Set the stage to raise capital, attract investors, and unlock growth opportunities with a Montana C corp. Starts at $0 plus MT state fees.
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Starts at $0 +MT state fee and only takes 5-10 minutes
Have you been thinking about starting your own business in Montana? There are plenty of business models out there that can be right for you, like a limited liability company (LLC), but if the corporation structure is especially appealing to you, then there are some things you should know about this business entity.
To formally begin the formation of your Montana corporation, you must register your company with the Montana Secretary of State. To do this, you will file the Articles of Incorporation. However, before you begin the registration and filing process, you will need to address a few details.
There are several steps to complete, like submitting your Articles of Incorporation and appointing a registered agent. We can offer the information you need to make your corporation a reality. Our step-by-step guide explains how to form a corporation in Montana. We’ll also cover some of the nuances of forming a professional corporation, a corporation organized by licensed professionals like doctors, attorneys, or accountants.
Coming up with a name for your Montana corporation is one of the first steps to successfully start your business. You’ll need a corporation name that gives your customers/clients an idea of the goods and services you’ll be providing, and the name should be creative and catchy. Most importantly, you’ll need to make sure that your name falls in line with the state’s requirements.
Conduct a basic search for business names in Montana to see which are available. This will allow you to cut names that are too close to established businesses or do not meet state guidelines. Use our free LLC name search tool for help.
All Montana corporation names must contain one of the following corporate designators:
Most of the rules to name a professional corporation are the same as naming a standard corporation, but there are a couple nuances. For starters, you’ll need to include the designator “professional corporation” or its abbreviation “P.C.” instead of another business type’s designators. Your name will also need to comply with any rules enacted by your industry’s licensing board. These rules vary from one profession to another, so please consult with your agency for full guidance.
When you’ve settled on a name that best fits your Montana corporation, you have the option to reserve it until you’re ready to file your formation paperwork. This will prevent anyone else from claiming your corporate name. Completing a name reservation puts your company name on hold with the state government for up to 120 days.
Applications can be completed online through Montana’s ePass platform, a digital business resource that connects you to all online government services offered by the state. You’ll need to create an account to use it.
It’s important and recommended for business owners to double-check that their company name isn’t infringing on any existing trademarks. To do so, you’ll need to look at both the federal and state levels.
Nationally, you can visit the United States Patent and Trademark Office (USPTO) website to see if the name you want has a trademark. If you need to check a name at the state level or file your own trademark, you can learn more about that process through the Montana Secretary of State. You may also register your Montana trademark using the ePass platform. Registering a trademark at the federal level can offer broader protections, but it’s often easier and quicker to file at the state level.
Finally, if you plan for your Montana corporation to operate under a name other than the one specified in your Articles of Incorporation, you will need to register an “assumed business name” with the Secretary of State. This is also known as a “trade name,” “fictitious business name,” or “doing business as” (DBA) name. Filing for a Montana assumed business name costs a fee and can be completed online via the ePass system.
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Forming a Montana corporation requires you to name a board of directors who will look out for your company’s best interests. Montana law stipulates that a corporation must have at least one director at the time of its formation. Further requirements mandate that directors be elected for one year at an annual meeting.
Montana has an additional requirement for professional corporations: at least half of the directors need to be “qualified persons” for the corporation, meaning they need to be licensed.
One of your board of directors can also be the “incorporator” of your Montana corporation. This particular member will be the one to sign your company’s Articles of Incorporation. Remember that your incorporator does not have to be a director and can be one of your shareholders, you as the founder, or another person authorized to act on behalf of your corporation.
Choosing a registered agent for your Montana corporation is the next step. Registered agents act on behalf of your business to receive “service of process,” which is legal correspondence, such as a notice of a lawsuit. You can choose an individual or a business entity as your registered agent, but Montana law does not permit a corporation to act as its own agent.
Your chosen registered agent will be named in your Articles of Incorporation and must also provide a physical street address in Montana (not a P.O. box). The agent will need to be able and willing to receive service of process at that stated address during regular business hours.
The Montana Secretary of State recognizes a distinction between commercial and noncommercial registered agents. The difference is that the first is registered with the Secretary of State as a professional provider of registered agent services, and the latter is not. The use of commercial registered agents in Montana follows the passing of the Model Registered Agent Act (MORAA) in 2007.
Here’s why it’s a good idea to seek a professional registered agent service for your Montana corporation:
Filing your Montana Articles of Incorporation and getting them approved is your next step. If filled out correctly and approved, your corporation will be considered a legal business entity in Montana.
Montana has recently shifted to an all-digital filing system. Before you begin your Montana corporation filing, you will need to have the following information prepared to enter into the application:
Check out the newly annotated Montana code related to specifics that must be contained in your Articles of Incorporation. The cost to file is $35. The Montana Secretary of State offers a 24-hour priority handling of business fillings for an additional $20 and even a one-hour expedited filing for all documents for an additional $100. Fees are subject to change.
Unlike some states, Montana actually doesn’t have a separate version of the Articles dedicated to professional corporations; you’ll file the same form we covered above. But there is an extra step to cover, so you can’t jump into doing business immediately after filing your articles. Instead, Montana law requires you to submit a copy of your Articles with each licensing agency that governs your professional services. You must file this before you start conducting business, so be sure to tackle this step promptly.
The creation of corporate bylaws is a vital step in establishing your company’s values and rules. Bylaws go into detail about all operating procedures, management structures, and legal requirements regarding your company’s operations.
Bylaws may also give further context into how company stocks can be shared, how directors should be replaced in an emergency, and any other pressing concerns that you want in writing regarding your business. For professional corporations, bylaws must follow regulations specific to the profession and ensure compliance with state laws governing professional services. Your Montana corporate bylaws should be kept in a place and manner where you have access to them.
Another essential guidepost for the effective governance of your Montana corporation is your shareholder agreement. A shareholder agreement safeguards the interests of the shareholders and outlines their rights and responsibilities.
Details to include in your shareholder agreement might include:
All Montana corporations are required to issue shares of stock. It’s your responsibility to make certain that the number of issued shares doesn’t exceed the number of authorized shares you specified in your Articles of Incorporation. You must also keep track of how many have been issued.
You can offer shares of your Montana corporation privately or publicly. Deciding to go public comes with the added responsibility of reporting quarterly stock statements to the U.S. Securities and Exchange Commission (SEC). You can apply to sell stock on the public market with Form 10-Q.
For professional corporations, public stock isn’t really an option because PCs have to be more restrictive in who they can issue stock to. Under Montana law, the shareholders of professional corporations need to be licensed individuals, partnerships in which all of the partners are licensed, or other professional corporations that share the company’s professional service. If any of the corporation’s shareholders cease to be properly licensed (from retirement, non-compliance, etc.), then they must transfer their shares to a qualified professional or the corporation itself.
You should also double-check with your licensing authority for any rules they have about shareholders; Montana allows these agencies to enact extra requirements if they wish.
The business permits and licenses necessary to operate your Montana corporation will vary based on several factors. Details such as the area in which you choose to incorporate and your industry may require specific licensure. For professional corporations, this step is especially important since every shareholder, half the directors, and each employee who offers the company’s professional license needs to be appropriately licensed.
Montana does not have a statewide general business license. In Montana, it’s local governments (city and county) that provide business licensing, while the state handles professional licenses. Specialized state licenses relating to regulated industries will be needed to participate in certain fields of business. Visit the official websites of your county and city to learn how local licensing requirements may affect your company.
In general, we advise our clients to check at the local, state, and federal levels for all necessary business permits and licenses.
Getting your Montana corporation set up properly for taxation requires registering your business with the IRS and obtaining your Employer Identification Number (EIN). Your company’s EIN is essentially the Social Security number of your new business.
The EIN is how the IRS will recognize your tax status and impose relevant taxation. The EIN is also what you will use when you seek funding for your business, hire employees, or open a business bank account. A business bank account is a great thing to have since it can make your taxes easier to handle. We offer a service to help you open an account.
Fortunately, applying for an EIN can be completed online for free via the IRS website. Your Montana corporation receives its EIN immediately after your successful filing.
In addition to federal corporate income tax, your Montana corporation will also be responsible for reporting corporate income tax to the Montana Department of Revenue. The standard corporate tax rate in Montana is 6.75%, with a minimum corporate tax of $50. You’ll first need to register your business with the Department of Revenue to pay your taxes. Professional corporations in Montana may have additional tax obligations depending on the services provided. Consult with a tax professional to ensure compliance.
Annual reports will be a constant fixture of your Montana corporation. The annual report is a mandated document that you will owe the Secretary of State to keep your corporation in good standing.
Annual reports typically include basic information about your corporation’s board of directors, stock profile, and structure. Much of the format and information will be identical to the Articles of Incorporation. If there are no major changes to your Montana corporation for the calendar year in question, filing your annual report is quick and simple.
The annual report for your Montana corporation will be filed online via the Montana Secretary of State’s Business Services Division; click on “File an Annual Report.” The cost to file the report is $20. All Montana corporations must file their annual reports between Jan. 1 and April 15 of each calendar year. Late penalties apply for reports not submitted during this time frame.
Corporations who have not rectified their annual report situation by Sept. 1 of a given year face involuntary dissolution and revocation by the state government.
Professional corporations need to file a state annual report just like regular corporations. But there’s an extra requirement: under state law, PCs are also required to file an annual statement with their licensing authority. This is called a statement of qualification, and it should list the names and addresses of your directors and officers. There may or may not be a filing fee, depending on your licensing authority’s policies.
Essentially, this statement of qualification allows the licensing authority to verify that all the required individuals are licensed in your professional corporation.
The complete expense list for the creation of your Montana corporation will depend on a multitude of factors. Items such as your business location and the field in which you are in will affect what you pay when forming.
At a bare minimum, you will owe $90 to begin legally conducting business. That sum consists of the Articles of Incorporation fee and the filing of the annual report, both of which are compulsory. Review Montana’s comprehensive list of business service filing fees to gain a better understanding of the total cost that your corporation will incur.
If you would rather avoid the headaches and confusion, reach out to ZenBusiness and try one of our business formation services. We can assist with everything from your company’s compliance with state law to registered agent services.
With so many business types to choose from, you might wonder why a Montana corporation is so advantageous. It can be helpful to research other organizational structures to get a sense of the major differences between forming a corporation instead of other entities, such as limited liability companies (LLCs), sole proprietorships, or partnerships.
One of the most attractive bonuses of forming a corporation is that substantial financial and legal protections extend to corporation owners. The following represent other major benefits of forming a Montana corporation:
Like most everything else in life, forming a Montana corporation is not all positive. Consider the possible disadvantages:
The exact tax structure of your Montana corporation will depend on its type. As corporations are a bit more complex, there are several ways to be labeled and taxed.
A standard corporation or “C corporation” exists as a separate taxable entity. As such, Montana corporations face federal and state income taxes set apart from the personal taxes of their founders. This results in “double taxation,” meaning that the corporation’s profits are taxed at the business level and again when they are distributed to the shareholders.
S corporations are known as “pass-through entities” and typically do not pay taxes at the business level. Profits are only taxed when they go to the individual shareholders, thus avoiding double taxation. A corporation must apply to the IRS for S corporation status. If granted, it applies both to federal and Montana income taxes.
Nonprofit corporations exist to serve the public good rather than make a profit for their founders. They can apply to the IRS to be exempt from federal income tax. If successful, they can also apply to be exempt from Montana income tax. Employees of nonprofits still pay federal and state income tax on their earnings.
Navigating the incorporation process can be daunting, but you’re not alone. While we don’t currently offer start-up services for professional corporations, we can help you with our standard business incorporation service. We’ve also got a variety of other programs, all here to guide you every step of the way, helping you form your Montana corporation starting at just $0 plus state fees. Let us simplify the journey for you!
Yes, corporations are considered a more complex business structure because they entail rigid adherence to reporting requirements and meticulous stock management.
A major difference between these two business structures is the tax status. Limited liability companies (LLCs) are viewed as pass-through entities, which means that owners are not subject to double taxation. The LLC structure is also typically more flexible and does not have as many requirements for government reporting.
Changing the name of a Montana corporation involves filing the Articles of Amendment on the ePass platform and paying the filing fee.
A Montana corporation must have at least one director listed in the Articles of Incorporation.
You can complete Montana corporation requirements, such as registering your business and filing annual reports, via the ePass Montana system.
The Articles of Dissolution have to be filed with the Secretary of State for any Montana corporation to be dissolved. A small fee is associated with this service.
Yes. A professional corporation is not the only option for your professionally licensed business. In the state of Montana, you can register a business as a professional limited liability company (PLLC) or limited liability partnership (LLP) entity. A PLLC is basically a limited liability company (LLC) that provides professional services. You can also form a professional limited liability partnership offering professional services.
Under Montana law, all of the shareholders of a PC need to be licensed in the company’s profession, so it’s not really possible to blend different fields on the ownership side of things. That said, a professional from a different field can serve as an officer or director of the professional corporation as long as at least half of the directors and officers are licensed.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Written by Team ZenBusiness
ZenBusiness has helped people start, run, and grow over 700,000 dream companies. The editorial team at ZenBusiness has over 20 years of collective small business publishing experience and is composed of business formation experts who are dedicated to empowering and educating entrepreneurs about owning a company.
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