How to Dissolve an LLC in Montana? (Most Effective Method)
When your Montana LLC has fulfilled its purpose or is no longer profitable, and you would like to dissolve it, there are a few things you need to do to make the Montana dissolution process official.
As a business consultant and legal advisor with over a decade of practice, I will provide you with a comprehensive guide on how you could dissolve your Montana limited liability company and what to do after the dissolution.
- To properly dissolve an LLC in Montana, you should consult the operating agreement, close all tax accounts, and file a Certificate of Dissolution with the Montana Secretary of State.
- Inform banks, creditors, and other loan associations about the dissolution and settle obligations such as business debts and business documents.
- In 2023, small businesses in Montana experienced a significant number of closures, as per U.S. Small Business Administration, with 5,439 reported, highlighting the importance of understanding the dissolution process.
- Personally, I think the detailed step-by-step guide emphasizes the necessity of careful planning and legal compliance when dissolving an LLC, reflecting the complexities of concluding a business entity responsibly.
6 Steps To Dissolving an LLC in Montana
The steps to dissolve an LLC in Montana include following the operating agreement, notifying creditors, cancelling all business licenses and filing a Notice of Dissolution.
Step 1: Vote to Dissolve the LLC
If your Montana LLC was formed with more than one member, follow the procedures outlined in your Montana LLC operating agreement.
An LLC’s operating agreement is a contract between the members of the LLC that sets forth how the business will be run, the process of dissolution, voting requirements, division of assets, and liquidation.
In the absence of an operating agreement, state laws apply. You will need to get the vote of all Montana LLC members to dissolve the company.
The Montana LLC Act is a set of laws that govern limited liability companies in the state of Montana.
It is important to familiarize yourself with these laws before taking any action to dissolve your limited liability company.
Step 2: Notify Creditors About Your LLC's Dissolution
After following the provisions indicated in the LLC’s operating agreement, it's crucial to notify your creditors and all interested parties about the company's dissolution.
This step is particularly significant considering the recent trend, where, according to the U.S. Small Business Administration, small businesses, including LLCs, faced a substantial number of closures, with 5,439 reported in Montana in 2023 .
During our dissolution, settling all taxes, obtaining a tax certificate from the Department of Revenue, and filing annual reports were essential before finalizing our Montana corporation's dissolution.
Step 3: File Final Tax Returns and Obtain Tax Clearance
To dissolve an LLC in Montana effectively, you must address all tax obligations, such as income, sales, and employment taxes.
This is underscored by the broader economic impact observed last year, where closing and contracting establishments led to a loss of 42,623 jobs, as noted in the Business Employment Dynamics data .
File the final federal tax return with the IRS, using Form 1065 for partnerships or Form 1120 for corporations, and ensure to check the "final return" box.
Then, file the final state tax return with the Montana Department of Revenue, tailored to your LLC's tax classification.
After settling all our outstanding taxes, we applied for a tax clearance or Certificate of Tax Standing from the Montana Department of Revenue, which confirmed that our LLC has no remaining tax liabilities.
You must attach this certificate to your Articles of Dissolution when filing with the Montana Secretary of State, and you should consider consulting a tax professional to ensure compliance with all tax requirements.
Step 4: File Articles or Certificate of Dissolution
The next step in the dissolution process is giving notice of dissolution to the Montana Secretary of State by filing a Certificate of Dissolution .
This document must include the following information:
- The business name
- The date of dissolution
- The reason for the dissolution
You can find a sample notice of dissolution on the Montana Secretary of State’s website.
Once we completed the form by providing the required information about our Montana LLC, we submitted it to the Montana Secretary of State along with the filing fee, which costs $15.
Once you have taken all of these steps, your Montana limited liability company will be officially dissolved.
"Should the dissolution be voluntary and should the members or managers decide to retract their decision to shut down the business, they are permitted to submit a Revocation of Dissolution form to the Montana Secretary of State."
-Jon Morgan, Co-Founder & Chief Editor of Venture Smarter
Step 5: Distribute Assets
Once all debts and obligations are cleared, an LLC in Montana is required to distribute its remaining assets to its members.
This distribution must be conducted in line with the provisions set out in the LLC's operating agreement, or, in the absence of such specifications, according to Montana's LLC regulations.
Generally, the distribution of assets is proportional to the ownership stakes of the members.
Step 6: Close All Accounts and Cancel Licenses and Permits
The last step in dissolving a Montana LLC is closing all business-related accounts, including bank accounts and credit cards. You must clear any debts before closing these accounts.
You should also cancel your LLC’s business license by contacting the Montana Department of Revenue and asking for a Business License Cancellation Form.
In our case, we also surrendered the professional licenses our Montana LLC had.
Professional licenses may include a contractor’s license or a real estate broker’s license.
How Much Does It Cost to Dissolve an LLC in Montana?
It costs $15 to dissolve an LLC in Montana, which covers the processing of the Certificate of Dissolution by the SOS.
How Long Does It Take to Dissolve an LLC in Montana?
It takes 7–10 days to dissolve an LLC in Montana but you can pay an additional $20 for a one-day delivery service.
Do I Need a Registered Agent to Dissolve a Montana LLC?
You do not need a registered agent to dissolve a Montana LLC. You may dissolve your LLC by filing the Montana LLC Articles of Dissolution with the Division of Corporations.