How to Register a Business in Montana

by Jennifer Kiesewetter in Guide
brown field near mountains under white clouds during daytime

Source: Unsplash

TLDR

  • When you register a business in Montana, you'll need to satisfy several requirements, allowing you to start your company legally and compliantly. Before registering, though, it's a good idea to map out your business, including your location, your ideal customer, and your marketing and sales approach, to name a few topics. You can do this by drafting a business plan.   
  • Before registering your startup in Montana, you must first determine your organization's legal entity structure. When deciding upon your startup's structure, it's a good idea to discuss your options with your accountant or attorney, as they can advise you in detail about the ownership, management, tax benefits, and drawbacks of each structure.
  • In Montana, you can choose from several different business structures, such as limited liability companies, limited partnerships, and corporations.
  • You'll also have to choose a name in choosing your startup's structure. When picking a name for an LLC, corporation, or limited partnership, you'll need to distinguish it from other business names already registered with the state. Further, your startup's name must comply with Montana's naming conventions. You can check for available names by visiting Montana's business search database.
  • Next, after choosing your startup's name, you need to identify a registered agent. A registered agent's "primary purpose is to accept service of process on behalf of the entities it represents. Over time, it has become common for business entities to use as their registered agent's businesses whose principal activity is the provision of registered agent services."
  • Finally, after completing the above steps, it's time to submit your formation forms to Montana's Department of Financial Institutions. The State of Montana provides sample forms for your use or review for new entities.
  • For example, if you choose to register as a for-profit corporation, you will file an Articles of Incorporation application along with a non-refundable $70 filing fee. For Montana startups registering as an LLC, you will file Articles of Organization application, also along with a non-refundable $70 filing fee.
  • Depending upon your chosen entity for your startup, you will have your initial filing fee payment, any additional annual filings, and any taxes. For example, as stated above, you must pay a non-refundable $70 filing fee for registering a for-profit corporation and an LLC. You'll need to file annual reports for your entity as well, requiring a filing fee.

With just over one million citizens, Montana is the 44th largest state (by population) in the U.S. With outdoor activities, such as hiking, backpacking, sailing, horseback riding, fishing, and rock climbing, Montana attracts numerous outdoor enthusiasts. However, Montana also has an entrepreneurial spirit.

For example, Montana works with governmental agencies, corporations, and nonprofits to boost its diverse startup community, providing access to resources, operations assistance, and networking opportunities. Boasting Big Sky + Big Opportunity, the Montana Department of Commerce offers numerous resources for founders, such as a site selector and a business navigator, helping founders start their businesses in Montana.

Small business numbers are equally impressive. In 2021, Montana was home to just over 126,000 small businesses, employing almost 250,000 people. Small businesses make up 99.3% of all Montana businesses while employing 67.2 percent of all the state's employees. Top small business industries include professional, scientific, and technical services; construction; retail trade; health care and social assistance; and accommodation and food services, 

As you're launching your startup and exploring where to locate your new business, this article will explore registering your business in Montana.

When Do You Need to Register a Business in Montana?

When you register a business in Montana, you'll need to satisfy several requirements, allowing you to start your company legally and compliantly. Before registering, though, it's a good idea to map out your business, including your location, your ideal customer, and your marketing and sales approach, to name a few topics. You can do this by drafting a business plan.   

To help guide you in drafting your business plan, you can check in with the U.S. Small Business Administration or SCORE, which focuses specifically on small businesses and startups. Montana's Department of Commerce and Secretary of State also offer numerous resources for Montana founders when starting a new business, in addition to resources specifically for entrepreneurs. Once you've identified some of the basics about your startup's operation, it is time to register your business.

Below, we've broken the Montana requirements into an easy step-by-step process.

Determine Your Business's Entity Structure

Before registering your startup in Montana, you must first determine your organization's legal entity structure. When deciding upon your startup's structure, it's a good idea to discuss your options with your accountant or attorney, as they can advise you in detail about the ownership, management, tax benefits, and drawbacks of each structure.

In Montana, you can choose from several different types of business structures. One of the more prevalent business types is the sole proprietorship. If you operate as a sole proprietorship, you do not have to file your startup in Montana formally. Instead, any profits or losses are reported on your personal tax return.

In addition to sole proprietorships, four other popular Montana business entities include:

  • Limited partnership
  • Limited liability partnership
  • Limited liability company
  • Corporation

For example, a sole proprietorship is "easy to form and gives you complete control of your business. You're automatically considered a sole proprietorship if you do business activities but don't register as any other kind of business. Sole proprietorships do not produce a separate business entity. This means your business assets and liabilities are not separate from your personal assets and liabilities. You can be held personally liable for the debts and obligations of the business."

Limited partnerships have "only one general partner with unlimited liability, and all other partners have limited liability. The partners with limited liability also tend to have limited control over the company, documented in a partnership agreement. Profits are passed through to personal tax returns, and the general partner — the partner without limited liability — must also pay self-employment taxes."

On the other hand, a limited liability company or LLC "lets you take advantage of the benefits of both the corporation and partnership business structures. LLCs protect you from personal liability in most instances, your personal assets — like your vehicle, house, and savings accounts — won't be at risk in case your LLC faces bankruptcy or lawsuits."

Choose Your Business's Name

You'll also have to choose a name in choosing your startup's structure. When picking a name for an LLC, corporation, or limited partnership, you'll need to distinguish it from other business names already registered with the state. Further, your startup's name must comply with Montana's naming conventions. You can check for available names by visiting Montana's business search database.

Reserved Names

Suppose you're not ready to register your business in Montana, but you want to preserve your startup's name. In this case, you can reserve a startup name, preventing another new business from taking the name, along with a $10 filing fee.  

DBA or Assumed Names

Note that reserving a startup name is not the same as registering a "doing business as" or DBA name. DBA names are also called fictitious or assumed names. For corporations, limited partnerships, and limited liability companies, you'll need to file a Registration of Assumed Business Name form indicating the fictitious name along with a $20 filing fee.

Suppose the founder chooses a fictitious name rather than their personal name for sole proprietorships. In that case, the founder will need to file an assumed business name application with Montana's Secretary of State's office, even though the entity itself does not need to be registered. Further, founders with sole proprietorships must check with local and municipal business license offices before conducting business.

Identify Your Registered Agent

Next, after choosing your startup's name, you need to identify a registered agent. A registered agent's "primary purpose is to accept service of process on behalf of the entities it represents. Over time, it has become common for business entities to use as their registered agent's businesses whose principal activity is the provision of registered agent services."

Submit Your Formation Forms

Finally, after completing the above steps, it's time to submit your formation forms to Montana's Department of Financial Institutions. The State of Montana provides sample forms for your use or review for new entities.

For example, if you choose to register as a for-profit corporation, you will file an Articles of Incorporation application along with a non-refundable $70 filing fee. For Montana startups registering as an LLC, you will file Articles of Organization application, also along with a non-refundable $70 filing fee.

How Much Does It Cost to Register a Business in Montana?

Depending upon your chosen entity for your startup, you will have your initial filing fee payment, any additional annual filings, and any taxes. For example, as stated above, you must pay a non-refundable $70 filing fee for registering a for-profit corporation and an LLC. You'll need to file annual reports for your entity as well, requiring a filing fee.

Additionally, most Montana startups must apply for specific business licenses or permits through Montana's Department of Revenue and local municipalities, which all may have separate filing fees. To help founders complete all business license filings, Montana has created an online filing system called eStop Business Licenses.

How to Register a Business in Montana that Started in Another State

If you founded a startup in a state other than Montana but want to conduct business in Montana, you'll have to register your business as a foreign entity. Whether a business is a domestic or foreign entity depends upon where the startup was formed and which state governs its management and operation.

For example, a registered startup in Montana is a "domestic" startup. However, if you have a Delaware registered startup but want to conduct business in Montana, your business would be considered a "foreign" startup.

Let's look at an example. Suppose you have a Delaware corporation, but you'd like to conduct business in Montana. Then, you can complete a Certificate of Authority application for your foreign LLC or a Foreign Registration Statement for your foreign corporation, along with a $70 filing fee.

The Benefits of Registering a Business in Montana

There are many benefits associated with registering your startup in Montana. Let's look at some top ones:

The Limitations Associated with Registering a Business in Montana

There aren't that many limitations associated with registering your startup in Montana. However, here are a couple of points to keep in mind:

  • Cold winters (and we mean brutally cold)
  • Lack of diversity
  • Little to no public transportation

Learn more with us

Access more guides in our Knowledge Base for Startups

We Can Help!

At AbstractOps, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most—your business.

If you're looking for help registering your Utah startup, we can get your documentation ready, overall shepherding this process to ensure it's done right. Get in touch with us.

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Note: Our content is for general information purposes only. AbstractOps does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.

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