by Crystal Bustamante

Created on: June 25, 2009

There are a number of reasons for opening a small business -the freedom of being your own boss or the ability to fulfill a life-long dream. Some individuals may even find themselves looking at the option of starting their own business after months of unemployment, having not been able to find gainful employment during the economic downturn.

Whatever your reason for starting your own business, there are a number of things that you will want to consider when preparing to open your business. These include: state laws, the location of your business, the type of business and how you will fund the business.

While online businesses are the easiest to start, require the least overhead and can be run from the comforts of your own home, they also tend to have the fiercest competition due to their place in the global marketplace. For the sake space and time, this article will focus on the legal requirements of starting a small brick-and-mortar business in Montana.

Legal requirements include business type, licensing requirements, building codes (which can vary be city) and employment laws.

BUSINESS TYPE

Most small businesses are either a sole proprietorship or a partnership.

A sole proprietorship, which is the simplest form of business organization, is owned by a single person who is responsible for all debts incurred by the business. Profits from a sole proprietorship are taxed on the owner's income tax forms.

In Montana, there are no requirements for establishing a sole proprietorship except for acquiring the necessary licenses in your municipality. These include registering the business name with the state and any licenses that are required by your individual city or county.

A partnership involves two or more persons who invest in the business and are responsible for debts incurred by the business.

Montana allows the creation of a general partnership or a limited liability partnership.

Other business types that are allowed in Montana are: corporations, S corporations and limited liability companies. Most small businesses, however, will not need to be formed as one of these three business types.

For those desiring to establish a legal business entity other than a sole proprietorship, Montana has some of the lowest fees associated with starting and operating the business.

LICENSING REQUIREMENTS

Montana state law requires businesses providing certain professional services to have a specific license issued by the state government. These professions

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