North Dakota LLCHow to Start & Form a Limited Liability Co in ND!

Forming a limited liability company (LLC) in North Dakota is straightforward and is simple enough to be done in 5 steps:

1. Name your North Dakota LLC
2. Assign a Registered Agent
3. File the Articles of Organization
4. Create your LLCs Operating Agreement
5. Obtain an Employer Identification Number (EIN)

After those 5 steps, you have an LLC formed successfully in the state of North Dakota!

Applying to establish a limited liability company in North Dakota will officially start when the legal documents that make the state recognize the existence of your business entity have been filed with the Secretary of State.

These legal documents are what actually create a limited liability company in North Dakota.

Formation of a limited liability company in North Dakota can only be applied for online and costs $135 for the filing fee.

Below are the steps you will need to take to guide you in the formation of your North Dakota LLC so you can get your business up and running.

STEP 1: Name your North Dakota limited liability company

Your limited liability company is going to need a name and so the first step in forming your LLC is to select a name for your business.

Naming your LLC in North Dakota may sound like a no brainer but there are actually some regulations to consider when selecting a name.

Most states have some rules when selecting a business name and the state of North Dakota has its own laws when it comes to naming a limited liability company.

Another point to consider, even after finding a name that is compliant, is to make sure that that name can be searched for easily by your existing and potential clients.

North Dakota guidelines for naming your LLC

• Your business name in North Dakota has to clearly indicate that it is an LLC which can be done in two ways. The first way would be to explicitly include the words “limited liability company” in its name. The second would be to include one of the two abbreviations for a limited liability company which are “L.L.C.” or “LLC” in its name.
• It is prohibited to have your business name include any keywords that may confuse people into thinking your limited liability company is a government agency. Examples of words that cannot be used in your business name to avoid confusion are: State Department, Treasury, FBI, Municipality, etc.
• There are other words that are considered restricted or can only be used by licensed individuals such as doctors or lawyers. Examples of restricted words that will have more regulations to comply with in order to have it included in your business name are: University, Attorney, Bank, etc.

Business Name Availability Check

• Check the business name availability in North Dakota. By law, a registered business name of an actively running business cannot be used by other businesses that would like to establish themselves with a name that is already owned by another business. Prevent naming problems down the road by checking business name availability through the North Dakota limited liability company search on their website.

Business URL

• Check the business domain name availability. It is always recommended for businesses to have their own URL to prevent others from using it for their gain or to prevent confusion on the part of your clients and target market. Even if a business does not plan to make a dedicated website right away, it is still recommended to buy the URL for your business. Check online to know if your business name is available to use as its web domain:

Frequently Asked Questions regarding Naming your North Dakota LLC

Below are some frequently asked questions that come up in regards to naming a limited liability company in North Dakota.

What is an LLC or a limited liability company?

LLC is an abbreviation for a business entity that is known as a limited liability company.

Several businesses in the United States classify as an LLC thanks to the simplicity of its structure that can provide more flexibility than the conventional corporation – all the while being able to provide about the same advantages and benefits.

Learn more about LLC’s here.

Is a trade name or DBA necessary when I run my business?

In most cases, the name of a limited liability company can already serve as the company’s brand name with which it can accept modes of payments such as checks or credit cards.

Most limited liability companies do not actually need a DBA or a “doing business as” name in order to function.

There will still be scenarios wherein, even if a DBA is not required, a DBA can still be registered if the owners would like to conduct their operations under another business name.

Learn more about DBA’s here.

STEP 2: Elect a registered agent for your LLC in North Dakota

It is a regulatory requirement to have a registered agent assigned to your limited liability company in North Dakota.

For those that are wondering what a registered agent is; it can be thought of as the business and the state’s point of contact.

Registered agent services are basically the businesses or individuals that are responsible for the task of receiving pertinent legal documents on behalf of your limited liability company.

With such an important task, you may be wondering who can qualify as a registered agent.

A registered agent is required to be a resident or corporation in North Dakota who are fully authorized to operate and have business transactions in the state.

Registered agents can be nominated from your company itself, among the members of your LLC so long as you are all residents of North Dakota.

You may also nominate yourself as your company’s own registered agent.

Learn more about being your own registered agent here.

Frequently Asked Questions regarding Registered Agents in North Dakota

Can I nominate myself as my own registered agent?

Yes.

You can elect yourself or even the other members of your limited liability company as your registered agent provided that you or any one of those members of your company are proven to be residents of North Dakota.

Is it worth the money it takes to pay for a registered agent service?

Being your own registered agent will mean that you will have to consider and be accountable for extra responsibilities on top of your general tasks as the business owner.

The repercussions for not being able to fulfill the role of being a registered agent can lead to court summons in extreme cases.

It is also not possible for owners to be in the location of business every hour of every business day.

With that said, professional registered agent service prices can range from $39 per year to over $300 per year so there is a registered agent service out there that can cater to different budgets making it a cost effective way to manage the limited liability company’s government filings.

Some of these registered agent services will even give you a free registered agent with the formation of your business.

It is because of this that many business owners find that the advantages of availing a registered agent’s services far outweigh its cost.

Learn more about registered agent service providers here.

STEP 3: File the articles of organization with the North Dakota Secretary of State

Filing the articles of organization with the North Dakota Secretary of State is done online and will cost $135.

This cannot be refunded once it is paid, so be sure you file it correctly and have all of your documents in order.

Those who are seeking to expand their limited liability company so they can operate as a business entity in North Dakota would not need to file a separate set of articles of organization for their LLC in North Dakota but rather, a foreign limited liability company will need to be formed instead.

Frequently Asked Questions regarding filing Articles of Organization in North Dakots

How long will it take to process the formation of my LLC in North Dakota?

Filing your limited liability company in the state of North Dakota can take up to 4 weeks to process.

What is the difference between a foreign limited liability company and a domestic limited liability company?

A domestic limited liability company is what we tend to refer to when we talk about an LLC.

Domestic limited liability companies are LLCs that have their business operations in the state where it was formed.

In contrast, a foreign limited liability company does not refer to an LLC that conducts its businesses overseas but rather, it is an LLC that has expanded from its presiding state to do business in another state.

What are the fees I have to pay to start a limited liability company in North Dakota?

Officially starting a limited liability company in the state of North Dakota means filing its articles of organization with the Secretary of State which will cost $135.

STEP 4: Draft the operating agreement of your limited liability company in North Dakota

It is not legally mandated to have and implement an operating agreement for your limited liability company in North Dakota.

Some people tend to confuse articles of organization with operating agreements but those two documents are completely different with the key difference being that the former has to be filed with the Secretary of State while the latter is most often just an internal document that basically dictates the company culture, standard operating procedures and how ownership and distribution of profits will be handled among others.

An operating agreement is still considered as a legal document and it is a set of papers that outlines what each member has agreed to when it comes to running the limited liability company and is bound by every member’s signature.

Operating agreements often prevent disagreements, arguments, and drastic deviations from what the business is supposed to be or do.

Operating agreements also serve as a means to mediate or even reconcile disputes within the limited liability company.

It is for these reasons that it is still important to have an operating agreement even if it is not a legal requirement.

Frequently Asked Questions regarding Operating Agreements for your North Dakota LLC

Will I need to file my operating agreement with the Secretary of State?

No.

Operating agreements are internal documents therefore they stay filed in a company for that company to be guided in the implementation of what is stated in those documents.

However, even if it is not a document that needs to be filed with the North Dakota Secretary of State, there are still several states that legally mandate every limited liability company formed in that state to have the existence of their respective operating agreements.

STEP 5: Acquire your Employer Identification Number (EIN)

 

EIN is an acronym for Employer Identification Number and is an Internal Revenue Service (IRS) system that makes use of assigning a nine digit number to businesses for the sake of being able to easily identify them for tax related purposes.

You can think of an Employer Identification Number as the business equivalent of an individual’s Social Security Number.

In certain states or areas, an EIN can also be known as a Federal Tax Identification Number (FTIN) or a Federal Employer Identification Number (FEIN).

An Employer Identification Number is not just used by the Internal Revenue Service but also, business owners will need an EIN when they hire employees, manage and file state and federal taxes and when they would want to open a bank account for their business.

There are cases when a sole proprietor already has an Employer Identification Number and they may be wondering if they can use that EIN for their LLC. The Internal Revenue Service will still mandate sole proprietors to acquire a new Employer Identification Number specifically created for a limited liability company if the sole proprietor plans to convert into an LLC.

Employer Identification Numbers can be obtained for free by requesting it from the Internal Revenue Service and is a fairly simple process that can be accomplished by mail or by fax if not done online.

Frequently Asked Questions about obtaining an Employer Identification Number (EIN) in North Dakota

Can I still get my EIN if I do not have my own social security number?

Yes.

You can still get your EIN even if you do not have your own social security number.

A social security number is not a prerequisite to obtaining an EIN.

What will end up happening is when you fill out IRS Form SS-4, you will just have to leave Section 7b blank.

After the form is filled, you will need to call the Internal Revenue Service at (267) 941-1099 to have your Employer Identification Number application completed.

What tax structure should I pick for my limited liability company in North Dakota?

Most business owners just opt to have the default tax status when forming their limited liability company.

Business owners are made aware of the different kinds of tax classification options that are available for them to choose from when they get their Employer Identification Number.

There are certain limited liability companies that are eligible to have their federal tax obligation reduced when they choose not to go for the default tax status in favor of opting for the S corporation (S corp) status instead.

Is an EIN a requirement for my limited liability company? Do I really need to have one?

An Employer Identification Number is a requirement for every LLC that has more than one member or if the limited liability company has employees.

Important steps to take after successfully forming a limited liability company in North Dakota

It takes 5 simple steps that we have covered in order to successfully form your limited liability company; however, there will still be certain steps you have to take after your LLC is formed to ensure that you get to really benefit from the advantages a limited liability company business structure can grant you.

Keep your business and personal assets separated

A lot of business owners opt to have a limited liability company because of how it can protect its owners from personal liability.

However, when the owners of the business keep their personal assets and business assets in one account, the personal assets of the owner from their cash, their real estate properties, and even their personal home and car can be at risk if their North Dakota limited liability company is sued.

This type of scenario is what is referred to as piercing the corporate veil in business law.

Making sure that the corporate veil is in place to begin protecting your limited liability company in North Dakota can be done with the following steps:

1. Open a checking account for your business – opening a checking account for your business that is separate from your personal one is what is necessary when putting personal asset protection in place. Having a separate business checking account also makes certain tasks like accounting and taxation easier to do.
2. Get a credit card for your business – getting a credit card specifically for your business and not for your personal use will separate your business expenses from your personal expenses. Having a credit card for your business will also be a way to build your limited liability company’s credit history. Having a good credit history for your LLC can be useful down the road when you need to raise capital like that of small business loans.
3. Hire an account for your business – hiring a qualified accountant for your business will make your payroll and bookkeeping process efficient and through that, you would have more time to focus on running and growing your business. Accountants will help have your business funds managed effectively by being able to pin point areas of losses that can be reduced or even eliminated while discovering areas where you can make extra profit. Accountants also help your business avoid paying fines, penalties and other costly fees for failure to comply with regulations while also preventing your business from overpaying or underpaying taxes.

Get business insurance for your limited liability company

Managing risks and taking them off of your plate for qualified and registered institutions to handle so you can focus on managing and growing your business instead starts with getting insurance for your limited liability company.

There are different kinds of insurance coverages that would suit different needs and budgets though the most common types of insurance that businesses avail of are the following:

• General liability insurance – general liability insurance covers a broad range of events to shield your business if it gets into a lawsuit. Most business owners opt for general liability insurance.
• Professional liability insurance – professional liability insurance covers claims of negligence, malpractice and other errors that may occur when professional service providers such as accountants, consultants and so on conduct their businesses.
• Worker’s compensation insurance – worker’s compensation insurance covers for employees in the event that they incur injuries, deaths or any illnesses while on the job. In the state of North Dakota, it is strictly required by the law to have businesses provide worker’s compensation insurance for their employees when they have at least one employee that includes corporate officers and limited liability company members.

Have a website made for your business

The surge of purchases being made online as well as the overall rapid increase of information being sourced and shared on the internet has made it important for businesses to make use of this resource through having their own online presence.

Having online presence can be done through social media though businesses who do not have their own websites will be letting the chance slip of garnering a larger percentage of leads, potential customers and revenue.

Businesses no matter how small or even if they are in what is considered an offline industry will still be needing their own websites.

Reasons why the building of a dedicated business website would benefit businesses include the fact that every legitimate business you will encounter has their own websites that show their credibility, authority and the selections they offer so potential customers know if the business offers what they need to make the purchasing decision even easier for the company’s target market.

Second, social media accounts from Facebook to even a LinkedIn business profile is not a proper substitute for a business website that you have full control and ownership of.

Third, hiring a website developer would not be necessary when wanting to create a professional site that you can be proud of thanks to the existence of website builder tools like Wix, SquareSpace or the GoDaddy Website Builder.

The process of building a website does not need to take any longer than 2 or 3 hours since there are built in and fully functional templates available that can be customized by dragging and dropping certain elements on the page so you would not even need to have a working knowledge in coding to design your own website.

Progressive advancements in technology have helped make the lives of small business owners easier with plenty of resources available online to guide these owners along the way.

Have press releases sent out

Strategies that do not break the bank when it comes to promoting your business and getting its name out there include sending press releases out.

Press releases have benefits that can last long and be part of building a good reputation that builds trust in your business and it only needs to be paid once per press release which also lessens the amount of effort that is made to advertise.

Press releases can be a means to drive more people to your website which can turn them into customers while improving the search engine optimization (SEO) of your website.

Press releases can not only provide publicity for your company but it can also be the means of creating your company’s brand presence on the internet.

Keeping your limited liability company compliant

Keeping your business running after it has been formed not only boils down to how much revenue the business’ operations bring in to prevent shutting down due to bankruptcy but also, it is important to have the company be compliant with its presiding laws, rules, and regulations to prevent the state from dissolving the business.

Business licenses and permits in North Dakota

Compliance starts with obtaining the business licenses and permits your LLC will need in the state of North Dakota.

An example of this can be seen in restaurant businesses.

Before a restaurant can begin its operations, it will need to have health permits, signage permits and building permits among others.

In order to actually operate your limited liability company, local government regulations as well as that of the federal and state will need to be complied with.

The licenses and permits needed will differ on a state by state basis so you will need to research and read carefully on this.

It would not be a surprise if you are also required to take short classes.

The cost of business permits and licenses will vary on what kind of permit or license you have to obtain.

You can get your necessary business permits and licenses on your own or you can hire a professional service to do it for you.

Federal permits and licenses can be obtained through the U.S. Small Business Administration (SBA). State permits and licenses can be obtained through the New Business Registration Licensing Information resource of North Dakota.

Lastly, local permits and licenses can be obtained by inquiring with your local country clerk to know which local permits and licenses you will need.

Limited liability company tax filing requirements in North Dakota

Different kinds of businesses will need different forms of state tax with some businesses being required to register for more than one form of tax.

Generally, there will be sales tax and employer tax requirements when filing your limited liability company taxes in North Dakota.

• Sales tax – businesses that sell a physical product will usually need to have a seller’s permit which can be registered through the website of the North Dakota Taxpayer Access Point. A seller’s permit is a certificate that proves that the business is permitted to collect tax on sales that are considered as taxable. Sales tax is also known as “Sales and Use Tax” and is a tax that is levied by municipalities, counties and even by states on business transactions that exchange goods and services that are taxable.
• Employer taxes – there are generally two types of employer taxes you will have to settle. Businesses with employees are required to have Unemployment Insurance Tax which can be registered through the Unemployment Insurance Employer Account System of North Dakota. In addition, businesses will also need to have Employee Withholding Tax which can be registered through the Taxpayer Access Point of North Dakota.

Federal limited liability company tax filing requirements

In most cases, limited liability companies are required to report their annual income to the Internal Revenue Service using either Form 1065 Partnership Return or Form 1040 Schedule C.

Form 1065 Partnership Returns are what most limited liability companies with multiple members use while Form 1040 Schedule C is what most limited liability companies with only one member use.

It should be noted that the distribution of the owner’s profits or how you pay yourself as the owner of the limited liability company will affect the federal taxes that you will have to pay.

Comply with annual report requirements of North Dakota for limited liability companies

It is required for every limited liability company in North Dakota to file its annual reports with the Secretary of State.

Filing of annual reports can be done online and will cost a $50 fee that cannot be refunded once paid.

When a limited liability company is newly formed, the first filing of its annual report will be due the following year.

Every November 15, annual reports must be filed with the North Dakota Secretary of State.

Late filings will have North Dakota charge you with a penalty of $50.

Failure to have the annual report filed with the Secretary of State within 6 months after it is due can put your business at risk of North Dakota revoking its limited liability company’s business registration.

Prevent and avoid having your business being automatically dissolved

Missing state filings whether you do it once or it has occurred multiple times may result in your limited liability company not only having to pay fines but also, the state of North Dakota has the power to serve your LLC its automatic dissolution.

When an automatic dissolution happens, the owners of the limited liability company are at risk of the loss of their limited personal liability protection that their LLCs grant them.

Avoiding automatic dissolutions can be done through hiring a qualified registered agent service who will be in charge of notifying you on deadlines to file important documents and these registered agent services will also submit those reports on behalf of your business.

Hiring employees for your North Dakota limited liability company

Hiring employees would mean that you would have to be compliant with North Dakota employment laws.

Complying with these laws can be done by having workplace compliance posters printed and placed in workspace areas that are highly visible, withholding taxes of your employees, providing worker’s compensation insurance, reporting employees as “new hires” to the state of North Dakota, and verifying that the employees you newly hire are able to work in the United States.

Questions you may have on hiring employees for your limited liability company in North Dakota

Below are some questions you may have on hiring employees for your limited liability company in North Dakota that have been briefly answered for your convenience.

What is the minimum wage in the state of North Dakota?

$7.25 per hour is the minimum wage in the state of North Dakota.

How frequently are employees supposed to be paid in the state of North Dakota?

It is required to pay salaries or wages regularly with a frequency of at least once every month in the state of North Dakota.

Additional information you will need on limited liability companies in North Dakota

There is certain additional information you will need to know on limited liability companies in the state of North Dakota that can range from foreign LLCs to certificates of good standing and intentional dissolution.

Foreign limited liability companies in North Dakota

Foreign limited liability company formations permit your company to do its business as the same entity it currently is in more than one state.

If you already have a previously formed limited liability company and would like to continue doing business as that previously formed entity in North Dakota, you will have to register as a foreign limited liability company.

Foreign LLC formation can be done through fax or by mail and will cost $135 that cannot be refunded once paid.

How to acquire a certificate of good standing for your LLC in North Dakota

Limited liability companies that are legally formed, have been properly maintained and have been compliant with North Dakota laws will have a document called a Certificate of Good Standing that verifies all this.

Certificates of Good Standing are needed when business owners would like to renew or obtain certain business permits or licenses, form a foreign limited liability company in a different state, or even to seek additional funding from lenders that include financial institutions like banks.

Acquiring your LLC’s Certificate of Good Standing in the state of North Dakota can be done by ordering it through mail, phone or email which will cost a fee of $20 that is not refundable once it has been paid.

How to dissolve a limited liability company in North Dakota

It is important for business owners to officially dissolve their limited liability companies when they would no longer intend to continue its operations or conduct business with it.

Failure to officially dissolve your limited liability company in a timely manner can result in possible penalties and tax liabilities in some cases while in others, legal problems will be faced.

Dissolving limited liability companies can be done in 2 comprehensive steps that include filing the LLC’s Articles of Dissolution and having the LLC’s business tax accounts closed.

Resources that small businesses can use

There are several resources that small businesses can use to help them get running and off the ground. Below are some of the resources available that you could consider looking into.

Business tools and resources for women

There are business tools that cater specifically to businesses owned by women to help them focus on growing their businesses.

There are resources available to help with funding through loans, investors or grants.

There are resources on managing events from meetups to conferences.

There are also guides on personal growth and business formation.

Support for businesses owned by women is available through business strategies that are shared, communities that one can take part of or through advice given on forums one could ask questions on with all these ways of support resulting in women entrepreneurs connecting with each other.

Free legal forms for limited liability companies

There are several free templates available that can be found online to help create limited liability company legal documents such as LLC resolutions, operating agreements and even hiring documents that include non-disclosure agreements (NDA), independent contractor service agreements (ICSA), and employment contracts.

Building credit for your business

There are resources available to teach business owners how to build their business’ credit to aid them in getting credit cards and other funding options for their business in their business’ name instead of the owner’s personal name so they can enjoy higher credit limits, higher interest rates and more.

Other free small business tools

There are small business tools that are useful and available for free which are designed to aid in bringing solutions to business challenges that are commonly faced including that of finding a business idea, making a business plan and drafting an LLC’s operating agreement.

Other free small business tools to look into include entrepreneur quizzes, business plan generators, operating agreement tools, free logo makers, business idea generators and business name generators.