How to start a Montana LLC

An LLC is a type of business that helps protect its owners (called members). This means that if the business owes money or gets sued, the members' personal assets, like their house or car, are usually safe. 

In the state of Montana, an LLC is defined as “an organization that is formed under [Chapter 8]” (35-8-102 (17)). That means an LLC in Montana is a company created within the state or a company that becomes subject to Montana's state regulations surrounding LLCs (Chapter 8).

If that sounds like a lot of legal jargon - that's because it is! What you need to know is that LLCs are popular with business owners because they are simple and flexible to run. They have fewer rules compared to comportations and the owners can choose if they want to manage the business themselves or appoint managers to do it. 

Another benefit is how taxes work: LLC owners can pay taxes through their own personal tax returns, or they can choose to have the business pay taxes separately, like a corporation. This gives owners more choices in how they handle taxes as their business grows.

Why should I register for an LLC in Montana?

You may want to register for an LLC in Montana when:

• You own or want to start a business in Montana, or want to expand an existing business into Montana, and want to stay legally compliant. 
• You own or want to start a business, and want more flexibility on how you will manage the business or pay taxes than a corporation would provide.
• You want to protect your personal assets from potential liability resulting from business you conduct in the state of Montana. 
• You own or want to start a business, and want to register in Montana to open accounts, lease or buy property, secure funding, or hire employees.

Do I need to file my LLC in Montana if I live in another state?

Any LLC that does business in Montana must file with the State of Montana. Montana does not outline any specific actions that constitute transacting business, however, these actions, among others, are not considered to be doing business in Montana:

• Maintaining, defending, or settling any proceeding.
• Holding meetings of the members or managers or carrying on other activities concerning internal affairs of the limited liability company.
• Maintaining bank accounts.
• Maintaining offices or agencies for the transfer, exchange, and registration of the limited liability company's own securities or maintaining trustees or depositaries with respect to those securities.
• Selling through independent contractors.
• Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts.
• Creating or acquiring indebtedness, mortgages, and security interests in real or personal property.
• Securing or collecting debts or enforcing mortgages and security interests in property securing the debts.
• Owning real or personal property that is acquired incident to activities described in subsection (2)(h) if the property is disposed of within 5 years after the date of acquisition, does not produce income, or is not used in the performance of a function of the limited liability company.
• Conducting an isolated transaction that is completed within 30 days and that is not a transaction in the course of repeated transactions of a similar nature.
• Transacting business in interstate commerce.

LLCs based in Montana are called "domestic LLCs," and out-of-state LLCs are called "foreign LLCs." Foreign LLCs and domestic LLCs may have different filing and compliance requirements -- Rocket Lawyer can help you navigate foreign LLC registration, regardless of where you live.

How to start an LLC in Montana

1. Find a unique name for your Montana LLC

The state of Montana requires that the names of all LLCs in the state:

• Must contain the words "limited liability company" or "limited company" or the abbreviations "l.l.c.," "l.c.," "llc," or "lc." The word "limited" may be abbreviated as "ltd.," and the word "company" may be abbreviated as "co."
• Have no business identifiers that indicate it's any other form of business.
• Are not too similar to existing LLCs in the state. You can search the state of Montana's database of business entities in the state to ensure your business' name is unique.

Rocket Lawyer can help you determine whether your business' name is eligible for registration in Montana and may be able to help you reserve the name before you file your LLC.

2. Include your other LLC members (if any)

In Montana, you can in fact form as a one-person LLC. In this case, the LLC would be referred to as a single-member LLC (SMLLC), whereas if there is more than one owner, the LLC may be called a multi-member LLC. 

The main difference between single-member and multi-member LLCs lies in ownership structure and management. With a single-member LLC, you have full control over the business. In contrast, a multi-member LLC has multiple owners, each with a specific percentage of ownership as defined in the operating agreement. This means that in a multi-member LLC, owners share profits, losses, and tax responsibilities based on their ownership percentage.

3. Provide a Montana address

This will be used as your official LLC address. The address that you list may either be your home, an office, or another physical location, but it cannot be a PO box.

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have a Montana address) or choose one to do that service for you (if you are not located in Montana or would like an extra layer of privacy).

5. Register your LLC with the state of Montana

Once you have a business name and registered agent, you can register your business as a Montana LLC with the Montana Secretary of State by filing your Articles of Organization. This document may be referred to informally as an LLC's "Articles," or in other states, it may be called a "Certificate of Organization," "Certificate of Filing," or "Certificate of Formation."

6. Get an Employer Identification Number (EIN)

Montana LLCs are required to have a Federal EIN tax number. Think of your tax ID as the social security number for your company. It will be important for business contracts, tax filings, and all manner of documents down the line. Every company should have one to remain in good standing.

7. Pay the state filing fee

Every state has different fees for forming an LLC, which can also vary from one year to another.

Congratulations! After you have completed all these steps, you have formed your Montana LLC.

What to do after forming a Montana LLC

There are a few steps you need to take to maintain your Montana LLC:

1. Create an Operating Agreement: we can help you create your Montana LLC Operating Agreement online.
2. Hold a meeting: a first meeting with members of an LLC is not required by law, but it is highly suggested in order to get organized. Also, unlike corporations, LLCs are also not required to maintain Meeting Minutes, but these documents are also recommended as they provide records for important decisions made.
3. Pay taxes according to how you chose to be taxed: traditionally, LLCs are "pass-through entities." This means that you pay your business taxes on your personal tax form. That said, you can elect to be taxed like a corporation, if you choose to do so.
4. File an Annual Report: this is required for all LLCs registered in the state by April 15 each year.

What is needed to keep records for my Montana LLC

Montana requires LLCs to keep the following documents at their principal place of business:

• A list, in alphabetical order, of all current and past members and managers. The list must include full names and last known addresses of anyone listed.
• A copy of the company's articles of organization and amendments that have been executed.
• Copies of the last three years' federal, state and local tax returns filed by the LLC. If no filings were made, copies of the documentation given to members to file taxes appropriately must be kept.
• Copies of the effective written Operating Agreements along with executed amendments.
• Copies of any documents or writings required under the Operating Agreement.
• Unless included in the Operating Agreement:
  • A copy of cash amounts contributed by members.
  • A copy of the agreed upon value of property or services contributed by members.
  • A copy of the times or events when additional contributions will be required.
  • A copy of any events that will cause the LLC to be dissolved.

Still have questions? Rocket Lawyer can help you with the process of forming a Montana LLC. Get started today!

  

Key takeaways Registering an LLC in Montana can give you a lot more flexibility than a corporation, as well as protection for your personal assets from potential liabilities. Even if you live in another state, you must register your LLC in Montana if you do regular business there, like selling things or having employees. After starting your LLC, it's advisable to create an Operating Agreement and hold a first meeting. You'll also need to file an Annual Report.  Keep records of your Montana LLC, like the names of all members, tax documents, and your business rules. These help you stay organized and follow the law.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is an LLC
• How are LLCs taxed
• How to start an LLC
• Do I Need a Registered Agent?
• How and when to file an Annual Report