If you have incorporated a business in Montana or planning to form a small business in the state then it’s time to apply for a business license. In order to operate your business in the state, permits, business licenses, and other professional licenses have to be obtained. The absence of license or permit to operate a specific business can lead to heavy penalties and in some cases, closure of the business.

It is important to note that not all business entities require a business license in Montana. Most information pertaining to the types of business that require permits or license is available with the Montana Small Business Development Center. There are specific permits or licenses that are not issued by the state and hence businesses will be required to apply with the city and county offices for same.

How to Get a Business License in Montana

What are the requirements for obtaining a business license in Montana? Are permits required for my business entity? Does the business entity require a single license or multiple permits or licenses? Who is the issuing authority for these licenses or permits? The only way to answer these questions is by understanding the process of business licensing.

Here is a step-by-step approach towards acquiring a business license in the state of Montana.

Step#1: The Industry or Business Type

How would you know what type of business or professional license is required to operate in Montana? The type of industry or the activities of a business entity helps in identifying the type of business license required.

Business license is issued by state departments for some of the following industries or business sectors:

• Agriculture
• Banking and Financial Institutions
• Gambling
• Insurance Companies
• Hard Rock Mining
• Liquor Beer & Wine
• Manufactured Dairy Products
• Pools and Spas
• Day Care Facility
• Retail Food Service Establishments

It is important to note that some businesses may require multiple Montana company license or permits.

Step#2: Licenses issued by City/County

If your business or industry type doesn’t fall under a statewide license then you will have to check with the local city or county office. A business license in Montana can also be issued by local counties or cities in which the business is located.

If your business entity is based in Hamilton, MT then you will have to apply for a license with the Public Works Department. The business license applications will have to be approved by various county or city inspectors depending on the nature or type of business. Once approved, the City Finance Office will collect the license fee as mentioned in the Business License Registration Form and issue a license accordingly. The license fee varies according to the type of business and the location of the business i.e., businesses situated within city limits or outside city limits.

Step#3: Issuance of a Business License

How is a Montana company license issued? Once you have identified the type of business and whether it will be issued by the state or the county, you need to download the proper application and submit it along with the required fee.

Let us look at an example to understand this:

If you were to start a “Retail Food Establishment” in Montana then the license would be issued by the Montana Department of Public Health & Human Services, Food & Consumer Safety Section. The type of food establishment businesses covered under this license includes:

• Food Service Establishment
• Produce (Onsite Retail Only)
• Water Hauler
• Food Service/Delicatessen (Onsite Retail)
• Tavern or Bar
• Meat Market (Onsite Retail Only)
• Perishable Food Dealer (Retail only)
• Bakery (Onsite Retail Only)
• Food Service/Catering (Retail)
• School Cafeteria
• Food Manufacture (Onsite Retail Only)
• Mobile Establishment

The license fee is $85 if the establishment has 2 or fewer employees and $115 for more than 2 employees. There will be separate business license fee for liquor or wine and they will be issued by the Montana Department of Revenue. The licenses are valid for a period of one year and will have to be renewed annually.

The bottom line is that it is important to identify the type of business, industry, and location of business in order to apply for the right business license.

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A report by the Department of Labor and Industry, Research and Analysis Bureau in Montana, revealed that the economy of Montana has been outperforming the national economy in recent years with the real GDP growing from $28.83 billion in 2000 to $41.85 billion in 2017. This economic stability has attracted incorporation in Montana with the largest sector of Montana’s economy being “outdoor recreation” according to Outdoor Industry Association (OIA). Some of the other important industries that contribute towards the economy of the state include agriculture, Petroleum refineries, Lumber and wood products, and community, business and personal services sector.

Why Choose Montana for Incorporation?

There are several industries or sectors you can set up company in Montana and these include the “Financial Activities” sector, which has a 17 percent contribution to Montana GDP. The transportation sector also contributes a large share to Montana’s growing economy followed by manufacturing, which has seen a definite rise in new small and medium enterprises being established in this segment.

Now let’s take a look at some of the salient benefits that are responsible for fuelling growth of small businesses in this state:

• Montana Empowerment Zone Tax Credit: This is a tax credit that you can benefit from post company incorporation in Montana. In order to be eligible for this tax credit, your business needs to be established in a qualified empowerment zone. The tax credit is applied on the basis of each new employee hired by the business and can vary from $500 for the first year of employment to $1,500 for the third year of employment. This tax credit can be carried forward for a period of seven years and also carried backwards for a period of three years.
• Business Grants and Incentives: One of the advantages of incorporation in Montana is that you can benefit from or claim a variety of business grants and incentives. Some of the most popular programs are:
  – Alternative Energy Production Credit: The credit is 35% of eligible expenditures
  – Alternative Fuel Credit: The allowable benefit is 50% of equipment as well as labor costs
  – Mineral and Coal Exploration Incentive Credit: The credit is a maximum of 50% of the tax liability for the tax year in which expenditure was made on mining exploration.
  – New Industry Credit: Manufacturing companies can benefit from credit of 1% on the total wage paid to new employees.

How do you incorporate in Montana?

What is the process of incorporation in Montana? What type of documentation is required? These are some of the common questions that you will be confronted with if you are planning to start a new business in the state. The following steps will help you understand the entire process:

Business Type

The first step towards company incorporation in Montana is choosing the type of business you want to form. You can choose to form an LLC or a Corporation. The type of business entity you want to form can be either a domestic or a foreign entity. The forms and fee will be different for each type of entity.

Business Entity Name

One of the most important steps towards incorporation in Montana is naming your business entity. You have to start by identifying, searching, reserving, and then registering the business entity name. There are 3 steps towards business name formation and they are:

• Naming Requirements: A corporate name pursuant to MT Code § 35-1-308 (2015) should contain the words “corporation”, “incorporated” or abbreviation like “corp.”, and “inc.” The names should be distinguishable from existing names.
• Business name search: You need to search for a business name that is not in use currently. You can conduct name search here.
• Name Reservation: Once you have identified the business entity name, it is advisable to reserve the name by filing an application with the office of the Secretary of State pursuant to MT Code § 35-1-309 (2015). Name reservations are valid for 120 days and are non-renewable.

Choose a Registered Agent

A domestic business entity as well as a foreign entity authorized to transact business in the state of Montana will have to maintain a registered agent pursuant to MT Code § 35-7-112 (2017). We are one of the respected registered agents in Montana and will be responsible for initiating incorporation in Montana through processing of your “Articles of Incorporation” for domestic corporations and “Certificate of Authority” for foreign corporations.

Articles of Incorporation and Certificate of Authority

You will be required to submit “Articles of Incorporation” pursuant to MT Code § 35-1-216 (2017), if your business is a domestic corporation. You will be required to file a “Certificate of Authority” pursuant to MT Code § 35-1-1028 (2017), if it is a foreign business entity. In order to streamline the process of incorporation in Montana, we can file documents on your behalf through the online process or through an expedited process.

Date Stamped Copies

As a part of the process of company incorporation in Montana, we will ensure, you receive date-stamped and filed copies that verifies that the state has filed as well as formed your corporation.

Costs and Fees associated with Montana Incorporation

What would it cost to set up a company in Montana? Check Fees here!

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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.

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Business Information & Rankings

• Montana ranks 4th in the nation in the amount of new high-tech research and development per capita.
• Montana ranks as one of the nation’s top ten states in hydroelectric capacity.
• Montana ranks 7th in the country for renewable energy potential, with the 7th best wind resources.
• Montana ranks 2nd in the nation in acres of land devoted to farming and ranching.

Cost of Living Index

Crime Rate

Montana has the 18th lowest overall crime ranking in the U.S. (FBI, 2004)

Fees & Taxes

Business Inventory Tax
Business inventory is exempt.

Corporate Income Tax
Montana’s corporate tax structure consists of a flat rate of 6.75% on all corporate income. Qualified corporations may elect to pay an alternative tax of 1/2% of gross sales in Montana during the tax year.

Personal Income Tax
Montana’s personal income tax system consists of ten separate brackets with a top rate of 11% starting at an income level of $76,200.

Personal Property Tax
Taxable. Montana is one of the 38 states that collect property taxes at both the state and local levels. Montana does not assess tax on intangible personal property.

State Sales and Use Tax
Base Rate: None
Machinery Rate: None

Unemployment Insurance
Montana charges new employers the average industry rate for 3 years.

Once your company is set up, you will need:

1. Tax ID (EIN) – free over the Internet or phone.
2. Yearly Requirements and Fees for Nebraska companies
3. Company Minutes & Stock Certificates – are included in incorporation. You will have access to documents generated on your client account.

Nebraska additional services

• Registered Agent
• Annual Report
• EIN (Tax ID)
• More Additional Services

• Why Nebraska?
• Nebraska Registered Agent
• Nebraska Annual Requirements
• Nebraska Corporation Statutes: Nebraska Statutes (2005) Chapter 21: Corporations & Other Companies