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How to Form an LLC in Montana

Learn to start and open your own LLC in Montana

Written by Melissa Pedigo – CPA, updated on

Montana — the “Treasure State” — has a rich mining history and huge natural resource deposits.

It’s also home to top-class natural attractions: the Glacier National Park, the Great Falls on the Missouri River, and Beaver Creek Park.

You might not know that Montana is also a treasure trove of business opportunities.

From hospitality venues to digital business services, there are many new business ideas you can pursue in this state for a low cost and with no competition.

Per U.S. Small Business Administration (SBA), 126,219 small businesses were operating in the state in 2021.

If you’re interested in joining their ranks, you should form a limited liability company (LLC) in Montana to benefit from the liability protection and tax advantages.

This guide explains how to start an LLC in Montana step by step and covers all related costs and fees.


Steps to open an LLC in Montana

  1. Step 1: Choose a business name for your Montana LLC
  2. Step 2: Designate a registered agent
  3. Step 3: File the Montana LLC Articles of Organization
  4. Step 4: Obtain an Employer Identification Number from the IRS
  5. Step 5: Register with the Montana Department of Revenue and Labor
  6. Step 6: Prepare an LLC operating agreement
  7. Step 7: Open a Montana business bank account

Step 1: Choose a business name for your Montana LLC

Every business needs a fine brand name. It should be short, memorable, and indicative of what you do.

LLCs, however, will also need to meet several Montana naming requirements.

The legal name you choose must:

  • Contain the words “limited liability company” or “limited company” or one of the abbreviations — “L.L.C.,” “LLC,” “LC,” or “L.C.” You may abbreviate “limited” as “ltd.” and “company” as “co.”
  • Be distinguishable from the names used by other domestic or foreign LLCs, corporations, nonprofits, or limited partnerships.
  • Not imply that the LLC is a business structure other than a limited liability company.

If you want to use restricted words like “attorney,” “bank,” or “university,” you may be asked to provide extra licensure paperwork.

Once you have several options, verify their availability in the business name database from the Montana Secretary of State (SOS).

If your Montana LLC name is available, go a step further and register a domain name to secure it ahead of time and prevent others from acquiring it.

Montana Secretary of State Business Name Search Form
Montana Secretary of State Business Name Search Form. Source: Montana Secretary of State.

Name reservations

If you’re not ready to file company formation documents yet, you can reserve your business name to prevent other companies from scooping it up.

In Montana, you can file a name reservation form online. The filing fee is $10. Your name reservation will be valid for 120 days.

Trade name

You might struggle to come up with a brandable business name. But don’t worry about that.

You can always file for an alternative name — a trade name, aka “doing business as” (DBA) name.

A DBA establishes an association between your business structure and the new brand name.

For example, you’ve launched a pet service business and named it Pat’s Pet Sitting LLC.

Later, you’ve decided to expand your operations and offer grooming services or sell pet supplies. Your initial name no longer represents your business well.

That’s when registering a trade name makes sense. You add a DBA to your LLC and legally operate as “Pat’s Pets.”

You can register a DBA with the Montana SOS online. The state fee is $20.

Step 2: Designate a registered agent

You’re required to list a Montana registered agent for your LLC.

A registered agent acts as a point of contact for your business. They receive service of process, important legal documents, and official correspondence on your business’s behalf.

An individual or business entity can act as a registered agent, provided they meet the following requirements:

  • Be over 18 years old and reside in Montana
  • Have a physical street address (not a P.O. Box)
  • For legal entities: be authorized to do business in the state

Legally, you can serve as your own Montana registered agent. Many single-member LLCs and some multi-member LLCs opt to do so. However, you must be present at the office during regular business hours and meet all the above requirements.

For most businesses, using a commercial registered agent makes more sense. The provider can handle state filings and other administrative paperwork instead of you. Plus, you have the freedom to leave the office or take time off.

Commercial registered agent services in Montana charge $100-$300 per year.

Step 3: File the Montana LLC Articles of Organization

You have a business name and selected a registered agent. The next step is to register your Montana LLC with the state.

To form an LLC, you must complete and file an Articles of Organization form online with the following details:

  • LLC name and mailing address
  • Registered agent’s name and address
  • Management structure
  • Names and addresses of all members or managers
  • Date and signature of the person filling out the paperwork

The state fee is $70 for approving your LLC’s Articles of Organization.

If you are already incorporated in another state and want to do business in Montana, you’ll need to register as a foreign LLC.

Foreign LLCs must file a “Certificate of Authority of Foreign Limited Liability Corporation” online with the Montana SOS and a current certificate of good standing/existence from the domestic state. The filing fee is $70.

Montana’s average LLC registration processing time is 7-10 business days.

If you need your LLC formed faster, expedited processing is available at an extra cost:

  • 24-hour priority handling: $20
  • 1-hour expedited handling: $100

Step 4: Obtain an EIN (Employer Identification Number) from the IRS

Once you are done with the state formalities, switch to the federal level.

All multi-member LLCs must apply for an Employer Identification Number (EIN). An EIN works like a Social Security Number (SSN) for the business that identifies it and lets you file federal taxes and pay your workers.

Single-member LLC without employees don’t need to apply for EIN immediately.

You request a new EIN online, by mail, or fax from the Internal Revenue Service (IRS). The registration is free.

Step 5: Register with the Montana Department of Revenue and Department of Labor

LLCs formed in Montana must register with the Montana Department of Revenue and Department of Labor & Industry to fulfill various state tax obligations.

If you have property, payroll, or employees in Montana, register with the Montana Department of Revenue to:

  • Set up a withholding account to withhold taxes from employees’ paychecks.
  • Submit business property tax forms.

One of the perks of Montana is that it has no statewide sales tax. So no sales permit is necessary!

If you have employees, you’ll also need to register for unemployment insurance tax through the Department of Labor & Industry. LLCs must also provide workers’ compensation insurance, which you can purchase from authorized insurers in Montana.

Both registrations are quick and can be done online.

Step 6: Prepare an LLC operating agreement

LLC operating agreement example
LLC Operating Agreement Example. Source: Northwest Registered Agent.

Multi-member LLCs should consider creating an operating agreement.

This legal document acts as a “guidebook” for running the company, managing operations, making decisions, and distributing profit.

Montana state law doesn’t require LLCs to have an operating agreement, but they strongly encourage you to have this document.

The agreement shows that:

  • Members’ assets and debts are separate from the LLC’s finances and legal liabilities.
  • Disagreements and conflicts can be prevented and resolved without invoking Montana law.
  • New investors or members have a clear picture of how the business operates.

You can draft your operating agreement with the help of an attorney or use a customizable online.

Step 7: Open a Montana business bank account

Unlike sole proprietorships, LLCs (even single-member ones) are not allowed to use a personal account for business finances.

That’s one of the key requirements for retaining personal liability protection.

Stacks of U.S

Apply for a business bank account for a local financial institution once you have all formation documents approved.

Popular Montana banks among small business owners include:

  • Opportunity Bank of Montana: $100 minimum opening deposit, no minimum balance requirement, no monthly service charge.
  • Farmers State Bank: $50 minimum opening deposit, no minimum balance, and no monthly fee.
  • Bank of Bozeman: $100 opening deposit, $100 average minimum balance, monthly fees may apply.

Montana LLC taxes, costs, and fees

To stay in good standing and keep your registration up to date with the Montana SOS, you must file an annual report online by April 15 each year and pay a $20 filing fee. Late filings attract a $15 penalty. Or worse — your LLC can be involuntarily dissolved if you continuously disregard compliance requirements.

Also, your LLC must fulfill its tax obligations to the state. Montana doesn’t charge franchise or state sales tax.

But your LLC may be subject to other types of local business taxes:

  • Business property taxes
  • Alcohol beverage taxes
  • Corporate income taxes (if you file federal taxes as C-corporation)

Montana also collects local business taxes on natural resources harvested in the state, such as coal, natural gas, oil, and metal.

Montana Local Taxes List
Montana Local Taxes List. Source: Montana Department of Revenue.

Montana business permits and licenses

Depending on your location, industry, and type of business, you need to obtain applicable business licenses, permits, or certifications to operate your LLC in Montana.

On a state level, there isn’t a general business license. However, you may need a professional license to provide a certain type of service.

For instance, the Montana Department of Revenue’s Liquor Licensing Division charges $200 to $400 for on-premises consumption licenses. Food truck operators need a retail food license that costs between $85 and $115.

You can learn more about business licensing requirements on the Montana Department of Commerce website.

Pros and cons of forming an LLC in Montana

LLC formation in The Treasure State comes with some definite perks and a few disadvantages. Here’s a quick summary.

Montana LLC pros

  • Low LLCs startup costs (registration and operation).
  • No franchise tax.
  • No state sales tax.

Montana LLC cons

  • Small domestic market.
  • Annual report required.

Key takeaways

  • The cost to start a Montana LLC is $70.
  • It takes 7-10 business days to form an LLC in Montana.
  • You don’t need to file an operating agreement with the Montana SOS.
  • Montana has no state sales tax or franchise tax.

Montana LLC FAQs

Below are some of the most frequently asked questions (FAQs) about forming an LLC in Montana.

Melissa Pedigo

Article by:

Melissa Pedigo

CPA

Melissa Pedigo is a US CPA with more than 20 years of experience. She’s worked at Big 4 firms, for the government, and internationally. Now a full-time writer, she enjoys translating complex financial and tax topics into plain English. When she’s not keeping current reading IRS rules or tax legislation, you’ll find her studying foreign languages or playing tennis.

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