How to Incorporate in Montana (May 2024 Update)
Forming a corporation in Montana provides business owners with liability protection and potential tax advantages. While the process may seem complicated, this step-by-step guide breaks down everything you need to know to get your Montana corporation up and running.
Incorporating in Montana offers many perks for business owners. As a separate legal entity, corporations protect owners’ personal assets from company debts and legal issues. They also provide inherent prestige and legitimacy. Plus, Montana corporations benefit from the state’s favorable tax climate, including credits, deductions, and no gross receipts tax.
Before diving into the incorporation process, let’s review the key advantages of a Montana corporation:
- Limited liability protection
- Financial flexibility for retained earnings, tax breaks, and investor options
- Built-in credibility and professional image
Steps to Form a Montana Corporation
Follow these 10 steps to properly set up your corporation in Montana:
1. Choose a Business Name
The first step is deciding on a unique, memorable name for your Montana corporation. You’ll need to check that your desired name follows state naming guidelines and is distinguishable from other registered businesses.
Rules for Montana Corporation Names:
- Must include a business identifier like “Incorporated,” “Corporation,” “Company,” etc. or a known abbreviation
- Cannot be confusingly similar to any existing Montana business names
- Check availability via the Secretary of State’s database
Be sure to have a second choice name in case your first pick is taken.
2. Appoint a Registered Agent
Nearly all states require designating a registered agent to accept official/legal mail and communications on the corporation's behalf. Montana registered agents must be Montana residents with a physical in-state address (no PO boxes).
Using a third-party registered agent service can help maintain privacy and avoid issues like documents being served at an inconvenient time/location.
3. File Articles of Incorporation
To formally create your Montana corporation, you must file Articles of Incorporation with the Secretary of State. Required information includes:
- Company name
- Corporate structure details
- Registered agent name and address
- Number of stock shares
- Incorporator's name and signature
The filing fee is $70 for traditional corporations. Submit articles by mail, fax, or hand delivery.
4. Create Corporate Bylaws
While not formally submitted, bylaws provide an internal roadmap for operating your Montana corporation. Well-drafted bylaws cover details like:
- Shareholder rights
- Board member duties
- Officer roles
- Shareholder and director meetings
- Stock structure
- Voting procedures
Having clear organizational rules and procedures will help avoid conflicts as your company grows.
5. Appoint Directors
Shareholders normally elect the corporate board of directors. For a new corporation, the incorporator generally appoints initial directors to oversee business operations.
6. Hold First Board Meeting
The first board meeting is critical for adopting bylaws, appointing officers, issuing stock shares, setting company policies, and more. Keep detailed meeting minutes as an official company record.
7. Authorize Stock Share Issuance
Selling stock shares allows shareholders to own a portion of the corporation. While not legally required, issuing paper share certificates is standard practice. Corporations get flexibility in pricing shares.
8. Obtain Licenses and Permits
Check if your Montana corporation requires any state or county licenses, permits, or registrations to operate. Common examples include professional certifications and trade group memberships.
9. Get an EIN from the IRS
An Employer Identification Number functions like a business Social Security Number for tax purposes. It takes just minutes to apply online for free.
10. File the New BOI Report
Effective January 2024, the federal Corporate Transparency Act requires nearly all US corporations to submit a confidential Beneficial Ownership Information report to FinCEN within 30 days of formation (90 days for companies formed in 2024).
Ongoing Montana Corporation Requirements
Even after formally creating your corporation, meeting a few recurring state requirements will keep your corporation in good standing:
- File an Annual Report between January 1 and April 15 ($20 fee)
- Montana corporations owing taxes must file annual income tax returns
- Hold annual shareholder and director meetings; keep documentation
Incorporation Costs to Budget
When starting a for-profit Montana corporation, expect to pay:
- Articles of Incorporation filing fee: $70
- Registered agent fees: $45 per year
- Annual report fee: $20
Plus, corporations doing business in Montana owe a state income tax of at least $50, assessed at 6.75% of taxable income.
Starting a Montana Corporation
We hope this guide gave you a clear overview of everything involved in properly forming and maintaining a corporation under Montana laws. While the process involves many steps, our detailed checklist breaks down exactly what you need to do so incorporating seems simple.