Montana Foreign Registration Nexus Rules

Businesses formed outside Montana must obtain a Certificate of Authority by registering with the Montana Secretary of State before engaging in most business activities within the state. 

Under Montana Code Annotated § 35-14-1503, any corporation, LLC, or other business entity formed in another state or country must register when "transacting business" in Montana. Operating without proper registration creates severe operational challenges, including loss of court access and the accumulation of penalties.

When foreign registration is required in Montana

Montana's standards for determining "doing business" obligations focus on substantial and ongoing business activities within the state, though the law does not provide a comprehensive definition of "transacting business." 

Instead, Montana applies a general principle that regular business operations, such as maintaining an office, employing people, or making sales in Montana, obligate registration, while excluding passive, preparatory, or isolated activities.

Montana's definition of "doing business"

Montana defines safe harbor activities that do not require foreign registration, providing clearer boundaries through statutory exclusions rather than comprehensive definitions of what constitutes "transacting business."

Activities that do not require foreign registration in Montana:

• Holding board, shareholder, or member meetings in Montana
• Maintaining bank accounts in Montana
• Conducting isolated transactions
• Ownership of property not involving regular business operations
• Soliciting or collecting certain debts or foreclosing on liens
• Engaging in preparatory activities like market research or scouting locations before commencing operations
• Defending or settling lawsuits

Physical presence triggers

Specific Montana physical presence activities that require registration include:

• Establishing offices, warehouses, retail locations, or other business facilities
• Employing personnel who regularly work within Montana beyond occasional visits
• Owning or leasing property that is actively used in business operations
• Maintaining equipment or inventory for regular business purposes
• Operating manufacturing, distribution, or service facilities
• Conducting regular business meetings, client services, or sales activities from Montana locations

Economic activity thresholds

Montana uses subjective economic standards rather than specific dollar thresholds for foreign registration requirements. The state focuses on whether business activities constitute a "substantial part of ordinary business" through:

• Regular and continuous business activity within Montana
• Making repeated, consistent sales or providing ongoing services to Montana customers
• Duration, frequency, and significance of business activities
• Economic dependence on or market focus within Montana
• Primary business location or operational center considerations

Unlike states with bright-line economic tests, Montana requires case-by-case analysis of business activities to determine if they rise to the level of "transacting business" requiring registration.

Digital business considerations

For modern digital businesses, Montana applies the same subjective standards, evaluating whether online activities create substantial business connections within the state. This includes:

• Software-as-a-Service (SaaS) providers with significant Montana customer bases
• E-commerce operations with regular Montana sales and customer service
• Remote employee management and work-from-home arrangements
• Digital product delivery combined with local customer support
• Online marketplace activities that go beyond isolated transactions

"Doing business" activities summary table

Next steps once nexus is established in Montana

Once your business activities approach Montana's "doing business" threshold, you should register as a foreign entity before conducting substantial operations. Montana offers registration through the Secretary of State's online portal, but paper filings are still accepted by mail or in person.

Consequences of operating without registration

Operating without proper Montana foreign registration creates significant legal and operational challenges:

• Inability to maintain lawsuits in Montana courts until registration is completed and all owed fees are paid
• Civil penalties and fines that may be assessed by the Secretary of State or courts
• Back taxes, licensing fees, and penalties retroactively assessed from when business activities began
• Contract enforceability limitations, as the business may not enforce contractual rights in court until registration and penalties are satisfied
• Administrative orders to cease operations issued by the Montana Secretary of State
• Loss of name protection and potential conflicts with Montana entities
• Reputational damage and complications for future registration efforts

Streamline your Montana foreign registration with Discern

Discern streamlines Montana foreign registration by automating the coordination of required documentation, managing registered agent appointments, and navigating the state's online-only filing system. 

Our platform eliminates compliance uncertainty and provides complete visibility into your compliance status across all the states in which you operate.

Ready to eliminate Montana foreign registration complexity? Try Discern today.