Are you a licensed professional who wants to form a Montana professional corporation? If that’s a yes, then our guide is bound to make the process easier. Lawyers, architects, surgeons, and other members of specialized professions can form professional corporations. Professional corporations require a fair amount of documentation and paperwork, but can prevent individuals from being personally liable for business debt.
Determine whether a Montana professional corporation structure is the right choice for you
There are a few business structure options available for licensed professionals looking to start their own business. You can open up a professional corporation (PC), professional limited liability partnership (LLP), or a professional limited liability company (PLLC). The legal structure you choose will affect things like tax payments, paperwork, liability, and company structure.
Is a Montana PC right for you? It depends on what you want. PLLCs and LLPs are easier entities to form but don’t offer the same high level of legal protection that a PC does. Forming a PC requires a formal management structure, keeping up to date with annual filing requirements, and storing a permanent record of company-wide decisions.
You will also need to decide how the corporation will be managed and how ownership will be divided. You’ll need to appoint officers and corporate directors as well as decide on a share structure for shareholders if you choose to open a professional corporation.
Choose a name for your Montana professional corporation
When you incorporate in Montana, your name needs to indicate that your business is incorporated. The signifier “professional corporation” or “P.C.” needs to be included in your name.
You need to check if your preferred business name is available, as it can’t be the same or overly similar to any other Montana business. Conduct a basic business name search on the Montana Secretary of State website to see what names might be out there similar to your choices. Once you’ve found an available name, you may want to reserve it until you’re ready to file to ensure no one else claims it. You can do this via the state website or by using ZenBusiness’s name reservation service.
Also think about securing a domain name for your website. ZenBusiness can also help you with this.
Select a Montana registered agent
Professional corporations in Montana appoint a registered agent for service of process. An agent is an individual, professional service, or entity that accepts legal documents on behalf of your company. Your Montana registered agent needs to have an active address in the state of Montana and must be available during business hours. In the state of Montana, a business entity cannot serve as its own registered agent.
ZenBusiness’s registered agent services can help you secure the services of a registered agent. We also store your documents on a secure dashboard and offer extra tools to help you keep your business up to date and compliant.
Complete your Montana Articles of Incorporation
The preparation and filing of your Articles of Incorporation is the most important step in the creation of your PC. The person/company who files your documents is the incorporator.
Professional corporations must file their Articles of Incorporation with the Montana secretary of state. This document is the business equivalent of a birth certificate and, once approved, essentially “creates” your corporation. The Articles of Incorporation document contains information such as directors’ names, allocation of company shares, business purpose, and company details.
Establish a corporate record in Montana
Professional corporations are required to keep a record of all business decisions. This record can include anything from bylaws to shareholder contracts and minutes of meetings. A corporate record is a timeline of vital information.
Designate a Montana professional corporation board of directors
Your shareholders will need to appoint a board of directors. In your Articles of Incorporation, you have to supply the details of all corporate directors. The directors will be responsible for governing the PC.
Create Montana corporate bylaws
Bylaws are a set of company guidelines and operating procedures detailing how your company is run. They provide a clear and concise structure outlining roles, discipline procedures, and any other details vital to the successful functioning of your corporation. You are legally required to have a set of bylaws in Montana, but you you don’t have to file them with the state. A lawyer or attorney can help draft these bylaws.
Hold your first board meeting
The first board meeting is designed to review bylaws, company structure, shares, and other industry-specific information. You might also want to discuss details such as banking and tax structures. File the minutes of the first meeting along with the rest of your corporate documents.
Handle Montana tax obligations
There are three types of tax obligations: federal, state, and local.
Fulfilling your federal tax obligations requires an employer identification number or EIN, which is a federal tax ID number provided by the IRS. You can apply for this yourself or use ZenBusiness’s EIN service.
Professional corporations are automatically a C corporation unless otherwise stipulated. C corporations are taxed at a corporate and individual level, resulting in double taxation. Your PC will also be responsible for state and local taxes.
Obtain Montana business licenses and permits
Depending on the nature of your business and its location, you might need industry-related permits and licenses. A general business license is not required in the state of Montana, but it is your responsibility to ensure that you’ve gotten all the licenses and permits that your specific business needs. Such licenses and permits can be required at the local, state, or federal level. ZenBusiness’s business license report can help you determine all the licensing you require to be in compliance.
Acquire insurance for your Montana professional corporation
Corporations with employees should get workers’ compensation insurance, as recommended by the state. In addition, you should consider taking out general business and malpractice insurance to protect your corporation.
Open a business bank account
Together with investors, you should discuss the type of business bank account that best suits your corporation.
Ready to start your business?
At ZenBusiness, we are proud to support small businesses through a variety of different tools and services. Whether you need a registered agent service, want to reserve a business name, or are looking to register a domain name, our goal is to help you stay on the road to success. Check out our services and contact us today to see how we can help you grow your company.
Montana Professional Corporation FAQs
What are the filing fees for a Montana professional corporation?
Professional corporation fees can vary, so we’ll break down the minimum costs. Montana PCs need to file their Articles of Incorporation with the Secretary of State, which can be done online. It costs $70 to file the document. Foreign professional corporations doing business in the state need to file a Certificate of Authority, which costs $70.
Do I need a lawyer to form a Montana professional corporation?
No. In Montana, there is no legal requirement to seek the services of a lawyer; any person can incorporate by following the steps laid out on Montana’s Secretary of State Business Services website.
Does Montana have other professional entity types?
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 PLLC or 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.
Can professionals from different fields form a Montana professional corporation together?
The state of Montana requires at least 50% of the company directors to be licensed professionals in the same field. The secretary and treasurer don’t need to be qualified professionals in the same profession.