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Advantages of Incorporating a Business in Montana
Are you nervous about forming a startup company Montana? It is a state that has a growing and stable economy is the state good for the growth of a business? Tax Foundation has ranked the state #6 when it comes to Business Tax Climate and Gallup-Healthways ranks Montana #3 on the list of “Happiest States in the Nation”. Some of the top companies headquartered in Montana include Benefis Health System, St Patrick Hospital & Health, Washington Corporations, Blackfeet Tribe, First Interstate BancSystem Inc., The Waggoners Trucking, and Murdoch’s Ranch & Home Supply among others.
Business Growth Incentive for New Businesses
As one of the top registered agents in the state, we can help you register a new business in Montana as this will ensure you are able to leverage all types of business gains and state provided incentives and grants. Let’s take a quick look at why Montana is the right destination for establishing a business:
Advantage#1: The benefits of Incorporation or LLC formation
Corporation
- Tax Incentives: There are a variety of tax incentives that businesses can benefit from in the state. Some of the popular incentives include:
– Energy Conservation Investments Deduction
– Energy Conservation Installation Credit
– Property tax abatement
– New or Expanding Industry Wage Credit
– Infrastructure Users Fee Credit
– Mineral and Coal Exploration Incentive Credit
– Qualified Endowment Credit
– New Market Tax Credits - Independent life: When you register a new business in Montana as a Corporation, it will enjoy an independent life. This means that the incapacitation or death of a stockholder will not have a negative impact on the business operations.
- Pass through taxation: If you register a new company in Montana as an S corporation then the corporation or firm will not pay any income tax. Instead, the income or loss of the corporation will be passed on to the stockholders.
LLC
- Montana State Small Business Credit Initiative (MT SSBCI) Program: If you are planning to register a new company in Montana as an LLC then this program will be extremely beneficial as it facilitates small business lending and investment. In fact, the program has already generated in excess of $1 Million in private financing for small businesses in the state.
- Limited Liability: One of the greatest advantages of forming a Montana LLC is “personal liability protection”. As an owner of an LLC, you will not be held under personal liability for any debts of that LLC. The creditors of LLC will not be able to touch your personal assets including car, property, bank accounts etc.
- Flow through Taxation: An LLC can benefit from the process of flow through taxation that will ensure there are no double taxations.
Advantage#2: Montana Business Incentive Programs
If you register a new business in Montana, you will be able to take advantage of several programs that provide a variety of benefits right from tax credits or abatements to loans and financing. Some of the most popular programs beneficial for all types of businesses include:
- New Industrial Property Benefit Program: This program offers businesses a reduced taxable valuation rate of 3% on new industrial property for the first 3 years of operation. This abatement is available to businesses in the manufacturing sector, mining, production of materials, warehousing, transportation, and agricultural sector among others.
- New or Expanded Industry Credit: This is a program that will benefit a startup company Montana as it provides a credit on 1% of total wages that are paid to new employees. The credit is available for a period of 3 years since inception or operation.
- Empowerment Zone Tax Credit: This is a program that allows eligible businesses established in various empowerment zones to benefit from a $500 credit against income tax liability on employees. This is a benefit that can be applied to insurance premium tax as well as income tax.
Once you register a new company in Montana, there are several other programs that you can benefit from and these include Energy Conservation Investments Deduction, Growth Through Agriculture (GTA) Program, Micro-Business Loans, Primary Sector Workforce Training Grant Program, and Research and Development Firms Tax Exemption among others.
Are there any Disadvantages of Incorporating in Montana?
Your business can enjoy a variety of advantages in the state of Montana and these include organizational benefits as well as business incentives in the state of Montana. The big question is if there are any disadvantages? There are just a few disadvantages, which are mostly related to the type of organization you form. For example, LLC’s get dissolved when they experience bankruptcy or if a member dies. The bottom line is that the advantages and benefits to a startup company in Montana far outweigh the disadvantages.