Not every limited liability company (LLC) lasts forever. In fact, many LLCs in Montana are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of Montana has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the Montana LLC dissolution process? Are there different processes for businesses based in Montana and those expanded from other states? When do you need to dissolve your LLC? We’ll answer all of these questions and more in this article.
How Do You Dissolve a Montana LLC?
When closing a business registered as an LLC in the state of Montana, you’ll need to take care to dissolve your business exactly as the state outlines. The most important part of this process is filing the correct paperwork with the relevant legal entities, but this is far from the only vital step.
In addition to filing documentation of your Montana LLC dissolution, you will need to liquidate the assets of your business, notify all individuals and business entities that have an interest in your company, and resolve any outstanding liabilities with vendors, suppliers, or clients.
There are potentially severe penalties for failing to comply with the Montana LLC dissolution process, and you as a business owner could be personally responsible for your LLC’s liabilities and debts. Therefore, it’s extremely important that you complete each step outlined in this guide to ensure an effective and compliant dissolution.
As for the question of when you should dissolve your LLC, you should do this as soon as you’re certain you will no longer conduct business through this entity. This gives you an opportunity to close up shop with the knowledge that you’re not transacting any business after you start the dissolution process.
Dissolution for Domestic Montana LLCs
Is your LLC based in Montana, and registered as a domestic entity in this state? If so, you’ll start your dissolution process with a document known as the Articles of Termination. You can find this form through the Montana Secretary of State website by entering your business name or number. This form will include some crucial information about your business, so you should fill it out carefully and accurately.
Among the info you’ll need to complete this form is the official business name of your LLC, the reason for your dissolution, the effective date of your dissolution, the name of your registered agent, your name, signature, and the date. Once you’ve finished filling out this form, you can submit it to the Secretary of State by mail or online.
The Articles of Termination document costs $15 to file. Typically, the state will process this filing in 7-10 business days. If you would like to speed up this process, you can expedite your order. One-day service is available for an additional $20, while an additional $100 can get your business terminated within one hour.
But what does this process look like for a business that was formed outside the state and then expanded to Montana?
Dissolution for Foreign LLCs in Montana
If you operate a foreign LLC in the state of Montana, the dissolution process looks quite different than it does for domestic entities. In fact, it’s actually technically called a withdrawal rather than a dissolution.
To dissolve a foreign LLC in this state, you’ll first complete the Certificate of Withdrawal of Foreign Limited Liability Company Application document, which you can find on the Secretary of State’s website. Much of the information for this form is the same as the info provided for the Articles of Termination, but there are some differences for the foreign version.
This form requires your LLC’s business name, the jurisdiction where you originally formed your LLC, a mailing address for potential future service of process deliveries, a Department of Revenue tax clearance form, and a signature.
To acquire your tax clearance document, you’ll need to file the Application for Tax Certificate form with the Department of Revenue. You should file this form as soon as possible because it can take two weeks to get it processed, and you can’t start your withdrawal without it.
Once you have your tax certificate, you can file it with your Certificate of Withdrawal online or by mail. There is a $15 fee for this filing, and the expedited options are the same as they are for the domestic version.
Involuntary Dissolutions in Montana
We should also discuss the potential for an LLC to be involuntarily dissolved by the state. There are several reasons this could happen, and most of them revolve around significant mistakes made by the LLC’s ownership group.
For instance, Montana could involuntarily dissolve your LLC if you originally formed your LLC through fraudulent means, fail to inform the state that you changed your registered agent within 60 days, fail to maintain a registered agent for your LLC, fail to file an annual report within 140 days of the due date, fail to pay any applicable fees or fines, or exceeded the authority granted to your LLC.
It’s obviously never advisable to operate your LLC in a way that leads to the state dissolving it against your will. However, the penalties in Montana aren’t too terribly steep. If you want to restore your LLC’s good standing, you’ll need to file an application with the state, pay a $35 fee, obtain a tax certificate indicating that your LLC has fulfilled all of its tax obligations, and file any missing annual reports.
Still, if you keep operating your business after the state involuntarily dissolves it, you could open yourself up to all sorts of legal issues due to the continued operation of a non-compliant entity. In general, you should be as careful as possible when it comes to following the rules and regulations in this state.
It’s not that the process for dissolving or withdrawing your LLC in Montana is terribly difficult. However, it is a process that you need to take great care to complete in a compliant fashion, or you could expose your business to a wide variety of potential legal complications and financial penalties. Trust us when we say it’s much smarter and easier to simply follow the directions with care to avoid any issues.
Do you need more information about operating an LLC in Montana? Take a look at the following resources: