Cost to Form an LLC in Montana: MT LLC Cost

Last Updated on November 29, 2023 by Dr. Gabriel O’Neill, Esq.

Embarking on the journey to establish an LLC in Montana involves more than just paperwork – it requires a clear understanding of the associated expenses. While the initial glance might raise concerns about the costs, a closer examination of the process reveals opportunities for strategic financial planning. 

In this article, we will delve into the various cost factors tied to the formation of an LLC in Montana. Furthermore, we will introduce you to valuable LLC services like ZenBusiness, designed to offer expert insights that can assist you in making well-informed decisions and potentially reducing your overall expenditures. 

By grasping the nuances of LLC formation costs and harnessing available support, you can confidently navigate the path to entrepreneurship with financial prudence.

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What Is the Cost of Forming an LLC in Montana?

The primary cost to form an LLC in Montana involves a $35 fee, which covers the online submission of your LLC’s Articles of Organization through the Montana Secretary of State’s platform.

Here’s the LLC Cost Guide for all US States:

Montana Foreign LLC Formation Costs

Should you possess an existing LLC registered in a different state and wish to extend your business operations into Montana, it will be necessary to enroll your LLC as a foreign entity within the state.

The fee associated with the registration of a foreign LLC in Montana amounts to $70. The procedure for registering a foreign LLC in Montana involves completing the online registration form.

Annual Cost for LLCs in Montana

When managing the financial aspects of your Limited Liability Company (LLC) in Montana, it’s essential to be mindful of the ongoing costs involved in both establishment and maintenance. These costs play a significant role in shaping your LLC’s financial health. The key continuous expenses for a Montana LLC encompass various elements:

Firstly, there’s the Annual Report, which mandates LLCs to submit annually. The fee stands at $20 if filed before April 15 and increases to $35 if filed after this date.

Secondly, if your LLC operates under an Assumed Business Name (ABN), renewal is required every five years through the Secretary of State, incurring a $20 fee that can be processed online.

Additionally, the appointment and retention of a registered agent is obligatory for all Montana LLCs, with third-party registered agent services typically incurring yearly charges ranging from $100 to $300.

By grasping the implications of these financial commitments, you can effectively strategize your budgeting and guarantee the financial well-being of your LLC.

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How Much Does It Cost to Start an LLC in Montana With the Best LLC Service? 

ZenBusiness LLC Formation Cost

The initial filing expense for establishing an LLC in Montana commences at $35, serving as a foundational cost with potential increments based on specific requirements. In terms of processing, the standard duration for processing stands at 2 to 3 weeks. 

Alternatively, expedited processing options are available, allowing for a faster turnaround: 5 to 7 days of expedited processing can be acquired at an additional cost of $50, while further acceleration to 7 to 8 days is attainable through a rush processing fee of $100.

ZenBusiness presents a selection of three well-structured pricing tiers for their LLC formation services: Starter, Pro, and Premium. 

• Starter plan: The, catering to fundamental business formation requirements comes at a cost of $0 alongside applicable state fees.

• Pro plan: For those seeking heightened features, the at $199 plus state fees, encompasses expedited filing and registered agent service. 

• Premium plan: The most all-encompassing option at $349 plus state fees, not only includes everything from the Pro plan but also provides unlimited Worry-Free Compliance, assisting businesses in adhering to state and federal regulations. 

As an added incentive, ZenBusiness offers a complimentary year of Worry-Free Compliance with the purchase of any plan.

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Additional Costs When Starting an LLC in Montana

Montana LLC Name Costs

Selecting a name for your Limited Liability Company (LLC) doesn’t come with a price tag. Your chosen name for your Montana LLC gets the green light without any additional expenses when the state approves your Articles of Organization filing.

You might have come across information online suggesting that LLC Name Reservations are obligatory, but this isn’t accurate for the majority of states. In most cases, you aren’t mandated to reserve a name before establishing an LLC.

If you do wish to secure your chosen name for a period of up to 120 days before officially forming your LLC, you can do so by submitting a Name Reservation form along with a $10 filing fee.

Montana Registered Agent Costs

Montana mandates the appointment of a registered agent for your LLC, a requirement that comes with either a fee of $0 or $125 annually. Opting for a registered agent in your Articles of Organization exempts you from any additional Montana LLC filing charges.

The role of a Montana registered agent involves receiving legal documentation and state notifications on behalf of your LLC. The registered agent must possess a physical address within the state and maintain availability during standard business hours.

Assuming the responsibility of being your own registered agent or having a known individual take on this role carries no extra expenses.

Alternatively, you retain the choice of employing a registered agent service, incurring a yearly cost ranging from $100 to $300. These services extend beyond registered agent duties and can also safeguard your confidentiality.

Selecting a registered agent service becomes a prudent decision when:

• You lack a physical address within the state (Montana law stipulates that registered agents must possess a state-based address)

• You aim to prevent your address from entering the public domain (depending on the chosen company, their address might serve as a substitute to maintain your privacy)

Montana Operating Agreement Costs

The fee for the LLC Operating Agreement is waived ($0). This agreement serves as a written contract among the LLC Members, outlining ownership, management structure, and profit distribution. Both Single-Member and Multi-Member LLCs are advised to create and retain this agreement, providing each Member with a copy. While many platforms typically charge between $50 to $200 for such agreements, there’s no charge here.

Montana EIN Cost

The cost of obtaining an LLC EIN Number is $0. 

An EIN, which stands for Employer Identification Number or Federal Employer Identification Number (FEIN), is essential for tasks like tax filing, opening an LLC bank account, and hiring employees if needed. Despite various platforms charging fees to acquire an EIN for your LLC, you can actually obtain it for free. The Internal Revenue Service (IRS) provides this service at no charge, and the online application process takes just a few minutes to complete.

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Montana LLC Taxes

The annual expenses for Montana LLC taxes can differ significantly due to the various types of taxes that owners are required to cover. A few examples of these taxes include

Federal Income Taxes

The IRS provides different treatment options for your LLC concerning federal income taxes. For Single-Member LLCs, the IRS treats them as Disregarded Entities, meaning they need not file separate federal income tax returns. Instead, the LLC owner files the return and pays the taxes. Taxation of the LLC depends on the owner’s status – as an individual owner, it’s akin to a Sole Proprietorship, and as a company-owned entity, it’s taxed as part of the parent company.

Multi-Member LLC Taxes

For LLCs with multiple owners, taxation follows Partnership rules. The LLC must file a 1065 Partnership Return and issue Schedule K-1 to owners, detailing their share of profits. Each owner pays income taxes on their share via personal returns (Form 1040).

Husband and Wife LLC Taxes

In select states like Texas, a husband and wife LLC might opt for Single-Member LLC taxation (Qualified Joint Venture) instead of Multi-Member LLC, but this isn’t applicable in states like Montana.

Electing Corporate Taxation

Apart from default options, an LLC can choose corporate taxation. There are two types: S-Corporation and C-Corporation. 

S-Corporation status, attained via Form 2553, helps profitable businesses save on self-employment taxes. Choosing C-Corporation status through Form 8832 can be beneficial for large employers aiming to reduce healthcare fringe benefit costs.

Montana State Income Tax

In Montana, single-member LLCs usually don’t file state-level returns. The owner includes LLC profits/losses in their personal state return. Multi-member LLCs might need to file a state-level Partnership return, with owners reporting LLC gains/losses in personal state returns.

Local Income Tax for Montana LLCs

Your Montana LLC, or you might have to pay income taxes locally (municipality level). Consulting an accountant is advised for accurate preparation and filing.

Montana Sales Tax

Montana stands out by not having a general sales tax. Thus, LLCs don’t need to register for a Sales Tax License or file such returns.

Montana LLC Payroll Taxes

LLCs with employees must manage payroll taxes, encompassing federal/state income tax withholding, Social Security, Medicare, unemployment taxes, and local deductions. Proper management is crucial to avoid penalties; payroll companies or accountants are commonly sought for assistance.

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Montana LLC Cost FAQs

How Much Does It Cost to Open an LLC in Montana?

To initiate a Montana LLC, there’s a $35 initial fee for filing the LLC Articles of Organization. In certain cases, specific to your industry and location, additional business licenses might be necessary, each with varying costs. Moreover, the nature of your LLC’s operations could dictate the requirement for business insurance.

How Much Does an LLC in Montana Cost Per Year?

Every year, all Montana LLCs are obligated to cover a $20 fee for the Montana Annual Report, directed to the Secretary of State, representing the sole state-required annual charge to maintain LLC standing. Additionally, if you’ve enlisted a registered agent service, an annual subscription fee of around $125 is customary. 

Furthermore, the necessity of a Montana business license varies based on industry and location; potential annual renewal fees for the business permit should be verified with your local municipality.

Should I Hire an LLC Formation Service?

Although not mandatory, you have the choice to independently set up your Montana LLC; however, for a streamlined and accurate registration process, it’s recommended to consider engaging a service like ZenBusiness. 

Renowned for their outstanding customer assistance, they also offer a free initial year of registered agent services, as well as extra benefits such as crafting an Operating Agreement and managing Annual Report submissions.

Conclusion

To conclude, the process of establishing an LLC in Montana goes beyond the initial formation expenses, encompassing tasks such as acquiring necessary documentation, enlisting registered agent support, and effectively handling critical components like operating agreements and EIN acquisition. Proficient financial management in these domains is crucial, highlighting the significance of specialized LLC services like ZenBusiness. 

With a grasp of these varied costs bolstered by ZenBusiness’s guidance, potential business proprietors can initiate their Montana LLC undertakings with certainty. 

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