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North Dakota LLC Formation

Forming a North Dakota LLC (limited liability company) could seem like a difficult task, but many business owners manage to complete the process on their own. If you're interested in forming an LLC in North Dakota, you must become familiar with state law requirements. Failure to meet state law requirements could lead to penalties down the road. Once you understand the state law requirements and steps to form your LLC, you can put your plan into action and make your dream a reality.

We make business formation EASY. Learn about our DIY business formation services here.

Steps To Start an LLC in North Dakota

Step 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.

Under North Dakota law, the business name you choose can't be the same as or confusingly similar to a business name that's already registered. 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. Submitting a name to the Secretary of State that is taken may lead to the rejection of your filing.

There are also naming requirements. Note that the LLC name that you choose must include one of the following entity designators: "limited liability company," "LLC," or "L.L.C." Make sure that you don't include any terms that would 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.

Step 2: Appoint 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 would handle receiving your paperwork when it's served. 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 registered agent service if you can't think of a suitable individual to handle service of process for your company.

Step 3: File Articles of Organization

Perhaps the most essential part of forming an LLC is filing the Articles of Organization. The Articles of Organization should include the following information:

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

There is a filing fee for Articles of Organization which varies from state to state. North Dakota Articles of Organization cost $135 to file online.

Step 4: Prepare LLC Operating Agreement

The operating agreement for your LLC is an internal document that you don't need to file with the North Dakota Secretary of State. It's meant to be kept for your records to refer to it in times of conflict. Operating agreements often include provisions regarding the handling of profits and losses, ownership, liabilities, and the rights and responsibilities of members of the organization. If there's ever a dispute, you can look to the operating agreement for guidance.

Step 5: Get an EIN

Getting an EIN (Employer Identification Number) or Tax ID number is required for most businesses. You'll need an EIN to open up a business bank account and hire employees.

An EIN is a social security number for your business. The IRS (Internal Revenue Service) assigns these numbers to business entities for identification purposes. You can apply for an EIN online for free.

Step 6: Open a Business Bank Account

One main advantage of LLCs is that this business structure offers personal asset 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.

To maintain limited liability, you must keep your personal and business funds separate. This is why it's necessary to get a business bank account and a business credit card or debit card as soon as possible. It will also allow tax preparation and accounting to be much easier.

Frequently Asked Questions About North Dakota LLCs

1. Do I need a business license or business permit for my LLC?

Business licenses and permits are handled on the local level. You might need a specific permit based on the type of business you're operating, so you'll need to contact local authorities to ensure that your business complies.

2. How do I handle sales tax for my business?

You may need to register with the North Dakota Office of the State Tax Commissioner if you're collecting sales tax for the sale of items.

3. Are there ongoing obligations after I create my LLC?

There is a requirement to file annual reports in North Dakota. The cost of the filing is $50, and you can file conveniently online.

4. Do I need a North Dakota DBA?

You only need to get a trade name in North Dakota if you're operating under a name other than the LLC name you filed with the North Dakota Secretary of State. You don't have to register a DBA or fictitious name if you're only using the legal business name for business activities.

5. How much does it cost to form a North Dakota LLC?

It costs $135 to file Articles of Organization, and there's a $10 fee if you'd like to reserve your business name before you file.

Note: State laws are always subject to change through new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct legal research to verify the state law(s) you are researching.

Get Help with the North Dakota LLC Formation Process

Fortunately, forming an LLC can be a straightforward process with FindLaw’s Business Formation Service. If you have further questions, it's a good idea to speak to a local business attorney.

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