Business registration in the USA is mainly regulated at the state level hence the processes may differ from state to state. In the state of Montana, the state government’s guidelines on how to commence a business adhere to an eight-step process (Montana Governor's Office of Economic Development, 2018). The first step is to create a business plan. It is the business plan that enables an entrepreneur to understand where to place the business, the size of the business, and its nature. The first step enables the making of the second step which is determining the nature of registration for the business. Available options include sole proprietorship, partnership, limited liability company (LLC), or corporation. Upon selection, the next step is actually registering the business under one of the choices above.
The fourth step will be to get a tax registration complete with an identification number for the business. The fifth step is understanding local laws and regulation for the business so as to determine which locality within Montana best suits the business choice (Montana Governor's Office of Economic Development, 2018). The understanding will enable step six which is actually choosing the physical location for the business. The seventh and eighth steps are to get financing then apply for necessary licenses respectively.
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The four categories of registration come with an elaborate pro et contra. Sole proprietorships come with ease of registration, decision making and the lack of profit sharing as advantages. However, it also has the disadvantage of limited abilities to procure financing and also unlimited personal liability for the business (MyUSACorporation.com, 2018). Partnerships have the advantage of ease of registration. However, as there are more than one proprietors, decision making may be protracted and profits have to be shared. Further, the liabilities of the business can be visited upon the owners directly. Both the sole proprietorship and the partnership also carry the advantage of lower tax regiments.
The LLC has the advantages of ease of registration though not as easy as the businesses above. It also carries the advantage of exponentially low taxation as compared to the corporation. Finally, in an LLC, there is limited liability for the owner who cannot be held personally responsible for the liabilities of the business (MyUSACorporation.com, 2018). The corporation has the disadvantages of a complex registration process, complicated decision-making processes and the most stringent taxation regimen, and complicated profit-sharing processes, more so for public companies. It, however, has the advantage of being considered positively by financiers and large-scale clientele.
Montana is extremely large, sparsely populated state whose populace also has a relatively low per capita purchasing parity when compared to other states in the USA (McNamee, Crowley & Johnson, 2018). The state economy is also relatively small as compared to states such as California, Texas, and the Commonwealth of Massachusetts. The above characteristics come with an elaborate pro et contra.
Among the advantages is ease of registration, ease of finding business premises, and support from state and local government. This is as opposed to more competitive states such as New York and Florida that are always flocking with potential new investors (McNamee, Crowley & Johnson, 2018). On the downside, the low population with a low purchasing parity reduces the potential market. It might also be harder to get financing since financiers are mostly willing to bet on businesses with a potential for high sales volumes.
The process of dissolving a business is mainly dependent on the nature of registration upon which the business is established. A sole proprietorship or partnership does not have limited liability hence it is very easy to dissolve the business. However, dissolution does not affect the liabilities of the business as they are just transferred to the owners. An LLC and corporation require an elaborate process to dissolve. The advantage, however, is that when the process of dissolution is complete, no liabilities can be visited upon the owners of the business (MyUSACorporation.com, 2018).
References
McNamee, G. L., Crowley, J. M., & Johnson, D. M. (2018, July 06). Montana State, United States. Retrieved from https://www.britannica.com/place/Montana-state
Montana Governor's Office of Economic Development. (2018). 8 Steps to starting your business. Retrieved from https://business.mt.gov/Business-Navigator/Start
MyUSACorporation.com. (2018). Start Your Business in Montana. Retrieved from https://www.myusacorporation.com/montana
