Find out how to qualify your LLC to conduct business in Montana.
If you own a company that was founded in a state other than Montana, you must qualify or register it in Montana in order to conduct business there. The requirements for qualifying your international (non-Montana) limited liability corporation (LLC) to conduct business in Montana are summarized below.
What exactly is a Foreign LLC?
If your LLC is founded in another state, it is referred to as a foreign LLC in Montana. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. An LLC founded in Tennessee, for example, is a foreign LLC in Kentucky.
Doing Business in Montana
If you are “transacting business” in Montana, you must register your foreign company with the state, according to Montana’s LLC Act. What exactly does this mean? Like other states, Montana’s LLC Act does not specify what “transacting business” with connection to international registrations entails.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. To be obligated to collect state sales tax on sales to citizens of a state, a firm must have a physical presence in, or nexus with, that state. In general, physical presence and nexus are synonymous and refer to:
a storage facility in the state
A shop in the state, an office in the state, or a sales representative in the state are all examples of state-based businesses.
Certain exclusions may apply, and the regulations become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
Some Activities Are Exempt
Montana’s LLC Act, like other states’, outlines specific actions that do not constitute doing business in the state. Among the objects mentioned are:
defending or settling a lawsuit dealing with internal business affairs, such as holding member or manager meetings having a bank account in the state selling through independent contractors soliciting or obtaining orders that require acceptance outside the state before they become contracts
creating or acquiring indebtedness, mortgages, or security interests in real estate or personal property securing or collecting debts or enforcing mortgages and security interests in property securing debts owning real estate or personal property acquired by any of the previous items, if the property is disposed of within 5 years of the date of acquisition, does not produce income, or is not used in the performance of a function
According to the Act, the above list is not comprehensive. Check Section 35-8-1001 of the Montana Code Annotated for the exact legal definition of each of the listed objects. If your LLC’s only operation in Montana is one or more of the activities mentioned above, you should not be required to register with the state.
Authority Certificate
You must submit a Certificate of Authority of Foreign Limited Liability Company Application to register your foreign firm in Montana. The needed form may be downloaded at the Montana Secretary of State’s website.
To complete the form, you must supply the same information that you would need to incorporate an LLC in your home state. However, since each state is different, there may be materials that Montana requires that you did not need to submit when you initially formed your LLC.
You must supply the following information to get a Montana Certificate of Authority:
the name of your limited liability company (which must contain the words “Limited Liability Company,” “Limited Co.,” or an abbreviation such as “LLC”)
the name of the state in which your LLC is formed, the date your LLC was formed, and the length of your LLC
the major office address of your LLC, which must be a street address
your registered office and agent in Montana’s name and street address your LLC’s business postal address
an indication of whether your LLC is member-managed or manager-managed, the names and addresses of your LLC’s present managers or managing members, the professional services your LLC will offer, and an approved signature.
The standard filing cost is $70.
What Happens If You Do Not Sign Up?
If your LLC does business in Montana without a Certificate of Authority, it cannot file a lawsuit. Furthermore, your LLC will be fined $5 per day, up to a maximum of $1,000 per year, for each day it does business without a certificate of authorization. However, the lack of a Certificate of Authority does not render any of your LLC’s contracts unlawful or prevent your LLC from defending a lawsuit in Montana.
Forming a Foreign Corporation
The regulations and standards for international certification in Montana are identical whether your company is structured as a corporation rather than an LLC. However, you must use a separate application form, Application for Certificate of Authority. For forms, information, and filing instructions, visit the Montana Secretary of State’s website.