How to Start a Montana Corporation


Steve Goldstein
Steve Goldstein
Business Formation Expert
Steve Goldstein runs LLCBuddy, helping entrepreneurs set up their LLCs easily. He offers clear guides, articles, and FAQs to simplify the process. His team keeps everything accurate and current, focusing on state rules, registered agents, and compliance. Steve’s passion for helping businesses grow makes LLCBuddy a go-to resource for starting and managing an LLC.

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Start a Montana Corporation

When you plan to start a business in Montana, you must decide on the appropriate structure. Starting a corporation may be more complicated than creating an LLC in Montana or a sole proprietorship. However, it is not that difficult as well. There are a few guidelines that you should be aware of when it comes to creating Montana corporation. Starting a corporation involves a legal process, that is, the process of incorporation.

In this article, I will share a step-by-step guide to start a corporation in Montana. I will also enlighten you on the advantages and disadvantages of having a corporation. Some people consider starting a corporation in Montana more than other business structures since it has many advantages over other forms.

What is a Corporation in Montana

In definition, a corporation is a formal organization established by stockholders, shareholders, or other people to make a profit. Like individuals, corporations can undertake contracts, own assets, sue and be sued, pay taxes, limit state and federal taxes, and loan funds from banking institutions.

Common Types of Corporations

Before you start with the process of forming a corporation, you should know what type of corporation you will form. There are several different forms of corporations you can take into consideration, depending on your corporation’s objectives and ownership structure.

  • C-Corporation: C-Corporation is the most known type of incorporation. They have almost all corporate distinguishing characteristics. Profits are distributed to corporate owners who are taxed at an individual level. The corporation is taxed similarly to a business unit.
  • S-Corporation: An S-Corporation is set up similarly to a C-corporation but has different tax implications and owner limits. S-corps have no more than 100 stockholders and are not taxed separately. These business units must also file paperwork with the Internal Revenue Service (IRS) to obtain their status.
  • Non-profit Corporation: Nonprofit businesses are frequently used by religious, educational, and charity institutions to run their operations without making a profit. Thus, a nonprofit corporation is exempt from paying taxes. The nonprofit organization’s gifts, contributions, or cash are reinvested in the company to fund its growth, future endeavors, or operations. Read how to start a nonprofit corp in Montana to learn about nonprofit corporations.

If you have a small business, it is recommended that you form an LLC instead of a corporation in Montana. LLCs have more tax benefits than other structures. Besides, LLCs protect your personal assets. However, it is wise to consult a legal expert before you start setting up your business in Montana.

LLCBuddy Editorial Team

How to Start a Corporation in Montana

To start a corporation in Montana, you must follow the below steps that, include forming a corporation name, appointing a board of directors, filing for Articles of Incorporation, drafting corporate bylaws, meeting with the board of directors, issuing stocks, creating a shareholders agreement, requesting for an EIN, and getting a license and permit. All these steps are basic ones. It can be changed depending on the type of corporation you form and the nature of your business.

Step 1: Choose a Corporation Name in Montana

Naming your business is one of the most crucial activities during the startup phase. Your corporation name serves as the foundation for your brand. Legal procedures should be taken into account when choosing your corporation name. Choose a corporation name that will enable you to develop a strong brand identity without being hampered by irrelevant factors.

If you are forming an LLC, there is a complete guide on Montana LLC name guidelines for a proper LLC name. Here are some guidelines you must follow while naming your corporation in Montana-

  • Your business name must contain entity identifiers, such as “Incorporated,” “Limited,” “Corporation,” or “Company,” or an abbreviation, such as “Inc.,” “Co.,” or “Ltd.”
  • Exclude any words in your business name, such as “Trust,” “Bank,” “Credit Union,” or “Trustee,” or words related to a government agency, such as “FBI,” “State Department,” or “Treasury.”

Step 2: Board of Directors Initial Appointment

To form a corporation in Montana, you must appoint an initial board of directors before making them permanent once the corporation is formed. In Montana, you may appoint at least Three board of directors. The initial board of directors is in charge of guiding the overall strategy of your business. The structure, responsibilities, and powers given to a board of directors are determined by the bylaws of a company or organization. So, appointing your corporation’s initial board of directors in Montana is a big step in forming a corporation.

Step 3: Filing the Articles of Incorporation in Montana

After you appoint the initial board of directors in your Montana corporation, the next step is to write and file a Articles of Incorporation. In writing, the Montana Articles of Incorporation, the corporation name, principal place of business, the purpose of business, Montana Registered Agent contact information, and the names and addresses of incorporators and/or initial board members, should be written.

Filing a Articles of Incorporation in Montana may be done with one method, that is online. The Articles of Incorporation fee may vary from different states. However, in Montana, it costs $70 for filing online..

  • Online Filing: Create an account/Log in to the SOS site, get the online form, fill it, and submit online
  • Offline filing: there’s no offline method of filing the documents

Step 4: Draft Corporate Bylaws

Now you are done filing a Articles of Incorporation in Montana, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

In creating corporate bylaws, you should include the following on how the decisions will be made-

  • The responsibilities are given to each officer.
  • How will judgments in business be made?
  • Where and when are the annual shareholder meetings?
  • The minimum number of shareholders required for decision-making.
  • Location and timing of dividend payments.

Step 5: Hold the First Board of Directors’ Meeting

After drafting the corporate bylaws, gather all the board of directors for the first meeting. This meeting will be finalized by appointing directors to manage the company’s daily operations, approve the bylaws, choose the corporation’s accounting year, and approve the stock issue. All board meetings should have minutes taken and stored with the company’s records.

Step 6: Issuing Stock in a Corporation

After starting your Montana corporation, one of the first official corporate actions is issuing stock to the shareholders. Keep track of the number of shares issued to each shareholder and the purchase price. A corporation in Montana is managed by its shareholders, who contribute to the business in exchange for ownership shares.

Step 7: Draft and Finalize a Shareholders Agreement

Even though drafting and finalizing a shareholders agreement is unnecessary, I suggest you still comply since it will benefit your corporation and its shareholders. A small business’s shareholders enter into a shareholder agreement contract. It establishes how ownership will be handled in unexpected situations, like a shareholder passes away, retires, becomes disabled, or quits the corporation. Early on in the life of your Montana corporation, signing a shareholders’ agreement can help maintain corporate continuity and prevent future disputes.

Step 8: Request an EIN in Montana

After everything is in place, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your Montana corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Montana can be through the following:

  • Apply Online- The EIN online application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in a number of ways. It will give your corporation the final advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 9: Get Licenses and Permits for your Corporation in Montana

Before your corporation operates in Montana, you must have a business license. A business license is a document issued by a government agency that permits you to operate your business in the geographic region that that agency governs. To legally operate your corporation, you’ll need a business license. Numerous corporate licenses need to be filed and renewed regularly. Check out how to get business licenses and permits in Montana to know more.

You must also register a DBA name if you intend to conduct business using a name other than your corporation’s legal name. The DBA name is sometimes known as “doing business as” or a “fictitious business name.” Depending on your location, you may need to register the DBA with your state, city, and county. You can skip this step if your business solely uses your legal company name.

Important Information

Paying your Taxes in Montana

Even if you have established your corporation in Montana, pay your taxes and keep everything up to date so you won’t pay any penalty. Unlike an LLC, there is a corporate tax that every corporation in Montana has to pay. On the other hand, they must pay income taxes based on their business income. Some other types of taxes in Montana are sales tax, franchise tax (not applicable to all the states), and other state taxes.

Cost of Forming a Corporation in Montana

A filing and annual fee must be paid to form a corporation in Montana. Without it, your corporation won’t operate. The initial filing fee for a corporation may vary depending on the state. However, in Montana, it costs $70 for filing online.. The corporation in Montana also has to file an annual report (though it might not be mandatory, it is recommended to file one). Ensure you comply with all the necessary fees and costs so your corporation will run successfully and smoothly. If, in the future, you make any changes to your corporation, you must file the Montana Amendment. It costs $15 to file an amendment in Montana.

Advantages of Starting a Corporation in Montana

  1. Limited Liability: The biggest advantage of setting up a Montana corporation is that the shareholders are not personally responsible for the debts of the company. As a result, when you incorporate as a corporation, personal assets like homes, vehicles, and other possessions are prohibited. One of the main benefits of setting up a corporation over a general partnership or sole proprietorship business structure is that neither the business nor the owners are held legally responsible for the obligations of the business, even if it means giving up their personal assets.
  1. Limitless Corporation: The fact that a corporation’s existence is independent of its owners is another significant benefit of incorporation. In other words, a corporation has an endless life and will continue operating normally even if the owner dies or decides to sell their ownership.
  1. Advantages in Tax: The deduction of health insurance premium payments made on behalf of an owner-employee is one of the many financial benefits to which corporations are entitled. Corporations also save on self-employment taxes since their revenue is not subject to workers’ compensation, Social Security, or medical taxes. Tax rates on corporate profits are lower than those on individual income.

FAQs

What is the process for forming a corporation in Montana?
In order to form a corporation in Montana, you must file articles of incorporation with the Montana Secretary of State. The articles must include the corporation’s name and address, the number of shares of stock it is authorized to issue, the name and address of the corporation’s registered agent, and the name and address of its incorporator.
Is a Montana corporation required to have a registered agent?
Yes, a Montana corporation must have a registered agent in Montana at all times. The registered agent must have a physical address in Montana where the Montana Secretary of State can send legal notices and process service of process.
What are the advantages of forming a corporation in Montana?
There are several advantages to forming a corporation in Montana. These include limited liability protection for shareholders, the ability to issue multiple classes of stock for financing purposes, and tax advantages such as pass-through taxation. Additionally, Montana has a relatively simple and straightforward incorporation process.
What is the cost to form a corporation in Montana?
The cost to form a corporation in Montana is $70. This includes the filing fee for the articles of incorporation. Additional costs may include the cost of a registered agent service, attorney fees, and other costs associated with forming and maintaining a corporation.
Are there any ongoing filing requirements for a Montana corporation?
Yes, there are ongoing filing requirements for a Montana corporation. These include filing annual reports and paying the necessary fees, as well as paying any other applicable taxes.
What are the requirements to start a corporation in Montana?
To start a corporation in Montana, you must file a Certificate of Incorporation with the Montana Secretary of State. Additionally, you must have a registered agent located in Montana and submit a $70 filing fee.
How long does it take to start a corporation in Montana?
Setting up a corporation in Montana typically takes about 4-6 weeks.
How much does it cost to start a corporation in Montana?
The cost to start a corporation in Montana is $70 for filing the Certificate of Incorporation and the registered agent fee. Additionally, you may incur other costs such as legal and accounting fees.
What are the benefits of incorporating in Montana?
Incorporating in Montana can provide protection from personal liability, tax benefits, and credibility. Additionally, Montana has a favorable business climate with low taxes and minimal regulations.
What types of corporations can I form in Montana?
In Montana, you can form a C Corporation, S Corporation, Professional Corporation, and Nonprofit Corporation.
What is a registered agent and why do I need one in Montana?
A registered agent is a person or business designated to receive legal documents and official government notifications on behalf of a corporation. Montana requires all corporations to have a registered agent located in the state.
Do I need to file an annual report for my Montana corporation?
Yes, all corporations in Montana must file an Annual Report each year with the Secretary of State. The filing fee for the Annual Report is $20.
Does Montana require me to hold an annual meeting for my corporation?
Yes, Montana requires all corporations to hold an annual meeting of shareholders. The meeting must be held at least once a year, however, it can also be held more frequently as needed.
What taxes do I need to pay if I start a corporation in Montana?
Corporations in Montana are subject to a corporate income tax, as well as any applicable franchise taxes. You may also need to pay property taxes and business license fees.
What is the minimum capital requirement to form a corporation in Montana?
There is no minimum capital requirement to form a corporation in Montana.
What are the filing requirements to form a corporation in Montana?
In order to form a corporation in Montana, you must file Articles of Incorporation with the Montana Secretary of State.
What is the filing fee to form a corporation in Montana?
The filing fee to form a corporation in Montana is $70.
What is the cost to maintain a corporation in Montana?
The cost to maintain a corporation in Montana will vary depending on the type of corporation and the services you need. Generally, Montana corporations must pay an annual business license fee, as well as any applicable franchise taxes.
Is there a tax or fee that must be paid each year for a corporation in Montana?
Yes, Montana corporations must pay an annual business license fee, as well as any applicable franchise taxes.
What other fees or taxes may I be required to pay if I form a corporation in Montana?
You may also need to pay property taxes and other local fees or taxes.
How long does it take to form a corporation in Montana?
It typically takes 10-15 business days to form a corporation in Montana.
How do I obtain a federal employer identification number for my corporation in Montana?
You can obtain a federal employer identification number for your corporation in Montana by filing Form SS-4 with the IRS.
What are the requirements for naming a corporation in Montana?
The name of a corporation in Montana must contain the word “corporation,” “incorporated,” “company,” or an abbreviation of one of these words. The name must also be distinguishable from the names of other entities on file with the Montana Secretary of State.
What is the difference between a C corporation and an S corporation in Montana?
A C corporation in Montana is a traditional corporation that is taxed as a separate entity from its owners, whereas an S corporation in Montana is a pass-through entity that is taxed similarly to a partnership.
Are there any restrictions on the types of business activities that a corporation in Montana can engage in?
There are no restrictions on the types of business activities that a corporation in Montana can engage in.
What is the process for amending the articles of incorporation of a corporation in Montana?
The process for amending the articles of incorporation of a corporation in Montana includes filing a Certificate of Amendment with the Montana Secretary of State.
What is the process for dissolving a corporation in Montana?
The process for dissolving a corporation in Montana includes filing a Certificate of Dissolution with the Montana Secretary of State.
Are there any special requirements for foreign corporations doing business in Montana?
Yes, foreign corporations doing business in Montana are required to register with the Montana Secretary of State and obtain a Certificate of Authority.
Are there any special requirements for nonprofit corporations in Montana?
Yes, nonprofit corporations in Montana must file Articles of Incorporation with the Montana Secretary of State and obtain a federal tax exemption.
Are there any reporting requirements for corporations in Montana?
Yes, corporations in Montana must file an annual report with the Montana Secretary of State.
How do I obtain a business license for my corporation in Montana?
You can obtain a business license for your corporation in Montana by filing an application with the Montana Department of Revenue.

Also Read

Why Montana Corporation is So Important

One of the key reasons why Montana Corporation is so important is its significant contributions to the economy. The company’s operations span across multiple sectors, creating jobs, generating revenue, and stimulating economic growth in the regions where it operates. Montana Corporation’s investments in research and development have also led to innovations that have helped drive progress and competitiveness in various industries.

Moreover, Montana Corporation’s commitment to corporate social responsibility sets it apart from its peers. The company places a strong emphasis on ethical business practices, sustainability, and community engagement. Montana Corporation actively works towards minimizing its environmental impact, supporting local communities, and promoting diversity and inclusion within its workforce. This dedication to corporate social responsibility not only benefits the company itself but also the broader society.

Another reason why Montana Corporation is so important is its role in driving technological advancements. The company invests heavily in research and development to stay ahead of the curve in a fast-paced and competitive business environment. By constantly innovating and leveraging new technologies, Montana Corporation is able to improve its products and services, enhance efficiency, and meet the evolving needs of its customers.

Furthermore, Montana Corporation’s global reach and influence cannot be overlooked. The company has a strong presence in both established and emerging markets, allowing it to tap into diverse opportunities and sources of growth. Montana Corporation’s international operations enable it to leverage different resources, markets, and talent pools, ultimately strengthening its competitiveness and impact on a global scale.

In addition to its economic and technological significance, Montana Corporation also plays a pivotal role in shaping industry trends and standards. The company is often at the forefront of regulatory developments, market dynamics, and consumer preferences, influencing the direction of various sectors and setting benchmarks for others to follow. Montana Corporation’s leadership and strategic vision have earned it a reputation as a trendsetter and industry leader.

In conclusion, Montana Corporation’s importance lies in its multifaceted contributions to the economy, technological advancements, corporate social responsibility, global influence, and industry leadership. The company’s operations and values are a testament to its commitment to excellence, innovation, and sustainability. As Montana Corporation continues to evolve and adapt to the ever-changing business landscape, its impact will be felt not only within the company itself but also in the wider world.

Conclusion

When determining which corporate form is best for you, be selective. You must know which business structure is bet-fitted for your product/service in Montana. Consult a legal professional before you take the first step while setting up your business. Finding the ideal ratio of corporate advantages and legal protection that meets your unique needs is very important. In forming a corporation in Montana, you need to ensure that every detail is well-formed so that your corporation will be successful. And if you have any questions, share them in the comment section below.

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