How to Start a Nonprofit in Montana


Steve Goldstein
Steve Goldstein
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Start a Nonprofit in Montana

Are you looking to start a nonprofit in Montana? You’ve come to the right place. Known for its vibrant community and rich culture, Montana (often referred to as The Treasure State) is an ideal location for establishing a nonprofit organization. Unlike for-profit businesses, nonprofits focus on addressing pressing social issues and require a strong foundation, thorough research, and a clear mission targeting a specific community problem.

Embarking on the journey of creating a nonprofit entails various crucial steps, such as obtaining 501(c)(3) status. A 501(c)(3) organization is designed for charitable, religious, educational purposes, and more, qualifying it for federal and state tax exemptions.

In the spirit of Montana’s motto, “Gold and silver (Oro y plata),” thousands of nonprofits are founded within the state each year. This article will provide a comprehensive guide to starting your own nonprofit corporation in Montana. Keep in mind that the steps discussed here are general guidelines, and modifications may be necessary depending on your specific circumstances. To gain a deep understanding of how to start a nonprofit in Montana, we encourage you to read this article in its entirety.

What is a Nonprofit in Montana?

Nonprofit organizations are legal entities that operate to serve public benefits and address community issues. Unlike for-profit organizations, nonprofits do not aim to generate any profit. The Internal Revenue Service (IRS) generally exempts nonprofit organizations from tax. However, based on the business entity structure, you will receive tax exemptions as a nonprofit.

In Montana, ensure you have a community issue to address before you start forming your nonprofit. It can generally be education, religion, charity, social service, or other social issues. Nonprofits do not pay taxes on the money they receive through fundraising programs, donations, or any charitable funding.

Types of Nonprofits in Montana

The first thing one has to decide is what type of nonprofit structure one wants. There are several types of nonprofits one can start. Here is a list of nonprofit types one can choose from-

  1. Nonprofit LLC
  2. Nonprofit Corporation
  3. Unincorporated Nonprofit

Forming an LLC in Montana for your nonprofit can be a smooth option. However, having a corporation is less complex than having a nonprofit LLC. Hence, it is wise to start a nonprofit corporation instead of an unincorporated nonprofit or nonprofit LLC.

LLCBuddy Editorial Team.

Technically, starting a corporation for your nonprofit protects your personal assets but also is eligible for Federal and State tax exemptions. When you form an LLC for your nonprofit, it only protects your personal assets but does not give you any tax exemptions. On the other hand, a nonprofit Corporation has both corporation and limited liability company benefits. You can also have an unincorporated structure where you don’t have to register it. Unincorporated nonprofits in Montana might be eligible for tax exemptions (check with Montana Department of Revenue), but this type of organization does not get to enjoy limited liability and personal asset protection.

How to Start a Nonprofit Corporation in Montana

Setting up a nonprofit corporation requires a few things to consider. Name of the nonprofit, initial directors, drafting bylaws, get a Registered Agent, obtain tax IDs, insurance, and a bank account – these are important steps you must follow. The steps mentioned here are general business formation steps. State-wise, some steps can be different. Getting an expert consultation before you start your nonprofit corporation formation is recommended. Here are the steps explained below-

Step 1: Get a Suitable Name for Your Montana Nonprofit Corp

The first step is to name your nonprofit corporation. You must be sure that the name is available and that no other organization is using this name. You can check the Montana LLC name search to find the best suitable name for your organization. You must follow those rules to avoid any legal issues later. You can reserve the name for 120 days for any domestic entity (such as a nonprofit LLC) if you’re not forming the nonprofit immediately.

Step 2: Appoint the Initial Board of Directors

The next step is to get your nonprofit’s initial board of directors. It is very important when you are setting up a nonprofit corporation. You need at least Three unrelated directors to start the organization. If you don’t choose a minimum of Three directors, it will automatically become a member-managed corporation.

Step 3: Appoint Your Montana Registered Agent

The third step is to get a Montana Registered Agent for your nonprofit corporation. The Registered Agent is a person who receives all the legal documents on your behalf. It is necessary to get a registered agent. He/she must be above 18 years old and have a physical address in Montana.

Step 4: Write Montana Nonprofit Bylaws

The next important step is to write the company bylaws. The directors and board members must decide how the meetings, elections, voting, and other corporate activities will be held. These bylaws must comply with the Montana state law. It is similar to an LLC operating agreement in Montana for the LLC owners.

Step 5: File the Montana Articles of Incorporation

This is the most important step. File your Articles of Incorporation with the Montana Secretary of State. You can do it through one method, that is online. All the formation forms, such as the Montana LLC Articles of Organization form, the Montana Articles of Incorporation form for corporations, forms for LLPs, and all others can be found on the Montana SOS official website. Submit the details of your nonprofit corporation, like the name of the nonprofit, address, name and address of the registered agent, operation dates, directors’ details, and more information related to your company. You can send the form (for offline filing) and the filing fee of $70 for filing online. to the State Capitol, Room 260 ~ PO Box 202801 Helena, Montana 59620-2801 or upload it online (if available).

Step 6: Obtain Tax ID for Your Montana Nonprofit Corporation

The subsequent step involves obtaining a Tax ID for your nonprofit corporation. You will need to acquire an Employer Identification Number (EIN) from the official IRS website. To obtain the EIN, submit your application to the IRS office either by mail or through their online platform. There is no associated cost for this process.

Step 7: Get Business Licenses in Montana

The next step is to get the business licenses you need to run your nonprofit organization in Montana. Check with the local government office if any special licenses you need to run your nonprofit. You can file your nonprofit as a charity if you want.

Step 8: Federal Tax Exemption

You must submit Form 1023 to the IRS to file for federal tax exemption. This form, titled “Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code,” is required for all nonprofit corporations. Smaller nonprofits have the option to file Form 1023-EZ instead. You will be prompted to provide details about your organization upon obtaining the relevant form. Complete the form with the necessary information and submit it. The filing fees are $600 for Form 1023 and $275 for Form 1023-EZ.

Step 9: State Tax Exemption

Once you get the Federal Tax Exempt, it is time for State Tax Exempt. In Montana, you must apply for the tax exemption to Montana Department of Revenue. Get the form, fill it up with the correct details, and send it to the office. You may need to pay a fee along with the form and supportive documents to apply for the State Tax Exemption. You need Tax-Exempt Request Form to apply for the state tax exemption. Read Montana classification of taxes to learn more about the Montana tax structure.

Step 10: Get Insurance for Your Montana Nonprofit

Once you start your nonprofit, you must get insurance to protect your organization. You must get workers’ compensation and unemployment insurance if you have employees. Based on your nonprofit structure, you might need general liability insurance, property, vehicle, auto insurance, etc. You can contact the insurance providers to learn more about which are required for your organization. Also, you can contact Montana State Auditor’s Office, Insurance and Securities Division for more information.

After Forming Your Montana Nonprofit Corporation

Once your nonprofit is formed, there are additional steps to complete:

  • Get a Business Bank Account: You must get a business account for all types of business-related transactions in Montana. You may need different documents based on the bank and place of business. Check with the bank for it.
  • File Nonprofit as Charity: This is optional. Your nonprofit is either for charity purposes or any purpose that meets your community’s needs. If your organization is for charity purposes, then you can file your nonprofit as a charity to enjoy tax exemptions.
  • Other Business Compliances: You may need additional compliances based on your nonprofit type. Check with your attorney or local authority for more information.

Names of Nonprofit Corporations in Montana

Following are some of the Nonprofit Organizations in Montana. The contact information of these organizations can be found on Montana SOS official websites.

  • Florence Charities
  • Forsyth Charities
  • Fort Benton Charities
  • Frenchtown Charities
  • Gallatin Gateway Charities
  • Gardiner Charities
  • Glasgow Charities
  • Glendive Charities.

FAQs

What are the steps to starting a nonprofit in Montana?
The steps to starting a nonprofit in Montana include
Are there any special requirements for starting a nonprofit in Montana?
Yes, Montana requires that a nonprofit register with the Montana Department of Labor and Industry, as well as obtain a state and local licenses. Additionally, the Articles of Incorporation must be filed with the Montana Secretary of State.
What type of paperwork is needed to form a nonprofit in Montana?
The paperwork required to form a nonprofit in Montana includes filing an Articles of Incorporation with the Montana Secretary of State, creating bylaws, obtaining a federal tax identification number, obtaining state and local licenses, registering with the Montana Department of Labor and Industry, and any other necessary paperwork.
Is there a fee associated with forming a nonprofit in Montana?
Yes, there is a fee associated with filing the Articles of Incorporation with the Montana Secretary of State.
Do I need to register with the Montana Department of Labor and Industry?
Yes, all nonprofits in Montana must register with the Montana Department of Labor and Industry.
Are there any other requirements for starting a nonprofit in Montana?
Yes, Montana requires that a nonprofit obtain a federal tax identification number and state and local licenses. Additionally, creating bylaws and other governing documents is necessary.
Are there any resources available to help with starting a nonprofit in Montana?
Yes, the Montana Secretary of State and the Montana Department of Labor and Industry both have resources and guidance available to those interested in starting a nonprofit in Montana.
What type of tax exemption does a nonprofit in Montana receive?
Nonprofits in Montana are exempt from state and federal income taxes. Additionally, nonprofit organizations may be eligible for a property tax exemption.
What types of activities can a nonprofit in Montana engage in?
Nonprofits in Montana can engage in a variety of activities, including but not limited to
Who can be a member of a nonprofit in Montana?
A nonprofit in Montana can have members from any geographic region and with any level of interest in the organization.
What are the benefits of starting a nonprofit in Montana?
Starting a nonprofit in Montana provides the organization with legal protection, the ability to access grants, and tax exempt status. Additionally, nonprofits often have access to resources that for-profit organizations do not have.
How long does it take to start a nonprofit in Montana?
The amount of time it takes to start a nonprofit in Montana varies depending on the complexity of the organization. Generally, it takes two to four months to complete the necessary paperwork and obtain all necessary licenses and registrations.
How do I apply for a federal tax identification number for my nonprofit in Montana?
To apply for a federal tax identification number for a nonprofit in Montana, you must file Form SS-4 with the Internal Revenue Service.
What is the process for filing the Articles of Incorporation with the Montana Secretary of State?
To file the Articles of Incorporation with the Montana Secretary of State, you must complete and submit the form, along with the filing fee.
Are there any restrictions on the activities of a nonprofit in Montana?
Yes, a nonprofit in Montana must adhere to all applicable laws, regulations, and codes. Additionally, the organization must not engage in activities that conflict with its stated purpose or mission.
How do I register my nonprofit with the Montana Department of Labor and Industry?
To register your nonprofit with the Montana Department of Labor and Industry, you must complete and submit the form, along with the filing fee.
What is the deadline for filing the Articles of Incorporation with the Montana Secretary of State?
The deadline for filing the Articles of Incorporation with the Montana Secretary of State is typically within 30 days of submitting the form.
Can a nonprofit in Montana engage in political activities?
Yes, a nonprofit in Montana can engage in political activities, as long as the activities are directly related to the organization’s mission and purpose.
Is there a fee associated with registering the nonprofit with the Montana Department of Labor and Industry?
Yes, there is a fee associated with registering the nonprofit with the Montana Department of Labor and Industry.
How do I obtain state and local licenses for my nonprofit in Montana?
To obtain state and local licenses for your nonprofit in Montana, you will need to contact the appropriate state and local authorities to determine the requirements and fees.
Do I need to create bylaws for my nonprofit in Montana?
Yes, all nonprofits in Montana must create bylaws to govern the organization.
What is the process for obtaining a federal tax identification number?
To obtain a federal tax identification number, you must file Form SS-4 with the Internal Revenue Service.
How do I find out if my nonprofit in Montana is eligible for a property tax exemption?
To find out if your nonprofit in Montana is eligible for a property tax exemption, you must contact the local taxing authority.
Do I need to obtain any additional licenses or registrations for my nonprofit in Montana?
Depending on the activities of the nonprofit, additional licenses or registrations may be necessary. It is important to research and contact the appropriate authorities to determine what is required.
Are there any other costs associated with starting a nonprofit in Montana?
Yes, there are other costs associated with starting a nonprofit in Montana, such as legal and accounting fees, filing fees, and insurance.
What is the best way to find out about available grants for my nonprofit in Montana?
The best way to find out about available grants for your nonprofit in Montana is to research grant opportunities and contact local foundations, corporations, and government agencies.
What are the requirements to start a nonprofit in Montana?
To start a nonprofit in Montana, you must submit a Certificate of Incorporation to the Montana Secretary of State’s office, and complete the necessary paperwork for federal tax-exempt status, including filing a Form 1023 with the IRS.
What are the legal documents required to form a nonprofit in Montana?
The legal documents required to form a nonprofit in Montana include a Certificate of Incorporation, Articles of Incorporation, the Bylaws for the organization, and the IRS Form 1023.
What are the filing fees to form a nonprofit in Montana?
The filing fees to form a nonprofit in Montana vary depending on the type of nonprofit entity, but generally range from $30-$50.
Are there any specific tax incentives available to nonprofits in Montana?
Yes, there are several tax incentives available to nonprofits in Montana. These include property tax exemptions, sales tax exemptions, and corporate income tax credits.
Is there any ongoing reporting required for nonprofits in Montana?
Yes, many nonprofits in Montana are required to file an annual report with the state. This report must include information about the organization’s activities, finances, and assets.
What are the rules for fundraising for nonprofits in Montana?
Nonprofits in Montana are subject to the same fundraising rules as other organizations. This includes complying with state laws regarding solicitation, disclosure, and reporting of fundraising activities.
What are the requirements for board members of nonprofits in Montana?
Board members of nonprofits in Montana must meet certain qualifications and responsibilities, such as being at least 18 years of age, signing a conflict of interest policy, and attending regular meetings.

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Why Montana Nonprofit Corporation is So Important

One of the key reasons why nonprofit organizations are so important in Montana is because they fill gaps in services that may not be adequately addressed by government agencies or for-profit businesses. These organizations often have a deep understanding of the unique needs and challenges facing their communities, allowing them to tailor their programs and services to meet those specific needs. Additionally, nonprofit organizations are often more nimble and flexible than government agencies, enabling them to adapt quickly to changing circumstances and provide critical support where and when it is needed most.

Another reason why nonprofit organizations are essential in Montana is because they rely heavily on volunteers and donations to sustain their operations. Volunteers play a significant role in the success of nonprofit organizations, offering their time, skills, and resources to support various programs and initiatives. Without the dedication and commitment of volunteers, many nonprofit organizations would not be able to operate efficiently or effectively. Similarly, donations from individuals, businesses, and foundations provide crucial funding that allows nonprofit organizations to deliver critical services and support to those in need.

Furthermore, nonprofit organizations in Montana often serve as advocates for social change and policy reform. These organizations work tirelessly to raise awareness about important issues, mobilize communities to take action, and advocate for policies that promote social and economic justice. Through their advocacy efforts, nonprofit organizations help to create a more just and equitable society where all individuals have the opportunity to thrive and succeed.

Nonprofit organizations also play a vital role in fostering a sense of community and social connectedness in Montana. By bringing people together around common causes and shared goals, these organizations help to strengthen the fabric of communities and build bridges across cultural, political, and socioeconomic divides. They create opportunities for individuals to connect, collaborate, and support one another in meaningful ways, ultimately fostering a sense of belonging and solidarity among community members.

In conclusion, nonprofit organizations are essential in Montana for a variety of reasons. They fill gaps in services, rely on volunteers and donations for support, advocate for social change, and foster community and social connectedness. Without the tireless efforts of nonprofit organizations, many individuals and families in Montana would be left without crucial support and resources. As such, it is crucial that we continue to support and invest in these organizations to ensure that all individuals have access to the services and support they need to succeed and thrive in our communities.

Conclusion

Starting a nonprofit corporation in Montana is an incredible way to give back to your community and positively impact the causes that matter most to you. By forming a nonprofit, you can provide essential services, promote awareness, and make a lasting difference in the lives of those who need it most. In Montana, a lot of nonprofit organizations are there to cater to people in need. Starting a nonprofit corporation is better than an LLC, as it provides limited liability and tax benefits. It helps you save taxes. If you want to start a nonprofit in Montana, you must follow the steps mentioned above in the article.

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