Delaware LLC vs Montana LLC: Side-by-Side (2026)

What is the real cost difference between a Delaware LLC and a Montana LLC?

The headline numbers tell two different stories, so be precise about them. Delaware charges roughly $110 to file your Certificate of Formation, then a flat $300 franchise tax each year, due June 1, with no annual report. Montana charges far less to start — approximately $35 to file your Articles of Organization and about $20 for the annual report each year. Those Montana figures are approximate and you should verify current Montana fees with the Secretary of State, because state filing fees change without much notice.

On raw state fees alone, Montana is one of the cheapest states in the country and Delaware is mid-priced. But raw fees are not the whole story. Delaware buys you a flat, predictable cost with no annual report, stronger privacy, a nationally respected business court, and credibility with investors and banks. Montana buys you rock-bottom fees and no sales tax, which matters most when you actually operate in Montana. If you are weighing the full picture, our Delaware LLC cost breakdown lays out every line item for year one and year two.

How do Delaware and Montana LLCs compare side by side?

Read across the table and the pattern is clear: Montana wins on the sticker price of state fees, while Delaware wins on predictability, privacy, court quality, and investor credibility. But there is one rule that overrides the comparison for anyone physically based in Montana, which is covered next. The Montana figures above are approximate — verify current Montana fees before budgeting.

Does forming in Delaware help if you live in Montana?

This is the question that trips up most founders, so be precise about it. Every state, Montana included, requires an out-of-state LLC that is transacting business within its borders to register as a foreign LLC. If you live in Montana and run your business from a home office in Billings, Missoula, or Bozeman, Montana generally treats your Delaware LLC as doing business in the state. That means you must register with the Montana Secretary of State, appoint a Montana registered agent, and keep up Montana filings.

When that happens, you now pay Delaware’s $300 franchise tax andMontana’s registration and annual-report costs, plus two registered-agent relationships. Forming in Delaware did not remove the Montana obligation — it added a second one on top. This is the “Delaware mirage” that costs in-state operators money every year without giving them anything they could not get from a single domestic LLC. Always confirm your specific situation with a Montana tax professional before relying on any structure. If you do end up needing to register, our foreign qualification guide explains how a Delaware entity registers to operate in another state.

What exactly counts as “doing business” in Montana?

“Transacting business” is not a single bright line, and the exact threshold is set by Montana law and interpreted case by case. The most common triggers are being commercially based in Montana (your management and day-to-day decisions happen there), having a Montana-resident member or manager who runs the LLC, or maintaining an office, employees, inventory, or real property in the state. A purely passive activity — holding a bank account, or being named in a single lawsuit — usually does not by itself amount to transacting business, but the line is fact-specific.

The practical takeaway: a founder sitting at a kitchen table in Helena, taking Stripe payments through a Delaware LLC, is very likely transacting business in Montana in the state’s eyes. Forming in Delaware did not change where the work happens. Because the rules are fact-specific and can change, confirm your exact position with a Montana CPA or attorney rather than relying on a rule of thumb. For founders who genuinely have no US presence, our Delaware LLC for non-residents guide explains why nexus is usually not a concern at all.

What about the double-fee trap of foreign-qualifying in Montana?

The single most expensive mistake in this comparison is forming in Delaware to feel “official,” then operating in Montana without registering — or registering and discovering you now pay for everything twice. When a Delaware LLC foreign-qualifies in Montana, you carry both states’ obligations at once: Delaware’s $300 franchise taxand registered agent, plus Montana’s foreign-registration filing, its ~$20 annual report (approximate — verify current Montana fees), and a separate Montana registered agent. Two agents, two sets of filings, one business.

If you skip Montana registration to avoid the second set of fees, the downside is worse than the savings. An unregistered foreign LLC generally cannot bring or maintain a lawsuit in Montana courts until it registers and pays what it owes, and the state can assess back fees and penalties. If a Montana customer or contractor stiffs you, you may be barred from enforcing your own contract in the state where you actually operate. The penalty figures are set by Montana statute and change, so treat any number as approximate and confirm current Montana penalties with a professional. The honest math: for a genuine Montana operator, a single domestic Montana LLC is almost always cheaper than a Delaware LLC plus Montana foreign qualification.

How do the taxes compare between Delaware and Montana?

Two facts matter most here, and they cut in different directions. First, neither state charges a general statewide sales tax. Montana is one of the few US states with no sales tax at all, and Delaware also has none, so on sales tax the two are effectively tied — this is rarely the deciding factor between them for an online or remote business. Second, Montana does have a state income tax, and a Montana-resident owner generally owes Montana income tax on profit that flows through the LLC, no matter where it was formed.

That is the crucial point about entity state and personal tax. Forming in Delaware does not change where you, the owner, are taxed personally. A Montana resident pays Montana income tax on pass-through profit whether the LLC was organized in Delaware or in Montana. Delaware’s advantage is that it has no personal income tax for non-residents and no entity-level income tax on an LLC, so a founder with no Montana nexus avoids Montana income tax entirely — but a Montana resident cannot use a Delaware filing to erase a home-state income tax bill. For the full picture of how a Delaware LLC is taxed federally and at the state level, see our Delaware franchise tax guide. These tax rules are approximate and change, so confirm specifics with a Montana CPA.

What does a worked two-year cost comparison look like?

Numbers make the difference concrete. Assume a small online business and three realistic setups: a clean Delaware LLC with no Montana nexus, a single domestic Montana LLC, and the trap case — a Delaware LLC operated from Montana, which must foreign-qualify and maintain both states. The Montana figures below are approximate and exclude your personal income tax; verify current Montana fees before relying on them.

The takeaway is blunt. On pure state cost, a single domestic Montana LLC is the cheapest option for someone who genuinely operates in Montana — the $35 formation and ~$20 annual report are hard to beat. A clean Delaware LLC with no Montana presence is more expensive in raw dollars but buys predictability, privacy, the Court of Chancery, and investor credibility. The worst outcome is the trap case: a Delaware LLC run from Montana pays bothstates and lands highest of the three. Delaware wins on value, not on sticker price — and only the genuine non-Montana operator captures Delaware’s benefits without also paying Montana. These figures are illustrative and exclude income-based taxes; confirm exact amounts with a tax professional.

When does a Montana LLC actually make more sense?

If you are a Montana resident, operate physically in Montana, serve mostly Montana customers, and have no plans to raise venture capital, a single domestic Montana LLC is usually the cleaner and cheaper choice. You will register in Montana either way, so a second Delaware filing just stacks a $300 franchise tax and a ~$99 registered-agent renewal on top without removing anything. Montana’s low fees and absence of a sales tax make it a genuinely friendly home state for an in-state operator, and one registered agent beats two.

The calculus flips the moment you have no genuine Montana nexus. A freelancer who moved abroad, a founder building a remote SaaS, a holding company, or a startup heading toward a venture round has no reason to lean on Montana’s low fees and every reason to value Delaware’s court, privacy, and credibility. The honest test is not where the fees are lowest — it is where the work actually happens and what the entity needs to do. If the answer is “operate in Montana,” form in Montana; if it is “raise money, hold assets, or operate from nowhere in particular,” Delaware pulls ahead.

When does a Delaware LLC win?

Delaware is the stronger choice in several common scenarios:

• Non-US founders. You can form a Delaware LLC with no SSN, US address, or visa, and you have no Montana nexus to trigger in-state registration. See our guide for forming a Delaware LLC.
• Remote US founders outside Montana.If you live elsewhere with no Montana presence, a Delaware LLC gives you a flat $300 tax, no annual report, and the country’s most respected business court.
• Startups planning to raise venture capital. Investors expect Delaware. An LLC formed in Delaware converts cleanly to a Delaware C-corp when the term sheet arrives.
• Holding companies, real estate, and series structures. Delaware’s Court of Chancery and centuries of corporate case law make it the default for asset-holding stacks, and the Delaware series LLC lets you segregate assets under one umbrella.

The Court of Chancery deserves emphasis: it is a business-only court with no juries, staffed by judges who decide corporate disputes all day. No other state, Montana included, offers anything as predictable. Privacy is a second edge — Delaware does not put LLC members on the public formation record. For a broader view of where Delaware fits among alternatives, compare Delaware vs Wyoming, Delaware vs Texas, and Delaware vs California, three of the most common runner-up states.

Can a Montana resident ever benefit from a Delaware LLC?

Sometimes — but rarely for fee savings on an ordinary in-state business, and never to skip Montana registration for a business actually run from Montana. The genuine cases tend to be structural. A Montana resident who is raising venture capital will want a Delaware entity for the investors, even though the operating activity in Montana still requires registration there, because the term sheet demands it. A Montana resident building a multi-state real estate stackmay form Delaware holding LLCs to keep title, governance, and disputes under Delaware’s Court of Chancery, while each property’s operating activity is handled in its own state.

What does not work is forming a Delaware LLC, running an ordinary business from a Montana desk, and expecting to skip Montana registration or fees — Montana will still treat that as transacting business in-state. So a Delaware LLC can serve a Montana resident’s structural goals (investor readiness, asset segregation, a respected forum for disputes) without delivering a fee shortcut on a local operating company. Walk your specific facts through a Montana CPA before assuming a benefit, and read our formation overview to see what the Delaware filing itself involves.

What are the ongoing obligations for each?

A Delaware LLC’s entire annual state duty is the $300 franchise tax due June 1. There is no annual report, and paying late adds a $200 penalty plus 1.5% monthly interest and loss of good standing, so the deadline matters — see our Delaware franchise tax guide for the full rules. You also need a Delaware registered agent, included free in year one with our service and roughly $99/year to renew afterward; our registered agent page explains why it is legally required.

A Montana LLC’s main recurring duty is the annual report (about $20, approximate — verify current Montana fees) to keep the entity in good standing, plus a Montana registered agent. Foreign-qualified Delaware LLCs operating in Montana carry both sets of obligations. If your Delaware LLC is foreign-owned, you may also face federal filings such as Form 5472, which is unrelated to the state choice but worth planning for. Whether you choose Delaware or end up registering in Montana, the flat all-in cost to get started with us is the same.

What about BOI and FinCEN reporting for either state?

Beneficial ownership reporting is in flux, and it does not depend on whether you choose Delaware or Montana — it depends on federal rules. Under a March 2025 FinCEN interim final rule, BOI reporting was removed for US domestic reporting companies; broadly, only “foreign reporting companies” are expected to report, and US persons are treated as exempt. This area is evolving and the guidance has changed more than once, so treat any summary as provisional.

The practical advice is the same for a Delaware LLC and a Montana LLC: confirm the current FinCEN status before you assume you do or do not need to file. Do not let BOI uncertainty drive your state choice — the meaningful, predictable differences between Delaware and Montana are the franchise tax versus the annual report, the doing-business registration rules, and Delaware’s court and privacy advantages described above, not the federal reporting question. If your situation is unusual, raise it with us on WhatsApp and check FinCEN’s current guidance directly.

What does it cost to form a Delaware LLC with us?

Our Delaware LLC service is $397, all-inclusive. The Delaware $110 state filing fee is already included — there are no surprise add-ons. That single flat fee covers your Certificate of Formation filed within 48 hours, EIN application, registered agent for year one, operating agreement, US bank account application help (Mercury, Relay, or Wise), Stripe approval support, and ongoing compliance tracking, with a named specialist available on WhatsApp. To see exactly how the process runs, read how it works.

The honest caveat for Montana residents is that this $397 only replaces your entity cost when your business genuinely has no Montana nexus. If you live in Montana and run the company from there, you will most likely still need to register the LLC in Montana and keep a Montana registered agent regardless of where it was formed — so the realistic comparison is the Delaware fee plus Montana registration, not Delaware instead of Montana. We will tell you which situation you are in before you pay, rather than sell you a structure that quietly costs more. For founders with no Montana footprint who value the court, privacy, and credibility, the Delaware route is worth the flat fee.

From year two onward, your ongoing Delaware cost is the $300 franchise tax plus about $99to renew your registered agent, with no annual report. Filing and EIN are backed by a money-back guarantee, and your EIN is obtained in 2–4 weeks even without an SSN. When you are ready, see exactly what is included on our pricing page, and review the Delaware LLC overview for the full formation walkthrough.