How to Start an LLC in Montana (May 2024 Update)

As one of the top-ranked states for small business owners and entrepreneurs, Montana presents exciting opportunities if you’re thinking about launching a new venture. Known for its natural beauty and friendly business climate, Big Sky Country rolls out the red carpet for aspiring LLC owners.

Forming a limited liability company (LLC) can provide important legal and tax benefits compared to other business structures. LLCs blend elements of partnerships, sole proprietorships, and corporations to create a flexible and affordable entity. As an LLC owner, you’ll enjoy personal asset protection if the business is sued while retaining pass-through taxation in most cases.

This step-by-step guide takes you through the process of starting an LLC from scratch in Montana:

• Choose a Name
• Appoint a Registered Agent
• File Formation Documents
• Draft an Operating Agreement
• Obtain an EIN
• Open a Business Bank Account
• Stay Compliant and Market Your LLC

Follow these steps carefully and you’ll be well on your way to launching a successful Montana LLC.

Step 1: Choose a Name for Your Montana LLC

The first step is deciding on an official name for your new business venture. You likely already have a great name in mind. However, to ensure it complies with state rules, double-check the following:

Include Required LLC Designators

Montana LLC names must include the words “limited liability company”, “limited company”, or abbreviations like LLC or LC. You can also use “Ltd. liability company” or “Ltd. company”.

Check Name Availability

Search the Montana Secretary of State database to see if your desired name is already taken. The name you choose must be distinguishable from existing business names.

Consider Reserving the Name

For $10 you can reserve an available business name with the state for 120 days. This prevents anyone else from using it while you complete the rest of the formation process.

Search for Trademarks

Conduct online searches to uncover any existing trademarks identical or similar to your LLC name. Receiving a trademark dispute down the road could force you to change names and rebrand.

Register an Assumed “DBA” Name

If you plan to use a trade name or “doing business as” name that is different than your formal LLC name, be sure to register it with the state. The filing fee is $20.

Step 2: Appoint a Registered Agent

All Montana LLCs need a registered agent on record with the state. This agent receives important legal and tax documents on behalf of the business.

You can designate yourself, a business partner, or an outside registered agent service. Whomever serves as the registered agent must meet the following criteria:

• Be at least 18 years old
• Maintain a physical street address in Montana (no P.O. boxes)
• Be available at their listed address during normal business hours

Many LLC owners prefer to use a registered agent service instead of being their own agent. This way, you don’t have to worry about missing time-sensitive legal notices that could jeopardize the legal standing of your business.

Step 3: File Articles of Organization

To formally create your Montana LLC, the next step is filing Articles of Organization with the Secretary of State. Prepare to provide the following details about your new business:

• LLC name
• Registered agent’s name and address
• Principal business address
• Management structure (member-managed or manager-managed)
• Members/managers names and addresses
• Purpose and duration

You must submit the Articles of Organization electronically via the state’s online filing system for a $35 processing fee. Filing online helps speed up approval which typically takes 5-6 business days in Montana.

Consider setting an effective date 90 days out if you need more time to prepare. You can also file optional amendments later if any information changes.

Step 4: Draft an Operating Agreement

Although not required, creating an operating agreement for your Montana LLC is highly recommended. This document lays out rules and protocols agreed upon by members. It helps settle disputes down the road and reinforces limited liability protections.

Typical operating agreement content includes:

• Member capital contributions and distribution of profits/losses
• Member voting rights and management authority
• Meeting requirements
• Process for accepting new members
• Grounds for member withdrawal/removal

Even single-member LLCs benefit from having an operating agreement. It allows you to name a successor in case you can no longer manage it. Reviewing your operating agreement with an attorney ensures it complies with state laws.

Step 5: Obtain an Employer Identification Number (EIN)

An EIN serves as a unique tax ID number for your business to be used when filing taxes and opening business bank accounts. As a new Montana LLC owner, take a few minutes to apply for your EIN directly on the IRS website – it only takes 15 minutes and there is no fee.

You’ll need an EIN even if your LLC doesn’t have employees. Banking institutions require it to open business bank accounts as it helps track financial activity for tax purposes.

Step 6: Open a Business Bank Account

Keeping your business finances separate from personal transactions is crucial as an LLC owner. After being approved for an EIN, shop around to find the best business bank or credit union in Montana to suit your needs.

When opening the business bank account, bring copies of the following documents:

• Montana Articles of Organization
• Company Operating Agreement
• IRS Employer ID Number

Maintaining a separate business account adds legitimacy to your LLC and preserves your personal liability protection. Plus, neatly tracking all revenue and expenses will save headaches at tax time.

For more information, take a look at our article on the key benefits of business checking accounts.

Step 7: Stay Compliant and Market Your New Montana LLC

Congratulations, the foundation of your Montana LLC has been laid! But the real work begins now as you look to build and grow the business. Here are some next steps to consider:

File Annual Reports

You must submit annual reports to the state each year by April 15th to maintain an active legal status. The $20 report confirms your company’s longevity and updates any changes.

Explore Licensing/Permits

Depending on your industry, the state or county/city your LLC operates in may require special licensing. For example, contractors need to register for state contractor licenses.

Market Online

A strong web presence is essential for modern small businesses. The earlier you build a professional website and social media pages, the faster word will spread. Promote your LLC’s products/services and make it easy for customers to learn about and contact you.

Buy Business Insurance

Speaking with an insurer helps identify coverage options to protect against losses tied to property damage, natural disasters, lawsuits, and interruptions. Buying adequate insurance ensures your LLC continues operations without financial strain from unexpected incidents.

Conclusion

Launching an LLC in Montana comes with advantages if you plan to base your business there. By following the seven steps covered in this guide, your new venture will gain solid legal footing. From naming your LLC to opening a dedicated business bank account, check each item off the list to avoid issues as you work to build the business.

The process does involve moderate upfront effort and paperwork. However, forming an LLC beats alternatives by offering outstanding flexibility and protections as your company expands. Simplify the process by using an LLC formation service. For less than $100 plus state fees, they handle completing and submitting all documents on your behalf.

Ready to join the thriving small business landscape scattered across Big Sky Country? Weigh the information and advice in this guide as you work towards launching your Montana LLC!