first shareholder meeting. Generally, the directors of the corporation will be adopting, amending, and repealing the bylaws of the company. They will also be in charge of supervising, electing, and removing officers.
Among the requirements in the state is an Incorporator Statement. It should include the complete names and addresses of the directors. The document should also be kept in the corporate records book. During the formation, the state only requires at least one initial director listed on the formation documents.
Step 4: Submit a completed Articles of Incorporation form.
The official registration of a corporation can only be done by submitting Articles of Incorporation to the Secretary of State and paying the $70 fee.
To accomplish the paperwork, the company will have to disclose some basic information.
- Company name
- Business address
- A statement of purpose
- The name and address of the registered agent
- The number of authorized stocks the company is allowed to issue
- The names and addresses of the initial directors
- The names and addresses of the incorporators
Other Tasks to Complete
Montana incorporation will legalize the operations of a business entity. However, the obligations of the company will not end with the registration. Here are some other things that a corporation needs to complete:
- Set up the corporate records book. The record book of the corporation is crucial. It contains all important documents, such as the Articles of Incorporation, stock certificate ledger and transfer documents, bylaws, and minutes of meetings. The company has to keep the corporate records book in its primary place of business.
- Prepare the bylaws. The corporation’s bylaws refer to the rules that will determine how the company will be run. They should also discuss the responsibilities of the board of directors and officers, how they are elected or appointed, the terms of office, how they function, and how the shareholder and board meetings will be held. Since corporations are required to hold at least one annual meeting, it is important to include information about shareholders meetings like how the shareholders will be notified and the voting procedure.At a bare minimum, the corporation’s bylaws should have its name, address, principal place of business, and fiscal year. It should also include the number and type of shares, as well as stock classes, that the company is authorized to issue. Make sure that the corporation’s bylaws supplement the rules set forth by the state and the federal government.
- Hold the first organizational meeting. A corporation should conduct its first shareholders meeting to appoint the members of the board of directors, elect officers, and adopt corporate bylaws. The company should make sure that the minutes of the meeting are properly documented and signed by all attending directors.
- Issue stock certificates. The company can choose to issue stock certificates to shareholders as proof of ownership. However, the state does not require it.
- Obtain an Employer Identification Number (EIN). The EIN is used to identify a company. It is necessary for tax purposes, opening a business bank account, and hiring employees. A business entity can get an EIN from the Internal Revenue Service (IRS) for free.
- Get state tax identification numbers. A corporation has to register for a state tax identification number and accounts. The forms depend on the taxes applicable to the company. Check the requirements with the Department of Revenue. Some business activities and locations may also require certain licenses and permits. Contact state and local agencies to find out more.
Get Started With Montana Incorporation
Incorporating a business entity in Montana not only legalizes the company’s operations and activities in the state, but it also provides protection to the owners and the company itself. While the state process may be simple, some entrepreneurs find it a bit much. It may take more time than expected and requires good attention to detail.
Companies that need help in handling the paperwork or are looking for a commercial registered agent can contact DoMyLLC. Our team of experts have the necessary skills and experience in taking care of business formation processes in all 50 states, including the District of Columbia. We are also authorized to serve as a registered agent. Depending on the client’s needs, we also offer personalized solutions.
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