North Dakota LLC Formation

By Catherine Hodder, Esq. | Legally reviewed by Ally Marshall, Esq. | Last reviewed December 30, 2022

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Forming a North Dakota limited liability company (LLC) could seem complicated, but many small business owners manage to complete the formation process independently. If you're interested in forming an LLC in North Dakota, you must become familiar with North Dakota state law requirements. Following the step-by-step guide to setting up your LLC can make your dream a reality.

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Table of Contents

Forming an LLC in North Dakota

1

Name Your LLC

You'll need to pick a company name for your LLC that complies with state law and attracts potential customers to your business. If you haven't started brainstorming yet, take some time to sit down and make a list of possible names.

There are specific naming requirements for a North Dakota LLC name. Your business should not be the same or confusingly similar to a registered business name. The LLC name that you choose must include "limited liability company" or an abbreviation such as "LLC" or "L.L.C."

Make sure that you refrain from including any terms to mislead the public. For example, don't use phrases such as "State Department" in your name, as your business may be confused with a governmental agency. Also, don't use restricted words, such as "attorney" or "bank," without the proper licensing or approval.

Search Name Availability. To check for name availability, conduct a business name search. If a potential name you type into the search is already on record, choose a different name. The state will reject your filing if you use the name of a registered business.

Check for Trademark Registration and Domain Name. You will also want to search for the name on the internet to make sure you are not infringing on a trademarked or domain name. You can look up the name on the United States Patent and Trademark Office (USPTO) website for prior registration. Search the LLC business name on the internet to see if it is in use, or check with an approved registration on the ICANN list to see if the domain name is available.

Reserve Your LLC Name. If you are not ready to file the articles of organization, you can reserve your LLC business name with the North Dakota Secretary of State. The name reservation fee is $10 and holds your name for one year.

Protect Your LLC Name. Your business name is an integral part of your brand identity. Protect your brand with trademark registration in North Dakota or with a federal trademark at the USPTO. You can register a trademark online with the Secretary of State and pay a registration fee. You can also register your business name as a domain name, so only you can use it.

2

Get a Registered Agent

Appointing a North Dakota registered agent is a requirement. A registered agent is an individual or a company that has the duty of accepting legal papers. For example, if someone sues your business, your registered agent is the person or company who receives the legal paperwork. Note that your registered agent must be available during regular business hours and have a physical street address in the state of North Dakota. You may want to consider using a professional registered agent if you can't think of a suitable individual to handle service of process for your company.

3

File Your Articles of Organization

The essential part of forming an LLC is filing the articles of organization. The articles of organization should include the following information:

  • LLC name
  • LLC's principal office address
  • Registered agent name and address
  • Purpose of the organization
  • LLC effective date
  • Organizer(s) name and address

North Dakota has a portal, "FirstStop," to file the articles of organization on the Secretary of State's website. The state fee for North Dakota articles of organization is $135 to file online.

4

Draft an LLC Operating Agreement

The operating agreement for your LLC is an internal document you don't need to file with the North Dakota Secretary of State. You keep it with your records to manage your company's operations. Additionally, a bank might request it when opening a business bank account or applying for a credit card.

An operating agreement should contain the following provisions:

  • Members' ownership percentages
  • Handling of profits and losses
  • Rights and responsibilities of managers and members
  • Procedures for holding meetings
  • Methods for transferring business interest (i.e., a buy/sell agreement)
  • Dissolution procedures

You can look to your LLC's operating agreement for guidance if there's a dispute.

5

Get an EIN

Most businesses need an Employer Identification Number (EIN) or tax identification number. You'll need an EIN to open a business bank account and hire employees.

An EIN is like a Social Security number for your business. The Internal Revenue Service (IRS) assigns these numbers to business entities for identification purposes. You can apply for an EIN online at the IRS website for free.

6

Set Up Business and Tax Accounts

After filing the articles of organization with the state, you will have numerous state and federal requirements for your new LLC.

The tax status you elect determines how your LLC pays taxes. If the LLC elects corporate status, you file corporate taxes for the LLC. If your LLC is a pass-through entity, the profits and losses appear on individual members' tax returns.

Investigate what state and federal tax accounts to set up for your LLC in North Dakota.

Business and Tax Requirements in North Dakota

Register your LLC for a state taxpayer account when starting a North Dakota business. North Dakota has a taxpayer access point (TAP) portal to register for sales and use accounts and withholding accounts.

State Business Tax

You may choose one of several different tax designations for your LLC. Consult an accountant or business attorney for what is best for you and your business. If your LLC is taxed as a corporation, your LLC pays a state tax on the LLC's taxable income. If you set up your LLC for pass-through taxation, the members pay a state tax based on their share of the income on their individual income tax returns.

State Employer Tax

If your LLC has employees, even if the employees are members, your LLC pays employment taxes. As an employer, you must do the following:

Sales and Use Taxes

If you sell to the public, you may have to charge a 5% sales tax to the purchaser and remit it to the state. You apply for a sales and use account on the North Dakota Taxpayer Access Point website.

Business Licenses and Permits

North Dakota regulates certain businesses through the Attorney General's office, the Secretary of State, and other departments. Depending on your type of business activities, you may need a license to operate in North Dakota. Start with the licensing information page for licensing requirements in North Dakota.

Registration in Other States

If you want your North Dakota LLC to do business in other states, contact the Secretary of State in that jurisdiction to register as a foreign LLC. That state may ask for a certificate of good standing, which you get from the North Dakota Secretary of State. You can order one online for a $25 fee. The certificate of good standing verifies your LLC is compliant with North Dakota tax filings and obligations.

Annual Requirements in North Dakota

There are a few things to do each year to keep your North Dakota LLC in good standing. Good standing means compliance with reporting requirements and payment of state taxes and fees.

You must file an annual report in North Dakota for your LLC by doing the following:

  • Confirm and update information on your LLC
  • File the report online with FirstStop
  • Pay the $50 filing fee

If you fail to file the report, you face penalties or involuntary dissolution with the state.

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North Dakota LLC Formation FAQs

    • To set up an LLC in North Dakota, you must pay an initial filing fee of $135 for the articles of organization. Each year after that, you file an annual report and pay an annual report fee of $50.

    • The fee is $135 to file the articles of organization.

    • The LLC must file an annual report after the year of formation. The cost of the annual report filing is $50 and is due by November 15 of each year. It is important to file your annual report on time to keep your LLC compliant and maintain good standing.

    • Single-member LLC. North Dakota allows an LLC to be owned by only one member, called a single-member LLC (SMLLC). An SMLLC has the same legal formation requirements as multi-member LLCs.

      Multi-member LLC. You can also set up an LLC owned by many members, called a multi-member LLC (MMLLC). The members can name one person or a group as "manager-members" to operate the LLC.

      Professional LLC. If you hold a professional license with the state, you must form a professional LLC (PLLC). Many doctors, lawyers, and accountants with professional licenses set up PLLCs.

    • Articles of organization is the initial filing accepted by the North Dakota Secretary of State. You get a copy of your articles of organization when the Secretary of State approves them. You use the copy to show banks when opening business bank accounts or applying for licenses and permits.

    • A certificate of good standing verifies the status of your LLC. North Dakota certifies your LLC complies with state law. When seeking a business loan or registering to do business in another state, you might need to show a certificate of good standing. You can request a certificate of good standing from the FirstStop portal on the secretary of state's website for a $20 fee.

    • To set up an LLC in North Dakota, you need the following:

      • An LLC business name, according to North Dakota laws
      • A registered agent
      • A registered office address (a physical street address in North Dakota)
      • A completed online application with member information
      • A filing fee of $135

    • One main advantage of LLCs is that this business structure offers personal liability protection. Your personal assets, such as houses and cars, will be protected if someone sues your business over a debt or obligation. Without this liability protection, you could lose your assets in a lawsuit against the LLC. There are also tax advantages. You can elect the tax structure you want, for example, as a corporation, a sole-proprietorship (for a single-member LLC), or a partnership (multi-member LLC). Additionally, LLCs have fewer reporting and recordkeeping requirements than corporations.

    • You keep the status of your LLC current by filing an annual report with the Secretary of State and paying a $50 fee. The report is due by November 15 each year after the year of your LLC formation.

    • No. The articles of organization is the first legal document to form your LLC. You file articles of organization with the state. An operating agreement is a document you keep for your business. An operating agreement outlines the management structure, profit and loss distributions, and members' rights and duties. Having an operating agreement for your business is a good idea, although North Dakota does not require it.

    • Yes. If you're operating under a name other than the LLC legal name you recorded with the North Dakota Secretary of State, register for a trade name in North Dakota. Other states call this a "doing business as" or DBA registration. First, search the North Dakota business name database to make sure the name is available. Then complete the application and pay a $25 fee. You must renew the trade name every five years.

    • You might need a specific permit based on your business, so you'll need to contact the licensing department regulating your business. You can start with licensing information on the North Dakota.gov new business registration page.

    • Yes. North Dakota has an online business services portal, FirstStop, where you can file articles of organization for your LLC. However, if you don't want to set up an account, you can use an LLC formation service company to handle the paperwork for you.

    • The secretary of state's address is:

      Secretary of State
      State of North Dakota
      600 E Boulevard Avenue, Dept. 108
      Bismarck, ND 58505-0500

    • Registered agent service companies file your articles of organization and maintain the good standing of your LLC. They provide registered agent services and backup to your business. Some of the key advantages of using a professional service company:

      • Privacy. Your registered agent receives service of process, meaning lawsuits. You don't alert your customers about any legal difficulties.
      • Compliance. The registered agent keeps you informed of requirements and deadlines, which keeps your business in good standing with the Secretary of State. Late or missed annual reports jeopardize your status, and you may face penalties or automatic dissolution.
      • Administrative Assistance. If you need a copy of your articles of organization or a certificate of good standing, they can order it for you.
      • Availability. The registered agent must be open to accept service of process during regular business hours of 9 a.m. - 5 p.m., Monday through Friday. Depending on your business activities, you may not be available during those times.

    • A domestic LLC is an LLC organized under North Dakota's laws. A foreign LLC is an LLC formed in another jurisdiction.

    • If you want to do business in another state, register your North Dakota LLC as a foreign LLC. Generally, when you register as a foreign LLC in another state, you must:

      • Search the business records in the new state to see if your business name is available
      • Complete their application for a foreign LLC
      • Provide North Dakota's certificate of good standing
      • Pay the foreign LLC registration fee to the state
      • Set up business and tax accounts (if necessary) in the new state
      • File annual reports in the new state (if required)

    • Any foreign (out-of-state) LLC that wants to do business in North Dakota must obtain a certificate of authority. You complete the foreign business limited liability company certificate of authority application online with the FirstStop portal. There is an online application, and the filing fee is $135.

    • If you want to close your LLC, file articles of dissolution and termination. To file your LLC's dissolution in North Dakota:

      • Follow any dissolution procedures in the LLC operating agreement
      • Close all tax and business accounts
      • File the articles of dissolution and termination online at FirstStop
      • Pay a $20 dissolution fee

    • An anonymous LLC does not list the LLC owner's name on the articles of organization. The articles of organization is a public record of the Secretary of State. Only Delaware, Nevada, New Mexico, and Wyoming allow anonymous LLC formation.

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