To start a corporation in Montana, you must file Articles of Incorporation with the Secretary of State. Montana’s Secretary of State’s office has gone completely digital to make the online business formation process easier. The Articles of Incorporation cost $70 to file. Once filed with the state, this document formally creates your Montana corporation.
Advantages of Incorporating in Montana
An incorporated business can do things a sole proprietor can’t, such as enjoying tax deductions not available to sole proprietors. A small business owner who decides to incorporate is protected from losing their personal assets to settle business debts. This protection might make incorporating worthwhile when you start a business.
Montana is home to the 10th best property tax and 16th best corporate income taxes in the nation. Businesses in Montana are eligible for tax deductions that include job credits, research and development deductions and credits, investment credits, and deductibles for the cost of goods sold by the business. Furthermore, Montana lacks a gross receipts tax, which can decrease a company’s taxable income.
LLC Formation and Benefits
Montana promotes setting up LLCs to avoid paying sales taxes. An LLC protects personal assets, and charging order protection is extended to single member companies.
Benefits of a Montana Corporation and LLC
- No Sales Tax
- No Franchise Tax
- No Tax on Corporate Shares
- No Excise Tax
- Simplified Flat 6.75% Corporate Income Tax Rate
Disclaimer
The cheapest state to open an LLC is Montana. However, you should only open an LLC in Montana if you live in that state, or do business there.
Establishing a Montana Corporation
You’ll need to provide your name and email address and create an ePass account.
To open a corporate bank account, you will need your Montana corporation’s EIN, Articles of Incorporation, and corporate bylaws. Some banks may also require a corporate resolution authorizing the opening of the account.
The next step after filing Articles of Incorporation in Montana is to draft corporate bylaws, which are the rules that control a corporation’s structure, processes, laws, and rules.
Conclusion
In conclusion, starting a corporation in Montana in 2023 can be a great way to protect your personal assets and gain access to tax benefits. If you’re planning to operate primarily in Montana, it’s an excellent place to consider for establishing an S corporation, offering pass-through taxation and other incentives for small businesses.