Start An LLC In Montana
Setting up a limited liability company (LLC) as a small business owner can help protect your personal assets, preventing creditors from seizing them to repay debts. It offers the tax benefits and simplicity of a sole proprietorship.
If you want to know more about the process, here’s everything you need to know about how to start an LLC in Montana.
This is how Montana compares to its neighboring states as a place to start an LLC.
|State||Montana||Idaho||Wyoming||North Dakota||US Average|
|LLC Filing Fee||$70||$100||$100||$135||$130.38|
|LLC Annual/Biennial Fee||$20 (every year)||$0 (however, an information report must be filed every year)||$60 minimum (every year)||$50 (every year)||$89.34 (every year)|
|Corporate Tax Rate||6.75%||6.50%||None||1.41-4.31%||5.60%|
|Nominal GDP per capita||$53,703||$49,616||$71,911||$81,795||$64, 773.08|
Before You Set Up An LLC In Montana
Setting up an LLC is easy, but before you get started, it’s essential to think about who will run the business, whether it will have multiple members or be run by a single member, and how quickly you need to register the LLC.
It would help if you also had a business plan in place, detailing your business goals and how you intend to achieve them. Going in without any sense of direction could cost you!
Moreover, we highly recommend going through the state laws concerning LLC formation to ensure that your business complies with these regulations.
How Much Does It Cost To Start An LLC In Montana?
At this point, you’re probably wondering: “How much to start an LLC in Montana?” The state filing fee for forming a Montana LLC is $70.
It could take up to 10 business days to complete LLC registrations. However, you could apply for 24-hour processing, which costs $20, and one-hour processing costs $100.
If you’re setting up a series LLC in Montana, you’ll have to pay an additional $50 for each series member.
Moreover, should you wish to reserve a business name, you’ll need to pay $10. This will ensure that the business name is reserved for up to 120 days.
One of the most commonly asked questions is: “How to start an LLC in Montana for free.” However, you cannot start an LLC without paying the mandatory filing fee.
Steps To Start An LLC In Montana
To set up an LLC, you can follow these steps:
1. Pick A Name For Your LLC
The first and most crucial step in forming an LLC in Montana is deciding on a business name. Make sure the name you choose conforms to Montana’s naming standards and is easy to search for and find by potential customers. Here’s what you’ll need to keep in mind:
- The words “Limited Company,” “Limited Liability Company,” or the acronyms “LLC,” “LC,” or “L.L.C.” must appear in all business names listed as LLCs, according to Montana law.
- Moreover, the name you choose must be different from the names of other businesses registered with Montana’s Secretary of State.
- Before deciding on a business name, you can check whether a name is available on the Montana Secretary of State’s company name database.
- By completing a Reservation of Business Name online with the Montana Secretary of State, you can secure the name of your choice for up to four months. The cost of filing this reservation is $10.
2. Find A Registered Agent In Montana
All LLCs in Montana are required to have a service of process agent. This person or company has agreed to accept official documents on behalf of the LLC if a lawsuit is filed against it. He or she serves as your point of contact with the state.
|ZenBusiness – $49 + state fees to register your LLC (read review)|
|Incfile – $0 + $50 state fees to register your LLC (read review)|
3. Articles Of Organization
The next step is to file the Articles of Organization. This will make your LLC official and must be filed with the Secretary of State in order to register an LLC in Montana. You can do this online. A non-refundable fee of $70 is payable in this step.
When filing the Articles of Organization, you will be asked to provide information about the business, including (but not limited to):
- The name of the registered agent
- Whether the company will be manager or member-managed
- What type of LLC it is (regular, professional, series, or professional series)
- The purpose of the LLC
Once you have completed this step successfully, the LLC will be registered in your name!
4. Operating Agreement
In Montana, drawing up an LLC operating agreement is not mandatory, but it is highly recommended. An operating agreement is essentially a company document that describes the terms for how your LLC will operate.
It details the members’ and managers’ rights and duties, as well as how the company will be administered.
Moreover, creating an operating agreement can also enable you to sustain your limited liability status because it demonstrates that your LLC is a separate legal organization. If you choose not to draw up this agreement, your LLC will be governed by state law.
5. Get An EIN
Suppose your LLC has several members. In that case, it will need to acquire an Employer Identification Number (EIN) from the IRS. If you establish a one-member LLC, you will only need to get an EIN if it will have workers or if you choose to tax it as a corporation rather than a sole proprietorship.
The Internal Revenue Service (IRS) gives EINs to businesses to identify them for taxation purposes. It’s effectively a company’s version of a Social Security Number.
Did You Know?Montana is one of the states with the lowest filing cost. This makes it one of the best places to start an LLC!
The Forms You Need To Register An LLC In Montana
We’ve compiled a list of the forms you’ll need to create an LLC in Montana. While most applications can be made online on the Montana Secretary of State’s website, here are some other forms you might need:
- Application for an EIN
- Form 1040 Schedule C – federal tax form for single-member LLCs in Montana
- Form 1065 Partnership Return – typically used by multi-member LLCs
Did You Know?Anyone involved in the LLC (as a member or manager) may not serve as its registered agent.
LLC Taxes In Montana
Because limited liability organizations have the option of being taxed as a partnership or corporation, the federal election made by the LLC affects how Montana will tax it.
If an LLC chooses to be treated as a partnership at the national level, it’ll also be charged as a partnership at the state level.
Montana has a 6.75 percent corporate tax rate that is charged on net income. There are two types of tax for LLCs in Montana, and the type of tax you will be required to pay is dependent on the nature of your business.
If you employ staff, you must register with the Montana Department of Labor and Industry for Unemployment Insurance Tax. You’ll also have to register with the Montana Department of Revenue for Employee Withholding Tax.
How Long Does It Take To Form An LLC In Montana?
As we’ve mentioned before, registering an LLC in the state takes 7 to 10 days.
However, you could reduce this processing time for a small fee.
What Does It Cost To Run An LLC In Montana?
All LLCs must submit an annual report every year by the 15th of April, and they will have to pay $20 for this annual submission.
Suppose you file your report after this date. In that case, you’ll be charged an additional fee.
What To Do After Formation?
The truth is that forming an LLC is just the first step. There are a number of other things you’ll need to do after your company is officially registered.
In the section below, we’ll give you a brief breakdown of what you’ll need to do after you have successfully created your limited liability company.
- Set up a business bank account. This will help to separate your personal assets from business assets.
- Create a logo. Having a logo helps to establish your brand and communicates your values, ownership, and quality to potential customers.
- Build a website or eCommerce store. In the digital age, creating a business website is one of the most important steps in establishing your company and reaching out to consumers.
- Business insurance. All LLCs in Montana must have workers’ compensation insurance to cover any costs for work-related injuries. It’s also a good idea to obtain general and professional liability insurance to protect your business if a lawsuit is filed against it.
- Annual reports. As mentioned before, you’ll need to submit an annual report to describe your company’s performance over the previous year.
Resources To Start A Successful LLC In Montana
Here’s a list of the resources you’ll need when starting an LLC in Montana:
- Secretary of State’s website
- Montana Secretary of State’s online registration portal
- Business name registry
- Agent registry
- Articles of Organization
- EIN application
- Resources for small businesses
- State statutes for LLCs
Start Marketing Your LLC In Montana
Once you have established your business and are ready to make sales, you will need to think about your marketing strategy. This should consist of both traditional and digital marketing strategies.
To ensure that you have a reliable marketing approach and that your website and online efforts are fruitful, you may need to hire a professional marketer to ensure that your web pages are SEO optimized. This means that it will have a better chance of showing up in users’ search results.
A marketer can also help you devise a traditional marketing strategy, including press releases, flyer distribution, email marketing, and more!
How To Dissolve An LLC In Montana
If you need to dissolve your LLC, here are some of the steps you’ll need to follow:
- Close your business accounts
- Get a tax clearance (if required)
- File the Articles of Dissolution
Keep in mind that a failure to file Articles of Dissolution could result in penalties and tax liabilities.
From personal asset protection to tax benefits, there are a number of reasons why you might want to set up an LLC. In just a few short steps, you can start the business you’ve always dreamed of having and be your own boss.
Before you get started, read Montana’s statutes concerning LLC formation to ensure that your business is compliant and prevent penalties. By following this step-by-step guide, you can have your LLC up and running in no time!