How to Start a Free LLC in Montana: Step-by-Step Guide (2026)

This guide covers the exact DIY filing steps, a full cost breakdown for Year 1 and ongoing years, and an honest look at when Inc Authority’s formation service makes financial sense versus filing on your own.

What Is an LLC?

A Limited Liability Company (LLC) separates your personal finances from your business. If the business gets sued or can’t pay a debt, your personal bank account, car, and home are generally protected. On the tax side, profits and losses flow through to your personal return, avoiding the double taxation corporations face. LLCs cost less and are simpler to maintain than corporations, which is why they’re the most popular structure for solopreneurs and small businesses.

Why Form an LLC in Montana?

Montana’s cost profile is genuinely different from most states, not just on filing day but every year after.

No sales tax: Montana is one of only five states with no statewide or local sales tax. Sell goods or services in Montana and you’ll never collect, remit, or file a sales tax return. There’s no sales tax software, no compliance filings, no audit exposure for in-state operations.

No franchise tax and no minimum business tax: Montana charges no flat annual tax on your LLC for existing. In California, every LLC owes at least $800/year even if it earns nothing. In Montana, no profit means no state income tax. The floor is $0.

No publication requirement: States like New York, Arizona, and Nebraska require LLCs to publish a formation notice in a local newspaper, a formality costing $300 to $2,000. Montana has no such requirement.

Low formation fee: Montana’s Articles of Organization filing fee is $35, among the lowest in the country.

Low annual report fee: The typical filing fee for Montana annual reports is usually $20. However, Montana’s Secretary of State has waived the annual report filing fee for on-time filings in 2026 and announced the waiver will continue in 2027, so your on-time cost may be $0 in those years.

One honest caveat: If you aren’t a Montana resident and can’t serve as your own registered agent, you’ll need a commercial agent at roughly $100 to $300/year. That raises your real minimum above $35. Details in the cost breakdown below.

How to Form an LLC in Montana: Step-by-Step

To start your Montana LLC, follow the five steps below in order. They cover what to do, where to do it, and what it costs. Skipping steps can create problems you’ll pay to fix later.

Step 1: Search for and Choose Your Montana LLC Name

Cost: $0 | Time: 10 minutes

Search for free at the Montana Secretary of State Business Services portal or with an online LLC lookup tool. Type your desired name and confirm it’s available. It takes just 10 minutes.

Your name must be distinguishable from every business already on file. One letter different isn’t enough if the names would confuse the public. Your name must also include an approved LLC designator:

• Limited Liability Company
• Limited Company
• LLC
• L.L.C.

Note: When choosing your business name, you’ll see terms thrown around for different actions. These are distinct steps, so don’t confuse them.

1. A name search is free and just checks availability for a business name in your state. Be sure to do this step before wasting money on formation filing with a name that will get rejected.
2. A name reservation is optional, costs approximately $10, and reserves your name with the state for roughly 120 days. Only use it if you aren’t filing immediately.
3. A trademark search is an important check to make sure that your name in Montana doesn’t infringe on federal trademarks with the USPTO. A quick search with an online trademark tool costs $0.
4. A DBA/Assumed Business Name is a separate filing that lets you operate publicly under a different name. It doesn’t form your LLC or reserve your name.

Cost-saving tip: If you’re ready to file now, skip the name reservation. Your LLC name is secured the moment your Articles of Organization are approved.

Step 2: Appoint a Montana Registered Agent

Cost: $0 if self-agenting; $100 to $300/year if hiring a commercial agent

Every Montana LLC needs a registered agent: a person or entity responsible for receiving legal documents and government notices on your LLC’s behalf. Two rules apply:

1. The agent must have a physical Montana street address (not a P.O. Box).
2. The agent must be a Montana resident individual or a business entity authorized to operate in Montana.

Option A: Be your own agent ($0/year). If you have a Montana street address where you’re reliably present during weekday business hours, you can serve as your own agent. This eliminates a recurring cost entirely. But you must be available at that address during all business hours to accept official correspondence, including service of process. A missed delivery can mean a missed deadline or unanswered lawsuit, potentially resulting in costly default judgments. This works best for Montana residents with a fixed location who are comfortable with their address in public records.

Option B: Hire a commercial agent ($50 to $300/year). If you lack a qualifying Montana address (most nonresidents, remote workers, or frequent movers), hire a Montana registered agent service. A professional agent is also more reliable if your schedule or location makes availability uncertain. This is typically the single biggest cost variable between a $35 LLC and a more expensive one. Free services like Inc Authority take on the cost of a registered agent in Year 1 for you to save on crucial funds as a new business owner.

Nonresidents: Plan on this cost. The SOS requires a physical in-state address, and an out-of-state address will get your filing rejected.

Step 3: File Your Montana Articles of Organization

Cost: $35, mandatory | Time: 15-30 minutes

This step legally creates your LLC. File the Articles of Organization for Domestic Limited Liability Company online through the Montana Secretary of State Business Filing Portal.

Gather this information before starting:

• LLC legal name: Must include an approved designator and match your confirmed available name.
• Principal office address: Physical street address (can be in Montana or your home state).
• Mailing address: Can differ from the principal office.
• Registered agent name and Montana street address: Physical address only, no P.O. Boxes.
• Management structure: Member-managed (owners run operations, standard for small LLCs) or manager-managed (a designated manager runs operations).
• Organizer information: The person submitting the filing. Doesn’t have to be a member or owner.
• Effective date: Leave blank to take effect on approval. Specify a future date if needed.

Processing time: On average, processing can take 5-6 days, but varies depending on demand. If you have not heard back in 2 weeks, contact the SOS via email at [email protected]. The SOS business portal has expedited processing for an additional fee: 24 Hour ($20) or 1 Hour ($100).

Once approved, your LLC legally exists. Save your confirmation. You’ll need the filing date and LLC ID number for your EIN application and business bank account.

Step 4: Get Your EIN

Cost: $0 | Time: 10 minutes

An EIN (Employer Identification Number) is a federal tax ID from the IRS. Think of it as a Social Security number for your business. Your LLC uses it to open a bank account, hire employees, and file tax returns. Even with no employees, get one. Using an EIN instead of your SSN on business documents reduces identity theft exposure.

Apply at the IRS EIN online application. It’s free, takes 10 minutes, and issues your EIN immediately. Apply as soon as your Articles are approved.

Do not pay any service to get your EIN. No one can get it faster or make it more official than the free IRS application.

Step 5: Create an Operating Agreement

Cost: $0 with a free template; $25 to $200+ for paid or attorney-drafted options

An operating agreement defines how your LLC is owned and managed: ownership percentages, decision-making authority, profit distribution, and member exit procedures. Montana doesn’t require you to file one with the Secretary of State, but every Montana LLC should have one.

Without a written agreement, disputes default to Montana’s general LLC statutes, which may not reflect what you and your co-founders actually agreed to. A written agreement also reinforces that your LLC is a separate legal entity, supporting the liability protection the structure provides.

For most single-member LLCs, a free operating agreement template customized with your details works fine. Paid options ($25 to $100 for templates, $200+ for attorney-drafted) make sense with multiple members, unequal splits, outside investors, or complex management structures.

Montana LLC Compliance Post-Formation Basics

Now that your LLC is legally formed, three more steps protect it and help keep it compliant.

Open a Dedicated Business Bank Account

Do not use your personal checking account for business transactions and instead open a business bank account. Mixing funds is one of the fastest ways to weaken liability protection. Courts have held LLC owners personally liable when they treated business and personal finances as interchangeable. Most banks offer free business checking for new LLCs.

Register for Montana State Taxes if Applicable

Montana has no sales tax, so you’ll never need a sales tax permit for in-state sales. Two situations require action before you start operating. If your LLC has employees, register for Montana withholding tax account before your first payroll. Late registration (after 30 days of hiring) triggers penalties of approximately 1.5% per month on unpaid withholding.

Also register with the Montana Department of Labor and Industry for unemployment insurance before your first employee’s first day. Registration is free, and late registration doesn’t eliminate the liability. If you sell into other states, check economic nexus thresholds for each state where you have customers.

Check Business Licensing Requirements

Montana has no general statewide business license, as these are all handled locally and requirements depend on your industry, city, and county. Doing a bit of research on your own with your municipality and the Chamber of Commerce can save you from paying for a compliance service.

Montana LLC Cost Breakdown

For a Montana resident who can self-agent, the minimum cost to form an LLC is $35. That’s the mandatory state filing fee. No service, attorney, or workaround can eliminate it.

Year 1 Formation Costs

Ongoing Annual Costs (Year 2 and Beyond)

You may only form your LLC once, but keeping your Montana business compliant every year costs some time and money. Be prepared for these recurring expenses:

Annual report: Montana requires LLCs to file an annual report, which usually comes with a $20 state filing fee (though this has been waived for 2026 and 2027). Note that failing to file on time comes with a $15 late fee.

Registered agent: You must maintain a registered agent in Montana every year. The most affordable option is to be your own registered agent, which costs nothing. But if you can no longer be your own agent with regular availability at a physical address in the state or if you signed up for Inc Authority’s free Year 1 registered agent, you will want to factor in the cost of an agent for Year 2 (roughly $100-300/year).

Money-Saving Tips for Montana LLC Owners

Montana Tax Advantages That Save You Money

No sales tax: Your LLC never collects, remits, or files sales tax returns on goods or services sold within Montana. Zero cost for sales tax software, zero filing deadlines, zero audit exposure from sales tax errors. Confirm details at the Montana Department of Revenue’s tax overview.

No franchise tax or minimum business tax: If your LLC earns no profit, you owe no state income tax, and there’s no minimum floor.

Competitive income tax rates: Montana’s HB 337 reduced the top marginal rate from 5.9% to 5.65% in 2026, with a further reduction to 5.4% scheduled for 2027. Be sure to verify the current applicable rate with the Montana Department of Revenue before filing your return.

PTE tax election for multi-member LLCs: Montana allows multi-member LLCs to elect Pass-Through Entity (PTE) tax treatment. The LLC pays state income tax at the entity level, which can reduce each member’s federal taxable income by bypassing the $10,000 SALT deduction cap. Whether this benefits you depends on each member’s total tax picture. Consult a Montana CPA before making the election.

Free State Resources

• Montana SBDC Network: The Montana SBDC offers free, confidential one-on-one advising funded by the SBA and the Montana Department of Commerce. No cost, no minimum business size. Advisors help with planning, projections, taxes, and growth. Regional centers are in Billings, Missoula, Great Falls, Bozeman, Helena, Kalispell, Havre, and Butte.
• SCORE Montana: SCORE pairs you with retired and active business professionals as free mentors. Sessions are free, in person or remote. Active chapters are in Billings, Missoula, and Great Falls.
• Montana Chamber of Commerce: Use the free Montana Chamber of Commerce website (previously called the Business Navigator) for a number of free resources and financing opportunities. Montana Business Navigator.

Avoiding Penalties

File your Montana LLC annual report by April 15 every year. It takes under 10 minutes online and costs $20 (waived for on-time filers in 2026 and 2027). Missing the deadline triggers a $15 late fee immediately. Continued non-filing risks administrative dissolution.

LLC dissolution is far more expensive to fix. Reinstatement requires filing all delinquent reports plus paying a reinstatement fee. Once dissolved, your business name becomes available to others. If someone registers it, you may need to rename your business entirely when reinstating.

Set a recurring reminder for March 15 each year, 30 days before the deadline. Don’t pay a compliance service $50 to $200 to file a 10-minute form for you.

How to Start a Montana LLC With Inc Authority

Inc Authority waives its own service fee, not the Montana state filing fee. You still pay the mandatory $35 to the Montana Secretary of State.

What the base package typically includes:

• Preparation and filing of your Articles of Organization
• Business name availability check
• One year of registered agent service (especially useful for nonresidents)
• Digital access to formation documents and online storage
• Basic compliance notifications for upcoming filing deadlines

What you’ll still pay or see at checkout:

The $35 state fee is always your responsibility. You may also see optional add-ons for services like EIN filing, operating agreement package, compliance monitoring, website/domain packages, business credit programs. These are convenient to save you the headache of doing it yourself, and you pick and choose at check out what works for you.

After Year 1: The registered agent service renews at the then-current annual rate of $249. If you qualify to self-agent (Montana street address, reliably present during business hours), switching after Year 1 drops your agent cost to $0. You will need to complete a Change of Agent form with the SOS to notify them of the update (there’s no filing fee).

When it makes the most sense: Nonresidents need a paid registered agent regardless. Inc Authority’s included agent means your Year 1 cost matches the DIY path at $35, and the paperwork (and privacy) is handled for you.

Start your Montana LLC with Inc Authority and pay only what you want + the $35 state filing fee.

Montana LLC Compliance: What You Must Do After Formation

Montana has a short list of ongoing requirements. Handle them yourself and compliance costs almost nothing.

Annual Report Requirement

Every Montana LLC must file an annual report to remain in good standing. Missing it is one of the most common and avoidable ways owners lose liability protection.

• Due date: April 15 each year
• Fee: $20 for domestic LLCs (waived for on-time filers in 2026 and 2027)
• Where to file: Online at biz.sosmt.gov, takes under 10 minutes
• Late fee: $15 if filed late

Important: Your first annual report is due between January 1 and April 15 of the year after the calendar year in which you formed. Missing the deadline puts your LLC out of good standing immediately. Under Montana Code Annotated Section 35-8-908, continued non-filing can result in administrative dissolution.

Montana will dissolve domestic LLCs that fail to file by December 1st. Once dissolved, your LLC name becomes available to other businesses, members lose limited liability protection for actions during dissolution, and reinstatement requires filing all delinquent reports plus paying a reinstatement fee.

Set a recurring reminder for January and another for March 15 to ensure you don’t miss the date.

Registered Agent Maintenance

Your LLC must maintain a registered agent with a physical Montana street address at all times. If anything changes (agent address, name, or you switch agents), file the change promptly through the Montana SOS Business Filing Portal. The update fee is currently $0.

Gaps in coverage are more than a technicality. If your agent is unreachable when a lawsuit is served, that document may go unanswered. A default judgment from a missed legal notice costs far more than any agent fee. Keep your information current, and if switching agents, confirm the new agent is in place before the old arrangement ends.

Tax and License Compliance

If your LLC hires employees, register for Montana income tax withholding before your first payroll. Late registration triggers penalties of approximately 1.5% per month on unpaid withholding. Also register with the Department of Labor and Industry for unemployment insurance before your first employee starts. Registration is free. Late registration doesn’t eliminate liability, and you still owe contributions from the hire date, plus potential penalties.

No employees? Neither registration applies.

Montana has no general statewide business license. Requirements depend on your industry, city, and county. Licenses in regulated industries (food service, contracting, childcare) typically require renewal, and lapsed licenses can mean fines or forced closure.

Frequently Asked Questions About Starting a Montana LLC

Is it really possible to start a Montana LLC for free?

Not completely. Montana charges a mandatory $35 state fee. “Free” means the formation service waived its own fee, not the state’s charge. To reach $35 total, you must file the Articles yourself (or use a no-fee service like Inc Authority) and serve as your own registered agent, which requires a physical Montana street address where you’re available during business hours. Nonresidents almost always need a commercial agent at $100 to $300/year.

What is the cheapest way to form an LLC in Montana?

Do everything yourself: file the Articles at the Montana SOS portal, self-agent, apply for your EIN free through the IRS, and use a free operating agreement template. Montana resident total: $35. Nonresidents need a commercial agent ($100 to $300/year), raising Year 1 to $135 to $335. One option: if a family member or colleague has a Montana street address and is willing to serve, they qualify as your agent for $0.

Why do some websites say LLC formation is free while others charge hundreds?

“Free” refers to the service fee being waived, never the $35 state fee. Free services make money through optional convenience add-ons at checkout. Mid-range services bundle the state fee with a service fee. Premium packages add agent service, operating agreements, and compliance extras. Almost every add-on (EIN, templates, report reminders) is free from the government or with a basic template if you learn to do it yourself.

Do I need a registered agent, and can I be my own?

Yes, every Montana LLC must have one at all times. The agent must have a physical Montana street address (no P.O. boxes). You can self-agent if you have a qualifying Montana address and are reliably present Monday through Friday, 9 to 5. It costs $0 but requires consistent availability. A missed service of process can result in a default judgment. No Montana address? Hire a commercial agent ($100 to $300/year). Commercial agents also solve the privacy concern of having your home address in public records.

How long does it take Montana to approve an LLC?

Processing times vary. Verify at the Montana SOS website before filing. Most online filings return approval within 1 to 3 business days. Some filers report same-day turnaround during low-volume periods, though this isn’t guaranteed. File online, as paper (if accepted) takes significantly longer. Note that your LLC isn’t official until the SOS approves it, so don’t sign contracts or open accounts under the LLC name until then.

Do I need an operating agreement for my Montana LLC?

Montana doesn’t require you to file one with the SOS. Still, every LLC should have one. Without it, disputes default to Montana’s general LLC statutes under Montana Code Annotated Title 35, Chapter 8, which may not match your intentions. For single-member LLCs, a free template works fine. Paid options ($25 to $200+) make sense with multiple members, unequal splits, or outside investors.

Is a DBA the same as reserving my LLC name in Montana?

No. A name search is free online and just checks availability. A name reservation temporarily holds your name while you prepare to file ($10 for 120 days). Skip this added cost if you can file immediately. A DBA/Assumed Business Name lets your LLC operate under a different public-facing name than your legal LLC name, and both have to be registered with the state of Montana. DBAs don’t form an LLC or reserve a name.