How to Start a Business in Montana (2026)

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 6, 2026 · Last updated Aug 6, 2026

To start a business in Montana you pick a legal structure, register it with the Montana Secretary of State (or operate as a sole proprietor with a trade name), get a free EIN from the IRS, register with the Montana Department of Revenue for the taxes that apply, and obtain any local and professional licenses. Montana has no general statewide sales tax.

Starting a Business in Montana: The Steps

Starting a business in Montana follows a predictable sequence: choose a structure, register the business (or a trade name), get an EIN, set up state tax accounts, and obtain licenses. Doing them in order avoids rework - for example, you want your entity registered before you apply for an EIN so the legal name matches.

How many of these steps apply depends on your structure. A sole proprietor may skip entity registration entirely, while an LLC or corporation must file formation documents first. Everyone who hires employees or sells taxable goods ends up registering with the state for the relevant tax.

This guide walks through each step for Montana. For the entity-formation details specifically, see how to form an LLC in Montana and the national how to form an LLC hub.

Budget both money and time. State filing fees for an LLC or corporation are modest, the EIN is free, and many tax registrations cost nothing, but licenses and professional permits can add up depending on your industry and location. Set up a simple recordkeeping system from day one so the tax and license deadlines you create in these steps do not slip.

Step 1: Choose a Business Structure

Your first decision is the legal structure, because it drives liability, taxes, and paperwork. A sole proprietorship is automatic and free but gives no liability protection. An LLC is a separate entity that limits liability and is taxed as pass-through by default. A corporation is a more formal entity often chosen by businesses seeking outside investment.

Most small businesses in Montana choose between the sole proprietorship and the LLC. The LLC costs a state filing fee and some upkeep but protects personal assets, which is why owners taking on contracts, leases, or employees usually form one. You can also elect S-corporation tax treatment later as profits grow.

Compare the trade-offs before you file. The structure you pick determines whether you register an entity in the next step or simply register a trade name as a sole proprietor.

Step 2: Register the Business with Montana

If you form an LLC or corporation, you file formation documents with the Montana Secretary of State and appoint a registered agent with a physical Montana address. The name must be distinguishable from existing entities, which you can check with the Montana business entity search.

If you operate as a sole proprietor and use a name other than your own, you register a DBA (assumed or trade name) instead of forming an entity. Either way, getting the name on the correct register is what lets you bank and contract under it.

Reserve the name first if you are not ready to file, and make sure your chosen name is also clear of existing trademarks so you do not build a brand you cannot keep.

Step 3: Get an EIN and Set Up Federal Taxes

Apply for a free Employer Identification Number (EIN) from the IRS. It is issued immediately online and is used to open a bank account, hire employees, and file federal returns. The IRS never charges for an EIN, so avoid paid look-alike sites.

Your federal tax treatment follows your structure: a sole proprietor or single-member LLC reports on Schedule C, a multi-member LLC files a partnership return, and either can elect corporate or S-corporation status. All of these owners typically pay quarterly estimated taxes because no employer withholds for them.

Open a dedicated business bank account once you have the EIN and formation documents. Keeping business and personal finances separate is essential, especially for an LLC that relies on the liability shield.

Step 4: Register for Montana State Taxes

Montana taxes business profit as personal income (pass-through) or corporate income, administered by the Department of Revenue. Montana has no general state sales tax, so most businesses do not register for or collect state sales tax (a few resort communities levy a local resort tax). You register for these accounts with the Montana Department of Revenue, generally through its online portal, after your business and EIN are set up.

If you hire employees, you also register for Montana employer withholding and unemployment insurance, and you handle federal payroll taxes separately. Getting the tax registrations right up front prevents penalties for collecting or withholding without an account.

See business tax and Montana LLC tax filing for how the state taxes different structures, and calendar the filing due dates for each account you open.

Step 5: Obtain Licenses and Permits

Montana has no single statewide general business license. Regardless of any statewide rule, licensing is often local: cities and counties may require a general business license or permit to operate within their limits. Some Montana cities and counties require local registrations or permits, and resort-area communities may impose a local resort tax.

Regulated professions and activities - contractors, food service, childcare, cosmetology, alcohol, and many others - need occupational or specialty licenses from the relevant state board. Check the specific requirements for your industry before you open, because operating without a required license can bring fines or force you to stop until you are properly licensed.

If you are unsure which licenses apply, start with your city or county clerk and the state's business portal, then confirm any professional board requirements. It is far cheaper to identify every permit up front than to discover a missing one after you have opened.

See business licenses in Montana and the national business license overview to identify what applies to your activity and location.

Step 6: Stay Compliant Year to Year

After launch, keep the business in good standing. LLCs and corporations must generally keep a registered agent and file periodic reports with the Montana Secretary of State; missing them can lead to administrative dissolution. Diary every recurring deadline.

File and pay your federal and state taxes on time, including quarterly estimates, and renew licenses before they expire. Maintain clean records and a separate business bank account, which protects an LLC's liability shield and simplifies tax filing.

As the business grows, revisit whether an S-corp election or additional registrations make sense, and use the glossary for any unfamiliar terms along the way.

Frequently Asked Questions

What are the steps to start a business in Montana?

Choose a structure, register an LLC or corporation with the Montana Secretary of State (or file a DBA as a sole proprietor), get a free EIN from the IRS, register with the Montana Department of Revenue for state tax, and obtain any local and professional licenses.

Do I need a business license to operate in Montana?

Montana has no single statewide general business license. However, many cities, counties, and regulated professions require their own licenses or permits, so you must check local and industry-specific requirements for your business.

Does Montana have a sales tax?

Montana has no general statewide sales tax. If it applies to what you sell, you register for a sales tax account with the state before making taxable sales.

How much does it cost to start a business in Montana?

Operating as a sole proprietor can cost nothing beyond a DBA fee, while forming an LLC or corporation costs the Montana Secretary of State filing fee plus any name or expedite fees. The EIN is always free from the IRS.

Do I need an EIN to start a business in Montana?

You need an EIN if you hire employees, form a multi-member LLC or corporation, or elect corporate tax. A sole proprietor with no employees can use an SSN, but most owners get the free EIN to open a business bank account.

Should I form an LLC or stay a sole proprietor in Montana?

An LLC costs a filing fee and some upkeep but protects your personal assets; a sole proprietorship is free but offers no liability shield. Owners with contracts, employees, or meaningful risk usually form an LLC.

Related

• How to form an LLC (cluster hub)
• How to form an LLC in Montana
• Sole proprietorship in Montana
• How to get an EIN
• Business licenses in Montana
• Business tax overview

Sources

1. Montana Secretary of State - Business Services (entity registration; annual report).
2. IRS - Limited Liability Company (LLC) (federal default classification).
3. IRS - Get an Employer Identification Number (EIN is free from the IRS).
4. IRS - Starting a Business (federal checklist).
5. IRS - Business Structures (entity types overview).
6. IRS - Sole Proprietorships (federal tax treatment).
7. Cornell LII - Limited liability company (Wex).
8. Montana Department of Revenue - Taxes (income tax; no general sales tax).
9. Montana Department of Revenue - Business (registration and withholding).
10. Montana Secretary of State - ePass Business Portal (online filings).
11. Justia - Montana Code Annotated (LLC Act, Title 35).
12. IRS - About Schedule C (Form 1040) (profit or loss from business).
13. IRS - Self-Employment Tax (Social Security and Medicare Taxes) (15.3% combined rate; $400 threshold).

LegalGlass provides general information for educational purposes and is not a law firm or a substitute for advice from a licensed attorney or tax professional. Laws, fees, and thresholds change; verify current requirements with the relevant state agency and the IRS before acting.