How Much Does an LLC Cost in Montana (What You Need to Know)
LLCs have become one of Montana's most often used corporate structures because of their independence and minimized taxes and expenses.
However, it's good to familiarize yourself with the costs of forming an LLC in this state before you begin operating your firm.
Through my experience as a Mergers and Acquisitions specialist and after consulting LLC experts in the state, we’ll provide the latest costs of running a Montana LLC.
Quick Summary
- An LLC in Montana costs $35 to file the Articles of Organization for your entity.
- Additional expenses that the business may cover include licenses and permits, annual reports, taxes, operating agreements, and other LLC documents.
- With 130,563 small businesses making up 99.3% of Montana's business environment, as reported by the US Small Business Administration, the importance of understanding the costs and benefits of forming an LLC in this state cannot be overstated.
- Considering the economic landscape and supportive state policies, I believe forming an LLC in Montana is a smart move for entrepreneurs looking to maximize their business potential.
Cost to Start an LLC in Montana
Before an LLC can begin operating in the state, there are mandatory fees and optional expenses the business has to cover.
1. LLC Formation Filing Fee ($35 - Mandatory)
There is a $35 filing fee if you submit your Montana Articles of Organization online to the Secretary of State [1].
After receiving your formation paperwork, the state typically processes it in five days; however, for an extra cost, I avail expedited processing for clients who want to operate their businesses as soon as possible.
Expedited processing for 24hrs costs $20, while if you want to expedite the LLC processing time in Montana even more and get your approval within an hour, it will cost you $100.
2. Registered Agent Fee ($80-$300 – Optional)
Although you can serve as your own registered agent, doing so puts additional responsibility on you. That's why delegating the duty to a registered agent service is preferable.
You can expect to pay between $80 - $300 annually if you hire a professional registered service in Montana.
3. Name Reservation Fee ($10 - Optional)
If you aren't quite ready to launch your business, reserve your company name to prevent someone else from using it.
You can purchase exclusive name use for 120 days at $10, which can be extended for 120 days at a $10 renewal fee.
Before making a name reservation, I advise clients to make sure their chosen business name is available. You can check our article on how to look up an LLC in Montana.
Expenses Following the Approval of Your LLC
Once the LLC has been approved, new expenses may arise in the form of license fees, taxes, annual reports, and other business-related documentation.
1. Local Business License Fees
There are various licensing procedures and fees for your LLC in each of the local jurisdictions in Montana.
For instance, Bozeman mandates that LLCs obtain a $50 general business license.
2. Professional Licensing Fees
The cost of your Montana professional license varies depending on your field and the body that oversees it.
For instance, the Montana Department of Labor and Industry Boards require Montana business licenses from professionals like dentists, sports trainers, and pharmacists, which costs $335.
A client of mine was required to obtain a professional license to operate a medical clinic in the state.
3. Annual Report Fee ($20 - Mandatory)
You must file LLC annual reports after establishing an LLC in Montana.
To continue functioning, your Montana LLC must maintain good standing and comply with all applicable laws. All you need to do is verify the data on the Annual Report, submit it to Montana SOS, and make the Annual Report fee.
The fee for the Montana LLC Annual Report is $20, sent annually for as long as your LLC exists.
4. Taxes
As "pass-through" businesses, LLCs are usually not required to file separate corporate tax returns; instead, the members of an LLC report their income and losses on their personal tax returns [2].
Also, unlike several jurisdictions, Montana does not charge franchise or privilege taxes to its LLCs.
These are some situations where Montana businesses will have to pay taxes:
- LLCs that have workers are required to pay unemployment insurance tax.
- A Corporate Income Tax Return must be filed, and the 6.75% corporate income tax must be paid by LLCs that have chosen to be taxed as corporations.
- Your local town, county, or city may have its business tax requirements.
5. Operating Agreement (Optional, but Recommended)
An operating agreement is a legal document that enables you to organize your limited liability company in the most advantageous method for your company.
Although an operating agreement is not required in Montana when you form an LLC, it is in your best interest to submit one, even if you are the only owner of the business.
You can purchase an operating agreement template from online LLC formation services for $100 to $200.
If you have a budget to spare, I advise that you hire a legal professional to draft the document on your behalf to ensure its legality.
6. DBA Name ($20 - Optional)
An "Assumed Business Name" (or ABN) is a business name you're legally permitted to use in Montana and differs from your LLC's legal name.
Each ABN you desire requires a separate Registration of Assumed Business Name. A $20 Montana LLC cost must be paid for each ABN form to the Montana Secretary of State.
7. Document Copies With Certification ($10 - Optional)
The Montana LLC's Articles of Organization cost $10 to have certified copies made. The state should complete your order within five days of receiving it if you select regular processing.
It’s good practice that I always keep copies for record-keeping in case legal issues arise.
8. Montana Certificate Of Existence ($10 - Optional)
You must pay $10 for standard processing to obtain a Montana Certificate of Existence for your LLC as proof of its legal standing.
Besides that, the Montana Department of Revenue offers a Certificate of Good Standing as a free service to prove that your taxes are compliant.
9. Employer Identification Number ($0 - Optional but Recommended)
Obtaining an EIN for your LLC can be done for free, even though many LLC formation services charge a fee.
Whenever clients ask the importance of obtaining an EIN, I tell them that they can use it to pay their taxes, open a business bank account, apply for loans, and recruit staff.
10. Business Insurance ($2-$100 - Optional, but Recommended)
The number of employees, location, risk factors, and more determine your Montana LLC's workers' compensation insurance premium. It costs approximately $2 for every $100 paid to employees.
"Most LLCs gain by purchasing insurance, such as property, liability, and home-based business insurance."
- Jon Morgan, CEO, Co-Founder & Editor-in-Chief of Venture Smarter
FAQs
Who Gets The Filing Fees for My Montana LLC Registration?
The Secretary of State of Montana gets the filing fees for your Montana LLC registration.
What Forms of Payment Are Accepted By The Montana Government for LLC Filing Fees?
A credit card, debit card, or check are the only forms of payment accepted by the Montana government for LLC filing fees. Cash and cryptocurrencies are not accepted as forms of payment.
References:
- https://biz.sosmt.gov/forms/business
- https://mtrevenue.gov/taxes/pass-through-entities/
