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Setting up an LLC in Montana means more than filling out forms. It’s also about smart money management. At first, you might worry about the costs. But look closer, and you’ll find chances to plan your expenses wisely.
This article explores the costs linked to starting an LLC in Montana. You’ll also learn about tools like Tailor Brands that provide expert advice, helping you make smarter choices and even cut costs.
Understanding LLC setup costs and using available resources lets you step into entrepreneurship wisely and with financial savvy.
What Is the Cost of Forming an LLC in Montana?
The main expense to create an LLC in Montana is a $35 fee for submitting your LLC’s Articles of Organization online via the Montana Secretary of State’s website.
Montana Foreign LLC Formation Costs
If you already have an LLC set up in another state and want to expand your business to Montana, you’ll need to register your LLC as a foreign entity in the state.
There’s a $70 fee for registering a foreign LLC in Montana. To do this, you must fill out the online registration form.
Annual Cost for LLCs in Montana
Managing the finances of your Limited Liability Company (LLC) in Montana involves staying aware of both the initial setup and ongoing maintenance costs. These expenses are crucial in determining your LLC’s financial health. Here are the major recurring costs for a Montana LLC:
First, there’s the Annual Report fee. LLCs must file this report every year. It costs $20 if filed before April 15; the fee increases to $35 after this deadline.
Next, if your LLC uses an Assumed Business Name (ABN), you must renew it every five years through the Secretary of State for a $20 fee, which you can pay online.
Also, Montana LLCs must have a registered agent. If you use a third-party service for this, expect to pay between $100 and $300 annually. Understanding these costs will help you plan your finances better and ensure your LLC’s financial health.
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How Much Does It Cost to Start an LLC in Montana With the Best LLC Service?
Tailor Brands LLC Formation Cost
The basic fee to start an LLC in Montana is $35. This is the starting point, and costs may increase depending on your specific needs. Normally, it takes about 2 to 3 weeks to process.
If you need things done quicker, there are faster options: for an extra $50, you can get your LLC processed in 5 to 7 days. If you’re in a real hurry, a $100 rush fee cuts that down to just 7 to 8 days.
The Tailor Brands Lite LLC plan offers customers standard LLC formation services at the most affordable rate, covering only state filing expenses. Priced at $199 plus state fees, the Essential LLC plan includes expedited LLC formation, annual compliance support, and an operating agreement.
To maintain these services, Tailor Brands imposes an annual fee of $199. Positioned as the top-tier option, the Elite LLC plan, priced at $249 plus state filing fees, encompasses all features of the Essential plan alongside additional business tools and services.
These offerings comprise a complimentary business domain for the initial year, access to a DIY website builder, an online store, eight free logos, a digital business card, a business card tool, and a social media post creator. To continue enjoying these services, customers are required to pay an annual fee of $249 to Tailor Brands.
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Additional Costs When Starting an LLC in Montana
Montana LLC Name Costs
Naming your Limited Liability Company (LLC) in Montana won’t cost you anything extra. Once the state approves your Articles of Organization filing, your chosen name for your LLC is approved at no additional charge.
You may have encountered information online suggesting that LLC Name Reservations are necessary, but this is different for most states. In the majority of situations, reserving a name before forming an LLC is not required.
However, you can secure your selected name for up to 120 days before officially establishing your LLC by submitting a Name Reservation form and paying a $10 filing fee.
Montana Registered Agent Costs
In Montana, appointing a Registered Agent for your LLC is mandatory, with fees ranging from $0 to $125 annually. Designating a Registered Agent in your Articles of Organization exempts you from additional filing charges specific to Montana LLCs.
The role of a Montana Registered Agent involves receiving legal documents and state notifications on behalf of your LLC. The Registered Agent must have a physical address within the state and be available during standard business hours.
Assuming the responsibility of serving as your own Registered Agent or having a trusted individual fulfill this role does not incur any additional expenses.
Alternatively, you have the option to use a Registered Agent service, which typically costs between $100 and $300 annually. These services go beyond basic Registered Agent duties and can also help protect your privacy.
Selecting a Registered Agent service is advisable in the following scenarios:
- You lack a physical address within the state (Montana law requires Registered Agents to have a local address).
- You wish to keep your address private (certain companies can provide their address to maintain your confidentiality).
Montana Operating Agreement Costs
The LLC Operating Agreement fee is exempted, meaning it’s free of charge. This document acts as a formal agreement between the LLC Members, detailing ownership, management framework, and profit sharing.
It’s recommended for both Single-Member and Multi-Member LLCs to draft and keep this agreement, ensuring each Member has a copy. While many platforms usually bill between $50 to $200 for similar agreements, there’s no cost associated with it here.
Montana EIN Cost
Obtaining an LLC EIN Number incurs no cost.
An EIN, also known as Employer Identification Number or Federal Employer Identification Number (FEIN), is vital for tasks such as tax filing, opening an LLC bank account, and potentially hiring employees. While many platforms levy fees for acquiring an EIN for your LLC, you can actually obtain it without any charge.
The Internal Revenue Service (IRS) offers this service for free, and the online application process can be completed in just a few minutes.
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Montana LLC Taxes
Montana LLC tax annual expenses can vary significantly due to the range of taxes owners must address. Some examples of these taxes include:
Federal Income Taxes
The IRS offers various treatment options for your LLC regarding federal income taxes. Single-member LLCs are treated as Disregarded Entities by the IRS, meaning they aren’t required to file separate federal income tax returns. Instead, the LLC owner files the return and pays the taxes. The taxation of the LLC depends on the owner’s status, as an individual owner, it’s similar to a Sole Proprietorship, and if owned by a company, it’s taxed as part of the parent company.
Multi-Member LLC Taxes
LLCs with multiple owners are taxed according to Partnership rules. The LLC is required to file a 1065 Partnership Return and provide owners with Schedule K-1, outlining their portion of profits. Each owner then pays income taxes on their share through personal returns (Form 1040).
Husband and Wife LLC Taxes
In certain states such as Texas, a married couple operating an LLC may choose Single-Member LLC taxation (Qualified Joint Venture) over Multi-Member LLC taxation. However, this option is not available in states like Montana.
Electing Corporate Taxation
Aside from the default options, an LLC has the option to elect corporate taxation. There are two types available: S-Corporation and C-Corporation.
Opting for S-Corporation status, obtained through Form 2553, enables profitable businesses to potentially save on self-employment taxes. Conversely, selecting C-Corporation status via Form 8832 can be advantageous for larger employers seeking to mitigate healthcare fringe benefit expenses.
Montana State Income Tax
In Montana, single-member LLCs typically do not submit state-level returns. Instead, the owner incorporates LLC profits or losses into their personal state return. On the other hand, multi-member LLCs may be required to file a state-level Partnership return, with owners reporting LLC gains or losses in their personal state returns.
Local Income Tax for Montana LLCs
Consider consulting with an accountant to ensure accurate preparation and filing, as failure to properly establish your Montana LLC may result in local (municipality-level) income tax obligations.
Montana Sales Tax
Montana’s unique feature is its absence of a general sales tax requirement. Consequently, LLCs are exempt from the necessity to register for a Sales Tax License or file related returns.
Montana LLC Payroll Taxes
LLCs that have employees are responsible for handling payroll taxes, including federal and state income tax withholding, Social Security, Medicare, unemployment taxes, and local deductions. Effective management is essential to prevent penalties, leading many businesses to seek assistance from payroll companies or accountants.
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Montana LLC Cost – FAQs
Conclusion
Establishing an LLC in Montana involves more than just initial formation costs. It includes tasks such as obtaining required documentation, securing registered agent support, and efficiently managing crucial aspects like operating agreements and EIN acquisition. Effective financial management in these areas is essential, underscoring the importance of specialized LLC services like Tailor Brands.
Prospective business owners can confidently embark on their Montana LLC endeavors armed with an understanding of these diverse expenses and guided by Tailor Brands’ expertise.
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