How to Start an LLC in Montana (Step-by-Step Guide)

If you’re considering forming a Montana LLC, you’re making a smart choice for protecting your assets while enjoying flexibility in business operations.

To establish your LLC successfully, you must choose a unique business name, designate a registered agent, and file Articles of Organization.

But there’s more.

Filing your Articles of Organization in Montana costs $35, and they are approved in about six business days.

This guide compiles all the information you need to start an LLC in Montana today.

What Are the Steps to Start an LLC in Montana?

To start an LLC in Montana, you need to:

• Step 1. Select a unique name for your Montana LLC
• Step 2. Select a registered agent in Montana
• Step 3. File Articles of Organization with the state
• Step 4. Create an Operating Agreement
• Step 5. Get an EIN from the IRS
• Step 6. File a BOI Report
• Step 7. File annual reports

Let us dive more in-depth into these steps so I can show you how to get them:

Step 1: Select a Unique Name for your Montana LLC

Choosing a name for your Montana LLC is an essential first step. Your business name needs to be unique and meet specific requirements.

Before you settle on a name, use the Montana Business Entity Search to ensure it has not already been taken. The state won’t allow two businesses to use the same name.

Your chosen name must also be distinguishable from existing names. Similar names might be rejected. Aim for something that stands out.

You must add a designation to your LLC name. This could be one of the following:

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

If your formal LLC name is lengthy, consider registering a trade name, a “doing business as,” or a DBA name. This name can be more straightforward and catchier. You can register a DBA name with the Montana Secretary of State’s office for a $20 fee.

If you find a suitable name, you can reserve it for 120 days for a $10 fee. This gives you time to ensure it is acceptable at both the state and national levels.

Finally, use the U.S. Patent and Trademark Office’s database to see if your name is already used elsewhere. This step helps avoid potential legal issues later on. If it isn’t, trademark it so that no one else can.

Trademarking your name is crucial to prevent others from using it. Without this protection, enforcing your intellectual property rights against competitors who infringe on them can be challenging.

Sometimes, a competitor might even trademark your name first and take legal action against you for using it. To avoid such issues, securing your trademark as early as possible is wise.

Step 2: Select a Registered Agent in Montana

Choosing a registered agent is essential in forming your LLC in Montana. A registered agent acts as your business’s official point of contact. They receive legal documents and important notices on behalf of your LLC.

Who Can Be a Registered Agent?

You have a few options for who can be your Registered Agent in Montana:

• You: You can act as your registered agent, but remember you must be available during business hours to receive documents.
• A Family Member: A trusted family member can be your registered agent.
• An LLC Formation Service: Professional services offer expertise in handling official correspondence and ensuring compliance with state regulations.
• A Lawyer: A legal service firm can also serve as your registered agent, providing additional legal support if needed.

Requirements for Montana Registered Agents

Montana law requires registered agents to have a physical street address, not just a P.O. Box. The address must be where the agent can consistently receive legal documents and official mail during regular business hours.

Additionally, the registered agent must be at least 18 years old and available to accept service of process. This means they must be present to handle any legal notices or court documents delivered to the LLC.

What registered agents do I recommend for Montana?

I highly recommend Northwest registered agent services for obvious reasons.

They offer a range of benefits that set them apart, including a free year of registered agent service, which helps you save (about $300) on initial costs.

You’ll receive a complimentary operating agreement essential for outlining your LLC’s internal structure. My favorite part? Northwest also allows you to use their office address for your LLC filing, keeping your address off public records and enhancing your privacy.

Their free email forwarding service ensures you stay on top of important correspondence, and their exceptional customer support is always available to assist you whenever needed.

Step 3: File Montana LLC Articles of Organization

Filing the Articles of Organization is crucial in starting your LLC in Montana. This document lets the state know your business exists and is ready to operate.

To file your Articles of Organization in Montana, follow these steps:

Step #1. Complete the Form: Obtain and complete the Articles of Organization form from the Montana Secretary of State website.

To file your Articles of Organization, you need to gather some essential information:

• The formal name of your LLC
• Your business’s principal mailing address
• The name and address of your registered agent
• Names and addresses of LLC members and managers
• Management structure (member-managed or manager-managed)
• Dissolution date, if applicable

Step #2: File Online: You can file your Articles of Organization online through the Montana Business Services Platform. However, Montana no longer accepts filings by mail.

Step #3: Pay the Filing Fee: The filing fee is $35. The state needs this fee to process your application and recognize your LLC.

Once approved, the LLC will receive a Certificate of Organization, proving the entity exists. It provides legal recognition and allows you to start your business operations.

Remember, ensuring all the information is accurate before submitting is essential, as errors can delay the process.

Step 4: Prepare Operating Agreement for Your Montana LLC

An operating agreement is an internal document that outlines how your Montana LLC will be run. While not required in Montana, it’s beneficial, especially for multi-member LLCs.

This agreement acts as a contract among the members. It helps clarify essential issues that could lead to disagreements.

Here are some key points to include:

• Ownership Percentage: Detail what portion of the LLC each member owns.
• Member Responsibilities: Define the roles and duties of each member.
• Taxation Choices: Specify how your LLC will be taxed separately or through members’ taxes.
• Profit Distribution: Outline how profits and losses will be shared among members.
• Liability Indemnification: Include provisions to protect members from certain liabilities.
• Voting Rights: Define how decisions will be made. Will all members have equal votes?
• Meeting Procedures: Outline how often meetings will occur and how members will be notified.
• Amendment Process: Describe how changes can be made to the agreement in the future.

Having an explicit operating agreement can prevent potential disputes and misunderstandings. It sets guidelines for decision-making and can help ensure smooth operations.

Since this document is legally enforceable, consider having a small business lawyer review it before signing.

Their expertise can help protect your interests and strengthen your business. Prepare this document carefully and take your time to ensure that all members agree.

Step 5: Obtain EIN for Your LLC

An Employer Identification Number (EIN) is a unique nine-digit number the IRS assigns. This number is essential for your LLC in Montana because it identifies your business for tax purposes.

It would be best if you had an EIN for several reasons:

• Opening a business banking account: Most banks require an EIN to open a business account.
• Taking out a business line of credit: Lenders often ask for an EIN when you apply for credit.
• Applying for specific permits: Some permits and licenses require an EIN as part of the application.
• Contracts with wholesale vendors: Vendors may request your EIN to process your orders.

How to Apply for an EIN:

• Online: Visit the IRS website. This is the fastest way to get your EIN.
• By Mail: Fill out Form SS-4 and send it to the IRS. This option takes longer.
• By Fax: You can also fax the completed Form SS-4.
• Phone: U.S. residents can call the IRS at 1-800-829-4933 to apply.

How Much Does It Cost To Get EIN?

Obtaining an EIN is free. However, some services charge $100 or more to help you with the entire process.

How Does it Take to Obtain my EIN?

• Online: Get it immediately.
• By Mail: Expect 4 to 6 weeks.
• By Fax: Usually within four business days.

Step 6: File a BOI Report

After setting up your LLC in Montana, you must file a Beneficial Ownership Information (BOI) report. This is a federal requirement for new LLCs.

You must submit this report to FinCEN within 90 days of forming your LLC. Filing is free and can be done online at the FinCEN website.

When filing your BOI Report, you will typically need to provide:

• Your Name
• Your Business Name
• Your Business Address
• Ownership Details

Make sure to check the specific instructions on the FinCEN website for any additional information required.

Gather this information along with your LLC formation documents. This will help streamline the filing process.

Completing the BOI report is essential for maintaining compliance with federal regulations. It ensures transparency about who owns and controls your LLC. Take the time to do this correctly to avoid any potential penalties.

Step 7: File an Annual Report

As the owner of an LLC in Montana, you must file an Annual Report each year. This report is essential for keeping your business in good standing with the state.

The filing fee for the Annual Report is $20, due by April 15 each year.

Your first Annual Report is due the year after your LLC is approved. For instance, if your LLC was approved on June 30, 2024, your first report will be due by April 15, 2025.

You must file your Annual Report online. Here’s how to do it:

• Go to the Montana Secretary of State Business Services page.
• Click on Filing Portal Login in the upper right corner and log in.
• Select File Annual Report under Business Services.
• Search for your LLC using its name or Business Identifier number.
• Click on your LLC name in the results and follow the prompts to complete your filing.

Staying on top of this requirement helps you avoid penalties. Make sure to set reminders so you never miss a deadline.

What are the Different Methods To Start a Montana LLC?

There are three main methods of starting an LLC in Montana. Each method has its steps and advantages. Choose the one that best fits your needs and budget.

DIY LLC Formation in Montana

Forming an LLC by yourself is a straightforward option. You will fill out and submit the Montana Articles of Organization and pay the required filing fee.

All by yourself, no third party!

Pros:

• Cost-Effective: You save money by not hiring anyone.
• Control: You have complete oversight of each step.
• Learning Opportunity: You gain knowledge about the process.

Cons:

• Time-Consuming: It may take longer if you are unfamiliar with the process.
• Complexity: You must ensure all forms are correctly filled out.
• Privacy issue: If you serve as your registered agent, you risk having your address out there.
• Lack of Guidance: You might miss the necessary steps.

Using a Professional/Online LLC Formation Services

Many online services can help you form your LLC. These platforms guide you through the entire process, handling most paperwork.

Pros:

• Convenient: They manage the filing, saving you time.
• User-Friendly: Most platforms have easy-to-understand instructions.
• Support Available: Many offer customer service for questions.
• Privacy benefits: Most services allow you to use their address for free, so your address doesn’t get compromised

Cons:

• Costs: You’ll pay a service fee.
• Variable Quality: Some services may not be as reliable as others.

Hiring an Attorney

Working with an attorney is another option for forming your LLC. This method ensures you have professional legal guidance throughout the process.

Pros:

• Expertise: An attorney knows the legal requirements and can avoid pitfalls.
• Customization: Your LLC can be tailored to your specific business needs.
• Support with Complex Situations: Ideal for businesses with unique circumstances.

Cons:

• Higher Costs: Legal fees can be expensive.
• Dependence on Others: You may rely heavily on the attorney’s schedule.
• Potential Delays: The process may take longer due to attorney workloads.

What is The Cheapest Alternative Way to Form an LLC in Montana?

If you want to start an LLC in Montana on a budget, the most affordable option is to do it online. By filing the Articles of Organization directly with the Montana Department of State, you can keep costs between $50 and $100, depending on your needs.

This DIY approach helps you avoid the extra fees of hiring a service or lawyer, saving you money for other business expenses.

However, while DIY is cost-effective, it requires some effort. You’ll need to understand all the forms and regulations, and missing a detail could delay your application or create problems later.

Consider using a registered agent if you prefer not to handle everything yourself.

They can make the process smoother by ensuring you receive important documents and helping you stay compliant with state requirements. Although this adds a bit to the cost, it can provide valuable support and peace of mind.

Who Provides the Best LLC Services in Montana?

There are a myriad of Montana LLC services from which to choose. Choosing the wrong one can affect your Montana LLC formation timeline—I know this from my experience using a few and researching a dozen over the years.

Here are some top-rated options you should consider:

Best Montana LLC Service	Google Rating	LLC Formation Cost	Registered Agent Fee
Northwest Registered Agent	4.7/5	$39	Free for 1 year
Doola	4.6/5	$0 (plus state fees)	$297/year
Tailor Brands	4.4/5	$0 (plus state fees)	$199/year
ZenBusiness	N/A	$0 (plus state fees)	$199/year

Besides, the fact that other services bill you for their registered agent in the first year, and Northwest offers it for free, is a HUGE plus for me.

Northwest Registered Agent stands out in Montana LLC formation due to its commitment to transparency, customer service, and privacy. Using their address helps protect your personal information, making them a reliable choice.

How Much Does It Cost To Form an LLC in Montana?

Starting an LLC in Montana involves some specific costs. The main fee is for filing the Articles of Organization. This document is essential for officially creating your LLC.

The current filing fee for the Articles of Organization is $35. This fee was lowered from $70 in 2022, making it more affordable for business owners.

Here’s a breakdown of the costs associated with forming an LLC in Montana:

Requirement	Cost
New LLC Formation Fee (Articles of Organization)	$35
Name Reservation	$10
DBA Registration (optional)	$20
LLC Formation Service	$39 (via Northwest)
Registered Agent Fee	$0 (via Northwest)
Annual Report Fee	$20
Total Estimated Cost	$65 – 130

When forming a new company in Montana, it is ideal to budget about $65 -$130 for the first year. Then, if you want to go further, you can get other bells and whistles like a virtual mailbox, custom website, trademark services, premium EIN services, etc.

The most significant (and essential) expense for every Montana business owner is filing the Articles of Organization, which costs $35.

Pros and Cons of Forming an LLC in Montana

6 Important Things To Do After Forming Your Montana LLC

After forming your Montana LLC, there are several key steps you need to take to ensure your business runs smoothly and stays compliant with regulations. These actions will help you operate effectively and protect your interests.

1. Research the Best Licenses and Permits for Your Business

Montana does not have a general State license. However, businesses may need specific licenses and permits to operate legally in Montana.

Before starting operations, ensure you secure all required licenses and permits if necessary. The specific types you need will depend on your business activities and location.

Common licenses include:

• Business License: Required for almost all businesses.
• Professional Licenses: Necessary for fields like medicine or law.
• Special Permits: Depending on your industry, such as health permits for food services.

This information can be found on the Montana Secretary of State’s website or at your local county office. To avoid fines, apply for these licenses as soon as possible.

2. Create Business Accounts for Your LLC

Opening a separate bank account for your LLC is essential for keeping your business finances organized and distinct from your funds.

This separation simplifies your accounting and helps safeguard your assets by clearly distinguishing between personal and business transactions.

When choosing a bank, look for one that offers business-friendly services, such as waived fees, free online banking, and other features that can benefit your business. To open the account, be prepared to provide your EIN and a copy of your Articles of Organization.

A dedicated business account streamlines your financial management and simplifies tax preparation.

Having all your business transactions in one place lets you easily track your income and expenses, ensuring everything is well-organized and accessible when tax season rolls around.

3. Understanding Montana Tax Requirements and Managing Your Taxes

Montana LLCs are subject to federal and state taxes. As an owner, it’s crucial to grasp your tax obligations.

If your LLC has more than one member, it may be taxed as a partnership. Single-member LLCs are typically considered disregarded entities for tax purposes.

Montana does not levy a state sales tax, which can result in significant tax savings for businesses that sell goods and services. This favorable tax climate offers distinct advantages for LLC owners, particularly those in retail or service sectors.

You can elect to be taxed as a corporation if it is advantageous. Make sure to keep records of all income and expenses. Familiarize yourself with Montana’s tax rates, and don’t forget about any local taxes you might owe.

4. File Your Annual Report

Montana requires all LLCs to file an Annual Report to maintain good standing. This report includes basic information about your business, such as your LLC’s name and primary business address.

The filing fee is relatively low, currently $20, and can be done online. File your report by April 15 each year to avoid any penalties. Keeping your report current helps you remain compliant with state regulations.

5. Get Business Insurance for Your LLC

Just as you wouldn’t leave your home without coverage, your LLC also needs the right business insurance to guard against potential risks and liabilities. Insurance protects your company’s assets and ensures financial stability in case of unforeseen issues or legal claims.

Your insurance needs will vary based on your business operations.

For example, general liability insurance covers risks such as slip-and-fall accidents or property damage if your LLC operates from a physical storefront.

Conversely, if you run your business as a consultant and work remotely, you might only need professional liability insurance to cover potential service errors or omissions. Assessing your business needs helps you choose the appropriate coverage to protect your LLC.

6. Setup Your Business Online Presence (optional)

An online presence is becoming increasingly important, even for local businesses. Start by creating a professional website that explains your products or services. Use an easy-to-navigate layout with clear contact information.

Social media accounts help engage with customers and promote your business. Choose platforms like Facebook, Instagram, or LinkedIn based on where your target audience spends time.

Establishing an online presence can improve visibility and attract more customers.

Montana LLC vs. S Corp vs. Partnerships vs. Sole Proprietorship vs. Corporations

When starting a business in Montana, you have several structures, each with unique features. Here’s a breakdown:

Sole Proprietorship

A Montana sole proprietorship is the most straightforward way to start a business. Imagine you’re running a lemonade stand on your own. You make all the decisions and keep all the profits.

However, there’s no legal separation between you and your business. If your lemonade stand faces financial trouble or legal issues, your assets, like your car or home, could be at risk.

It’s easy to set up and manage, but it does leave you personally responsible for any business debts.

Partnership

A Montana partnership involves teaming up with one or more people to run a business together.

Think of it as joining forces with a friend to open a café. You share the profits and responsibilities, and you both make business decisions.

However, like a sole proprietorship, each partner is personally liable for any business debts or legal issues. If the business encounters financial trouble, your assets could be at risk, too. Partnerships are relatively easy to set up but require clear agreements between partners to avoid conflicts.

LLC (Limited Liability Company)

An LLC offers a blend of flexibility and protection.

Picture it as a protective umbrella over your lemonade stand. This structure separates your assets from your business, so if your LLC faces legal issues or debts, your personal belongings are generally safe.

LLCs are more formal than sole proprietorships or partnerships but offer flexibility in management and tax treatment. They are ideal for small—to medium-sized businesses that want liability protection without the complexity of a corporation.

S-Corporation

An S Corporation is a more structured business form.

Think of it as a business where owners are shareholders, much like a small-scale company with multiple investors. It protects liability and allows profits to pass through to your tax return, avoiding double taxation.

This means you report the income and losses on your tax return, which can be beneficial for tax purposes. However, S Corps have stricter operational requirements and formalities compared to LLCs.

Corporation

A Montana corporation is the most complex structure, suitable for larger businesses aiming for significant growth. Imagine a big company with many shareholders. A corporation offers robust liability protection and is a separate legal entity from its owners, meaning your assets are protected.

Corporations can raise capital more efficiently by issuing stock and can offer employee benefits.

However, they come with extensive regulatory requirements, formalities, and paperwork, making them more suitable for businesses with significant resources and expansion plans.

My Final Thoughts: Forming an LLC in Montana

Starting an LLC in Montana is an exciting step toward bringing your business idea to life. Although it might seem like many steps initially, breaking them down makes the process more manageable and ensures you cover all the essential bases.

To start an LLC in Montana, follow these steps:

• Choose a unique name for your LLC.
• Designate a registered agent to receive legal documents.
• File the Articles of Organization with the Montana Secretary of State.
• Prepare LLC Operating Agreement
• Obtain an Employer Identification Number (EIN) from the IRS.
• File a BOI Report
• File annual report

The filing fee for Articles of Organization is $35.

After forming your LLC, prepare for annual reports, which cost $20 yearly.

Setting up your LLC properly is an essential step in protecting your business and personal assets. Keep track of any filings and fees to stay compliant with state requirements.

Learn More About Starting an LLC in Montana

If you need additional help to start an LLC in Montana, check out these valuable resources:

Frequently Asked Questions

Can I change my registered agent in Montana?

Yes, you can change your registered agent in Montana. To update your records officially, you must file a form with the Secretary of State.

How do I change my Montana LLC’s name?

You must file an Amendment to the Articles of Organization with the Montana Secretary of State to change your LLC’s name. There are fees associated with this amendment.

How do I renew my Montana LLC?

Renewal of your Montana LLC is done through the annual report process. To keep your LLC active, you must submit an annual report and pay the associated fee each year.

How do I dissolve an LLC in Montana?

To dissolve your LLC in Montana, file Articles of Dissolution with the Secretary of State. It would be best to settle any debts and obligations before dissolution.

How do I add a member to a Montana LLC?

To add a member, you may need to update your LLC’s operating agreement and file an amendment if required. Ensure all members agree to the changes.

How do I add a DBA to an LLC in Montana?

To add a DBA (Doing Business As), you must file a Registration of Assumed Business Name with the Secretary of State. This allows you to operate under a different name.

Can a minor own an LLC in Montana?

Yes, a minor can own an LLC in Montana. However, legal guardians may need to manage the business until the minor reaches adulthood.

What is the Cost of the Montana Annual Report?

The annual report fee in Montana is $20. However, this fee may change, so it is advisable to check the current fee on the Secretary of State’s website.

Does LLC expire in Montana?

An LLC does not expire in Montana if you file annual reports and pay the necessary fees. Failure to do so may lead to administrative dissolution.

Can a non-resident open an LLC in Montana?

Yes, a non-resident can open an LLC in Montana. You must fulfill the requirements as residents, including appointing a registered agent.

Can I buy a house or car with my LLC in Montana?

You can buy a house or car with your LLC in Montana. The LLC will own the property and assets rather than you.

Can you have multiple businesses under one LLC in Montana?

While it is possible to have multiple businesses under one LLC, it is often advised to create separate LLCs for each company. This can help limit liability and keep finances distinct.

Is Montana an excellent state in which to form an LLC? Is it worth it?

Montana offers advantages like low fees and privacy. The decision depends on your specific business needs and whether you will conduct significant business within the state.

Can one person form an LLC in Montana?

Yes, one person can form an LLC in Montana. A single-member LLC is a standard structure and provides personal liability protection.