Getting a Foreign Nonprofit Corporation Authorized in Montana

Montana calls a nonprofit foreign when another state, a tribe or another country granted its charter. Nonprofit corporations have their own act, chapter 2 of Title 35, rather than the Business Corporation Act, and the foreign provisions sit in part 8 of that chapter. The result is a certificate of authority, which lets the nonprofit transact business in Montana subject to the state's right to revoke it (MCA 35-2-824).

With the certificate, the nonprofit enjoys the rights of a Montana nonprofit of a similar character and carries the same duties, restrictions and penalties. The certificate gives Montana no say over how the organization is run internally. Soliciting donations from the public and claiming tax exemption each involve separate registrations and approvals, which this guide leaves aside.

Under MCA 35-2-820, a foreign nonprofit must hold a Secretary of State certificate ahead of transacting any business in the state. The statute never defines transacting business. It names what falls outside the term and describes the list as incomplete:

• Taking part in a lawsuit or other proceeding, as plaintiff, defendant or by settlement
• Meetings of the board or the members, and similar internal matters
• Bank accounts
• A transfer office for memberships or securities the nonprofit itself issued, and trustees or depositaries that hold them
• Selling through independent contractors
• Soliciting orders, whether by mail or through staff or agents, that need acceptance outside Montana
• Incurring or acquiring debt, and mortgages or other security interests in land or personal property
• Securing or collecting what is owed, and enforcing a mortgage or other security
• Owning property that came to the nonprofit while it was collecting a debt, if sold within 5 years, and owning property that earns no income or that plays no part in a corporate function
• One isolated transaction completed within 30 days, apart from any pattern of similar transactions
• Interstate commerce

The property item has two parts, and the second is the broader one. Read literally, land or equipment that produces no income, or that is not used in a corporate function, is outside the definition. Nothing we found explains how the office applies that wording to a nonprofit with a Montana office, a program site or staff working here, so treat those facts as a reason to ask an attorney rather than as safe. Unlike the corporation and LLC acts, the nonprofit section has no rule making a contract with the state or a local government a trigger.

The office's help center adds that an out-of-state organization with a real presence here, for instance a remote employee, generally needs to register. A Montana attorney can help when the contact is smaller or the facts are mixed.

Filings go through the Secretary of State's web portal. After signing in, choose the foreign forms intended for an organization formed in another state or country, answer every required field, and pay by card or e-check. An approval email follows. The state's fee for the nonprofit certificate of authority is $15, and rush service on any document is $20 for a day or $100 for an hour.

Under MCA 35-2-822 the application gives:

• The nonprofit's name, or a substitute name if its own is unavailable in Montana
• The state, tribe or country that chartered it
• The date of incorporation and its period of duration
• The business mailing address of its principal office
• The registered agent information Montana requires
• The names and business mailing addresses of current directors and officers
• Whether the corporation has members
• Which category it would fall into if chartered in Montana: public benefit, mutual benefit or religious
• The purposes it plans to pursue in Montana
• A statement of compliance with its home organizational laws and of existence there

Directors and officers appear on a public filing, so check the list before you submit. An amended certificate is required when the name, duration, agent information, home jurisdiction or public benefit, mutual benefit or religious designation changes (35-2-823). The fee sheet lists $15 for the amended version.

Not as a document. The last item on the application is a statement that the nonprofit has met the organizational requirements of its home jurisdiction and exists there. The statute's wording leaves out any certificate of existence or good standing, so none gets ordered and no age limit applies.

The portal was not viewable during our review, so follow any on-screen instruction that goes further. Montana can also revoke if it receives an authenticated certificate from the home jurisdiction stating that the nonprofit has dissolved or disappeared in a merger (35-2-832).

A foreign nonprofit's name must stay distinguishable, on the office's records, from the names of Montana nonprofit and business corporations, reserved or registered names, other foreign corporations' fictitious names, and assumed business names, limited partnership names, LLC names, trademarks and service marks on file (35-2-826). If the real name is unavailable, the board can adopt a fictitious name for Montana by resolution, certified by the secretary and filed with the office. There are ways around a conflict, including written consent from the other corporation (which has to promise to rename itself) or a court judgment establishing your right to the name.

The application also names a registered agent under Montana's agent chapter. An individual, or a business entity organized anywhere, may serve either as a commercial agent listed with the state or as a noncommercial agent the nonprofit designates. Give a street or rural-route location inside Montana, and add a separate Montana mailing address only when it differs. Naming the agent is the nonprofit's way of saying the agent agreed to serve, and the agent's duty is to forward what is served. The help center advises a commercial agent for organizations with no Montana presence or a privacy concern about their own address.

Annual reports for a foreign nonprofit run on a January 1 to April 15 cycle, with the first due the year after authorization (35-2-904). The report lists the name and home jurisdiction, the agent information, the principal office, directors and principal officers, a brief description of activities, and whether the nonprofit has members. On the fee sheet the report costs nothing if filed before April 15 and $35 after, and the help center confirms the waiver for filings between January 1 and April 15.

Revocation can begin when the annual report is 90 days late, franchise taxes or penalties go unpaid for 90 days, the nonprofit has no registered agent for 90 days or more, or an agent change goes unreported for 90 days. Notice is delivered first, and the nonprofit has 60 days to fix the problem (35-2-833). Montana's help center says foreign entity types cannot be reinstated and must requalify.

Leaving Montana takes a certificate of withdrawal (35-2-831). The application states that the nonprofit has stopped transacting business here, ends the agent's authority, designates the Secretary of State to receive service on claims from the period it was authorized, and supplies a mailing address for forwarded process. The fee sheet lists no fee, though the help center says some withdrawal filings need a Department of Revenue tax certificate, so read the form.

Section 35-2-821 lists the consequences, and one of them is a daily dollar amount. While a foreign nonprofit lacks a certificate, it is barred from maintaining a proceeding in Montana courts. The same bar reaches a successor and anyone holding an assignment of the claim, and a court is allowed to put the case on hold until it sorts out whether a certificate was needed.

On top of that comes a civil charge of $5 per day of unauthorized activity, topping out at $1,000 each year, which the attorney general is empowered to collect. What is left intact is the validity of the corporation's acts and its right to defend a proceeding in Montana. The statute does not say whether registering late wipes out an amount already owed, so ask the Secretary of State or an attorney.

Nonprofit corporations cannot be ordered through Mainstay's foreign qualification checkout, which is limited to LLCs and corporations that operate for profit. Someone for the nonprofit, or its attorney, completes the certificate application in the portal. What Mainstay provides is the Montana registered agent, $149 a year, priced the same at every renewal.

Mainstay's Montana address goes on the application and shows on the public record. Process served on the agent shows up in your account, scanned, on the business day it arrives, with no fee. The same applies to the first three government mailings each year. Should another agent be on the record, Mainstay submits the replacement, and the fee sheet shows the state charging nothing for it. More about the service is on the Montana registered agent page. Mainstay is not a law firm. Ask an attorney whether your activity requires authority.