Montana Franchise Forms - Montana Franchise Law

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Montana Franchise Forms FAQ

What is a franchise?

There is a definition of a franchise which has been developed by the Federal Trade Commission. Basically, a franchise involves an owner of a trademark, trade name and/or copyright giving others a license under certain conditions to use these trademarks, trade names or copyrights in providing goods or services to the public. The franchisor is the party who grants the franchise, and the franchisee is the party who receives the franchise.

What is the legal relationship between a franchisor and franchisee?

Technically, the relationship between a franchisor and franchisee is a relationship between two independent contractors. Their rights are determined by the franchise agreement. A franchise then is not a separate business entity, but is a business relationship between two separate business organizations such as a sole proprietorship, a corporation, or a partnership. The relationship between the franchisor and franchisee is controlled by the franchise contract. A corporation, sole proprietorship, or partnership may own the franchise contract or may be the entity entering into the franchise contract.

What laws govern franchises?

There are laws that restrict termination of some franchises. In some states, prior notice of termination is required. Owners of automobile dealership franchises are protected from termination of their dealerships in bad faith. This protection is provided by the Federal Automobile Dealers Franchise Act.


What are Articles of Incorporation?

The Articles of Incorporation are basically a legal document that a business or organization needs to create in order to become officially recognized as a corporation. In the state of Montana, the Articles of Incorporation explain important details about the corporation, such as its name, purpose, location, and the names and addresses of its owners or shareholders. These articles also outline the structure and governance of the corporation, and once they are filed with the Montana Secretary of State, the corporation becomes a separate legal entity that can conduct business within the state.


What to Include in Articles of Incorporation

When creating Articles of Incorporation in Montana, it is important to include certain information to establish and legally formalize your corporation. Firstly, the articles must include the name of your corporation, making sure it is unique and not already registered. You'll also need to state the corporation's purpose, which is a clear explanation of why your company exists. Additionally, the articles should specify the number of shares the corporation is authorized to issue, as well as their par value, if any. It's necessary to include the name and address of the registered agent who will receive important legal documents on behalf of the corporation. Finally, the articles should be signed by the incorporated, who is usually the person initiating the corporation, and must be filed with the Secretary of State along with the required fees.


1. Full Name of Corporation

The full name of the corporation in Montana is not specified.


2. Principal Place of Business

The Principal Place of Business refers to the main location where a company conducts its primary operations. In Montana, this would be the central hub or main office from where all the important business activities take place. It serves as the headquarters of the company in the state, where decisions are made, strategies are developed, and important decisions are executed. This location is vital for establishing a physical presence in Montana and connecting with customers, employees, and other stakeholders.


12. Limitation of Director’s Liability

In Montana, there are limitations on the liability of directors. This means that directors of a company are not personally responsible for the company's debts or legal issues in most cases. They are protected from being held personally liable, as long as they have acted in good faith and within the scope of their authority. However, it's important to note that directors can still be held accountable if they have engaged in fraudulent or illegal activities, have breached their fiduciary duties, or have personally guaranteed the company's debts. It is always wise for directors to act responsibly and make decisions in the best interest of the company and its stakeholders to avoid any potential liability.