A Montana LLC operating agreement is a document that helps you set the functions for a company’s operations and establish its ownership interest. For this kind of document to be legally binding, you can seek the signatures of all company owners.
You don’t file it with a specific government office upon creating it. Instead, each involved member can keep a copy of their records, and the business can hold its copy.
Is an LLC Operating Agreement Required in Montana?
No, aspiring business owners in Montana don’t have to draft an LLC operating agreement. However, this document can help them organize the structure of their company.
The Montana Code Annotated (MCA) features the Montana Limited Liability Company Act under Title 35, Chapter 8. This act covers the main rules and guidelines individuals can follow to create operating agreements and conduct business through an LLC.
The operating agreement statute is present in § 35-8-109. It emphasizes that members of an LLC can enter into an operating agreement, and they don’t need to put this declaration in writing. When you create an LLC operating agreement in Montana, you can outline members’ duties and responsibilities. Note that you can’t use it to:
- Unreasonably limit member rights
- Violate the duty of loyalty
- Violate the duty of fair dealing and good faith
It’s also worth noting the definition of an operating agreement in Montana, as § 35-8-102(23) summarizes: “An operating agreement is an agreement, including amendments, as to the conduct of the business and affairs of a limited liability company and the relations among the members, managers, and the company that is binding upon all of the members.”
Costs and Fees
In Montana, starting your own LLC will only cost $35. You pay this fee when you file your articles of organization with the Montana Secretary of State. A foreign LLC is slightly more expensive to begin in Montana, as it will cost $70.
If you want to reserve your name, you can pay just $10 and file a name reservation form with the Montana Secretary of State.
How to Form an LLC in Montana
Here’s a list of steps you can follow to form an LLC in Montana:
Step 1 – Name for Your LLC
Any LLC begins with a name. Ensure to include some “limited liability company” variation within your business name. You can keep the full phrase or use an abbreviation like L.L.C or LLC.
Step 2 – Find a Registered Agent
Once you’ve selected your business name, it’s time to find a registered agent. A registered agent is a person who accepts documents as they relate to government correspondence, compliance, and service of process.
In Montana, a registered agent can be any state resident or a business entity legally allowed to operate in the state. The registered agent must have a physical street address in Montana.
Step 3 – File Your Articles of Organization
When you find a registered agent, you can begin filing your articles of organization online. Whether you’re registering as a domestic or foreign LLC, the appropriate forms are available on the Montana Secretary of State website.
Individuals wanting to create a domestic LLC should fill out the Articles of Organization for Domestic Limited Liability Company form. Individuals wishing to develop a foreign LLC should complete the Certificate of Authority for Foreign Limited Liability Company.
Remember that you need to include your filing fee when following either process.
Step 4 – Create an LLC Operating Agreement
While creating an LLC operating agreement is optional in Montana, you can still benefit from having one. It can show that you treat your business and your finances separately. You can also seek separate investments or open business bank accounts.
Include the following information in your LLC operating agreement:
- The duties and rights of each member
- The business’s operations
- The percentage of the company each member owns
- The process for conducting votes and holding meetings
Step 5 – Get an Employer Identification Number (EIN)
The last step of the process is to get an Employer Identification Number (EIN). Although single-member LLCs can use their social security number instead of an EIN, getting a separate identifier is still helpful.
You can get an EIN by applying for one on the IRS website. It’s completely free to do so, and with your new EIN, you’ll be able to hire employees, open a business bank account, apply for business loans, and take out a business credit card.