How To Form An Llc In Montana seems like an easy enough question to answer, right? After all, an LLC is just a company...right? Wrong! Before you decide to start a limited liability company or any other type of business for that matter, it's important to understand how the laws in Montana actually work.
An LLC is essentially a Limited Liability Company entity type which enables business owners (also called members) to enjoy both tax benefits and personal liability protections without extensive and time-consuming compliance requirements. In essence, operating as a Montana LLC simply combines the most important features of a Corporation combined with administrative ease comparable to that of a sole proprietorship...and without the hefty tax burden. However, just because an LLC is easy to open, doesn't mean you can just jump right in and call your company an LLC - there are a few key pieces of information which must be collected and submitted on the appropriate forms before you can legally open an LLC. In addition to these filing requirements, there are some other filing requirements that must be met for your LLC to become operational...so it's advised that you work through a qualified and experienced advisor who can guide you through the process.
If you're considering incorporating in Montana, you'll need to provide the appropriate paperwork to the appropriate authorities (your local Secretary of State, an office of the treasurer, or state revenue department). For most states, an LLC does not require a separate filing with the state, but if you do, here's what you'll need to provide: the name of the LLC (including the word "limited"), the LLC's address, the LLC's LLC tax ID number, and the LLC's distinguishing officer. Once these are filed, you're completed filing and should receive a notice from the Secretary of State that the LLC has been formally filed. Your official notice will also list the LLC's status, such as "active" or "inactive", and will advise you of any necessary tax information necessary for you to receive your income tax return.
How To Form An LLC In Montana
Operating Agreement. Your operating agreement is the first document you'll need to draft and sign if you decide to incorporate in Montana. Like the name of your LLC, the word "limited" must appear in the name of your LLC, and it should include the word" LLC". The word "personal" should be used in the names of any members of the LLC, and must describe the type of ownership structure you have (either members-owned or team-owned).
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Operating Agreement and Taxes. An operating agreement is important because it establishes the scope of your LLC's operations. It also describes your responsibilities to members of the LLC and to the IRS. All LLCs are treated as partnerships by the IRS, which means they are jointly liable for federal income tax, although in some cases each member may be taxed individually. The IRS treats all LLC's the same and treats all income or gain arising from a member's business as gain or loss derived from his or her own business.
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Business Bank Account. The way in which you incorporate your business and obtain business licenses in Montana depend largely on your choice of business bank account. A separate bank account is required for all LLCs, with separate banking instructions for members and for the other businesses that will be conducted on your LLC's behalf. For example, if you choose to incorporate as a sole proprietorship, each of your business license holders must open and maintain his or her own separate bank account. If you choose the business bank account option for your LLC, each of your license holders must contribute to and retain his or her own checking or savings account.
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Operating Agreement and D&A. Operating agreements and D&A are the contract documents that describe the general terms of the relationship between the members of an LLC and the LLC. Operating agreements should include provisions about who is responsible for paying what taxes (if any) and who is responsible for maintaining the LLC's registered agent (or addresses and phone numbers). The operating agreement and D&A also need to include any restrictions that apply to the LLC's operation, such as the amount of money it can spend, the length of time it can operate, and its right to bind other LLCs.
Registered Agent. A registered agent is a person who is authorized to sign documents on behalf of the LLC. Each LLC has its own registered agent. In Montana, registered agents can be anyone who is physically able to sign. This physical address allows a company to choose its registered agent who can also be its attorney, accountant, or business broker.
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