Many self-employed Montana residents are eager to start their businesses. The simplest and most rational solution to this issue is to join the ranks of sole proprietors.
Organizing and managing a business in this format is the least difficult in America and has no service pitfalls. Although, future business owners will have to adhere to certain norms. Also, be prepared that you will have to face some restrictions regarding the functions of your sole proprietorship.
So, the main task of this manual is to help you answer the essential question – is the business format of an individual enterprise right for you? And, of course, we will tell you which aspects to pay attention to while opening a sole proprietorship and how to set up a business structure in this vein properly.
The Proper Way To Start Business As The Montana Sole Proprietor
There is no algorithm for organizing the business work of an individual entrepreneur in Montana as for LLC. In addition, the state does not charge additional service fees for the formation or management of this type of business or company. Are you looking to become an individual business owner and start a sole proprietorship in Montana? – Just start working!
Though, you still have to go through several additional legal formalities. These service stages are optional. Although many sole proprietors prefer not to neglect them, compliance with these formalities guarantees the legal protection of their interests.
Applying For DBAs
Almost every company and business owner prefers doing business as a DBA. There are many benefits to running a business under an assumed name compared with an entity or LLC. We are talking primarily about creating the business image of your company. Potential clients and consumers will find this approach more professional and give you more confidence. It turns out that a company that uses the real name of its owner is often not competitive.
Let’s clarify that a company owned by sole proprietors can use the DBA to open and manage a business bank account. Customers will appreciate it as one more advantage in favor of the business owner, so they feel more comfortable.
If you start an individual business in Montana and plan to get a DBA, your first step is to choose a fictitious name. You can find out this if you use Montana Secretary of State’s Business Services search. If the name is available, you can take it. But to do this, you need to register that. You can register an assumed name here, using the division’s online portal. If you still have any questions, read our full article, and you will find all the answers, regarding the registration of DBA in Montana.
Clarification & Compliance with Tax Requirements
You can run your business in this format and not hire third-party employees. In this case, you do not need to obtain an EIN (Federal Tax Identification Number) because your Social Security number will replace it. Of course, it would be correct to take care of your confidentiality and still use the EIN and not the SSN.
The nature and the structure of the business activity of individual entrepreneurship determine the list of tax requirements that the state will put forward (as with LLC).
All entrepreneurs in Montana have to pay taxes, depending on the business field. These can be a variety of tax requirements. For example, you can pay income tax, medicare tax, or usage tax. You should be aware of all the updated tax requirements of Montana State.
You will find out about this after launching these IRS guidelines and forms. To run a legal business, you need to pay the taxes that intended for your industry. To do this, just become registered with Montana’s Business Tax Express.
Business Licenses & Permits
There is a single licensing rule for all individual entrepreneurs of the Montana State – they do not have to obtain a general license that is common to all enterprises in Montana. However, if you do business here, you should get those licenses and/or permits that relate specifically to your field.
Any business object in Montana must have a license. What kind of license should you have? You will find out this at the online service Small Business Development Center’s Business License Guide. Here is the latest information regarding all types of industrial and professional permits for enterprises in the state of Montana.
In addition, individual entrepreneurs in this state can easily find any license at the Montana Business Checklist. This convenient online tool will allow you to navigate well in the modern licensing requirements of the Montana State. Also, with the help of this virtual service, you can find local licenses that you should get.
Any county and city in the state of Montana also impose certain requirements related to licenses. These permissions differ from each other, and not to miss anything but to get exactly the right local license, study this complete list of contact information. Here you will find a lot of information.
Montana Sole Proprietor: The Notion & Essence
A sole proprietor is not a legal entity! But any corporation and limited liability company (LLC) has this status. As a sole proprietor, you run the business alone (register and manage it on your behalf). It is worth noting that this gives the business owner advantages, though, imposes additional obligations and responsibilities on him.
Make Sure to Pay Attention to the Following Three Aspects
There are obligations to pay taxes to the state
A business owner and an individual entrepreneur are the same people. It means that filing tax returns is not a requirement, as with an entity or LLC. You need to declare your income and expenses and fill out the declaration of an individual;
Business owners who are registered as sole proprietors have the right to enter into contracts on their behalf, unlike an entity. Also, receiving profit from clients, in checks they can indicate their name in the recipient column;
Flexible terms of business management
The advantage difference between individual entrepreneurship and any entity is the ability to combine work and personal assets. Whereas corporations and LLCs must separate personal assets from company assets. It has several positive and negative aspects. For example, if you have financial difficulties, creditors can seize or confiscate your personal property (house, car, etc.). In the case of corporations and LLCs (or any entity), creditors do not have this freedom, as their powers only apply to business assets.
Of course, the structure of doing legal business as a sole proprietor is greatly simplified while in Montana. You don’t even have to pay any commission fees provided for the entity or LLC. At the same time, based on the nature and structure of the business activity that you conduct, you will all have to go through a series of entity stages.
The issues of taxation, obtaining licenses, and permits require more detailed consideration. Also, pay attention to the possibility of obtaining and using DBA. These aspects are vital, as their omission can result in unnecessary legal penalties for you.
We have prepared this manual so that you can think over the structure of your business to the smallest detail. Manage it correctly and get more legal profit!