Registering a business in Montana may seem complicated, but it’s simpler when broken down into manageable steps. To help you get started, we’ve turned the complex regulatory details into clear, actionable guidance to help you move smoothly through the process. With this step-by-step approach, you can confidently handle each part of the registration without getting bogged down in details.
Related: Starting A Business In Montana Checklist
Step 1: Choose a Business Structure
The first step in registering a business in Montana is selecting a business structure (also called a business entity). A business structure refers to how a company is legally organized to operate. The business structure can affect your personal liability, tax obligations, and overall management of the company.
In Montana, there are four common business entity types: sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC). It’s important to understand the differences between these four types so you can choose the right one for your needs.
Related: Comparison of Business Structures
A sole proprietorship is the easiest and least expensive form of business, as the business is considered legally the same as an individual. On the plus side, you don’t need to file any paperwork to create it. The downside is that you’ll be personally liable for the business’s debts and obligations.
Related: How to Start a Montana Sole Proprietorship
A general partnership is also relatively easy to create. It is like a sole proprietorship; instead, there is more than one owner. The partners share the business’s profits and losses. However, partners are personally liable for business-related obligations like a sole proprietorship.
A corporation creates a separate legal entity from its owners. The corporation’s management makes business decisions, and the shareholders (who may be the same people) own the corporation. The shareholders are not generally personally liable for the corporation’s obligations, and the corporation pays taxes on its profits.
Related: How to Form a Montana Corporation
Last, a Limited Liability Company (LLC) combines the positive features of a sole proprietorship/partnership and a corporation by providing limited liability protection to its owners (called members) while having the easier administration of a sole proprietorship.
Related: How to Form Montana LLC
Step 2: Select a Business Name
After choosing a business structure, the next step is selecting a business name.
For sole proprietors and general partnerships in Montana, if you plan to operate under a name different from your full legal name or the names of the partners, you will need to register an Assumed Name, also called a Doing Business As (DBA), with the Montana Secretary of State.
For instance, if a sole proprietor opens a small plumbing business called “Big Sky Plumbing,” instead of using the owner’s full name, they’ll need to file for a DBA.
For corporations and LLCs, choosing a business name is part of the formation process. Most will not register multiple names, but they have the option to.
All business entities in Montana must verify that their chosen name is available and not already in use. Conduct a Montana business name search using the Montana Secretary of State’s name database to ensure your desired name is unique.
Step 3: Federal Employer Identification Number
A Federal Employer Identification Number (FEIN) is a unique nine-digit identifier issued by the Internal Revenue Service (IRS) for businesses. Many Montana businesses require a FEIN for tax and administrative purposes.
You need an EIN if:
- Your business has employees
- Your business is structured as a corporation, partnership, or multi-member LLC
Sole proprietorships or single-member LLCs without employees can use the owner’s Social Security Number but may opt for an EIN if desired.
The IRS provides the EIN at no cost. The application process is straightforward and typically takes only a few minutes to complete online.
Step 4: Professional Licensing
Several professions in Montana require specific licenses before practitioners can offer their services. The Montana Department of Labor & Industry’s Business Standards Division oversees most professional licensing in the state.
Common professions requiring licenses include:
- Barbers
- Cosmetologists
- Massage Therapists
- Landscape Architects
- Real Estate Agents
- Accountants
- Nurses
- Engineers
To research which professions require licensing, visit the Montana Department of Labor & Industry website.
Step 5: Montana Department of Revenue
Businesses in Montana may need to register with the Montana Department of Revenue for various tax-related obligations. While Montana does not have a general state sales tax, businesses still need to be aware of other tax requirements, such as:
- Withholding Tax: If your business has Montana employees, you will need to register with the Montana Department of Revenue to withhold state income taxes from employee wages.
- Corporate Income Tax: If your business is structured as a corporation or an LLC taxed as a corporation, you must register to file corporate income taxes.
- Lodging Facility Use Tax: If your business provides lodging services, such as hotels, motels, or short-term rentals, you may need to register for this tax.
- Excise or Other Specialized Taxes: Depending on the nature of your business (e.g., selling tobacco, alcohol, or operating certain industries), there may be specific excise taxes you need to register for.
You can register for these taxes through the Montana Department of Revenue’s online system, TransAction Portal (TAP). This system allows you to manage multiple tax accounts and file returns electronically.
Step 6: Local Business Licenses
There isn’t a statewide general business license in Montana, but many municipalities require specific local licenses for certain business activities. Here are some common types of local business licenses you might encounter:
- Food Service Licenses: Restaurants, food trucks, and other food service businesses often need a license from the local health department. For example, the City-County Health Department in Great Falls requires a food service license for establishments serving food to the public.
- Liquor Licenses: Businesses selling alcoholic beverages typically need a local liquor license in addition to the state requirements. In Billings, the City Council reviews and approves liquor license applications before they’re forwarded to the state.
- Contractor Licenses: Many cities require contractors to obtain local licenses. For instance, the City of Missoula mandates that all contractors register with the Development Services Department before conducting business within city limits.
- Home-Based Business Licenses: Some cities regulate home-based businesses. For example, the City of Bozeman requires them to obtain a Home Occupation Permit from the Planning Division.
- Peddler/Transient Merchant Licenses: Businesses conducting door-to-door sales or operating temporary locations often need special permits. In Helena, the City Clerk’s office issues Peddler/Solicitor Licenses for such activities.
Note that licensing requirements can vary significantly between municipalities. Always check with your local city or county government offices for specific requirements in your area.
Step 7: Local Building & Zoning Permits
Before setting up a business location in Montana, it’s important to understand and comply with local building and zoning regulations. These regulations ensure that your business operates in an appropriate area and that your building meets safety standards. Here’s an overview of these requirements:
Zoning Regulations: Zoning laws determine where different types of businesses can operate within a municipality. Before leasing or purchasing a property, verify that the location is zoned for your type of business. Some areas may have restrictions on home-based businesses, so check local ordinances if you plan to operate from home.
Building Permits: Building permits are typically required for new construction, renovations, or changes to existing structures. They ensure that any modifications or new buildings comply with local building codes and safety standards. The specific department handling building permits varies by municipality, but it’s often the Building Department or Community Development Department.
Certificate of Occupancy: Many Montana municipalities require a Certificate of Occupancy before a business can operate in a building. This document certifies that the building complies with all building codes and zoning laws and is safe for occupancy. You’ll typically need to obtain this certificate after completing any required building work and passing final inspections.
Special Use Permits: Some businesses may need a special use permit if their operations don’t fit within standard zoning categories. This could apply to unique businesses or those that might impact neighboring properties. The local Planning Department or Zoning Board usually handles these permits.
Sign Permits: If you plan to install business signage, you may need a separate sign permit. Sign regulations can be quite specific, covering size, placement, and sometimes even design elements. These permits are often handled by the same department that manages building permits.
Before committing to a location or beginning any construction or renovation work, it’s advisable to consult with your local planning or zoning department. They can provide specific information about the requirements for your business type and chosen location in Montana.
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