- Step 1. Naming Your Montana LLC
- Step 2. Appoint a Registered Agent
- Step 3. File Your Articles of Organization
- Step 4. Create an Operating Agreement
- Step 5. Get an EIN/Tax ID Number
- Step 6. Keeping Your LLC Running
- Montana LLC Resources
- Montana LLC FAQs
Step 1. Naming Your Montana LLC
Your LLC’s name is incredibly important, as this is what the public will know your business by. When naming your LLC, there are several rules to keep in mind about what you can and can’t call your business.
Legally Required Designation
In accordance with Montana LLC regulations, the name of your LLC must have the phrase “limited liability company” in it or contain one of the following approved abbreviations:
- Limited Company
The name that you choose for your LLC must be unique and distinguishable from all other businesses in the state. You can ensure that your desired LLC’s name is available by running a search on the business name database provided by the Montana Secretary of State’s office.
If you find a name that you like and is available, you can file a Reservation of Name with the Secretary of State. This form will reserve your chosen LLC name for 120 days before you officially establish your business. There is a $10 filing fee associated with the form, and you can file it online.
You may also want to perform a domain name search while you are looking for an available LLC name. Even if you don’t want to set up a business website immediately, it is a good idea to purchase a matching domain name ahead of time, reserving it for when you do want the website.
When choosing an LLC name, keep in mind that it should not include any words that may risk confusing your business with a state or federal government entity. This can include words like “CIA,” “Treasury,” “IRS,” or “State Department.”
You should also be aware that using words such as “bank,” “attorney,” or “chiropractor” may require the presence of a properly licensed individual in your LLC and additional LLC paperwork filings. These words may also categorize you as a professional LLC in Montana, which you can read more about here.
Using a Trade Name
You are allowed to use a trade name, or DBA (doing business as) name, for your LLC in Montana. This type of name means that you will continue using your legally registered LLC name on all official documents (both state and federal) but will use the DBA name when interacting with the public.
To register your DBA name in Montana, you will need to file a Registration of Assumed Business Name with the Secretary of State’s office. There is a $20 filing fee associated with this form, and you will need to file it online using the state’s ePass system.
Step 2. Appoint a Registered Agent
A registered agent also called an agent for service of process, must be appointed for every LLC operating in Montana. The registered agent will be responsible for receiving all legal documents, government communications, and tax documents, acting as a contact point between your LLC and federal agencies or the state of Montana. They will also be the responsible party that is contacted in the event of a lawsuit against your LLC.
You can appoint any Montana resident or a business that is authorized to conduct operations in the state as your registered agent. As long as your appointee has a valid state address, they are eligible to be your registered agent.
If you want, you can check out the list of registered agents that the Secretary of State’s office provides and select one from there.
Step 3. File Your Articles of Organization
In order to officially establish your LLC, you will need to file your Articles of Organization with the Montana Secretary of State. This document will need to contain information about your LLC, without which the state cannot allow your LLC to operate. Below, you can check out some of the information that may be required on this form.
- Your LLC’s type (either regular, professional, series, or professional series)
- Your LLC’s name
- Your LLC’s registered agent’s name
- The address of your LLC’s principal office
- Whether your LLC is perpetual or has a designated end
- Your LLC’s purpose (i.e., the type of business it conducts)
- If your LLC is a tribal business
- If your LLC will be member-managed or manager-managed, and the applicable names and addresses of a member or manager
- If LLC members are liable for the business’s debts and obligations
- The LLC applicant’s signature
Once you have completed the document, you can file the Articles of Organization online. Follow the link and select the Articles of Organization form. Press “file online,” and you will be taken to the Montana ePass system. From there, you can create an account and proceed through the steps listed to file your document.
There is a $70 filing fee associated with this form, and it will take between 7 and 10 days to be fully processed. If you so choose, you can pay an additional $20 expedited service fee for 24-hour processing or a fee of $100 for one-hour processing.
Step 4. Create an Operating Agreement
An operating agreement is not required by the state of Montana, but you should consider creating one for your LLC anyway. An operating agreement will set clear guidelines for how exactly your LLC is managed, the rights that members or managers have, and what to do in the case that your LLC dissolves or experiences a lawsuit.
Additionally, most business bank accounts, loan applications, and other business services will require you to have an operating agreement on hand to demonstrate your LLC as a separately operating business entity before you can secure funding or business services.
If you need help drafting an operating agreement, you can contact a legal advisor familiar with Montana LLC law, or you can follow one of the templates offered here. If you do use a template, make sure that you read through it carefully and make any applicable changes based on Montana regulations and your personal preferences.
Step 5. Get an EIN/Tax ID Number
After your Articles of Organization have been filed, you will need to apply for a Tax ID number, also known as an EIN (Employer Identification Number), through the IRS. Any LLC that has more than one member, or any single-member LLC that wants to either hire employees or be taxed as a corporation, is required to apply for an EIN.
Your EIN will be used to identify your business to the IRS on all tax documents and necessary government filings; the number acts much like a social security number for your LLC. If you want to hire employees, file federal taxes, open business bank or credit accounts or apply for business funding, you will need an EIN.
It is free to apply for your EIN with the IRS, and you can file the application online or by mailing it in. Keep in mind that if you are a foreign filer or do not have a social security number, you will need to file for your EIN through the mail.
The quickest and easiest way to apply for your EIN is online; you will receive your number once your application is completed. Visit the IRS website to apply for your EIN for free.
You will need to fill out this form when applying for your LLC by mail. If you are a foreign filer or do not have a social security number, leave section 7b blank. Mail the completed form to the address below. You can follow up on any questions with the IRS at (267) 941-1099.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Step 6. Keeping Your LLC Running
Even after your LLC has been legally established in Montana, there are several regulations that you will need to keep up with to ensure your business stays running without issue.
File Annual Reports
All LLCs that are operating in Montana must file an annual report. This document keeps the Secretary of State updated on your business and allows you to stay in good standing. Your annual report will be due each year by April 1st, and there is a filing fee of $20. If you file your report after April 1st, it will be considered late, and the filing fee will increase to $35.
LLCs that don’t file their annual report by December 1st will be involuntarily dissolved by the Secretary of State’s office. If this happens to you, you will need to file an Application for Reinstatement within five years after the dissolution. You can read more information about this here.
Separate Your Business Finances
It is not required by Montana to open a business bank account, but it may be a good idea to establish one anyway. A business credit or debit account can help keep your LLC’s finances separate from any personal ones, establishing the LLC as an independently operating business.
Keep in mind that you will most likely need to show your Articles of Organization, operating agreement, EIN, or other LLC documents to open a bank account for your LLC. You should also make an effort to compare all of your banking options before making a choice on where to open an account; different banks will have varying minimum required balances or credit spending limits, and you want to be sure that you select something that is the best for your LLC’s needs.
Keep Up With Federal and State Taxes
While operating your LLC, you will need to keep up to date with both federal and state taxation requirements. Failure to do this may result in major tax penalties or issues running your business in the state.
Federal Tax Requirements
There are several different tax structures you can choose from for your LLC that can meet different company needs, as each tax structure comes with its own unique type of federal taxation requirements. This article can help you gain an in-depth understanding of the differences between each type of tax structure and help you decide which is best for you.
In general, most LLCs are taxed as sole proprietorships or partnerships. This means that you will be expected to file Schedule C, along with your individual income tax return, to declare any income that you receive through your LLC (your LLC is acting as a pass-through entity in this situation). When using this tax structure, you should keep in mind that you will most likely need to pay self-employment tax (which has a rate of 15.3%), in addition to any income tax. You may also need to make quarterly estimated tax payments to avoid any IRS fines; the IRS website gives more details on this.
If you want, you can choose to have your LLC taxed as a corporation, like an S Corporation or a C Corporation. You will need to fill out IRS Form 8832 and IRS Form 2553 to declare this. After these forms have been processed, your LLC will be treated as a corporation and expected to file a separate corporate tax return with the IRS.
Montana Business Taxes
While Montana does not have a statewide business tax requirement, it does have a corporate income tax. This means if your LLC is taxed like an S or C corporation, you will likely be liable to pay some of this tax on your annual state returns. You can read more about the Montana corporation income tax, including information about tax rates and due dates, on the Montana Knowledge Base database.
You should also keep in mind that LLCs taxed as sole proprietorships or partnerships (pass-through entities) will be subject to state income tax as it is declared on your individual income tax return. You can learn more about filing individual income tax reports on the Montana Department of Revenue website.
Sales and Use Taxes
Fortunately, Montana does not have a general sales and use tax that you would need to register for if your LLC is selling goods or services. More information about this can be found here.
State Employer Taxes
If your LLC will have employees, you will most likely be liable to pay both state withholding taxes and unemployment insurance tax. Withholding taxes can be registered and paid for through the Montana Department of Revenue, while unemployment insurance taxes should be registered and paid for through the Montana Department of Labor and Industry.
Acquire Necessary Permits and Licenses
There is not a general business license requirement in Montana, but you may need to acquire permits or licenses on a city or county level. You should check with the clerk’s office of the locality that your LLC is located in to be sure.
If you will be offering professional services through your LLC, you may be subject to different licensing requirements. You can find out more information about licensing your small business in Montana using the Department of Commerce’s website.
Additionally, you may be required to obtain certain permits and licenses for your LLC on a federal level. Whether this is needed depends mostly on the type of business you are running and the services you are offering. For help determining if you need to meet additional federal licensure requirements, you can use the directory on the U.S. Small Business Administration’s website.
Montana LLC Resources
The below list of resources can help guide you through every step of the way in creating your Montana LLC from the ground up.
- Available LLC name search
- Reserve an LLC name
- Available domain name search
- Register a DBA name
- Articles of Organization form
- Montana ePass system
- IRS EIN online application
- Annual Report filing instructions
- Montana Department of Revenue
- Montana Department of Labor and Industry
- Small business licensing information
- S. Small Business Administration
Montana LLC FAQs
Check out the answers to these frequently asked questions below for help understanding the LLC setup process or to put any remaining worries to rest.
In Montana, it will cost you $70 to file your Articles of Organization, establishing your LLC. You may also need to pay $10 to reserve your LLC name ahead of time or $20 to register a DBA name for your LLC.
The cheapest way to start your LLC in Montana is to file your Articles of Organization without first reserving an LLC name or registering a DBA name. Doing it this way will only cost you $70 to get your LLC up and running.
Once you file your Articles of Organization, it will take between 7 and 10 days to be processed by the Montana Secretary of State. You do have the option of paying an additional $20 expedited service fee for 24-hour processing or an extra fee of $100 for one-hour processing.
How much your LLC pays in taxes depends on the individual tax structure you have running for your business. You should also keep in mind that while there isn’t a general business tax for LLCs in the state, you may be liable for either individual state income tax or corporate income tax. And if your LLC has employees, you may need to register for and pay additional state employer taxes.
In Montana, LLCs are required to file state reports on an annual basis. The report is due by April 1st each year, carries a $20 filing fee, and must be filed online. Any report filed past April 1st is considered late and will be charged a filing fee of $35.
If you neglect to file your annual report by December 1st, your LLC will be involuntarily dissolved.
If you are finished conducting business under your LLC in Montana, you will need to file the Articles of Termination with the Secretary of State’s office. There is a $15 filing fee associated with this form, and you will need to file the articles online using the state’s ePass System.
Additionally, you will need to consult your operating agreement (if you have one created) to ensure you follow the agreed-upon terms for wrapping up and closing down all aspects of your LLC’s business.