North Dakota LLC
The LLC, or Limited Liability Company, is a legal business structure that limits its owners' personal liability for company debts and liabilities. North Dakota is a good place to form a limited liability company. Find out how to establish and maintain an LLC in North Dakota.
$135
Formation fees
$10
Name reservation fees
$50
Annual report fees
Page sponsor
Why we like StartGlobal?
My genuine thoughts
Willy Justin
Founder, Statepedia
StartGlobal: Legal + Taxes + Bookkeeping for solopreneurs
Product
For small businesses, managing taxes, accounting and everything legal is just a pain. Nobody wants to do it, but they have to. Instead of working with CPAs, attorneys and others separately, Start brings all of them under a single subscription. It’s just smooth.
Team
I know the team behind StartGlobal very well. It’s a very hardworking group of individuals who are genuinely passionate about small businesses. They are backed by successful founders like Balaji Srinivasan, Biz Stone(Twitter) and others.
Price
Getting a CPA or attorney is a matter of thousands of dollars. It’s just unfair to pay so much when you’re a small business. Start has a single subscription that covers it all. It is a definite money saver.
$599 one-time
What is an LLC?
Limited Liability Company
LLC is a business entity in the U.S that provides limited liability to its members. It has characteristics from both corporation and sole proprietorship. LLCs are permitted under State statutes of each US state.
Limited liability
Personal assets are protected for people with limited liability when they are sued.
Corporation
A business entity that can issue shares and give limited liability to shareholders.
Members
Owners of an LLC are referred to as members. They own membership interest in the LLC.
Sole proprietorship
Where an individual engages in business activity without formal organization.
Types of LLC
Depends on the number of members and whether it has elected to change its IRS classification.
Single-member LLC
Has only a single member. IRS considers it as a sole proprietorship for tax purposes.
LLC as C-corp
Owners of an LLC are referred to as members. They own membership interest in the LLC.
Multi-member LLC
Has two members. IRS considers it as a partnership for tax purposes.
LLC as S-corp
A special election for a maximum of 100 US shareholders.
Actions
Here are some possible actions to take in a North Dakota LLC. Click below to read in detail:
How to form an LLC in North Dakota?
Follow these 7 steps:
1. Name your LLC
Think of a list of names for your business that your customers would find appealing. Show it to your friends and some customers and get their feedback. If you already have a few names in mind, great.
To check if those names are available in the state of North Dakota, go to the official entity search tool on the Secretary of State website. It’s free to search.
You can reserve a name with the state, by paying reservation fees. The reserved name will be expired after a specified duration. If you are filing Articles of Organization, you need not reserve a name separately.
Reservation fees
$135
Reservation duration
4 weeks
Every LLC needs to be identified with a designator. Must contain the words "limited liability company", or must contain the abbreviation "L.L.C." or the abbreviation "LLC".
Make sure you follow LLC naming guidelines specified by North Dakota state as per N.D.C.C. 10-32.1-11. This includes not using names similar to existing companies, etc.
2. Get a mailing address
If you have an office or factory in North Dakota, you can use that as your official company address. Note that this address will be made public. You can even use your home address as your official company address. But that may not give you privacy.
Alternatively, pick a virtual office address. This way, you pay a company for a street address and they handle all your mailing. You can then give this address to the state.
3. Hire a registered agent
Every North Dakota LLC requires a registered agent in the state. If you are a resident of North Dakota, you can be the registered agent for your LLC. However, your details will be made public and you must be available during all business hours to receive service of process.
Alternatively, there are companies that provide registered agent services for a fee. Pay for their service and you get to keep your privacy and ability to freely move around without worrying about compliance.
4. File Articles of Organization
Once you have a registered agent and an official office address, you can go ahead with filing your Articles of Organization. You can file it online on North Dakota Secretary of State website.
Filing fees
$135
Processing time
4 weeks
5. Create an Operating Agreement
Operating agreements are not mandatory in North Dakota, but it is highly recommended. There are websites where you can customize operating agreements to your needs. Create and get it signed by your LLC members.
6. Get Employer Identification Number (EIN)
EIN is used by IRS to identify business entities. You create an EIN for free at IRS website.
7. Open a business bank account
It is important to separate your business and personal transactions. There are several ways to create business bank accounts. You can definitely open business checking accounts at traditional banks like Chase, Wells Fargo, etc. There are several other modern banking solutions that offer plenty of benefits to entrepreneurs.
Entity name
Every LLC should have a unique name in North Dakota. North Dakota maintains a list of names of entities in the state. Go through it to check if your chosen name is available.
Search for names
Go to the official website of the North Dakota business search tool to see if the name you want is available.
Searching fee
Free
Reservation
You can reserve a name for your LLC for a specific duration by paying reservation fees to the North Dakota business services. You will have to file your LLC formation documents within this period to keep the name. Alternatively, you can directly go ahead with the LLC formation without any reservation. That's fine too.
Reservation fee
$10
Reservation period
1 year
LLC naming guidelines
The name you choose for your LLC must the official naming guidelines.
N.D.C.C. 10-32.1-11
Visit
Here are some of the guidelines in simple language:
- 1
Must contain the words "limited liability company", or must contain the abbreviation "L.L.C." or the abbreviation "LLC".
- 2
Don’t include terms that indicate that you are doing an activity that you are not authorised to do.
- 3
Your name should be ‘distinguishable’ in the Secretary of State records. Adding a punctuation or ‘the’ does not make it distinguishable.
- 4
Don’t use words that makes it seems like you are a governmental entity or has an affiliation.
Articles of Organization
In North Dakota, Articles of Organization is the form you file with the Secretary of State to form an LLC. It contains the articles of formation for the LLC.
Filing Articles of Organization
Here's how you file it
File it online on North Dakota Secretary of State website
Visit
Online fee
$135
Online processing time
4 weeks
LLC Annual Report
Every LLC has to file this report in North Dakota to stay compliant with the state laws.
Filing Annual Report
North Dakota LLC is expected to file this report annually by November 15
File it online on ND Secretary of State website
Visit
Online fee
$50
Online processing time
instant
Failure to pay
North Dakota charges a $50 penalty for failure to file on time. In addition, it can revoke an LLC’s business registration after 6 months if you fail to file an annual report.
Registered agent
A registered agent is an agent of your LLC on whom any notice, process or demand may be served. Every LLC in North Dakota needs to have a registered agent located in the state.
Requirements
According to North Dakota Century Code § 10-32.1-16:
- 1
Registered agent can be an individual or an authorised organisation.
- 2
Registered agent must have a street address where they can personally receive service of process.
- 3
Office of Registered agent cannot be just a mailbox service of a telephone answering service.
EIN
An Employer Identification Number, also known as Federal Tax Identification Number, is used to identify a business entity.
Who must have an EIN?
Single member LLC elected to be taxed as C-corp or S-corp
Single member LLC with an employee
All multi-member LLC
Operating agreement
Operating agreement is an internal business document that outlines the general rules and policies of the LLC.
Importance
It is not a legally mandatory document. However, it is recommended to have one since many courts, banks and financial institutions use it for verification. It is also nice to clearly outline the duties and relations between multiple members of an LLC—so you avoid any confusion in the future.
Format
There is no ‘required’ format for an operating agreement. You can include anything reasonable in it. In general, it has the following sections:
Basic Business information
Contains name, address, names and details of members, purpose
Member relationship
Contains membership interest, decision making process, powers, duties.
Membership transfer
Contains details on how to add or remove members and managers.
Accounting and tax
Contains details on how company records and distributions are maintained.
Dissolution
How to dissolve, wind up and terminate, due process to follow and exceptions.
LLC in North Dakota
Similar to LLCs, there are other business entities that are considered by businesses in North Dakota.
North Dakota Business search
North Dakota LLC add member
North Dakota LLC remove member
Page sponsorWhy we like StartGlobal?
My genuine thoughts
Willy Justin
Founder, Statepedia
StartGlobal: Legal + Taxes + Bookkeeping for solopreneurs
Product
For small businesses, managing taxes, accounting and everything legal is just a pain. Nobody wants to do it, but they have to. Instead of working with CPAs, attorneys and others separately, Start brings all of them under a single subscription. It’s just smooth.
Team
I know the team behind StartGlobal very well. It’s a very hardworking group of individuals who are genuinely passionate about small businesses. They are backed by successful founders like Balaji Srinivasan, Biz Stone(Twitter) and others.
Price
Getting a CPA or attorney is a matter of thousands of dollars. It’s just unfair to pay so much when you’re a small business. Start has a single subscription that covers it all. It is a definite money saver.
$599 one-time