How to Start a Business in Montana:
Registering your business in Montana can be done in a few easy steps, including forming your legal entity, naming your business, registering your business with the state of Montana, registering for taxes, and obtaining all the necessary permits and licenses. In Montana, it is not necessary to apply for a general state business license, but there are city licenses that are needed to legally operate a business. Montana is also one of five states that do not have a sales tax for business owners.
Form your business.
Review Montana formation options.
Montana offers 4 ways of forming your business. Review these closely and pick the one that fits your business best.
Name your business.
Once you have chosen your business name, you will be required by Montana law to register your business name with the Montana Secretary of State (SOS).
If you need help finding a business name, be sure to check out NameSnack's free business name generator.
Before you are able to register, you must first verify if your business name is available. You can check which names are already on file by doing a business entity search on the SOS website.
If you're starting a sole proprietorship or partnership with a business name that is different from the name(s) of the business owner or individual partners, you must file an Application for Registration of Assumed Business Name, or a DBA, with the Montana SOS. The filing fee is $20.00.
LLCs and corporations can reserve a business name for 120 days by filing a Reservation of Name Application.
Get an Employer Identification Number.
Nearly all businesses will need to register for federal taxes by applying for an Employer Identification Number (EIN).
Register your business in Montana.
When starting a business in Montana, you will be required to file online on the Secretary of State's website.
On the SOS website, open the menu, go down to "Business Services & UCC," and click the arrow to open the sub-menu. Click on the arrow next to "Business services" for the next sub-menu, and click on "Register A Business."
You will be taken to the ePass Montana secure login page, where you can create an account.
LLCs must file Articles of Organization with the LLC Division and, once approved, must hold an "Organizational Meeting" to organize the LLC, including one-person LLCs.
Corporations must file Articles of Incorporation with the Corporation Division and hold an "Organizational Meeting" to determine each shareholder's percentage of ownership, choose a company bank account, elect S-corporation status if desired, and more.
Obtain the necessary permits and licenses.
In Montana, not all businesses require a general business license. However, depending on your business, you may still need a state license, permit, or registration. Many professional and occupational services also require specific licenses and permits.
Montana does not require a general state business license, but you may need a city business license. You can contact your local city or county office to find out what licenses and permits you need.
Regulatory licenses and permits are needed to cover things such as health and safety, the environment, building and construction, and specific industries and services.
People in professional fields such as healthcare, cosmetology, and engineering need professional and occupational licenses.
Businesses should check local zoning regulations in the location they want to operate in.
Register your business for taxes.
Register with the Montana Department of Revenue.
Montana is one of four states that does not have a required sales, use, or transaction tax. There are, however, four general tax types that certain businesses should pay:
- Income tax: all businesses except for partnerships should pay income taxes.
- Self-employment tax: individuals who work for themselves (sole proprietorships) should pay this tax.
- Employment taxes: include social security, medicare, federal income tax withholding, and federal unemployment tax.
- Excise taxes: included in the price of certain products (e.g., gasoline) and on certain activities (e.g., highway usage by trucks).
Go to the Montana Department of Revenue's homepage and click on "Transactional Portal."
Under "Businesses," click on "Register for a New Tax Account."
Complete the online application form. You will need your EIN or social security number and your Secretary of State identification number (received when you registered your business).
If you need to send a resale certificate to any out-of-state vendor/s, you can use the Montana Business Registry Resale Certificate.
Sole proprietorships must pay state taxes on business income with their personal state income tax returns.
Each partner in a partnership must pay state taxes on their personal tax returns and should file a Montana Partnership Information and Composite Tax Return.
LLC members pay state taxes on their personal tax returns. The LLC must file an annual report with the SOS.
Corporation shareholders pay state taxes on their dividends and those with salaries must also pay state income tax on their personal state tax return. Corporations are also subject to the corporation license tax and must file an annual report with the SOS.
All businesses with employees must pay state employer taxes.
Register for an employer withholding tax number.
If you plan on hiring employees, you need to register for an employer withholding tax number with the Montana Department of Revenue (DOR). You can register for withholding tax online using the Taxpayer Access Point (TAP) or on paper, using Form GenReg, Application for Permit.
Report all new and rehired employees to the State.
The Directory of New Hires law requires Montana employers to report all newly hired or rehired employees within 20 days of employment. This process must be repeated every time you hire a new employee. Rehired employees who have been separated from the business for 60 consecutive days are also classified as new hires.
You can report new employees online. In order to file online, you first need to create an ePass account. The ePass account is free and will allow you to access other state electronic services. You can also report new employees by fax, mail, or via telephone. For more information, read through the Employer New Hire Reporting Guide.
Under Montana law, all business owners who employ one or more employees must provide workers' compensation insurance. This may also apply to independent contractors, except if they provide proof of self-insurance or file an exemption form.
For information about Montana exemptions and compliance, contact the Montana Department of Labor.
All employee drivers are required to carry minimum automobile insurance. If you plan on using your car or truck for business activities, a commercial vehicle policy is recommended.
Put up labor law posters and notices.
You will need to display federal and State of Montana labor law posters to inform employees of their rights. You can print these posters for free from the Montana Department of Labor & Industry's website.
Montana Business Types:
1. Sole Proprietorship.
Montana's sole proprietorship is the simplest business structure. Owned and managed by one individual, with no legal difference between the owner and the business entity, the owner of a sole proprietorship is responsible for all business profits, taxes, and liabilities.
In Montana, there are no filing requirements for starting a sole proprietorship, except for the Registration of Assumed Business Name if the business is operated under a business name that is not the owner's legal name.
2. Limited Liability Company (LLC).
An LLC is one of the most popular legal business structures. It separates the owner/s from the company from a financial and legal perspective. For small business owners, an LLC business structure is a great option as it's simple to set up and manage, with minimal paperwork.
In addition, this structure is beneficial during tax season, as LLC owners are not required to file a corporate tax return. LLCs must file Articles of Organization with the Montana Secretary of State.
A corporation is a more complex business structure that exists as a separate legal entity with its own rights and liabilities. It has shareholders who invest in the business and therefore own a part of it and must hold annual meetings. Corporations are not subject to self-employment taxes on their income.
A Montana partnership is operated by two or more individuals who share management responsibilities, profits, and liabilities. General and limited partnerships are the most common and partnership agreements may be filed with the Secretary of State's Office. Partnerships are subject to self-employment tax on their income.
Montana Business Filing Fees:
Limited Liability Company
Keeping up with on-going requirements.
Once you launch your business, you need to stay up-to-date with the different laws or regulations that may affect your business and industry.
In Montana, LLC business owners must file an annual report with the Secretary of State by April 15th. There is a $35.00 filing fee. To ensure the fastest confirmation time, Montana SOS encourages all businesses to file their reports online. The online filing option means your report will be processed immediately, and confirmation is sent as soon as payment is confirmed.
A corporation in Montana must also file an annual report with the SOS. Filing online is the fastest and easiest method to file a report. A report can also be sent by mail. There is a $35.00 filing fee.
How much does it cost to register a business in Montana?
It costs between $20.00 and $70.00 to register a business with the Montana Secretary of State. In addition, there is a $50.00 fee for each series member named in a series LLC.
What permits do I need to start a business in Montana?
- Local and/or county licenses and permits.
- A city business license.
- A professional license.
- A contractor's license.
Is Montana a good place to start a business?
Montana has been rated as one of the top states to start a business in. It has a thriving startup culture with a high small business five-year survival rate. Montana also has a good employment base, although it does lack a good-sized high-skilled labor pool, and it offers low real-estate rates, labor costs, and state and local tax rates.
How do I get a business license in Montana?
Montana does not require a general business license. However, you can search through the different state-issued business licenses by going to Montana's Department of Revenue website.
How much does it cost to start an LLC in Montana?
It costs $70.00 to start an LLC in Montana. In addition, there is a $50.00 fee for each series member in an LLC.
Do you need a business license in Montana?
No, The State of Montana does not require a general business license.
How do I register an LLC in Montana?
- Name your LLC.
- Choose a resident agent.
- File the Articles of Organization.
- Create an operating agreement.
- Obtain an EIN.
How do I get a general contractor's license in Montana?
- Register your business through the Montana Secretary of State website.
- Obtain your license.
- If you have employees, show proof of workers' compensation insurance.
- Complete and submit the application.
How do I incorporate in Montana?
- Choose your corporation filing option.
- Submit the Articles of Incorporation.
- Establish corporate bylaws.
- Get a Federal EIN.
- Open a corporate bank account.
- Obtain the required business licenses.
- File your Annual Report.
What new hire information needs to be reported in Montana?
- Federal Identification Number.
- Business name.
- Business address.
- Date of hire.
- Social Security number.
- Mailing and home address.
Where can I apply for a Montana sales tax license?
There is no sales tax in the state of Montana.
Are there any specific rules for an LLC in Montana?
In order to register your LLC, you must file the Articles of Organization with the State of Montana. You can file online, by mail, or in person. The filing costs $70.00. In Montana, an operating agreement is not mandatory.
Do I need workers' compensation?
Yes. Montana law requires all employers of one or more employees to carry workers' compensation.
How do I register a business name in Montana?
You can register your business name with the Montana Secretary of State. Visit the SOS website for the proper documentation.