Guide to Forming an LLC in Montana
Follow our free guide to form an LLC in Montana
- Pros and Cons of Forming an LLC in Montana
- Starting Your Montana LLC
- Maintaining Your Montana LLC
- Additional Montana Resources
Starting an LLC in Montana involves a number of different steps. Our comprehensive guide is divided into two main phases to help you better understand every part of the Montana LLC formation journey.
Pros and Cons of Forming an LLC in Montana
Low Start-Up Costs
Montana is a great place to start an LLC business without spending a lot of money—from the low filing and annual report fees ($90 combined) to low state income tax rate and no corporate taxes for LLCs.
No Corporate/Franchise Taxes
Montana does not impose any corporate or franchise tax on LLCs. The only taxes owed on the LLC’s revenue is the personal income tax paid by the members.
No State Sales Tax
Montana is one of only a few states in the nation that does not have a state sales tax.
Air Pollution Issues
Montana is among the worst places in the nation for clear air; the biggest problem for the air pollution is smoke from wildfires and wood-burning stoves.
Less Privacy for Owners
Montana state law requires the LLC members/manager to be listed in the Articles of Organization.
Cost of Doing Business
- $70 filing fee / $20 annual report
- No corporate tax and no sales tax
Phase One: Starting Your Montana LLC
Starting an LLC in Montana does not have to be stressful—the process is much simpler than you might think, especially when you have experienced and professional help. To begin setting up your Montana LLC, check out the following steps:
- Step 1: Name your LLC
- Step 2: Establish Ownership of your LLC
- Step 3: Decide on a Registered Agent
- Step 4: File the Articles of Organization
- Step 5: Create your Operating Agreement
- Step 6: Register for an EIN
Step 1: Name Your Montana LLC
Choosing a good business name is the first step to successfully forming your Montana LLC. You should make note of the state and federal regulations and restrictions that are in place regarding certain words in business names.
Tip: Use a free business name search tool to ensure your company’s desired name is available.
Business Name Guidelines
- The official name of your business must end with: Limited Liability Company, Limited Company, LLC, or L.L.C.
- Your business name cannot be intentionally misleading to consumers
- The name of your new LLC must not be similar to another organization’s name/trademark
- “Lottery” and “Bank” are ineligible for use (any state)
- Terms that represent educational or Veterans’ organizations are restricted
- Terms related to the Armed Forces or civil servants (police, EMT, fire)
LLC business names associated with government and/or financial entities are not always restricted—it depends on the state. Additional paperwork may be required.
It is important to also establish an online presence for your Montana LLC. In addition to choosing a business name, you also need to decide on a domain name for your business’s website.
Step 2: Establish Ownership
The owners of an LLC are actually known as members and managers. All LLCs will have members, but not every LLC will have managers — the difference depends on the management structure of the business.
LLC Management Structures:
- Member-managed: All members participate in the operating and decision-making of the LLC
- Manager-managed: An appointed manager oversees the daily operations of the LLC and the members are not actively involved.
Montana LLC Member Guidelines
Required Number of Members
There must be at least one member or manager to form an LLC in Montana.
Member Disclosure Requirements
All managers/members of the LLC must be included in the Articles of Organization/Certificate of Formation.
LLC members in Montana may be of any age.
There are no residency restrictions imposed on LLC members in Montana.
Step 3: Find a Registered Agent in Montana
The registered agent is required for all Montana LLCs. In fact, businesses cannot officially operate without filling this position.
What is a registered agent?
A registered agent is a person or business who receives all of the official government mail and service of process notices on behalf of the LLC.
Why do you need a registered agent?
Montana law requires business owners to appoint a registered agent so that the state government has a consistent contact person for your LLC.
What are the main requirements for a registered agent?
- The registered agent must have a physical address — not a P.O. Box
- The registered agent must be available during business hours
Who can be a registered agent in Montana?
- A state resident with a physical address in Montana
- An LLC or corporation that is licensed to conduct business in Montana
Is the registered agent’s contact information publicly accessible?
The name and contact information of the LLC’s registered agent is a matter of public record.
Can I be my own registered agent for my business?
You can be your own registered agent as long as you have a physical address in Montana.
Is being my own registered agent discouraged?
Since the registered agent’s name and address are publicly listed, LLC business owners who choose to be their own registered agent risk compromising their personal information.
Tip: Avoid the hassles and choose Swyft Filings to fill the registered agent needs for small businesses in Montana. Find more information here.
Step 4: File the Articles of Organization
The most important step in forming your Montana LLC is to file the Articles of Organization with the Secretary of State.
What is the Articles of Organization?
The Articles of Organization is a legally binding document that is filed with the state government to officially and legally form your LLC.
Why do I need the Articles of Organization?
Your LLC business in Montana will not be legally recognized by the Secretary of State without filing this document. Consider the Articles of Organization as part of your LLC’s foundation.
What information is included in the Articles of Organization?
- The name and address of the LLC
- The name of the LLCs members/managers
- The name and location of the registered agent
- The chosen LLC management structure
- The duration of the LLC (perpetual or not)
- The statement of purpose
Please Note: Montana allows LLC members to include their tribal information in the Articles of Organization if desired.
Additional Montana Filing Information — Professional LLCs
Professional service businesses in Montana can form a specific type of LLC known as a Professional Limited Liability Company (PLLC).
The following professions are allowed to form a PLLC:
- Physicians/Medical Professionals
- Professional Counselors and Psychologists
- Architects and Engineers
- Social Workers
A few points to consider:
- The business name must include “PLLC” or “Professional Limited Liability Company”
- All members of the PLLC must be licensed in the profession of the business.
- The PLLC is only allowed to provide services for which the business was formed.
- The members are still subject to whichever licensing boards govern the PLLC’s profession.
Step 5: Create an LLC Operating Agreement
An LLC Operating Agreement is not required by the state, but it is still necessary for the continued success of your Montana LLC.
What is an LLC Operating Agreement?
The LLC Operating Agreement is a legal document that defines the roles of the parties involved in the business and lays out the details involving the LLC’s internal operations.
Why do I need an LLC Operating Agreement?
The LLC Operating Agreement is necessary because it provides structure for the business, protects business assets from creditors, and reduces disputes among members.
Do I need to file the LLC Operating Agreement?
You do not need to file the Operating Agreement with the state; it is for the benefit of your LLC and remains in-house.
What goes into an LLC Operating Agreement?
While there is not a set rule of what must be included in your LLC Operating Agreement, most documents include the following information:
- List of the members/managers and their roles
- Designation of authority in the LLC
- Initial capital contributions of the members
- Voting designations and percentages of the members
- Member transfer/addition rules and restrictions
- Distribution of profits
- Meeting schedule
Tip: Get a customized LLC Operating Agreement for your small business with Swyft Filings. Add structure to your LLC now.
Step 6: Register for an EIN
The majority of Montana-based businesses are required by law to have an EIN. Your Montana LLC will not be able to conduct business without this ID.
What is an EIN?
The EIN (Employer Identification Number) is a nine-digit number that is assigned to your business by the Internal Revenue Service (IRS). The EIN is similar to a personal Social Security number.
Are all businesses required to have an EIN?
Federal law dictates that certain types of business entities register for an EIN:
- Any business with employees (even if owned by one person)
- Any business with more than one member
- A partnership (LLC or C-corp)
Please Note: A sole proprietorship is not required to have an EIN, but it is still recommended.
Why does my LLC business need an EIN?
The more common reasons you would need an EIN are:
- To hire employees
- To open a bank account in the U.S.
- To file your company’s taxes
- To pay independent contractors
In short, if you make money through your business and it has employees, you must have an EIN.
Is the EIN publicly listed?
The EIN for your LLC will be part of public record.
Can I use my Social Security Number as the EIN?
If you are a sole proprietorship who wants an EIN for your business, you can elect to use your social security number; however, your EIN is part of public record.
Swyft Filings offers EIN services for small businesses in Montana. Find more information here.
Phase Two: Maintaining Your Montana LLC
The next phase of setting up your Montana LLC is meant to help move your business forward and stay compliant with the state and the federal government. The next few steps are:
- Step 1: Register for Taxes in Montana
- Step 2: Apply for Permits and Licenses
- Step 3: File the Annual Report
- Step 4: Request a Certificate of Fact
Step 1: Register for Montana State Taxes
Montana does not charge LLCs with a corporate or franchise tax. LLC members are still required to pay state and federal income taxes on their earnings.
State Income Taxes
LLC members will also be responsible for paying the state income tax in Minnesota. The chart below lists the most recent tax rate information:
Corporate Tax Information
You can also choose to have your LLC taxed as a corporation; if so, you will be responsible for paying the corporate income tax rate on your business’s earnings. Corporations in Montana must pay 6.75% corporate income tax.
Additional Tax Information
Other taxes your LLC may need to pay:
- Employee Withholding Tax
- Unemployment Tax
Please note: Montana is one of the few states that does not have a state sales tax.
Step 2: Obtain Business Licenses and Permits
The licenses and permits required for an LLC in Montana can vary, depending on a number of variables:
- Location (city and county)
- Type of Business
Tip: If you would like to see more in-depth information on licenses and permits, please feel free to visit the content in our learning library that covers business licenses and permits.
Step 3: File an Annual Report
All Montana businesses are required to file an annual report with the Secretary of State.
What is an annual report?
An annual report, which is also called a periodic report, is a legal form that is filed with the Secretary of State on a periodic basis that is designed to keep your business’s information current with the state.
What kind of information is in the annual report?
The information requested in the annual report is similar to what was listed in the Articles of Organization:
- The name and address of the business
- The name and address of the registered agent
- The names of the members
- The business’s EIN
Is the annual report part of public record?
The annual report filed on behalf of your LLC is a matter of public record.
Fees and Due Date
Due Date: April 15th
Implications of Late Filings: $15 late fee/LLC dissolution after November 1st
Swyft Filings helps you stay compliant by providing stress-free solutions. File your annual report with us today.
Step 4: Request a Certificate of Fact
The last step in forming your Montana LLC is securing a Certificate of Fact for your business.
What is a Certificate of Fact?
The Certificate of Fact, also known as a Certificate of Good Standing, is an official notification that confirms your business is properly formed and compliant with all state regulations.
Who issues the Certificate of Fact?
The Certificate of Fact is generally issued by the Secretary of State.
When can I request a Certificate of Fact for my business?
You can get a Certificate of Fact through the Secretary of State after your LLC is officially formed .
Why do I need a Certificate of Fact?
The Certificate of Fact offers proof to businesses and financial institutions that your LLC is in good standing with the state government.
Please Note: some states require a Certificate of Fact before a business can apply for Foreign Qualification.
Does the Certificate of Fact have an expiration date?
The Certificate of Fact does not expire/does not need to be renewed.
Swyft Filings can create a Certificate of Fact for your Montana LLC. Click here for more information.