Form a S-Corp in Montana
Everything you need to know about forming a S-Corp in Montana. Filing fees, requirements, timeline, and step-by-step guidance.
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How to File
Choose a Corporate Name
Select a unique business name that complies with Montana naming rules and includes a required designator such as 'Corporation,' 'Incorporated,' 'Company,' or an abbreviation thereof. Use the Montana Business Name Search on the SOS website to confirm availability.
30 minutes
Appoint a Registered Agent
Designate a registered agent with a physical street address in Montana who is available during normal business hours to receive legal and official documents on behalf of the corporation. The agent can be an individual or a registered business entity authorized to operate in Montana.
30 minutes
File Articles of Incorporation
Prepare and file Articles of Incorporation with the Montana Secretary of State, including the corporate name, registered agent information, number of authorized shares, and incorporator details. File online at the Montana SOS Business Filing Portal or submit by mail with the $70 filing fee.
1-2 hours
Create Corporate Bylaws
Draft corporate bylaws that outline the internal governance structure, including rules for shareholder meetings, board of directors responsibilities, officer roles, and voting procedures. Although not filed with the state, bylaws are essential for legal compliance and operational clarity.
2-4 hours
What's Next After Filing
Once your S-Corp is officially formed, you'll want to complete these important steps:
- •Hold an Organizational Meeting — Conduct an initial organizational meeting of the board of directors to adopt bylaws, appoint officers, authorize issuance of shares, and address other foundational corporate matters. Document all decisions in written minutes and maintain them in the corporate records book.
- •Obtain EIN and Elect S-Corporation Status — Apply for a federal Employer Identification Number (EIN) from the IRS at no cost, then file IRS Form 2553 (Election by a Small Business Corporation) to elect S-Corporation tax status. The election must be made no later than two months and 15 days after the beginning of the tax year in which it is to take effect.
- •Register for Montana State Taxes and Licenses — Register with the Montana Department of Revenue for applicable state taxes, including corporate income tax and withholding tax if you have employees, and obtain any required local business licenses or permits specific to your industry or municipality.
Advantages
- ✓Pass-through taxation avoids federal double taxation, with income and losses reported on shareholders' personal tax returns
- ✓Shareholders who are active employees can reduce self-employment tax liability by splitting income between salary and distributions
- ✓Limited liability protection shields shareholders' personal assets from business debts and legal judgments
- ✓Montana has no state franchise tax on S-Corporations, reducing the overall tax burden compared to many other states
- ✓Enhanced credibility with customers, vendors, and investors due to the formal corporate structure
Considerations
- •Strict IRS eligibility requirements limit S-Corps to 100 shareholders, one class of stock, and only U.S. citizen or resident alien individual shareholders
- •More administrative complexity and ongoing compliance obligations than an LLC, including required meetings, minutes, and formal record-keeping
- •Montana S-Corporations may still owe state income tax on Montana-source income at the entity level, adding a layer of state tax compliance
- •Transferring ownership or bringing on new investors is more restrictive compared to a C-Corporation due to S-Corp eligibility rules
Annual Obligations
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