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Montana LLC For Beginners: No Attorney Required 

Montana LLC For Beginners: No Attorney Required 

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Montana LLC For Beginners: No Attorney Required 

There are so many things to think about when starting a business in Montana – from the initial idea to taking orders and running the company. One of the first decisions you’ll need to make is what business structure to choose. While there are several different types, this guide will focus specifically on starting an LLC in Montana.

Related: Guide to starting a business in Montana

What is an LLC?

The Limited Liability Company (LLC) is a popular business structure (also called a business entity) for companies starting in the state of Montana.  The LLC provides personal liability protection and has the potential to save money on taxes.

Unlike a sole proprietorship or partnership, where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal entity that protects the business owner’s personal assets. So, if the LLC is sued, the owner’s personal assets are usually protected.

Besides liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of potential tax savings and ease of administration.

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What are the steps to Form a Montana LLC?

Step 1: Choose an LLC Name

One of the first steps in forming a Montana Limited Liability Company is to choose a name for your business. But before you can register your LLC with the state of Montana, you need to make sure that the name you want to use is available.

This step is important because the name of each LLC must be distinguishable from other entity names registered in the state of Montana. The Montana Secretary of State makes it easy to do a Montana LLC name search, where you can quickly verify if your LLC name is available.  

In addition to the name being unique, the entity designator (identifier used at the end of the business name) must be either:

  • Limited Company
  • Limited Liability Co
  • Limited Liability Co.
  • Limited Liability Company,
  • L C
  • L L C
  • L. C.
  • L. L. C.
  • L.C.
  • L.L.C.
  • LC
  • LLC
  • Ltd Co
  • Ltd Co.
  • Ltd. Co
  • Ltd. Co.

A comma may be used after the business name and before the designator.  “Yellowstone Yarns LLC” and “Yellowstone Yarns, LLC” are both acceptable.

Before finalizing a name, you may also want to see if a domain name is also available to have a matching website address.

Step 2: Appoint a Montana Registered Agent

In Montana, every LLC will need to designate a registered agent. A registered agent is simply an individual or company with a Montana street address who will be responsible for any legal correspondence. This includes the receipt of legal documents, such as lawsuit notifications, on behalf of the business.

While many LLC owners opt to fulfill this role themselves, some owners choose to hire registered agent services like Northwest Registered Agent. Utilizing a registered agent service ensures that your LLC adheres to state requirements while offering an added layer of convenience and confidentiality since the owner’s personal address isn’t disclosed in public records.

Related: What is a Montana registered agent?

The selected registered agent will need to consent to be an agent for the LLC. When filing the Articles of Organization (next step), you will click on the box for the statement, “The appointment of the registered agent listed above is an affirmation by the represented entity that the agent has consented to serve as a registered agent.” Even though it’s not required, it is recommended to get the agent’s consent in writing.

Step 3: File the Montana LLC Articles of Organization

The paperwork to officially create an LLC in Montana is called the Articles of Organization. To submit the paperwork, log on to ePass Montana, which is the Montana Secretary of State’s website.

When filling out the Articles of Organization, there are a few sections and terms that can be confusing. Let’s go over a few of these sections to help get your LLC started right.

Related: How to fill out the Montana Articles of Organization

Delayed effective date: If you want the LLC to start on today’s date, don’t enter a date in the box; otherwise, enter a date less than 90 days in the future to start.

Some will delay the LLC start date if they aren’t ready to go but want to get the filing out of the way or if they are close to the end of a calendar year and want to delay until the following year so they won’t have to file business taxes.

Type of Limited Liability Company: If forming a regular LLC (that’s what most businesses will choose), select “Limited Liability Company.”

If the business activities require a professional license from the state, you will want to select “Professional Limited Liability Company.” Common licenses for professionals include accountants, attorneys, and veterinarians.  See what licenses and permits are needed in Montana for more information on what businesses need professional licensing.

A “Series Limited Liability Company” provides liability protection across multiple asset groups or businesses, each of which would be protected from liabilities from the other series. The Series LLC is not a common choice and is typically most common with real estate investment companies. 

An out-of-state LLC wanting to do business in Montana will have to register as a foreign LLC by filing the Application for Certificate of Authority with the Montana Secretary of State.

Term: In this section, you can indicate how long it will remain in existence.  Most LLCs will choose a “Perpetual” duration as there is no predetermined close date.  Some businesses (usually investment-related) will have a specific closure date.

Purpose: Unless this filing is for a Professional LLC, this box is optional.  Here you provide some basic information about what the business does.  You can also use “engage in any lawful business activity for which a Limited Liability Company may be organized in Montana” in addition to the original purpose statement to keep the purpose open-ended.

Read more about answering the business purpose.

Managers & Members: This section asks if Members or Managers manage the LLC.

  • Member-Managed LLCs have an active involvement in the day-to-day operations of the business.  Most LLCs are Member-Managed.
  • Manager-Managed LLCs have managers hired by the members to run the LLC, similar to a CEO of a corporation.

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If you are worried about making a mistake when forming your LLC, or just don't want to deal with filling out state paperwork, an LLC formation service will help guide you through the process. My top recommended services include:

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What To Do After Forming A Montana LLC

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare a Montana LLC Operating Agreement

The operating agreement is a document that governs the framework of an LLC.  This document covers items like ownership rights, LLC member responsibilities, how profits and losses are distributed, and more.

Most states (such as Montana) do not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:

  • The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
  • Member’s personal liability protection may be diminished.
  • Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.

Related: Montana operating agreement template

Obtain an EIN

If the LLC will hire employees or is owned by more than one member, an EIN is required. 

The EIN or Employer Identification Number (also referred to as a Federal Employer Identification Number, FEIN, or Federal Tax ID Number) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.

Related: How to apply for an EIN

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

  • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the original LLC formation paperwork from the state showing the creation of the LLC.
  • Driver’s licenses of the members.
  • In some circumstances, a Montana Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.

Related: How to open a business bank account for your LLC

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, there will likely be various business licenses and permits needed before starting your business. Some common registrations include:

  • Business license: There isn’t a statewide business license, but some cities require businesses to obtain licensing before they can start.
  • Professional license: Certain types of businesses in Nebraska such as barbershops, massage therapists, salons, and others must be licensed.
  • Sales & use tax: While Montana has no sales tax, other states may require a business selling to residents of other states to collect tax, depending on their sales volume.

Related: What business licenses are needed in Montana?

File Montana LLC Annual Reports

Montana LLCs are required to file an annual report with the Montana Secretary of State.  The annual report filing fee is $20 and is due by April 15th of each year.

Related: How to file a Montana LLC Annual Report

File the Beneficial Owner Information Report

Beginning in 2024, any individual who owns at least 25% or has “substantial control” of an LLC or corporation in Montana or any other state must file the Beneficial Ownership Information (BOI) form with the Financial Crimes Enforcement Network (FinCEN). BOI reports are filed electronically through FinCEN’s website.

Montana LLC FAQs

How much does it cost to start an LLC in Montana?

The Montana Secretary of State filing fee to start an LLC in Montana is $35.

How long does it take to set up an LLC in Montana?

It normally takes 7-10 business days for the Montana Secretary of State to process the Articles of Organization. Expedited processing is available for an additional fee.

What are the annual costs for a Montana LLC?

Each year, an annual report must be filed, along with paying the $20 annual registration fee.

Do you need a physical address for an LLC in Montana?

A physical address is required for the registered agent, but the use of a physical address is optional for a Montana LLC.

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

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Montana LLC For Beginners: No Attorney Required 

Montana LLC For Beginners: No Attorney Required 

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