The following information pertains to the state of Montana. If you live in another state, please consult with your attorney regarding how your state handles corporate mergers.
Montana does not recognize statutory conversions. This means that there is no process by which a corporation can convert into an LLC without creating a new LLC.
In order to merge your corporation with an LLC, you must first dissolve your corporation. Dissolving a corporation involves filing articles of dissolution with the Secretary of State. You cannot file articles of dissolution unless you have been dissolved. Therefore, you cannot proceed with converting your corporation to an LLC until you have filed articles of dissolution.
Once you have filed articles of liquidation, you must notify each corporation member in writing. A copy of the notice must be served upon each member by registered mail. Notice must include the name of the LLC, the date the notice was sent, and the address where notices will continue to be mailed. Members must sign the notice within 30 days of receiving it.
After the members receive the notice, they can either consent to the conversion or object to the conversion. Objecting requires a written statement signed by each member stating why he objects to the conversion.
If the members do not object to the conversion, the LLC takes over the assets and liabilities of the corporation. The LLC continues to exist even though the corporation ceases to exist.
Your corporation’s existing board of directors should approve the plan of conversion before the LLC’s members adopt the plan of conversion. The conversion plan becomes effective once it is ratified by the members and the board of directors.
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Transfer assets from yourself into your LLC
If you want to take advantage of tax benefits offered by small businesses, transferring assets from yourself to your limited liability corporation (LLC) could make sense. There are several ways to do it, including through a capital contribution or an assignment.
A capital contribution update is the most common file method to transfer assets Open to your company. This involves giving cash or other property to your company. You must pay income taxes on the amount transferred. If you don’t already own the asset, you’ll likely have to pay sales tax on the item’s value. In addition, you might have to pay state and local taxes on the asset’s value.
An assignment is another option to consider. With an assignment, you give up ownership of the asset but continue to control how it is used. For example, you assign a car to your company, but you retain possession of the vehicle. When you sell the car, you still owe money to the seller, but you don’t owe anything to the IRS.
The best thing about both options is that you’re able to keep the same level of control over the asset. However, there are some drawbacks to each approach. Capital contributions require you to pay taxes on the full value of the asset. Assignments typically involve a fee.
Contact an accountant or attorney for information on how to transfer assets to your LLC properly.
Make sure your contracts and agreements are up to date.
If you are contracting with another party, it is important to make sure that you understand what type of entity you are creating. This includes whether you are setting up a sole proprietorship, partnership, limited liability corporation (LLC), general partnership, or legal structure. You do not necessarily need to set up an LLC unless you plan to do business outside your home state. In fact, most states require that you register your LLC with the Secretary of State within 30 days of formation.
The best way to determine how to set up your entities properly is to consult with a lawyer.
File a Final Tax Return
If you are self-employed and want to make sure you’ve filed your taxes correctly, you’ll need to do it soon. If you haven’t already done so, you’ll need to file a final tax return for 2018.
There are several reasons why you might need to file a final return. For example, you could be claiming certain expenses that aren’t allowed during the regular tax season. Or maybe you had some income that wasn’t reported. Whatever the case, there are things you need to know about filing a final return.
Open a new business bank account for your LLC
You’ve got a great idea for a new business venture. You want to start it up but don’t know how to do it. If you’re like most entrepreneurs, you probably already have a checking account. But what about a business banking account? Opening one isn’t too difficult, and there are plenty of options to choose from. Here’s everything you need to know about opening a business bank account.
Where Can I Get A Business Bank Account?
There are several places where you can open a business bank account. Some banks offer accounts specifically for businesses. Others allow companies to use personal accounts. And some banks even let you open an account without having a physical location.
How Do I Choose My Business Banking Option?
When choosing a business banking option, consider the following factors:
• Fees – How much does the bank charge for each transaction? Are there fees per month, per transaction, or both?
• Features – What features does the bank provide? Does it offer mobile apps? Online bill payment? Mobile deposit?
Frequently Asked Questions
What is A Montana Amendment?
A Montana amendment is a constitutional provision that allows the state to impose restrictions on firearms ownership. The most common example is the right-to-carry law, which requires citizens to obtain a permit before they can carry a concealed weapon in public.
How long does it take for the state to process an amendment?
The state of Florida has a process for amending the constitution. This is called an amendment convention. There are two ways to amend the Florida Constitution: by petition and by constitutional convention. A constitutional convention can be initiated by either the legislature or the people, but only if there is a majority vote in favor of it.
Can a DBA become an LLC?
If you are doing business in the state of California, you need to register as a corporation or limited liability company (LLC). If you do not want to pay the yearly $800 registration fee, you can form an LLC with no fees.
James Rourke is a business and legal writer. He has written extensively on subjects such as contract law, company law, and intellectual property. His work has been featured in publications such as The Times, The Guardian, and Forbes. When he’s not writing, James enjoys spending time with his family and playing golf.