Form a Montana Corporation

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Incorporate in Montana

Incorporating in Montana is critical to businesses based of Montana. At LawInc, we prepare your Montana corporation Articles of Incorporation, bylaws, stock certificates, stock ledger and more. We can also obtain your Montana corporation Tax ID number and file your Montana S corporation election with the IRS.

Montana Incorporation Information

The following information will be useful when deciding to incorporate in Montana.

Montana Corporation Name

The first step in registering a Montana corporation is selecting the business name. Montana corporation names:

• Must contain the word “corporation”, “incorporated”, “company”, or “limited”; the abbreviation “corp.”, “inc.”, “co.”, or “ltd.”; or words or abbreviations of similar meaning in another language. If a professional corporation the business name must contain the words “professional corporation” or an abbreviation.
• May not contain business name identifiers or language that states or implies that the corporation is a business other than a corporation (“Business name identifier” means a word or words used by a business entity in its name or title that describes the type or form of its business. Business name identifiers include but are not limited to corporation, partnership, limited partnership, limited liability company, limited liability partnership, association, and abbreviations of those terms).
• May not contain language that states or implies that the corporation is organized for a purpose other than those permitted by the Montana Business Corporation Act. and its articles of incorporation.

An available Montana corporation name may be reserved with the Montana Secretary of State for a 120 day period.

LawInc.com permits you to choose up to three names and will conduct a name search for your Montana corporation, prior to filing. Create a Montana corporation with confidence that your Montana corporation name is available.

Montana Corporation Formation

Montana Filing Procedure: To incorporate in Montana, you must file Montana Articles of Incorporation with the Montana Secretary of State.

Montana Corporation Articles of Incorporation: The Montana Articles of Incorporation should include:

• Name of the Montana corporation.
• Name and address of Montana registered agent.
• Number of authorized shares.
• Name, business mailing address and signature of the incorporator.

Montana Filing Fee: The Montana corporation filing fee is $70.

Montana Corporation Incorporator: Minimum number of incorporators is one (1) (a natural person over 18 years of age) and there is no requirement that the incorporator be a resident of Montana.

Montana Corporation Directors: The minimum number of Montana directors is one (1).

Montana Corporation 1244 Stock: Election to have stock classified as IRC Section 1244 stock allows for a substantially larger application of the deduction from business losses to ordinary income than regular stock. With regular stock, you can only offset $3,000 against ordinary income. With the issuance of Section 1244 Stock, the corporation can claim an ordinary loss deduction of as much $100,000.

Montana Registered Agent: When you incorporate in Montana, a Montana corporation must maintain a registered agent and office to receive service of process in Montana. The Montana registered agent should be available, at a Montana physical address, during normal business hours to accept important legal and tax documents on behalf of the Montana corporation. The registered agent can either be (1) an individual with a physical Montana address or (2) a corporation authorized to serve as registered agent.

Montana Corporation Post-Filing Requirements

Montana Corporation Annual Report: Annual reports should be filed with the Secretary of State before April 15 each year beginning the year following the incorporation and each year thereafter. Every year the Montana Secretary of State will mail a notice that the Annual Report is due to the corporation’s registered agent (35-1-1104, MCA).

Montana Corporate Minutes: Montana corporations should hold and document annual shareholder and director meetings.

Montana Corporation Taxes

Montana Corporation Taxes: For information on Montana income tax, visit: http://revenue.mt.gov.

Montana C Corporation: When incorporating in Montana, all Montana corporations formed by default are “C” corporations. A Montana C corporation is a Montana corporation that has not made an election to be an “S” corporation. The term C corporation is specifically used because the entity is taxed under subsection C of the IRS code. Montana C corporations are taxed at two levels (“double taxation”). This means that the corporation itself pays its own tax when it makes money (the first tax). The owners or shareholders are then taxed again when they are paid a salary or dividend by the corporation (the second tax). Despite double taxation, Montana C corporations offer many planning and benefit opportunities.

Montana S Corporation: A Montana S corporation is a corporation that has made an election with the IRS to be treated for tax purposes as a “pass-through entity.” This means that corporate profits and losses are passed through to the shareholders (owners) who report them on their own personal tax returns and pay the tax at the individual level. The corporation pays no federal income tax at the corporate level. Montana S corporations are not subject to the double taxation C corporations encounter. The State of Montana recognizes federal S corporation status.

These are the 3 main advantages of forming a Montana S corporation:

1. No double taxation: One of the main advantages of Montana S corporation status is that it avoids the double taxation that occurs with a regular Montana C corporation. In a Montana C corporation, the corporation pays income tax on its profits and, if those profits are distributed to shareholders, the shareholders pay income tax on the distribution.
2. Loss deductions: The availability of losses. Shareholders of a Montana S corporation generally may deduct their share of the corporation’s net operating loss on their individual tax returns in the year the loss occurs. Losses of a Montana C corporation, however, may offset only the corporation’s earnings.
3. Self-employment tax savings: By electing S corporation status, only the earnings actually paid out to you as salary are subject to payroll taxes; money left in the business is not subject to payroll taxes or self-employment tax. All income passes through, but its tax status depends on whether it is classified as salary or ordinary income.

Federal Tax Identification Number/Employer Identification Number (EIN): The Federal Tax Identification Number, also known as the Employer Identification Number (EIN) is a number that is assigned to a business by the Internal Revenue Service. An EIN is like a Social Security Number for a business. It is a requisite for certain business functions such as opening bank accounts or hiring employees. When incorporating in Montana, Montana corporations should obtain an EIN.

Montana Incorporation Summary

Montana Corporation Conclusion: Please contact us 24/7 with any questions regarding forming a Montana corporation.