Montana as a state was recently ranked at number 6 when it comes to business tax according to the Tax Foundation, and has one of the best business climates in the country. The economy of the state is also booming, and it has enjoyed stability for many years now.
You will be able to create your corporate structure, perform your business paperwork, and learn more about taxation, licenses, permits, and any additional criteria to begin your small business in Montana. This is part of the reason why the state is very popular for LLCs and corporations, and why companies like First Interstate, Home Supply, and Blackfeet Tribe are headquartered there.
Once you file a new business in Montana, you’ll be able to reap the benefits of several programs that offer a range of incentives including tax credits to loans and funding discounts. Let’s take a closer look at a few reasons why you should consider forming your LLC in the Treasure State.
4 Important Benefits of Forming Your LLC in Montana
1# Tax Deductions
One of the things that sets Montana apart is the large number of tax deductions corporations have access to. These deductions and credits include things like R&D credits, job credits, deductibles on goods sold, and investment credits.
You won’t see many states that offer this amount of benefits. Another thing that is great about Montana is that it has no gross receipts tax. This means that you’ll be able to further reduce your business’s taxable income.
All your losses, income and expenses flow to the current members through the company. You avoid paying corporate tax or personal tax double taxation. This will generally be a tax advantage, but situations may prefer a system of corporate tax.
Other incentives include a reduction on property valuation tax for companies in mining, manufacturing, agriculture, warehousing, production of materials, and transportation for 3 years, as well as a 1% credit on total wages for new employees for the first 3 years as well.
2# Financing Initiatives
In addition to tax credits and deductions, the state also has a variety of initiatives aimed at helping companies get financing.
The Montana State MT SSBCI Small Business Credit program allows businesses who form an LLC in the state to get private investments more easily.
To this day, the program has generated over a million in lending and investments from private investors. Personal liability corporations can choose different forms of benefit distribution. Unlike a traditional relationship with a 50-50 split, LLC’s versatility is much greater.
3# Room for Growth
Montana is also a state with tons of room for expansion and new opportunities. The state only has 1 million inhabitants, even though it is the fourth largest in the country.
It also has a good variation of demographics, and many college towns as well. It will live an independent life if you file a new business as a corporation in Montana. Also, it ensures that a shareholder’s impairment or death will not adversely affect business operations.
4# Things You Should Know Before Forming a Montana LLC
If you were thinking of forming a Montana LLC, you have to know the proper procedure first. First of all, you’ll have to find a name for an LLC and make sure that it is unique to all other corporations and LLCs in the state. Your name should also have the terms “Limited Company”, “Limited Liability Company”, or any abbreviation of these two at the end to be valid.
Once you’ve found a valid name, you will need to appoint a registered agent. They will be responsible for receiving documents and will act as your intermediary with the state.
You can decide to be the registered agent, or work with a specialized service that will offer a registered agent as part of their packages. This is a good option if you don’t intend to have a residence in the state as it is a requirement for being a registered agent.
Once you’ve filed your articles of organization and got your Employer Identification Number, your LLC will be ready to do business in the state.
A unique aspect of the Montana LLC Act is its fines for failing to declare a foreign LLC in Montana for doing business. This is sometimes referred to as “qualifying” a foreign LLC to do official government business. A foreign LLC is an LLC created by a state other than Montana’s rules.
Starting an LLC in Montana has many benefits, and you should definitely consider the option. Make sure that you take a closer look at everything the state has to offer, and see if it would be a good fit for your organization.
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Author: Abdul Mateen