Why Montana LLC or Corporation

Why Montana is One of The Best States To Form Your Business

The state of Montana offers some distinct advantages for businesses above and beyond the average state in the country, that causes one to most certainly consider forming a Montana LLC or Corporation.

Benefits of Montana LLC's and Corporations:

• Simplified Flat 6.75% Corporate Income Tax Rate (C-Corporations Pay Income Tax Only)
• Personal Income Tax Capped at 6.9%
• No Franchise Tax
• No Tax on Corporate Shares
• No Sales Tax
• No Excise Tax
• No Inventory Tax
• Amongst The Lowest Property Taxes in the US
• Disclosure of any shareholders (Nevada now requires disclosure of one shareholder/ member)
• Very Pro-Business State Ranking #6 in US

MASSIVE MONTANA ADVANTAGES

• Minimal Formalities and Government Restrictions - Much like the other preferred
• Extremely Low Annual Fees - The minimum annual fee is only $20 to maintain your entity.
• Protection Versus Unwanted Partners - Montana law allows an llc to protect its members business states, as discussed in a previous post, if you are looking for less restrictions then this is one of the states to consider. So if your business is a subchapter s-corporation and not a c-corporation, this will be your only ongoing fee from unwanted and unapproved transfer of interest with respect to affecting managerial rights. Whether approved in the operating agreement or subsequent to a transfer, in order for full managerial rights to be conveyed, the transfer must be approved by the members. If not approved by the members, per state law, only the distribution will convey.
• Creditors - Montana is unique in that IF a creditor were to somehow obtain a charging order against an llc member, the courts only allow a distributional NOT a managerial interest to be conveyed. What this means is that is essence by virtue of state law, a creditor can only obtain the distribution interest that otherwise might be payable to the member and no management rights whatsoever.
• Managerial and Profit, Loss, and Capital Customization - State law allows an llc to customize its capital contribution and vary distribution of profits and loses based upon its operating agreement. Additionally, allowed is the customization of different levels of voting and non-voting rights classifications of membership. This allows an llc even more flexibility than it already has through the ability to scale up all the way up from a small closely held family business to a big business controlling multi-million dollar projects.
• Perpetual Lifetime - A Montana llc by state law runs into perpetuity outliving the lifetime of its members. Of course this does not mean that it cannot be dissolved by vote of the members, it just means that it will run a life of its own until that possibility arises.
• Privacy - For a Montana corporation, the only information to be disclosed upon formation is that of the incorporator. For a Montana llc, provided there are managers, an individual or entity can be filed in place.

Photo by ettdefenseinsight.com

**Remember each and every Corporation and LLC actually exists and resides within their bylaws or operating agreement which is the heart and soul of a corporation or llc. Without good, solid by-laws or operating agreement, you really do not have a corporation or llc. 

***This blog is for educational purposes only and as such you are advised to seek out and consult with your legal and tax advisors prior to engaging in any decision making affecting your business.