Last Updated on June 13, 2022 by Fair Punishment Team
Thinking of becoming a business owner? You’re making a great decision to opt for an LLC.
Otherwise known as a Limited Liability Company, an LLC is a type of business structure only in the U.S. that not only protects owners from liabilities but also offers tax benefits that make it an ideal choice for small businesses.
Nevertheless, from important documentation to tax returns, not to mention the fact that rules and regulations often tend to vary depending on the state it is located in, many people find the process of actually setting up a Limited Liability Company daunting – but we’re here to help streamline the process and make the set up of your business a breeze.
This guide is going to be showing you how you can get your LLC up and running in six steps.
From important business documents that you’ll need to file, to potential tax requirements that your LLC might encounter, we’ve covered all the basics so you can start your LLC without any missteps along the way.
Just read on!
1. Choose A Name For Your Montana LLC!
One of the first things that you are going to need to do is give your brand new LLC a name. Without a name, you won’t be able to file your business documents, appoint a registered agent, and much more – so it’s a good idea to start the process of setting up your LLC by giving it a name.
We recommend that you spend some time brainstorming ideas for a name so that you can come up with a shortlist of potential names that you might like to call your LLC.
The name of a business can arguably make or break the success of a business, so you’ll want to make sure that the name that you choose is catchy, stands out, and clearly outlines what you sell/what your services are.
Alongside making sure that your business name stands out from the rest and aligns with what you are going to be offering your customers, you are also going to need to make sure that the name you select for your business also meets the requirements that have been put in place by the state of Montana.
At the time of writing this article, the requirements for a business entity name are as follows:
Avoid Restricted Words Or Ask For Approval If You Want To Include Them
You might already be aware of this requirement, but it is still important to note.
Even though you have full control over what the name of your business is going to be called, you are going to need to make sure that you are trying to avoid any restricted words in the name, as this is a mandatory requirement in Montana.
These are words such as a bank, attorney, or lawyer. However, if you want to use a restricted word, you’re going to need to ask the Secretary of State for approval, and may even require a licensed individual to become a member of your LLC.
Are Press Releases Important?
Another important requirement that you must meet when naming your LLC in the state of Montana is to ensure that you are not using any words that may cause potential customers and the general public to confuse your business with a government entity, such as the Montana police department, the FBI or a state department.
Include LLC/L.L.C/Limited Liability Company
Another requirement that you must ensure you meet when naming your LLC is to include either LLC, L.L.C or Limited Liability Company in the name somewhere. Typically, most people will put their chosen term at the end of the name, but it is entirely up to you how you choose to include it.
Ensure That The Name Isn’t Already Taken
Last but not least, the final consideration that you will need to make when naming your Montana LLC is whether or not the name has already been taken by another LLC in Montana.
For this reason, we recommend that you run the name that you have in mind through the name search database located on the Montana Secretary of State’s website!
2. Choose A Registered Agent
The next thing that you are going to need to do is to nominate a person or company to be your registered agent for your Limited Liability Company.
To cut a long story short, your registered agent will be a person or a company that will be responsible for handling all of your business mail (including government and legal correspondence) on behalf of your business.
Even though a registered agent can be technically anyone (including yourself or another member of your LLC) it is highly recommended that you opt for a registered agent that has experience working as one to ensure the smooth runnings of your LLC’s legal and government correspondence, especially if you are just starting out.
In addition to this, you are also going to need to make sure that the registered agent that you choose for your Limited Liability Company meets the following criteria:
- Is located within the state of Montana and is registered to be able to work as a registered agent within the state.
- Is available to be either on-site or in the office during the standard business hours in Montana, so that they will be able to receive all legal documents and general business mail on the behalf of your Limited Liability Company.
- Can provide the state with an address that is situated within the state of Montana.
In addition to all of the above, the person or company that you choose to serve as your LLC’s registered agent will also be the first point of call for any legal problems and will be responsible for alerting you to any legal notices or disputes that your LLC might be facing.
3. File The Articles Of Incorporation
Along with picking a name and appointing a registered agent, you are then going to need to make sure that you have created and filed the Articles of Incorporation. It is a legal requirement in Montana for all business entities to have their own Articles of Incorporation, and that goes for your LLC, too.
Even though they might sound a little daunting, the Articles of Incorporation are just an important piece of documentation that will allow you to officially establish your LLC by providing the state with all of the necessary information about your business. It’s as simple as that.
In order to successfully file for your Articles of Incorporation in Montana, you are going to be required to file them directly with the Montana State Corporate Commission, as this is the only way that you can currently officially file and register your LLC within the state.
One of the best parts about filing for your Articles of Incorporation is that you have the ability to fill out the form online and then simply send it in so that the Montana State Corporate Commission can look through it and then approve it for you.
However, if you would like a paper copy that you will be able to fill in with a pen, then this option is also available to you.
Instead of filling the form out online, all you will need to do instead is to simply print the document out and then mail it over to the Montana State Corporate Commission once you are done.
To help give you a better understanding of the Articles of Incorporation, here is a quick breakdown of the information that you might need to include within yours:
- The name of your LLC and the address that it has been registered to upon establishment.
- The name and contact details of the person or company that you have chosen to be your registered agent.
- An explanation of what the LLC is and why you decided to form it. This is just to give the Montana State Corporate Commission an insight into what your company is before they approve the document.
- The duration of your LLC.
- The management structure of your LLC.
- Liability clauses.
- A signature of the person who is forming the LLC.
After you have drafted your Limited Liability Company’s Articles of Incorporation, you will then need to go ahead and send them to the Secretary of State who will be able to look over the filing and review them so that they can be approved.
If you find that the Articles of Incorporation have been approved by the Secretary of State, then your LLC will become a recognized legal entity within the state of Montana.
4. Create An Operating Agreement
After you have filed for the Articles of Incorporation, the next important business document that you are going to need to file for is something that is known as the operating agreement.
In a nutshell, the operating agreement is a type of internal document that will allow you to clearly outline the way that your LLC will be run, as well as other important operating information.
At the time of writing this article, the operating agreement isn’t a business document that is mandatory for LLC owners to have.
However, by making sure that you take the time to create your own operating agreement for your business, you will find that it is extremely useful for a variety of reasons, particularly for helping to settle any disputes or misunderstandings that may arise.
If you do not make sure that you take out an operating agreement, this means that settlements for any disputes that may arise over the duration of your LLC (both internally and externally) will fall to the state of Montana to decide.
Typically, in the instant that this occurs, the dispute will be given to the courts to handle, which means that you will have no control over the determinations that are made by Montana’s courts based on state law.
With that being said, without the presence of an operating agreement in your LLC, any determinations and settlements that are made based upon state law by Montana’s courts will be out of your hands, and will not necessarily result in a settlement that benefits your Limited Liability Company.
To help you understand the operating agreement a little bit better, here is a quick summary of the type of information you will need to include in yours if you decide to file for one:
- The management structure of your business.
- The members of your organization and the various roles that they fill.
- The hiring process for new employees, as well as the exit process for employees that are departing your company.
- Whether or not the members of your organization are liable for any debts or liabilities of the LLC.
- The way losses and profits are divided and distributed throughout the LLC.
- The name and contact information of the registered agent.
- Basic information about the Articles of Incorporation.
- What the purpose of the business is, as well as the duration of the LLC, too.
- Any liability and indemnification clauses existing within your LLC.
As a side note, it is also worth noting that the operating agreement, if filed for, will also serve as a way to give your business legal credibility in the eyes of the state, so it’s definitely worth having.
If you would like to file an operating agreement for your LLC, then you can find the Montana form here.
5. Get An EIN number
After you have finished filing for all the necessary business documents that you are going to need to operate your LLC, you are then going to need to make sure that you have also taken the time to file for an EIN, too.
If you’re not aware of what this is, EIN simply stands for Employer Identification Number, and is an identifying number that the IRS will use for tax returns and other general tax purposes. You can choose to acquire your LLC EIN by visiting the IRS website.
Along with being necessary for the IRS to identify your LLC for tax purposes, the EIN will also allow you to hire employees, open up business bank accounts and apply for funding.
6. Decide If You Need A BIN
Last but certainly not least, the final step you are going to need to complete is to decide whether or not your LLC is going to need a Business Identification Number, which is used by the IRS for payroll tax purposes.
The BIN isn’t always a requirement for LLC owners in Montana, but if you are planning to hire employees or start your LLC with a small team already in place, then you will need to acquire one. Just like the EIN, you can also file for a BIN via the IRS website.
Frequently Asked Questions
Do You Need A Business License?
Whether or not you will need a business license for your LLC will depend on the state the LLC is located in. At the time of writing, Montana does not currently have a standard business state license, so you won’t need one.
What Are The LLC Tax Requirements?
Just like with a business license, tax requirements vary from state to state. In the state of Montana, your LLC will be taxed the corporate income tax, which has a flat rate of 6.75% of net income.