Setting Up an LLC in Montana
A Montana LLC (limited liability company) is a popular business entity that provides its owners significant personal liability protection and flexible options for how it can be managed and taxed. To form a Montana LLC, you’ll need to file the Articles of Organization with the Montana Secretary of State and pay a $35 filing fee. But before you do that, you must make sure your business name is available and appoint a registered agent. Setting up an LLC in Montana typically takes between one and two weeks, although you can pay extra to have your LLC formed the same day. Montana’s business filing system has gone completely digital, so you will need to complete all filings online. We’ll tell you all the steps you need to take to make your LLC official.
Ready to Start an LLC in Montana?Get Started
Name Your LLC
Designate a Registered Agent
Submit LLC Articles of Organization
Write an LLC Operating Agreement
Get an EIN
Open a Bank Account
Fund the LLC
File reports + taxes
1. Name Your Montana LLC
If you’ve been planning your business for a while, you probably already have a name in mind. But you need to make sure your business name follows Montana’s LLC laws. The rules for naming Montana LLCs are detailed in MT Code § 35-8-103. Your LLC’s name must:
- Include the words “limited liability company” or an abbreviation, such as “LLC.”
- Not contain language that makes it sound like a different business type, such as “corporation” or “limited partnership.”
- Not already be taken by another Montana business.
Already have a business name? Check to see if it’s available.
Can I reserve a business name in Montana?
Yes. If you want to reserve your business name until you’re ready to officially form your LLC, you can do so for up to 120 days by submitting a Reservation of Name form to the Montana Secretary of State’s office, which must be done on the Montana Secretary of State website. There is a $10 filing fee.
What’s the difference between my LLC’s name and an assumed business name?
The legal name for your LLC is the one you write on the Articles of Organization. Any other name your business uses is an assumed business name—also called a trade name, fictitious business name, or doing business as name (DBA). In Montana, you’re required to register any assumed business name you use with the Secretary of State. You must register your assumed business name on the Montana Secretary of State website and pay a $20 filing fee.
Learn how to obtain a DBA.
2. Designate a Registered Agent
Next you must designate a registered agent for your business. Your registered agent is the person who accepts service of process (lawsuits and other legal mail) for your business. You could be your own registered agent, or you could designate another individual or a registered agent service. Montana law requires every LLC to have a registered agent. You’ll have to include your registered agent’s name and address on your Articles of Organization.
Learn why the pros use a registered agent service.
What does a registered agent do?
- Maintain a physical address in Montana.
- Be available at that address during regular business hours.
- Accept legal correspondence on your business’s behalf and forward it to you without delay.
Can you be your own registered agent in Montana?
Yes. Just keep in mind that if you are your own registered agent, your name and address will be on the public record. And you will need to be at this address during regular business hours to accept service of process in person.
A lot of business owners decide to hire a registered agent rather than become one. This is because it’s tough to maintain a constant presence at your address when you’re trying to get a business off the ground (or if you just like to sneak in a little hike in the afternoon). A registered agent will shield your information from the public record and handle any time-sensitive legal mail your business may receive.
Can I change my registered agent after I start an LLC?
Yes. You can change your Montana registered agent anytime by submitting a Statement of Change of Registered Agent to the Secretary of State’s office. Changing your registered agent is free in Montana.
3. Submit LLC Articles of Organization
Filing a form called Articles of Organization is what officially forms your LLC in Montana. You can only submit your Articles online, via the state’s online filing system. The first step is to create an ePass Montana account. From within your account, you can file your Articles of Organization.
Note: All of the information on this form will become part of the public record.
You’ll need to provide the following information:
- Effective date. If you want your business to start immediately, skip this. If not, add a start date up to 90 days in the future.
- LLC type. Indicate whether you’re forming a standard LLC, a Professional LLC (PLLC), Series LLC, or Captive Insurance Company. Hint: Most LLCs are standard LLCs.
- Company name. Must include “limited liability company,” “LLC,” or “L.L.C.” You also need to indicate if you’ve already reserved your business name with the Secretary of State.
- Business term. Specify whether your business will operate perpetually or whether it will dissolve at a specific future date. Hint: Most LLCs choose “perpetual.”
- Mailing address. A P.O. box is okay here.
- Physical address. This must be an actual street address and will go on the public record.
- Registered agent. Whoever will accept legal mail and forward it to you. Specify if your registered agent is an individual or a business. You must also confirm that your registered agent consents to perform this role.
- Registered agent address. Must be a physical address in Montana.
- Registered agent mailing address. If different from the physical address.
- Additional documents (optional). If you want, you can attach additional documents, such as contact information.
- Management structure. Is your LLC managed by members (owners) or managers?
- Member or manager information. The names and mailing addresses of your members (if member-managed) or managers (if manager-managed).
- Liability statement. If any of your members will be personally liable for business debts, you need to attach a liability statement. Usually, only members of PLLCs have personal liability.
- Organizer. Whoever fills out and signs the document. This does not have to be someone within your LLC.
- Organizer contact information. How the state will contact you if there’s an issue with your filing.
Ready to start your Montana LLC Articles of Organization? File for free with Northwest.
How can I keep my personal information off the public record?
Any information on the Articles of Organization will be available to the public, meaning that if your personal address is on the form, you’re likely to be bombarded with junk mail from marketers.
The best way to protect your privacy is to hire a registered agent company who will put their business address on forms, so that you don’t need to make your personal address public.
What’s the difference between a member-managed and manager-managed LLC?
The difference between member-managed and manager-managed LLCs is in the name: member-managed LLCs are run by their members, and manager-managed LLCs are run by managers hired by the members. The people who manage your LLC will be oversee the daily operations of your business—think tasks like hiring and firing employees, managing bank accounts, signing leases, ordering snacks for the break room, and more.
For help with deciding which management structure will work for you, see our page on LLC Member Vs Manager.
How do I file the Montana Articles of Organization?
You must submit your Articles of Organization online. There is a $35 filing fee.
What’s a series LLC?
A series LLC is a special type of LLC that consists of a “parent” or “umbrella” LLC and one or more series under the parent LLC, each with its own liability and assets. For example, a real estate investor might choose to structure her business as a series LLC, so that each of her properties is protected from the liability of the other properties.
Learn more about How to Start a Montana Series LLC.
What’s a PLLC?
A professional limited liability company (PLLC) is an LLC that provides state-licensed services, such as medicine or law. Members of a PLLC have liability protection from business debts and from their business partners’ malpractice. However, PLLC members can still be held liable for their own malpractice.
What is a Captive Insurance Company?
A captive insurance company is a business created and controlled by a parent company to provide insurance for that company.
4. Write an LLC Operating Agreement
Your operating agreement lays out the rules and structure of your LLC. It’s where you establish how you will allocate profits and losses, how voting will work, and even how you’ll settle disputes. Montana operating agreements are internal documents that are not filed with the Montana Secretary of State. But without one, your LLC will be subject to Montana’s default LLC laws.
Check out our attorney-drafted Montana LLC Operating Agreement.
Does Montana require an LLC to have an operating agreement?
No, there’s no Montana law mandating that LLCs have an operating agreement. Per MCA §35-8-109, an LLC may adopt an operating agreement, which “need not be in writing.” However, in order to have the maximum amount of control over your LLC, and to protect your limited liability status, it’s essential that you adopt a written operating agreement.
What should be included in an operating agreement?
Ideally, your operating agreement will cover all the “big-picture” issues that are likely to come up for your LLC, from how you’ll split the profits to what you’ll do if the business ever needs to dissolve. These are some topics most operating agreements cover:
- initial investments
- profits, losses, and distributions
- voting rights, decision-making powers, and management
- transfer of membership interest
- dissolving the business
You can include almost any rule in your operating agreement, as long as it doesn’t violate Montana law. Topics that you may not change in your operating agreement are listed in MCA §35-8-109. For example, your operating agreement can’t unreasonably restrict a member’s right to information or remove your obligation to act in good faith.
Does a single-member LLC need an operating agreement?
Yes. Even a single-member LLC will need an operating agreement to open a business bank account. And if you’re ever faced with a lawsuit, having a written operating agreement is essential for reinforcing your limited liability status.
5. Get an EIN
An EIN (employer identification number) could be loosely defined as a social security number for businesses. You’ll put your EIN on tax forms so that the IRS can identify your business. You can apply for an EIN for free on the IRS website or by mailing a form to the IRS. It’s fastest to apply online, but if you don’t have a social security number, you will need to mail in the paper form.
Do I need an EIN for my Montana LLC?
Yes. Legally speaking, an EIN is only required if your LLC has employees or is taxed as a corporation. However, nearly every bank requires an EIN to open a business bank account. Having an EIN is also important for privacy, since it spares you from needing to give strangers your social security number.
Sick of filling out forms? Hire Northwest to file your LLC.
What To Do After Forming Your Montana LLC
6. Open a Bank Account
Once you’ve received your EIN from the IRS, it’s time to open a business bank account. A business bank account allows you to keep company and personal finances separate, which is essential for maintaining your LLC’s limited liability status.
To open a bank account for your Montana LLC, you’ll need to bring:
- Montana LLC Articles of Organization (a copy is fine)
- the LLC’s operating agreement
- the LLC’s EIN
- an LLC Resolution to Open a Bank Account (if your LLC has more than one member).
If your LLC has more than one member, use our free LLC Resolution to Open a Bank Account.
7. Fund the LLC
You can’t leave your shiny new business bank account sitting empty. It’s time to contribute some funds. Each member should invest an initial amount into the LLC to fund their membership interest. Usually, each member will invest by writing a check to the LLC bank account, although it’s also possible to invest in the form of property or services. Be aware that investments in the form of property or services are likely to have tax consequences.
What is LLC membership interest?
Membership interest is the percentage of ownership each member has. In most cases, the amount each member invests directly correlates with their membership interest. For example, if one member invests $40,000 into an LLC, and six other members invest $10,000 each, the first member would have 40% membership interest, and the other six members would each have 10% interest.
Unless you make different rules in your operating agreement, membership interest correlates to voting power. So in our example LLC, the member with 40% membership interest would basically have four votes, whereas the other six members would each only have one vote.
8. File State Reports & Taxes
Montana LLCs are required to file an annual report every year. The report serves as an information update, making sure the state knows who is in charge of your business and how to contact you. Montana’s annual report filing fee is $20. The report can only be filed on the Montana Secretary of State website.
Worried you’ll forget? Let us file your Montana annual report for you.
When is the Montana Annual Report due?
Montana’s annual report deadline is April 15th every year following the business’s formation. So if you start your LLC in March, you won’t have to file your first annual report until April of the following year.
How are Montana LLCs taxed?
Montana LLCs with default tax classification are subject to pass-through taxation. That means the LLC members are taxed individually on the profits they earned through the LLC, but the LLC itself doesn’t pay taxes. The profits for a Montana LLC are taxed according to the federal self-employment tax rate (15.3%). LLCs can also file with the IRS to be given an S-Corp or C-Corp tax designation.
Learn more about S-Corp Vs LLC tax designation.