Montana is one of many states that allows licensed professionals to form a professional limited liability company (PLLC), which is basically a limited liability company (LLC) whose members are licensed professionals. Licensed professionals, such as architects, lawyers, attorneys, therapists, real estate brokers and doctors, fall into this group. Individuals wanting to start their own business in such a professional niche can opt to form a professional limited liability partnership (LLP), professional corporation (PC) or professional limited liability company (PLLC) which is one of the more popular options. For this article, we’ll describe how to form a Montana PLLC.
Who can form a Montana PLLC?
Any licensed professional can start a professional services limited liability company (PLLC). A professional is someone who requires a Montana state license to practice and may include such careers as physicians, doctors, chiropractors, lawyers, and dentists.
Professionals can form an LLP, PLLC, or PC. An LLP requires a minimum of two partners. However, just one professional can start a single-member PLLC, which is typically considered a disregarded entity for tax purposes. PLLCs are easy to set up and dissolve, while professional corporations offer a higher level of protection when it comes to shared legal and financial responsibilities. Ultimately, you have several options for structuring a business.
Choose a name for your Montana PLLC
Montana is similar to other states when it comes to choosing a company name. There are a few regulations that you need to take into account before launching your business. First, you need to see if your potential business name is available checking with the Secretary of State‘s business name database. If your name is available, you have the option to reserve your Montana PLLC business name for up to 120 days using our service or via the state website.
The name for your new venture should give some indication as to the type of operation, and it must have “professional limited liability company” or an approved abbreviation in the title. Make sure your business name adheres to Montana’s PLLC naming conventions before registering.
Select a Montana registered agent
Montana requires every business to have a registered agent who can receive legal documents as well as correspondence from the Secretary of State. Agents must reside in the state and have a physical address where someone is available during normal business hours. If you want to avoid the inconvenience of tied down to your office all day, ZenBusiness can point you in the right direction to a Montana commercial registered agent who is authorized to receive service of process in the state.
Complete and file Montana Articles of Organization
Next, you need to file your Articles of Organization with the state and ensure that your documents are in order.
Before filing your articles, you need to decide if your PLLC will be managed by its members or by managers. Member-managed occurs when members oversee the day-to-day activities of your PLLC and make decisions on the PLLC’s behalf. Manager-managed occurs when the members appoint a member(s) or hire an individual(s) from outside the PLLC with or without a stake in ownership to manage your PLLC.
This designation needs to be on the form. You will also need to supply other information, including addresses for each decision maker. A $70 filing fee is required, and expedited service is available for an additional $20 to $100. Checks should be payable to the Secretary of State, and applications should be mailed to the designated address.
Handle Montana tax obligations
Your tax obligations depend on your industry and tax status. PLLCs are by default taxed as pass-through entities, meaning that profits are only taxed at the individual owners’ level, not at the business level. PLLCs in Montana must follow local, state, and federal tax rules. Nearly all PLLCs (even those without employees) need to have an Employer Identification Number (EIN) from the IRS, which ZenBusiness can assist with obtaining. This number is like a Social Security number for your business. It’s needed for tax filings and other administrative activities.
Obtain Montana business licenses and permits
There are industry-specific professional licenses needed when setting up a PLLC. It’s your responsibility to ensure that all of your industry-specific licenses or certifications are up-to-date. In addition to professional licensing, your business may need additional federal, state, and/or local licenses. Our business license report service can help you determine what licenses and permits you need to operate legally.
Acquire insurance for your Montana PLLC
A PLLC doesn’t safeguard you against all claims related to debt, malpractice, or liability. This is why it’s wise to purchase malpractice insurance and general business insurance. Workers’ compensation is required if you have any employees unless your business qualifies for an exemption. Optional liability insurance provided by a business owners’ policy is also recommended.
Open a business bank account
To open a PLLC business bank account, you’ll need your EIN. Banks may require proof that the applicant has at least 25% ownership in the company or has authority to establish a bank account through the PLLC’s operating agreement.
Ready to kick-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 PLLC FAQs
- What are the filing fees for a Montana PLLC?
The fees for a PLLC or LLC are $70 for the Articles of Organization (payable by check), and expedited service is available for an added fee. The state charges $10 for reserving your business name, which is optional.
- Do I need a lawyer to form a Montana PLLC?
You don’t need a lawyer, but hiring a knowledgeable professional to oversee your paperwork is advisable.
- Does Montana have a professional corporation (PC) entity?
Yes. A PC is one of a few options for licensed professionals who want to start their own business in Montana. Other options include a PLLC or LLP. PCs are unified corporate entities that are controlled by a board of directors and must follow strict record-keeping requirements.
- Can professionals from different fields form a Montana PLLC together?
In Montana, half of the PLLC members must be qualified persons who work in the same field even if they don’t reside in the same state. Professionals within a PLLC may provide multiple related services unless this is prohibited by the regulatory board or licensing authority.
- How will I be taxed as a Montana professional limited liability company?
PLLCs are by default taxed as pass-through entities, meaning that profits are only taxed at the individual owners’ level, not at the business level. PLLCs can also choose to be taxed as C or S corporations.