Montana Processing Times and Fees
Almost all states allow you to choose standard or expedited processing times for forming your corporation. Montana is no exception. To help you pick the best option for you, we have a list of the average wait times for both.
Montana charges a filing fee for processing your corporation paperwork. If you choose to expedite your filing, there's an extra charge. To see all state fees for Montana, visit our incorporation center and see “compare pricing.”
Deciding Between a Montana C-Corp or S-Corp Tax Designation
Most aspects of C Corps and S Corps are the same, including compliance documents, structure, management and liability limits. An S-Corp is a special tax designation a corporation can elect if it meets certain rules. These are the main differences between C Corps and S Corps that you should be aware of:
Ownership Rules: A C Corp has no limits on the number of share classes or shareholders it may have. An S-Corp is limited to one share class and not more than 100 shareholders. Also, all shareholders in an S Corp must be United States citizens or legal residents.
Taxes: A C Corp is taxed as its own entity. It pays corporate taxes on money earned. Individual shareholders may also pay taxes on dividends they receive. An S Corp does not pay corporate taxes on earnings. It's a “pass-through” entity. Earnings pass through to the owners, who then pay taxes on them on their individual returns.
Documents: When you file as a corporation, you're automatically a C Corp. To become an S Corp instead, you must file IRS Form 2553, Election by a Small Business Corporation.
Every state has its own personnel requirements for incorporating. In Montana, they include the following:
- Age requirement: Montana does not have any age limits on directors or incorporators.
- Minimum number of directors: Your corporation must have at least one director.
- Residency requirement: Montana does not require that directors live in the state.
You do not have to include your directors' names in your Articles of Incorporation, although you can if you like.
Other Requirements for Your Articles of Incorporation
In addition to personnel requirements, your Montana Articles of Incorporation must also include the following.
Every corporation must appoint a registered agent to receive important tax, legal or government documents on behalf of the business. Your registered agent must be available during normal business hours and have a physical address in Montana. Montana requires that you include your registered agent's name and address in your Articles of Incorporation. If your agent's mailing address is different from the physical address, you must also include that as well. Your agent should sign the appropriate section of your Articles. We'll help you designate a registered agent when you incorporate with Rocket Lawyer.
You must also include the following in your Articles of Incorporation in Montana:
- Your corporate name.
- The total number of shares your corporation is authorized to issue, and it must be at least one.
- A designation for each share class, if there will be more than one class.
- The names and addresses of all incorporators.
You can also include the following in your Articles of Incorporation in Montana if you like:
- The purpose of the corporation.
- The duration of the corporation, if it's not intended to be perpetual.
- A par value for authorized shares.
Guidelines for Your Name
When you choose a name for your new corporation, you'll want to pick something that fits your business purpose. Your name must also meet Montana's requirements:
Your name must include “Corporation,” “Incorporated,” “Company,” “Limited,” or an abbreviation of one of these words. Professional corporations must include the words “Professional Corporation” or an abbreviation.
Your name must be distinguishable from all business names already registered or reserved with the state.
Your name must not imply a business purpose other than that which is stated in its Articles or which is permitted under Montana law. For example, if your business sells office supplies, don't call it "Video Game World, Ltd."
Montana Corporate Taxes & Reports
It's not much fun to think about taxes, but you'll need to pay them for your new corporation. Before doing any business, you must apply to the IRS for an employer identification number, or EIN. This federal tax ID is similar to a Social Security number, and all businesses with employees must have one. We have more information to help you better understand the actual tax structure of a C-Corp and an S-Corp.
You may also need two state tax IDs:
- A state withholding tax ID number from the Department of Revenue
- A state unemployment insurance tax ID number from the Montana Department of Labor and Industry
Montana also requires that corporations file annual reports with the Secretary of State. They're due between Jan. 1 and April 15 of each year. The information must be current as of the date the report is prepared. Your first report is due in the calendar year after you incorporate, along with the appropriate filing fee. If you don't file this report by Dec. 1, the state will dissolve your corporation. You'll have five years to file an application for reinstatement.
Keeping Corporate Records and Ongoing Filing Requirements
Montana also requires that you create and maintain certain corporate records to maintain your corporate status:
Bylaws:A corporation's bylaws formalize its management, structure, operating procedures and other important considerations. All provisions in the bylaws must be consistent with law and with your corporation's Articles of Incorporation.
Meeting minutes: All decisions and actions taken during shareholder and director meetings must be recorded as corporate meeting minutes. These minutes must be maintained as permanent records. Three years of minutes must be kept at your business's principal office.
Neither document must be filed with the state. They should be stored with the rest of your important corporate documents.We have more detailed information about Montana's requirements for bylaws and corporate meeting minutes.
Starting a new business is a big step, and we wish you the best of luck with your venture. When you're ready to form your corporation in Montana, remember we're here to help every step of the way.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.