Business Organization and Licensing
What this domain tests
The exam tests how a Montana construction business is formed, registered, insured, and kept in good standing. Montana does not issue one statewide general contractor license. Instead, construction contractors register with the Montana Department of Labor and Industry (DLI), and cities or counties may require their own license. Knowing which approval is which is a frequent scoring point.
Core rules
- Entity choice: sole proprietorship, partnership, LLC, or corporation. LLCs and corporations file with the Montana Secretary of State and submit annual reports; an assumed business name must also be registered.
- Contractor registration: under MCA Title 39, chapter 9, construction contractors register with DLI, pay a fee, and show workers' compensation coverage. Registration is not a competency license.
- Workers' compensation: employees must be covered. Owners may elect coverage or file an exemption depending on entity type. DLI's Independent Contractor Central Unit audits misclassification.
- Local licensing: municipalities may require a business license or contractor license; check before bidding.
- Public work: registration and prevailing-wage compliance are conditions of bidding.
Worked example
A two-member LLC wants to remodel a store. It files Articles of Organization, obtains an EIN, registers its assumed name, registers as a contractor with DLI, and buys workers' comp for its one employee. The member without employees may file an exemption, but that election does not cover the LLC's employee. Bidding before registration is complete can disqualify the bid.
Traps
Treating registration as a license; letting registration lapse mid-project; issuing 1099s to workers who fail Montana's independent-contractor tests; overlooking a city license.