A limited liability company (LLC) is called that because it limits the amount of liability individual owners, known as members, have in relation to the company. It is a way for owners to protect their personal assets and keep them separate from company property. Montana has its own state-specific requirements on creating an LLC that you must accurately follow.
One of the most important things that you will need to do in creating an LLC is to decide on a business name that is different from other companies and not already taken. Once you settle on a name, you will need to register it. You will also need to file the necessary paperwork with the Montana Secretary of State and apply for a tax ID number.
Additionally, you may need to apply for local licenses, workers compensation, and/or a professional license, depending on your LLC’s requirements. If you are setting up a professional LLC such as an accounting firm, then at least half of the directors or officers have to be licensed. Finally, all LLCs will also need a registered agent in Montana who can be served for process.
What kind of paperwork you need to file depends on whether your LLC is foreign or domestic. If you are forming a domestic LLC, you will need to file Articles of Organization by printing out the correct form and mailing it in to the Montana Secretary of State’s Office.
The form will ask if you are forming a regular LLC or a professional LLC, what the name of your LLC is, and if you have a date as to when the LLC will end. You will also have to put down the name and address of your registered agent, whether the LLC will be run by a manager or a member, and the names and addresses of the members or managers who will be running it. One member can also be put down to be solely liable for the LLC’s debts, but that is up to the company.
Instead of filing Articles of Organization, a foreign LLC will need to file a Certificate of Authority to do business in Montana. The form requires you to state whether the company is a regular LLC or a professional LLC.
You will also need to list the name of the LLC and where and when it was originally formed. Just like with Articles of Organization, a Certificate of Authority will require you to provide the name of and contact information about your registered agent. The form also needs you to put down your office address, as well as the names and addresses of the members.
Overall, LLCs are associated with many benefits when contrasted with other types of business structures. The main, overarching benefit is that LLC members generally cannot be held personally liable for any debts or violations stemming from the company’s actions.
For instance, if the company falls into debt, creditors are not allowed to reach the LLC members’ funds or resources for the purpose of debt payment. On the other hand, the members are not shielded from liability for their own personal negligence or violations.
Furthermore, LLCs may have access tax breaks and treatments that are advantageous for the company. Specifically, Montana does not have a sales tax, which means that any purchases made by the LLC will not be taxed, even if the members of the LLC are not residents of the state.
Another tax benefit of an LLC is that the profits from the LLC are taxed only once through each member’s personal income tax, so you do not have to pay separate corporate taxes for the LLC.
You have to file an Annual Report with the Montana Secretary of State. Additionally, if you are forming an LLC for a professional business, such as an architecture firm or a tax company, Montana law requires you to meet the same requirements as a professional corporation, which involves more paperwork than a regular LLC.
Some general disadvantages or drawbacks of LLCs include limited control over the organization and its decision-making process. Members may also be more restricted in how they can contribute financially to the company, and their business contributions may be processed differently. These types of issues can sometimes require legal guidance and assistance in order to avoid a violation.
How you set up your company and making sure you do it correctly can be extremely important. Thus, you should speak with a Montana business lawyer for advice on how to set up an LLC correctly. Your attorney can help with the filing process, and can represent you in court in the event of a legal dispute or lawsuit.