Montana LLC

This step-by-step guide will walk you through every phase of forming an LLC in Montana, including choosing a business name, filing Articles of Organization, drafting an operating agreement, and meeting licensing and tax requirements.

1. Name Your Montana LLC

Your business name is more than just a label—it's your brand identity. Choosing the right name requires creativity, legality, and strategy.

Steps to choose a name:

Define Your Business Concept: Clearly identify the products or services you'll offer and your target audience. A descriptive name helps customers understand your business immediately.
Get Feedback: Ask friends, family, or potential customers for input. Sometimes an outside perspective helps identify potential confusion or misinterpretation.
Search Online: Check if the domain name is available and ensure that similar business names don't exist, which could cause confusion or legal disputes.
Use Business Name Generators: These can spark ideas, but remember—they won't replace your unique creativity or understanding of your niche.

Montana LLC Naming Rules:

Must include "Limited Liability Company" or an abbreviation (LLC or L.L.C.).
Cannot include words that suggest government affiliation (e.g., FBI, Treasury).
Must be distinguishable from other business names registered in Montana.
Certain words like "bank," "insurance," or "university" require state approval.

National Trademark Check: It's important to verify that your business name isn't federally trademarked using the US Patent and Trademark Office (USPTO) database.

Reserving Your Name in Montana:

You can reserve your LLC name for 120 days by filing a Name Reservation with the Montana Secretary of State. This can be done online, and the cost is $10. Enter your business details, electronically sign, and pay the fee.

Doing Business As (DBA):

If you plan to operate under a name different from your LLC, you must register a DBA, known in Montana as an "assumed business name." For example, if your LLC is "Big Sky Bakeries," you may want to operate certain product lines as "Big Sky Muffins."

Registration is online via the Secretary of State portal.
Fee: $20 standard; expedited services cost $20 for 24-hour processing and $100 for same-day approval.
Assumed business names are valid for 5 years.

2. Select a Registered Agent

Montana requires that your LLC appoint a registered agent, who will receive legal and official correspondence on behalf of your company. This can be an individual or a business entity authorized to act as an agent.

Registered Agent Requirements in Montana:

Must be 18 years or older.
Must have a physical address in Montana (no P.O. Boxes).
Must be available during normal business hours.
If the agent is a business entity, it must be registered to operate in Montana.

Tips: Many business owners hire professional registered agent services to ensure compliance and maintain privacy. Serving as your own registered agent is possible but requires you to be present at the registered address during business hours.

3. Determine Your Management Structure

Montana LLCs can be:

Member-Managed:

All members actively manage the LLC. Ideal for small LLCs where members are involved daily.

Manager-Managed:

Managers (who may or may not be members) handle operations. Best for larger LLCs where some members want to remain passive.

If your LLC's articles of organization don't specify management, Montana defaults to a member-managed structure.

Tip: Think carefully about how responsibilities, decision-making, and voting rights will be handled to avoid future disputes.

4. File Articles of Organization with the Montana Secretary of State

Filing your Articles of Organization legally forms your LLC in Montana. This can be done online or by mail.

Required Information:

LLC name
Principal office address
Registered agent name and address
Business purpose
Duration (perpetual or limited)
Governing authority (member-managed or manager-managed)

Filing Process:

Create an account on the Montana Secretary of State website.
Complete the Articles of Organization form online.
Review and submit your application.

Fees & Processing:

Standard fee: $35
Online confirmation usually within 7–10 business days

Montana Secretary of State Contact:

Montana Secretary of State – Online Business Services Website
Montana Capitol Building, Room 260
P.O. Box 202801
Helena, MT 59620-2801
Phone: 406-444-3665
Email: sosbusiness@mt.gov

5. Draft an Operating Agreement

Although Montana does not legally require an operating agreement, having one is highly recommended. It establishes clear rules for ownership, responsibilities, voting rights, and financial arrangements, which is crucial in preventing disputes.

Key Elements:

LLC's name and address
Duration of the LLC
Registered agent details
Member information and ownership percentages
Management roles and voting rights
Profit and loss allocation
Procedures for adding/removing members
Dispute resolution procedures
Record keeping and communication

Tip: Even single-member LLCs benefit from having an operating agreement, as it strengthens legal protection and clarifies internal rules.

6. Get Your Employer Identification Number (EIN)

Your EIN, issued by the IRS, acts as your business's tax ID. It's required if you have employees or multiple members.

Application:

Apply online on the IRS website.
Must disclose a "responsible party," a natural person controlling the LLC's funds.
Required for tax reporting, payroll, and opening a business bank account.

7. Obtain Business Licenses and Permits

Montana LLCs must comply with federal, state, and local licensing regulations. Licenses vary by industry, location, and services offered.

Federal Licenses: Industry-specific permits, such as OSHA permits or health licenses.
State of Montana: Professional licenses for regulated activities (e.g., contractors, accountants, healthcare providers). Montana does not levy sales tax statewide, and local sales taxes are rare.
Local Licenses: City and county offices handle zoning, building permits, health permits, and business operation licenses.

Examples of Licenses You May Need:

Professional or occupational licenses (construction, plumbing, financial, childcare)
Building and zoning permits
DBA registration
Fire safety permits
Health inspections

Tip: Operating without proper licenses can result in fines, penalties, or business closure. Consulting a business attorney or professional service can ensure full compliance.

8. Determine Your Tax Status

By default, Montana LLCs are pass-through entities. This means profits or losses flow through to members' personal tax returns, avoiding double taxation.

Single-Member LLC:

Taxed like a sole proprietorship. Income is reported on Schedule C, and self-employment taxes apply.

Multi-Member LLC:

Taxed as a partnership by default. Files Form 1065; members report their share on personal returns and pay self-employment taxes.

Optional Corporate Election:

C-Corporation: LLC pays corporate tax (21% federal), dividends subject to personal tax. Members avoid self-employment taxes on dividends.
S-Corporation: Income passes to members' returns, but members must receive a "reasonable" salary subject to payroll taxes. Additional profits avoid self-employment taxes, potentially saving significant money for high-income LLCs.

Additional Steps After Forming Your Montana LLC

Open a Business Bank Account:

Separates personal and business finances, protecting your liability. Bank requirements typically include EIN and Articles of Organization.

Apply for a Business Credit Card:

Helps establish business credit and manage startup expenses.

Get Business Insurance:

Essential to protect your assets. Types include:

General liability
Professional liability (E&O)
Workers' compensation
Property and equipment coverage
Commercial auto
Business Owner's Policy (BOP)

Maintain LLC Records:

Keep copies of Articles of Organization, operating agreements, contracts, licenses, and other official documents in a secure location.

Annual Reporting:

Montana requires an annual report by April 15 each year. Fee: $20. Late filings incur penalties, and failure to file can lead to administrative dissolution.

Montana LLC FAQs

Name Reservation Fee: $10; LLC Registration Fee: $35; Business License Fees: Vary by city/county and industry; DBA (Assumed Business Name) Fee: $20 (expedited options available); Annual Report Fee: $20.

Use the Montana Secretary of State Business Search to search by name, entity number, or registered agent.

File a "Registration of Assumed Business Name" online. Fee: $20. Expedited processing: 24-hour ($20) or 1-hour ($100).

Standard online filing: 5–6 business days. Expedited options: 24-hour ($20) or 1-hour ($100).

File an Annual Report each year online between January 1 and April 15. Late filing penalties: $15. Administrative dissolution may occur after December 1 if not filed.

Yes, if you are over 18, have a physical Montana address (not a P.O. Box), and are available during business hours.

No, but strongly recommended to define ownership, management, and dispute resolution.

By default, pass-through taxation applies. LLC members pay federal self-employment tax and Montana state income tax on their share of profits. Optional corporate elections (C-Corp or S-Corp) may provide tax advantages.

How to Start Your Own LLC in Montana