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Businesses may be structured in a variety of ways, each with its own advantages and disadvantages. Following is a brief overview of some of the more common business structures and the associated registration forms that must be filed with the Secretary of State’s Office. It may be necessary to obtain for your business additional forms or state and local licenses. The Secretary of State’s Office strongly recommends that you consult with an attorney, accountant, financial adviser, and/or banker to help you determine which structure best suits your needs.
Assumed Business Name
An assumed business name is a “trade name” or “fictitious business name” under which the business or operation is conducted and presented to the public. It is not the legal name of the person(s) who actually owns the business. An assumed business name must be distinguishable on the record from an assumed business name that is already registered or from any corporate name, limited partnership name, limited liability company name, limited liability partnership name, trademark, or service mark registered or reserved with the Secretary of State.
Individuals who choose to own a business under an assumed business name can register the name and declare that they are sole proprietors. A sole proprietor is a business owned personally by one owner. An assumed business name can be used by:
- a sole proprietor,
- a corporation,
- a partnership,
- a limited partnership,
- a limited liability company,
- a limited liability partnership, or,
- an association.
This type of business is owned by a single individual. A sole proprietor has total control of and responsibility for his or her business, receives all profits, and can make important decisions quickly. The sole proprietor is responsible for all taxes and liabilities of the business.
If you plan to start a sole proprietorship and you are not planning to do business under your own name, you must file an Application for Registration of Assumed Business Name with the Secretary of State’s Office. Otherwise, no registration is required. You must obtain any necessary state and local business licenses.
A partnership is an association of two or more people acting as co-owners of a for-profit business. Individuals may create a partnership by oral or written agreement. Under this arrangement, the partners share personal liability for all claims against the partnership, as well as share all profits and losses. Profits are taxed as personal income for each individual partner.
A general partnership may register with the Secretary of State by filing an Application for Registration of Assumed Business Name. The filing fee is $20. A partnership agreement is generally maintained by the partnership itself. However, if you choose, you may file a partnership agreement with the Secretary of State’s Office once the application for registration of assumed business name has been filed and there is a $20 filing fee to record the agreement.
A limited partnership is more closely regulated than a general partnership. There must be at least one general partner who manages the business and who is fully and personally responsible for claims against the business. In addition, there are investors who play no part in the management of the business and whose liability for the business is limited to the extent of their investment.
Limited Liability Partnership
A limited liability partnership operates much like a general partnership, except none of the partners can be held personally liable for claims against the business. Partners are not liable for the errors or negligence of the other partners or their employees unless they themselves are supervising, directing, or involved in the action for which a claim has been filed.
Limited Liability Limited Partnership
A limited liability limited partnership is a business entity similar to a limited partnership except that it offers extended protections for liability of the general partners.
A corporation is a more complex form of business organization. It exists apart from its owners or shareholders and is a legal entity in its own right. As a separate entity, it has its own rights, privileges, and liabilities apart from the individuals who form it.
A corporation has shareholders who invest money in the business and therefore own it. The shareholders hold an annual meeting at which they elect a board of directors. The board makes policy decisions for the company and selects the corporate officers who manage the company’s daily affairs.
A corporation affords limited liability to its shareholders and can continue on after the death of or transfer of shares by one or more of the owners. A corporation pays taxes on its profits and its shareholders pay taxes on dividends.
There are several types of corporations; some operate for profit and others are not for profit. An attorney can advise you as to which type best suits your needs.
Among these types are:
- S corporations. S corporations generally do not pay taxes. Profits or losses are passed on to the individual shareholders’ gross incomes for tax purposes. You must apply to the Internal Revenue Service to get S corporation status. The IRS places limits on who can be a shareholder.
- Statutory Close corporations. This type of structure allows a business to eliminate many of the formalities of a standard corporation. For example, the business can elect to operate without a board of directors. A shareholder of a statutory close corporation may not sell shares in the business without the approval of the other shareholders.
- Public Benefit corporations. These profit corporations create a material positive impact on society and the environment and meet higher standards of accountability and transparency.
- Professional corporations. Individuals who are licensed in certain professions may form a professional corporation. This provides them with the benefits of a corporate structure for the business aspects of their practices while preserving the personal and professional relationship between them and the clients they serve. Shareholders may only be people who are licensed to render the specific professional service; at least half of the officers and directors must also be licensed. A professional corporation must file Articles of Incorporation with the Secretary of State and provide a copy of the filed articles of incorporation with each licensing authority having jurisdiction of a type of professional service described in its articles of incorporation.
- Nonprofit corporations. These are established solely for the benefit of charitable, religious, educational, or scientific purposes. No earnings are distributed to members, trustees, officers, or other individuals, except for compensation for services rendered. A nonprofit corporation is exempt from income tax. You must apply to the IRS to receive nonprofit status.
A nonprofit corporation may take one of three forms:
- A public benefit corporation operates for public or charitable purposes. Members may not sell their interests or receive distributions from the organization.
- A mutual benefit corporation exists to serve its members. Trade associations, social clubs, and fraternal organizations are examples of this type of nonprofit. Members are given broader voting rights and, while not entitled to receive distributions while the organization is operating, they are entitled to sell their memberships and receive distributions when the organization dissolves.
- A religious corporation is treated much like a public benefit corporation.
Limited Liability Company
This form of business structure offers both the protections from personal liability of a corporation and the favorable tax treatment of a partnership. It provides for flexibility in the contribution and distribution of assets.
Under this type of structure, annual meetings are not required, but Articles of Organization and annual reports must be filed with the Secretary of State’s Office.
Professional limited liability companies have the same requirements as professional corporations (see above).
As with a general partnership, profits are taxed as personal income for each individual partner.
Series Limited Liability Company
A series limited liability company has the ability to partition its assets and liabilities among a set of separate limited liability companies. Each limited liability company may have different assets, economic structures, members, and managers. The profits, losses, and liabilities of each are legally separate from the others in the series, thereby creating a firewall between each entity. It also offers advantages of a partnership while limiting the liabilities of the members and series members.
If an entity wishes to reserve a name for registration at a later date, they may file a name reservation. The name is reserved for 120 days from the filing date and cannot be renewed.
A foreign corporation or limited liability company that is not, at this time, transacting business in Montana may file a name registration with this office. The name registration must be renewed each year between October 1 and December 31 or it will expire.
A trademark is a word, name, symbol, device, or any combination of those, used by a person to identify and distinguish the GOODS of that person from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.
A service mark is a word, name, symbol, or device, or any combination of those, used by a person to identify and distinguish the SERVICES of one person from the services of others and to indicate the source of the services, even if that source is unknown. A service mark differs from a trademark in that a service mark is used for the advertising of services rather than on the packaging or delivery of goods. When registering a service mark, use the same form as when registering a trademark.
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Montana Office of Tourism and Business Development
Department of Commerce
301 South Park Avenue
P.O. Box 200533
Helena, MT 59620-0501
Fax: (406) 841-2871
Business Services Division
Secretary of State
Room 260, Capitol Building
P.O. Box 202801
Helena, MT 59620-2801
Fax: (406) 444-3976
Citizen Outreach Bureau
Department of Revenue
125 North Roberts Street, Mitchell Building
P.O. Box 5805
Helena, MT 59604-5805
Fax: For Alcoholic Beverage Control Division: (406) 444-0722
Fax: for Business, Income and Miscellaneous Tax Admin: (406) 444-6642
Fax: for Cannabis Control Division: (406) 444-4110
Fax: for Property Assessment Division: (406) 444-9383
Gambling Control Division
Department of Justice
2550 Prospect Avenue
P.O. Box 201424
Helena, MT 59620-1424
Fax: (406) 444-9157
Internal Revenue Service
10 West 15th Street
Helena, MT 59626
To order tax forms: 800-829-3676
For federal tax assistance: 800-829-1040
Montana Society of CPAs
1534 9th Avenue
Helena, MT 59601
Mortgage Broker Licensing
Division of Banking and Financial Institutions
Department of Administration
301 South Park, Suite 316
Helena, MT 59601
PO Box 200546
Helena, MT 59620
Fax: (406) 841-2930
Professional and Occupational Licensing
Department of Labor and Industry
301 South Park Avenue
P.O. Box 200513
Helena, MT 59620-0513
Fax: (406) 443-8163
Public Service Commission
Department of Public Service Regulation
1701 Prospect Avenue, Vista Square Building
P.O. Box 202601
Helena, MT 59620-2601
Fax: (406) 444-7618
Securities and Insurance Divisions
840 Helena Avenue
Helena, MT 59601
Fax: (406) 444-3497
Small Business Administration
Montana District Office
10 West 15th Street, Suite 1100
Helena, MT 59626
Fax: (406) 441-1090
State Bar of Montana
7 W. 6th Avenue, Suite 2B
P.O. Box 577
Helena, MT 59624
Fax: (406) 442-7763
Disadvantaged Business Enterprise (DBE)
Department of Transportation
PO Box 201001
Helena, MT 59620-1001
Fax: (406) 444-7243
A certification program for companies owned and controlled by socially and economically disadvantaged individuals.
Title & Registration Bureau
1003 Buckskin Drive
Deer Lodge, MT 59722-2375
Fax: (406) 846-6039
Unemployment Insurance Division
Department of Labor and Industry
1327 Lockey Avenue
P.O. Box 8020
Helena, MT 59604-8020
Fax: (406) 444-9038
Workers’ Compensation Regulation Bureau
Department of Labor and Industry
1805 Prospect Avenue
P.O. Box 8011
Helena, MT 59604-8011
|To Apply For An Employer ID Number|
|Federal employer ID number||Internal Revenue Service||(800) 829-4933
|State employer ID number||Labor and Industry||(800) 550-1513
|State Regulatory Information|
|Montana License Lookup||(406) 444-6900|
|To Register a Consumer Complaint|
|Montana Consumer Protection Office||Administration||(800) 481-6896 or (406) 444-4500|
|Utility consumer complaints||Public Service Commission||(800) 646-6150 (toll-free)|
|To Register a Patent, Trademark or Copyright|
|Patent Depository||Montana Tech Library||(800) 445-8324|
|Patents, national trademarks||U.S. Patent and Trademark Office||(800) 786-9199 (toll-free)|
|Copyrights||U.S. Copyright Office||(877) 476-0778 (toll free)|
|Insurance coverage||State Fund||(800) 332-6102|
|Unemployment insurance||Labor & Industry||(800) 207-0667 or (406) 444-3783|
|Tax withholding||Revenue||(406) 444-6937|
|Workers compensation||Labor & Industry||(406) 444-6543|
|Other state employer information||Labor & Industry||(406) 444-2840|
|Federal employer information||U.S. Dept. of Labor||(866) 487-2365 (toll free)|
|New Hire Reporting||Public Health and Human Services||(406) 444-9290|
|Montana Nonprofit Association||Montana Nonprofit Association||(406) 449-3717|
|Montana List of Automatic Revocations||Internal Revenue Service|
|Automatic Revocation of Exemption||Internal Revenue Service|
|Other Useful Links|
|Federal Consumer Information Center||(800) 333-4636 (toll-free)|
|U.S. Small Business Administration||(800) 827-5722 (toll-free)|
|IRS One-stop Business Resource||(800) 829-3676 (toll-free)|
|Business Resource Division||Commerce||(406) 841-2730|
|Small Business Development Center||Commerce||(406) 841-2747|
|Montana State Library||(406) 444-3115|
|State Law Library||(406) 444-3660|
|State of Montana Website|