A Montana LLC operating agreement is the legal document that defines how your limited liability company is owned, managed, and dissolved. Montana doesn't require LLCs to adopt an operating agreement by statute, but certain overrides only count if they're in writing under 35-8-109, MCA.
Choose the version that matches your Montana LLC structure and download it in PDF or Word format. Each template is designed to help you document ownership, management, and internal rules more clearly from day one.
Aaron Kra’s Take on Montana’s Written-Override Trap
I see this misunderstanding all the time in Montana. Because the statute says an operating agreement “need not be in writing,” many LLC owners hear “not required” and stop reading. But that is exactly where the risk starts.
What many business owners miss is that under 35-8-109(1), MCA, Montana draws an important line: there are 3 situations where only a written operating agreement can override the default rules. If you want to change those rules, a verbal understanding is not enough.
A written agreement is required to override:
- Distribution rules
- Recordkeeping access
- Member-admission procedures
If you skip the written document, the LLC will operate under Montana’s default rules, even if those rules do not match how the business actually runs. That is why I treat a written operating agreement as essential in Montana, even though the statute does not generally require one.
Does Montana Require an LLC Operating Agreement?
No. Montana law doesn't mandate an operating agreement for any limited liability company. Under 35-8-109(1) of the Montana Code Annotated, the agreement doesn't even need to be in writing. Oral and implied terms can govern the company's operations.
The catch: three categories of rules can only be changed with a written operating agreement. Without one, the statute's default language will control how your company operates:
- Records and information access under 35-8-405, MCA
- Distribution rights under 35-8-601 and 35-8-903, MCA
- Member admission under 35-8-707, MCA
If you want to split profits based on each member's investment (rather than equally), the operating agreement must be on paper. A verbal understanding between company members won't hold up against the statute.
Montana also sets legal boundaries that no operating agreement can cross. Under 35-8-109(3), MCA, the document can't eliminate the duty of loyalty, unreasonably reduce the duty of care, or waive the obligation of good faith and fair dealing. These are nonwaivable provisions built into the Montana Limited Liability Company Act.
The short version: an operating agreement isn't legally required in Montana, but every LLC will benefit from having one. For multi-member companies, it's close to essential.
Montana's Default Rules Without an Operating Agreement
Without a written operating agreement, Montana fills every gap in your company's governance. These default rules aren't suggestions. They're the law until a written agreement says otherwise, and they will apply to every LLC that hasn't put its own terms on paper.
Profit, Loss, and Distribution Defaults
Under 35-8-503, MCA, company members first receive repayment of their capital contributions, then share equally in profits, losses, and surpluses. Equally. Not proportionally to what each person invested.
That equal-sharing default causes real problems for multi-member LLCs. A member who contributed $150,000 to the company gets the same profit share as a person who contributed $15,000. Interim distributions follow the same rule under 35-8-601(1), MCA: every member will receive an identical cut unless the Articles of Organization or a written operating agreement say otherwise.
Management and Voting Defaults
Montana limited liability companies are member-managed by default. Each member holds equal rights in the management and conduct of company business under 35-8-307(3), MCA. Ordinary business decisions pass by a majority of the members, counted by headcount rather than by membership interest percentage.
Worth flagging: the unanimous-consent list under 35-8-307(5) is long. These actions require every company member's vote:
- Amending the LLC operating agreement or the Articles of Organization
- Admitting a new member to the limited liability company
- Approving a merger or sale of substantially all company property
- Consenting to dissolve the company
One holdout blocks any of those. That's a real governance risk for any multi-member LLC that hasn't addressed voting thresholds in its operating agreement.
Dissolution Triggers You Didn't Choose
Without custom terms, your limited liability company dissolves based on 35-8-901, MCA: consent of all members, expiration of a stated term, or a court order. Under 35-8-902, MCA, a Montana district court can force judicial dissolution if the company isn't operating in conformity with its operating agreement. After dissolution, 35-8-903 governs winding up: the company will settle debts, distribute remaining assets to members, and file Articles of Termination.
In Gordon v. Kuzara (Mont. 2012), the Montana Supreme Court addressed judicial dissolution where the company wasn't operated in conformity with the agreement. The case underscores why explicit dissolution events and deadlock provisions belong in every LLC operating agreement.
| Topic | Default Rule (No Written OA) | With a Written Operating Agreement |
|---|---|---|
| Profit/loss split | Equal among company members (35-8-503) | Custom allocation based on contributions or any agreed formula |
| Distributions | Equal among members (35-8-601) | Pro-rata, preferred returns, or any schedule the members choose |
| Management | All members manage the company equally (35-8-307(3)) | Designated managers or weighted voting |
| Major decisions | Unanimous consent of all members required (35-8-307(5)) | Supermajority, simple majority, or managing-member authority |
| Dissolution | Consent of all members or court order (35-8-901) | Custom triggers, buyout mechanics, deadlock resolution |
Aaron Kra’s Take on Montana’s Equal-Split Default
I’ve seen founders contribute wildly different amounts to a Montana LLC and assume profits would track those contributions. Under 35-8-503, they do not.
What the founders assumed
One client put in $200,000, while the other member contributed $20,000 in sweat equity. They assumed the larger capital contribution would lead to a larger profit share.
What Montana law actually did
Without a written operating agreement, Montana law entitled both members to a 50/50 split. The statutory default controlled, not the founders’ expectation.
This is exactly why distribution language matters so much in a multi-member LLC. Once money starts coming in, assumptions about fairness tend to collapse if the agreement never states how profits are supposed to be divided.
My takeaway
A simple two-paragraph distribution clause in the company’s written operating agreement would have prevented that dispute entirely. When contributions are uneven, I always make the allocation formula explicit from day one.
What to Include in a Montana LLC Operating Agreement
Every clause in your LLC operating agreement should respond to a specific gap in Montana's default rules or address a legal risk the statute leaves open. Here's what matters most for Montana limited liability companies.
Ownership Structure and Capital Contributions
Define each member's membership interest as a percentage and tie it to a specific dollar amount or property contributed. Montana's equal-sharing default under 35-8-503, MCA makes this the most important section in any multi-member operating agreement.
For single-member LLCs, document the initial capital contribution and confirm sole ownership of the company. That record matters when banks, lenders, or a future buyer asks for proof of the company's structure. Business owners looking to start an LLC in Montana should draft this section before opening a business bank account.
Transfer Restrictions and Buy-Sell Provisions
Montana draws a sharp line between a distributional interest and full membership in the company. Under 35-8-707, MCA, a person who receives a transferred interest doesn't automatically become a member. The transferee will receive distributions but can't vote, inspect company records, or participate in management unless the operating agreement or unanimous member consent allows it.
A charging order is the exclusive legal remedy for a creditor of a company member in Montana. Build right-of-first-refusal language and buy-sell provisions into the operating agreement so existing members can control who joins the company. Also worth including: an indemnification clause covering members and managers acting in good faith, and a dispute resolution mechanism (mediation or arbitration) to keep company disagreements out of court.
Dissolution, Exit, and Deadlock Clauses
Custom dissolution events in the operating agreement override the defaults in 35-8-901, MCA. Two equal members need a deadlock provision more than anyone. Include valuation methods, buyout timelines, and a mechanism for breaking ties.
Montana case law backs this up. In Herbert v. Shield Arms (Mont. 2025), disputes over company valuation and wrongful dissociation went to litigation. Doll v. Little Big Warm Ranch, LLC (Mont. 2024) centered on the distinction between a member's dissociation and the company's dissolution. Same lesson in both: specific drafting in the operating agreement reduces courtroom exposure.
For detailed breakdowns of Montana LLC formation costs, including the $35 Articles of Organization filing fee, Boost Suite's cost guide covers every line item.
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Member-Managed vs. Manager-Managed LLCs in Montana
Choosing a management structure for your Montana LLC isn't just an operating agreement decision. It's a formation decision. Under 35-8-202(1)(d), MCA, the Articles of Organization must state whether the limited liability company is manager-managed. If the articles don't include that statement, the company will default to member-managed.
| Feature | Member-Managed LLC | Manager-Managed LLC |
|---|---|---|
| Who runs day-to-day company business | All members equally | Designated managers |
| Required in Articles of Organization? | No (default) | Yes (required under 35-8-202) |
| Ordinary business decisions | Majority of company members (35-8-307(3)) | Majority of managers (35-8-307(4)) |
| Major decisions | Unanimous consent of all members | Unanimous consent of all members |
| Who appoints/removes managers | N/A | Majority of members |
In a manager-managed limited liability company, the operating agreement should spell out manager authority in detail: signing contracts, opening company bank accounts, hiring, and committing the company to obligations above a set dollar threshold. Without those boundaries in the operating agreement, each manager will have equal authority over all company business under 35-8-307(4), MCA.
Montana's limited liability shield applies equally to both structures. Under 35-8-304(1)-(2), MCA, a member or manager isn't personally liable for company debts solely because of that status. Failure to observe usual company formalities isn't by itself a ground for personal liability against any member or manager of the limited liability company.
One thing to watch: Montana allows an unusual opt-in personal liability provision under 35-8-304(3), MCA. All or specified members can agree to be personally liable for LLC debts if the articles provide for it and the affected person consents in writing. Most generic guides skip this legal detail entirely.
Founders comparing best LLC services in Montana should confirm that any service provider correctly reports the management structure in the articles. Changing it later requires a formal amendment to the company's Articles of Organization.
Single-Member vs. Multi-Member Operating Agreements in Montana
Montana allows one or more persons to form a limited liability company under 35-8-201(1), MCA. The difference between a single-member and multi-member LLC operating agreement is scope, not legal weight.
A single-member LLC operating agreement can be brief: confirm sole ownership of the company, describe the initial capital contribution, name a successor in case of the member's death or incapacity, and document the management structure. Montana's statute under 35-8-304(2) means skipping corporate-style meetings won't, by itself, destroy the limited liability shield. That said, a written operating agreement still separates a person's assets from company assets in a way verbal assurances can't.
Multi-member LLCs face higher stakes. The equal-sharing defaults under 35-8-503 and 35-8-601 will apply unless the company has a written operating agreement that says otherwise. Unanimous-consent requirements under 35-8-307(5) can paralyze business decisions if company members disagree. And dissociation events under 35-8-803, MCA (withdrawal, expulsion, bankruptcy, death, incapacity) will trigger consequences that vary based on what the operating agreement says.
Bottom line: multi-member limited liability companies without a written operating agreement are relying on defaults that rarely match how the members actually intended to run the business.
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How Montana's 2025 Amendments Affect Your Operating Agreement
The Montana Legislature updated two sections of the Montana Limited Liability Company Act in 2025 through House Bill 898 (Chapter 749, Laws of Montana 2025). Both changes directly affect how LLC operating agreements are interpreted and enforced by Montana courts.
Change #1: Contract-law interpretation is now codified. Section 35-8-109(2), MCA expressly ties operating agreement interpretation to Montana's general contract-law rules in Title 28, Chapter 3 of the Montana Code Annotated. Montana courts will now apply plain meaning, course of dealing, and good faith doctrines any time a company operating agreement is disputed.
Change #2: Dissolution ambiguity is clarified. Amendments to 35-8-307, MCA address procedures when dissolution events are uncertain. If your limited liability company was formed before 2025, check the operating agreement's amendment and interpretation clauses. An agreement drafted under the prior legal framework may not account for the updated rules.
The Montana LLC processing timeline hasn't changed, but the statutory framework around your company's operating agreement has.
Aaron Kra’s Take on Montana’s 2026 Annual Report Fee Confusion
Compliance risk
This is the kind of filing detail that can quietly create unnecessary compliance costs if you overlook it.
Here’s a detail that eats into your compliance budget if you miss it: Montana’s Secretary of State fee schedule still lists the annual report fee at $20 if filed by April 15 or $35 if filed late. At the same time, the official SOS announcement for 2026 says the filing fee is waived entirely.
What the fee schedule says
The standard fee page still shows an annual report filing fee of $20 by April 15 and $35 if filed late.
What the 2026 SOS announcement says
The official 2026 SOS announcement says the annual report filing fee is waived entirely. Both pages are live on sosmt.gov right now.
When two official pages send different signals, I tell business owners to focus on the filing deadline, not just the fee. A temporary waiver may disappear next year, but a missed deadline can still create avoidable compliance problems.
Choose the version that fits your LLC structure.
Montana LLC Operating Agreement FAQ: Filing, Signing, and Compliance
These questions cover the filing, signing, and compliance issues Montana LLC owners ask about most when drafting an operating agreement for their company.
Is a Montana LLC operating agreement legally required?
No. Montana doesn't require limited liability companies to adopt an operating agreement. Under 35-8-109(1), MCA, the agreement isn't required to be in writing for most purposes. Certain distribution, recordkeeping, and member-admission overrides, however, are only legally enforceable if they're in a written operating agreement.
Does a Montana LLC operating agreement need to be signed?
Montana's statute doesn't impose a universal signature requirement. Boost Suite's legal editor, Aaron Kra, JD, recommends that all company members sign the operating agreement anyway: a signed written agreement is far easier to enforce in a Montana district court, and banks will ask for one before opening a business account for the limited liability company.
Do you file a Montana operating agreement with the Secretary of State?
No. The operating agreement is an internal company document. It's never submitted to the Montana Secretary of State. The public filing is the Articles of Organization ($35), which establishes the company's legal existence. The articles create the LLC; the operating agreement governs how company members will run the business.
Does a Montana LLC operating agreement need to be notarized?
No. Montana doesn't require notarization for an operating agreement. Keep the signed original at the company's principal office or registered office address alongside the Articles of Organization, EIN confirmation (IRS Form SS-4), and any tax-election filings (IRS Form 8832 or IRS Form 2553).
Can a single-member LLC in Montana have an operating agreement?
Yes. Montana allows formation by one or more persons under 35-8-201(1), MCA. A single-member LLC operating agreement documents the member's ownership interest, management authority, and succession planning for the company. The agreement also supports the limited liability shield by proving that the company operates as a separate legal entity from the person who owns it.
How do you amend a Montana LLC operating agreement?
Under 35-8-307(5), MCA, amending the company's operating agreement requires unanimous consent of all members unless the agreement itself sets a different threshold. In Barbier v. Burns (Mont. 2025), the Montana Supreme Court upheld a district court reading that allowed amendment without full unanimity because the original operating agreement authorized it. Draft your amendment clause carefully.
What's the difference between Montana Articles of Organization and an operating agreement?
The Articles of Organization is the public legal document filed with the Montana Secretary of State to create the limited liability company: company name, registered agent name, registered office address, management structure (member-managed or manager-managed), and names and addresses of initial members or managers. The operating agreement is a private document that governs internal company operations: profit allocation, voting rights, transfer of membership interests, and dissolution procedures. Both must use the exact same LLC name. Run a Montana business entity search to confirm your company name is available before filing.
Does Montana have a franchise tax for LLCs?
No. Montana doesn't impose a separate franchise tax on limited liability companies. LLCs are treated as pass-through entities by default, and Montana follows that federal tax classification. The Montana Department of Revenue administers state business taxes, including the pass-through entity tax. Each member will report their share of company profits and losses on individual returns using the Montana Schedule K-1. An S corporation election (IRS Form 2553) or corporation election (IRS Form 8832) changes the treatment at both the federal and state level.
- Montana Limited Liability Company Act, Title 35, Chapter 8, MCA
- 35-8-109, MCA: Operating Agreement; Scope, Function, and Limitations
- Montana Secretary of State Business Services
- Montana Secretary of State: 2026 Annual Report Fee Waiver
- Montana Department of Revenue: Pass-Through Entities
- IRS: Single-Member Limited Liability Companies
- IRS Form 8832: Entity Classification Election
Looking for an overview? See Montana LLC Services
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