How Much Does It Cost to Start a Business in Montana
How Much Does It Cost to Start a Business in Montana
Starting a business in Montana costs significantly less than most states. Montana has no state sales tax, no LLC franchise tax, and streamlined filing fees. Your actual startup cost depends on the legal structure you choose, whether you use a registered agent, and which industry licenses apply locally. This guide breaks down every expense you'll face, with exact dollar amounts.
Montana LLC Formation: The Baseline Cost
An LLC is the most popular business structure in Montana, and the filing fees are straightforward. The Montana Secretary of State charges a flat $35 filing fee for Articles of Organization, regardless of your business size or revenue projections.
That $35 gets you a legally formed business. There's no separate application process, no approval period to wait through, and no hidden state fees. The Secretary of State's online portal at https://biz.sosmt.gov accepts filings electronically, and you can submit them yourself in under 30 minutes.
If you want to speed up the filing process, Montana offers expedited handling:
- 24-hour priority handling: $20 added to your $35 filing fee (total $55)
- 1-hour expedite filing: $100 added to your $35 filing fee (total $135)
For most startups, standard processing is fine. You'll know your LLC exists within a few business days.
Corporation Formation Costs
If you're forming a Montana corporation instead of an LLC, the state filing fee is identical: $35 for Articles of Incorporation. The same expedited options apply if you need faster processing.
Corporations are less common for small businesses because they involve more ongoing formality and double taxation if structured as a C corporation. Most founders choose an LLC over a corporation for simplicity, so the higher administrative burden usually outweighs any tax advantage at startup.
Business Name Search and Reservation
Before you file, you should search the Montana Secretary of State's business registry to ensure your chosen name is available. The search tool at https://biz.sosmt.gov/search/business is free to use.
If you want to lock in a name before you're ready to form your business, Montana offers a name reservation for $10. The reservation lasts 120 days and is non-renewable, so plan to file your formation documents before that window closes. Most startups skip this step and search for free, then file immediately after confirming availability.
Registered Agent Fees
Montana law requires every LLC and corporation to name a registered agent, who receives legal documents and official correspondence on your behalf. You have two options:
Option 1: Noncommercial Registered Agent (Free)
You can appoint yourself or another owner to serve as registered agent. The only requirement is that this person must have a physical street address in Montana. Use this option if you're based in Montana and willing to handle official mail yourself. Your cost: $0.
Option 2: Commercial Registered Agent (Paid)
If you're not based in Montana or prefer not to handle official documents, hire a professional registered agent service. Commercial registered agents are licensed by the Montana Secretary of State and maintain a physical address in the state where documents can be delivered. Commercial agent fees vary by provider, typically ranging from $75 to $300 per year, depending on the level of service and mail forwarding included.
Changing your registered agent later costs nothing. You simply file a Statement of Change with the Secretary of State at no fee, making this decision flexible.
Annual Compliance Costs: Favorable Through 2027
Montana's annual compliance burden is light and temporarily free. Every LLC and corporation must file an Annual Report with the Secretary of State each year by April 15. Here's the current cost structure:
| Year | Fee if Filed by April 15 | Fee if Filed After April 15 |
|---|---|---|
| 2026 and 2027 | $0 (waived) | $0 (waived even when late) |
| 2028 and beyond | $20 | $35 |
This means if you file your LLC in 2024 or 2025, you'll owe zero dollars in annual report fees through 2027. After that, the fee returns to normal: $20 if you file on time, $35 if you file late. Missing the April 15 deadline triggers the higher fee, and filing more than 90 days late can result in administrative dissolution of your business.
Montana Business Licenses and Permits
Montana has no general statewide business license. Instead, licensing is handled at the local level by city and county offices. You may or may not need a local license depending on your business type and location.
Check with your city or county clerk's office for their requirements. Some jurisdictions charge a flat annual fee, typically $50 to $150. Others base the fee on your annual revenue or business category.
Certain regulated industries do require state licensing from the Department of Revenue:
- Alcoholic beverage sales
- Cannabis businesses
- Food service and manufacturing
The Department of Revenue issues these professional licenses through its eStop Business Licenses portal. Costs vary by industry and licensing type, so confirm specific requirements with the Department of Revenue at https://revenue.mt.gov/.
DBA (Assumed Business Name) Costs
If you want to operate under a "doing business as" name different from your LLC or corporation name, you must register it with the Montana Secretary of State. Registration costs $20 and is valid for 5 years. Renewal also costs $20.
You must renew your DBA in the 90 days before it expires or it will be canceled. Missing this window means you lose the right to use that name, so set a calendar reminder.
Federal EIN and Tax Registration
The IRS (federal) requires most businesses to obtain an Employer Identification Number (EIN). You can apply for an EIN free online at https://www.irs.gov/ein. There's no cost, and you'll have your number within minutes if you apply online.
Sole proprietors operating under their own name can use their Social Security number instead of an EIN, but forming an LLC or corporation requires an EIN.
Montana Income Tax: No Franchise Tax on LLCs
Here's where Montana shines for startups: Montana has no LLC franchise tax or annual LLC tax. Your LLC doesn't pay state income tax directly. Instead, Montana taxes pass-through income at the owner level.
As an LLC member, you report your share of business income on your individual Montana return, taxed at Montana's personal income tax rates (4.7% to 5.9% on ordinary income for 2025). This is far simpler and cheaper than states with annual LLC fees or franchise taxes.
If your LLC elects to be taxed as a C corporation, you'll owe Montana corporate income tax of 6.75% with a $50 minimum annual tax. Most small LLCs don't make this election because pass-through taxation is cheaper.
Professional Services: Attorney and CPA Costs
You can form an LLC yourself by filing the Articles of Organization online at https://biz.sosmt.gov. No attorney required. Your cost: $35 plus your time.
However, some startups benefit from professional guidance:
Business Formation Attorney
An attorney can review your business structure choice, draft an operating agreement, help you understand liability protection, and advise on tax elections. Expect to pay $500 to $2,000 for basic LLC formation services, depending on complexity and your location. For simple one-owner or two-owner LLCs, this may be unnecessary. For multi-member LLCs or corporations, an attorney's guidance is valuable.
CPA or Tax Preparation
A CPA can help you understand Montana's income tax implications, set up accounting systems, and plan your first-year tax strategy. Annual CPA fees for a startup typically range from $1,000 to $3,000. Many startups do their own bookkeeping initially and hire a CPA to file taxes once or twice yearly, which is less expensive.
Your Total Montana Business Startup Cost
Here's a realistic breakdown of the minimum cost to launch a Montana LLC:
| Item | Cost |
|---|---|
| LLC formation (Articles of Organization) | $35 |
| Registered agent (self-appointed) | $0 |
| EIN application | $0 |
| Annual report 2026-2027 | $0 (waived) |
| Local business license (estimated) | $50-150 |
| Total minimum | $85-185 |
If you add a commercial registered agent, add $75 to $300 per year. If you hire an attorney to review your structure and draft an operating agreement, add $500 to $2,000.
Why Montana Is Cheap to Start
Montana's low startup cost comes from three advantages:
- No state sales tax. Many states impose sales tax registration fees or ongoing compliance costs. Montana has zero sales tax and no related fees.
- No LLC franchise tax or annual LLC fee. Many states charge yearly fees just to keep an LLC active. Montana doesn't. Annual reports through 2027 are free.
- Flat, modest filing fees. Montana's $35 LLC and corporation filing fees are among the lowest in the nation. No complex fee structures based on revenue or member count.
Ongoing Costs After Launch
After formation, plan for these annual or recurring expenses:
- Annual report filing: $0 through 2027, then $20 (if on time) or $35 (if late)
- Registered agent (if commercial): $75-300 per year
- Local business license renewal: varies by jurisdiction
- Accounting and bookkeeping: $500-3,000+ per year depending on complexity
- Montana business income tax: based on your net income (4.7%-5.9% personal rate for pass-through LLCs)
Resources for Montana Business Owners
Once you've calculated your startup costs and formed your business, use these official Montana resources:
- Montana Secretary of State Business Filing Portal: https://biz.sosmt.gov, file your Articles of Organization, search business names, and manage annual reports.
- Montana Secretary of State Business Division: https://sosmt.gov/business/, general business information, including fee schedules and filing requirements.
- Montana Department of Revenue: https://revenue.mt.gov/, tax information, license applications for regulated industries, and tax forms.
- Montana Small Business Development Center (SBDC): https://commerce.mt.gov/Business/Programs-and-Services/Small-Business-Development-Center/, free business counseling and training.
- SBA Montana District Office: https://www.sba.gov/district/montana, federal small business resources and financing information.
Important Disclaimer
This guide provides informational content about Montana business formation costs and requirements. It is not legal advice, tax advice, or a substitute for professional guidance. Business formation involves legal and tax implications that vary based on your specific situation, industry, and business structure. Consult a qualified Montana business attorney or CPA before making final decisions about your business structure, tax elections, or compliance strategy. Tax rates, fees, and requirements are subject to change.