Think about your LLC a year from now: raking in profits and taking Montana by storm. You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.
And we’re not talking about renting office space or paying employees – before you sell a single product, there are startup costs associated with launching an LLC in Montana.
While you’re making plans and dreaming big, make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common Montana startup fees here.
Quick Note: If you’d like to keep your costs of starting an LLC as simple and low as possible, consider hiring ZenBusiness – a reliable business formation service. To get a better idea of the value they offer and how it works, we compared them to the two most well known services:
Bare Minimum Cost to Start an LLC in Montana
Optional: LLC Name Reservation Fee
- $10, only available online. An additional $20 for 24-hour processing, or $100 for one-hour processing.
Required: Articles of Organization Fee
- $70, only available online. An additional $20 for 24-hour processing, or $100 for one-hour processing.
Overall Montana LLC Formation Costs
LLC Name Reservation Fee
This first step is an optional part of the LLC formation process. If you go directly to the Articles of Organization, that will officially register your name. But if you aren’t quite ready to start your business, you may choose to reserve your business name so that no one else takes it in the meantime. For $10, you’ll receive exclusive rights to your desired name for 120 days. Need more time? You can renew your reservation for subsequent 120-day periods by paying an additional $10 fee each time.
Articles of Organization Fee
This is the big one, the most important form that you’ll file to start your Montana LLC. The state won’t recognize your LLC or allow it to conduct business until you have the Articles of Organization on file. It costs $70 and must be completed online. There are also two options for faster processing: priority handling (24 hours) for $20 and expedited handling (one hour) for $100. The nice part is that you won’t have to pay this $70 again because the Articles of Organization is a one-time filing.
LLC Formation Service
Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an LLC formation service. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.
Most of these services (like ZenBusiness and Northwest) offer basic LLC formation service like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, Operating Agreements, and expedited filing.
Registered Agent Service
Appointing a registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with Montana business law. In short, you need an agent you can trust.
While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
Not all registered agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to registered agent services, Northwest also handles LLC formation — and they’ll include a registered agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our Best Registered Agent Services guide.
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2000.
Cost variations depend on the experience and location of the lawyer. But with so many options, how can you know you’re hiring the best fit? Using a site like Avvo will allow you to search, compare, and contact a whole database of Montana business attorneys, so you can be sure that you’re getting the right one for your LLC.
Foreign Qualification Fee
This only applies if your LLC was formed in another state and is now expanding into Montana. In this case, a “Certificate of Authority” would take the place of the Articles of Organization.
All foreign business entities are required to foreign qualify in Montana, or they could incur some pretty severe penalties. Avoid them by filing the Certificate of Authority through the Online Business Filing System. The fee is $70, but like the Articles of Organization, you won’t have to pay it again, as long as the state accepts your application.
LLC Annual Fees
The fees we’ve discussed so far have primarily required payments, but Montana also requires recurring business fees, namely Annual Reports. Every LLC operating in the state must file an Annual Report online by Apr. 15 in order to keep the Secretary of State updated on your most current information. Each Annual Report costs $20, so you can count on making this payment every Winter/Spring. Late fillings incur a $15 late fee.
Another payment you may need to make every year is taxes. Because LLCs are typically classified as “pass-through” entities, they don’t need to file separate corporate tax returns; instead, its members report income and losses on their own individual returns. Plus, Montana doesn’t impose franchise or privilege taxes on its LLCs like some states do. Still, there are certain circumstances that would require your business to pay specific business-related taxes. For example:
- Single-member LLCs are sometimes Montana Disregarded Entity Information Return.
- LLCs with employees must pay an unemployment insurance tax.
- LLCs deliberately set up to be taxed as a corporation will need to file a Corporate Income Tax Return and pay the corporate income tax of 6.75%
- Your local city/county/municipality may require their own business taxes.
What If I Don’t Pay?
Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.
Specifically for Annual Reports, late filings are assessed a $15 late fee, and if you don’t file by Nov. 28, your LLC can be administratively dissolved. Miss other necessary maintenance filings, like registered agent changes, it can also result in dissolution. LLCs who have been dissolved cannot do business in the state until they have been officially reinstated. Plus, outstanding filings will cause you to fall out of good standing with the state, which means you’re no longer able to foreign qualify in most other states, apply for business loans, renew professional licenses, and more.
Missing tax payments will result in some serious penalties too. The penalty depends on the the type of tax, the amount due, and how late it is. Check out the Department of Revenue’s penalties page to learn more.
Planning Your Expenses
By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in Montana.
Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees – like Annual Reports and taxes – so your business doesn’t fall out of good standing.