North Dakota LLC (6 Step Guide) – How to Start an LLC in North Dakota

Get Professional Help When Forming an LLC in North Dakota

When forming a new business, a very important decision you will have to make is what type of business entity you are going to use. One of the most common is an LLC, which stands for limited liability company. Today we’re going to talk about the state of North Dakota and how to create an LLC there. If you are interested in forming an LLC in North Dakota, then keep reading, as we will take you through the steps you will need to take, as well as lots of other helpful hints and guidance.

Most Importantly – What is an LLC?

A limited liability company is a business entity for private companies in the US. It combines parts of other business entities, such as partnerships and corporations, and because of this, benefits from flexibility and flow through taxation, which a partnership and a sole proprietorship have, plus the benefit of maintaining the limited liability status of a corporation.


Why Should You Form an LLC in North Dakota?

An LLC is a very popular business entity for many businesses that choose to start a business in the state of North Dakota. There are many reasons for this, one is that it offers personal liability protection to the business owner, so if something were to happen to the business, such as it went into depth or got sued, the owner’s personal assets are protected, which is not the case in several other business structures. As it is a separate legal structure, the owner is not personally liable for lawsuits against the business.

Not only that, but this type of business entity also has the potential to save money on taxes, it is relatively easy to form and manage and has a very flexible management structure.

North Dakota LLC Pros and Cons

Pros

  • If you register a new business in North Dakota, you will be able to benefit from a variety of tax exemptions such as all personal property is exempt from taxation, the state exempts different types of items from sales tax which is often taxed by other states, such as groceries and electricity. There is also no tax on items like office equipment or inventory, and accounts receivable.
  • The state of North Dakota also has a number of business incentives that an LLC may be able to benefit from. Some of the more popular incentives include the new or expanding business income tax exception program, the wage and salary credit program, and the North Dakota renaissance zone. You can find out a lot more information about each of these incentives online.
  • There is, of course, many other benefits that come with running an LLC in general. For example, an LLC protects the personal liability of the business owners by keeping the business and personal assets separate. They are also relatively easy to set up and run compared to other business entities, and are also generally flexible when it comes to structure and management.
  • North Dakota has a growing economy, forming over 4,000 new LLCs every single year, so it is a very popular place to form a new business.

Cons

  • There are relatively few cons that come with forming and running an LLC in North Dakota. The process of incorporating can be quite time-consuming and require a bit of paperwork.

6 Simple Steps on Forming an LLC in North Dakota

Step 1: Pick a Name for Your ND LLC 

Choose-Your-Business-Name

The very first step of the business formation process is picking a name for your North Dakota LLC. If possible, you should pick a name that is easily searchable by your potential clients, but you also need to ensure that your business name complies with the North Dakota naming guidelines. So there is a lot to think about.

Follow the naming guidelines

The state of North Dakota has a few guidelines that need to be followed when it comes to picking a business name.

  • Firstly, your business name must include the phrase ‘limited liability company’ or an abbreviation of the term.
  • There are several words that you cannot include in your business name, such as FBI, Treasury or State Department, as these could confuse your LLC with a government agency. There is a whole list of other terms that cannot be used in your business name.
  • Lastly, the business name must be unique in the state, which means it can’t already be being used by another business. You can check that your desired name is still available by using the North Dakota Secretary of State business name database. This is free to use, and will easily tell you if someone is already using the business name that you were after.

It is possible for you to reserve your name for 12 months to make sure that another business does not use the desired name before you get a chance to. This is done by filing a Reserve name Application with the North Dakota Secretary of State. There is a $10 filing fee, and this can be done both online or by mail or fax.


Step 2: Appoint a Registered Agent in North Dakota

Registered-Agent

Most states need you to have a registered agent before you can apply officially for your LLC. A registered agent is a business or an individual who is in place to accept legal papers on behalf of the state. Essentially they are the business’ contact with the state. For this reason, they must be a resident of North Dakota, or if it is a business you are using, they must be authorized to do business in North Dakota and both should have a street address in North Dakota. Other than that, who can be your registered agent is pretty flexible. In fact, you could even be your own registered agent if you wanted, but most people would not advise this as it can be quite time-consuming and tie you down to usual business hours.


Step 3: File the Articles of Organization for Your North Dakota LLC

Articles-of-Organization

Once you have a registered agent in place and you have decided on a name for your business, it is time to file your Articles of Organization (North Dakota Official form), which is how your North Dakota LLC is created. When filling out your Articles of Organization, you need to ensure it contains certain information, these include:

  • The LLC’s name
  • The address of the LLC
  • The name and address of the registered agent that you have chosen
  • The date that your LLC begins, which could either be when you are filing the Articles of Organization or a later date of your choosing
  • What your LLC does
  • The signatures of the LLCs organizers
  • The name and address of each of the organizers
  • The LLC’s term of existence

Once the Articles have been filled out sufficiently, you need to file them at the North Dakota Secretary of State, on the FirstStop website, or you can also do this by mail or fax. There is a filing fee of $135.


Step 4: Create Your ND LLC’s Operating Agreement

LLC-Operation-Agreement

You don’t have to have an operating agreement to file an LLC in North Dakota, but it is advisable that you have one, as they can be hugely beneficial in the long run. For a start, they can prevent conflict in the future, as it is written down on paper from the outset the operations of the business. It outlines roughly how the business is run, which includes the duties, liabilities, obligations, powers, and rights of the members.

As an operating agreement is not strictly necessary, therefore it does not need to be filed with the Secretary of State. Instead, it should just be filed internally with other important business documents.


Step 5: Get an EIN For Your North Dakota LLC

EIN-Employee-Identification-Number

The next step is to get an EIN. An EIN stands for Employer Identification Number, and if your company has more than one member, you must get one, even if you don’t have any employees. There are several reasons why it is advisable that you get an EIN, for example, it is needed if you are looking to open a business bank account.

If you have a one-member LLC, then you will need to get an EIN if you are looking to get employees or if you elect to have it taxed as a corporation. It is easy and free to get an EIN, just fill out the online EIN application form on the IRS website.


Step 6: File Your Annual Report

Annual-Reports

One of the requirements of having an LLC is to file an annual report every year. It must be filed with eh North Dakota Secretary of State by the 15th November every year, with a filing fee of $50. The very first annual report you need to file is due the year once you have initially registered with the Secretary of State.


Steps to Consider After Forming Your ND LLC

Although it may seem like your job is done once you have filed your Articles of Organization, there are still a lot of tasks to complete once you have formed your LLC.

Business-Bank-Account

Open a Business Bank Account

Opening a business bank account is a vital step for giving yourself personal liability protection, as it automatically separates the funds belonging to the business with the member’s personal funds. Although it is pretty simple in most cases to open a business bank account, there are several documents that you will need, such as:

  • A drivers license of the members
  • A banking resolution document
  • Copied of the original formation paperwork that you would have received when forming your LLC.
  • In some cases, the bank may also request that you provide a North Dakota Certificate of Good Standing, which proves that the business is doing well and is trustworthy in the eyes of the state.

Licenses-and-Permits

Apply for Business Permits and Licenses in ND

You will not always need business permits, but depending on what your business does and where you are conducting business, you may need to purchase specific business licenses and permits. Some cities will require you to have a business license before you even start conducting business, so it is always worth checking the requirements of the city you are in. A professional license is needed for certain service-related businesses, such as an electrician, contractors, and many others. You may also need a sale and use tax permit, which is needed if you sell certain products or services. It is always worth checking first before getting started and potentially getting costly fines.


Business-Insurance

Get Business Insurance For Your North Dakota LLC

Business insurance is very important for all businesses to protect them if anything were to happen that is out of the business’ control. There are lots of different types of business insurance, but some of the most common can be found below.

  • General liability insurance: General liability insurance is the most common type of business insurance, and most small businesses have it. It covers damages owned and medical expenses for accidents that may happen at your workplace.
  • Business property insurance: This is another common type of business insurance that is used to replace damaged, stolen or lost business property. This may also include business equipment and supplies, and anything else that you use to help run your business.
  • Business vehicle insurance: Business vehicle insurance is similar to the above, but instead is used to cover company vehicles, and depending on the insurance, also sometimes personal vehicles if they are used for business.
  • Workers Compensation Insurance: If you have employees, this type of insurance is mandatory in most states. If an injury or accident happens at work to one of your employees, then this type of insurance should cover the medical expenses.

Create a North Dakota LLC With Professional Help Today

Many people will choose to form an LLC themselves. BY following the steps above, it should be possible to form your LLC without any outside help, however, the process can very time-consuming and often confusing, especially for those that have never formed a business before. There is plenty of help out there, with many businesses offering LLC formation services. Some businesses have different strengths than others and come with different price tags, so it is worth conducting some research before you decide on a company to go with. We have outlined two of the best and most popular LLC formation service companies below.

#1: Starting North Dakota LLC With Zenbusiness

Zenbusiness is one of the most popular LLC formation services out there, despite the fact they are relatively new to the industry. They have been used by a huge range of new businesses, and many seem to have liked the service they have received thanks to the huge number of positive reviews that they have got online. The company has one of the lowest prices when it comes to LLC formation, with their most affordable package coming in at just $39, and has everything you need to successfully form a business, including a full year of registered agent service.

$49

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Rating: 4.8/5
Review count: 4500+

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Form an LLC today with ZenBusiness for only $49. They Have 98% customer satisfaction rating and over 4500+ verified reviews.


#2: Creating North Dakota LLC With Northwest

Northwest Registered Agent is another popular LLC formation service company. It has been around for longer than Zenbusiness and again has thousands of positive reviews online. One of the biggest positives of Northwest is its customer service. They are known for having incredible customer service, with the company representative responding very quickly, and do as much as they can to answer any questions and queries you may have. They are not the cheapest, but in many cases, you get what you pay for. This company also offers a year of registered agent service.

Use our special promo and get an LLC today with Northwest & get Registered Agent 1 year for free! Hassle-free and quick.


FAQs About North Dakota LLCs

How much does it cost to form an LLC in North Dakota?

The initial fee for filing for an LLC in North Dakota is $135, which means it is not one of the cheapest, nor one of the most expensive states to form an LLC in. Another fee you need to think about is the annual report fee, which is an additional $50 every year.

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About the Author
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Founder & author

Ian Broderick is an avid author and owner of LLCGuys.com. He's been involved with the LLC formation field for over 4 years. On top of that, he has worked in several well-known LLC formation service providers. Now he decided to share his knowledge and advice with everybody. Since there are a lot of questions and concerns surrounding this field - his aim is to make LLCGuys a top-notch information provider in regards to LLC creation, service reviews and etc..

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