Forming an LLC in Montana isn't difficult. Search your Montana LLC name in the state registry and pick your registered agent. File your Articles of Organization with the Montana Secretary of State and then wait for your LLC to become registered.
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In order to avoid double taxation, most people incorporate their businesses through a Limited Liability Company. An LLC is a separate entity from its owners, so it can't be viewed as a liability on state taxes. However, some states, such as Montana, require an LLC filing fee. Operating a Limited Liability Company isn't difficult either. If you've never incorporated before, there are several things you need to know.
First, if you haven't already filed your income tax returns, you will have to get your financial information together before you apply for an LLC. Most people file their taxes using the "payroll-only" method. If your tax situation isn't quite perfect, you'll still be able to incorporate an LLC without paying an additional tax. Choose your registered agent, business location, and yearly report, and you're all set!
How To Form An LLC In Montana
Next, you'll need to create your operating agreement. Like many other types of corporations, an LLC has to have a formal operating agreement. However, unlike corporations, an LLC has no separate board of directors. The members of an LLC share a common legal structure: a president is the president of the LLC, and the general manager is the company's manager. A secretary is the second highest ranking official and manages the daily business operations. You can elect any number of members for each position, but it's important that you select someone with extensive legal experience to manage the LLC.
Once you know who will manage the LLC, you'll need to determine if you're going to incorporate as an S-corp or as a C-corp. S-corp LLCs are separately filed tax reports and are not treated as an entity for tax purposes. A C-corp, on the other hand, is a corporation. It's a good idea to consult a qualified lawyer before filing an LLC. He or she will be able to give you the best advice about how to incorporate an LLC in Montana.
Forming an LLC in Montana doesn't end with the creation of the Operating Agreement. An Employer Identification Number (EIN) must be filed with the IRS. This number must be used for all tax purposes, including for the reporting and payment of payroll taxes. The Operating Agreement is also your notice of the LLC's general operating procedures.
Because an LLC is a separate legal structure, there are different tax requirements for it than there would be for a sole proprietorship or corporation. Because of this, many LLCs choose to utilize a different filing status, commonly referred to as tax "pass-through" taxation. Taxes are only owed on income earned within the LLC, rather than income earned by the sole proprietorship or corporation. You can help minimize your personal tax liability by incorporating an LLC. A good idea is to use the services of a qualified tax planner to help you determine which options are best for you.
Forming an LLC in Montana doesn't end there. If you have other LLCs that you operate, you're going to need to notify them of your new LLC. Depending on whether the state permits a separate filing, you may be required to change your address and contact information as well as to register the name with the secretary of state. You'll also be required to pay the appropriate fees. In order to protect yourself from being sued, make sure you have a registered agent who can be contacted should legal issues come up.
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