How to Form a North Dakota LLC in 10 Steps
In a Limited Liability Company (LLC), one or more persons may own a portion of a company. It is a common business structure. The LLC profits are passed through to its members. The LLC does not file a separate tax return the way a corporation does. Owners of an LLC also have reduced exposure to liability based on company activities.
There are several steps to forming a Limited Liability Company, but it is a straightforward process.
1. Select Your Company Name.
Make sure your company has a name that no other company has the right to use. You can conduct your own name search, or at SunDoc, we can run your name search or reserve your LLC name for you too (with a nominal fee).
It is critical that the name you choose is available with the State of North Dakota. You'll also want to check whatever name you choose for a registered trademark.
2. Understand the LLC Organizer Requirement.
You are required to name an LLC organizer on the Articles of Organization form. By preparing and filing your own Articles, you are, by default, the organizer.
At the same time, you can choose anyone to be your organizer; it doesn’t have to be a manager or a member of your LLC. Often, it’s an attorney who has helped in the formation of your LLC in some way. It can also be SunDoc if you choose to have us file your Articles.
3. Designate a Registered Agent.
Your chosen registered agent will have to be named on your Articles of Organization form. When choosing a registered agent, you may select either a firm or an individual. For more information, use our article, Registered Agent Service, which provides additional facts on what makes registered agents so important to your LLC.
4. Decide Your Ownership and Management Structure.
You will be asked how you want your LLC to be managed on your Articles of Organization form. Essentially, you are choosing between member management and manager management, but there are three options total. Your LLC can be managed by one manager, managed by multiple managers, or managed by all members.
5. Set Up an Operating Agreement.
It’s possible you will need an operating agreement, depending on your entity type. This is a document that most LLCs need as it outlines specific regulations, rules, and provisions for the functional and financial aspects of your company. The core purpose of the document is to govern the internal operations of the business in a way that suits the specific needs of the owners.
Your operating agreement will create a governance for your business, including creating an outline of how your business is governed, how working capital is managed, and how you pay out profits. Critical matters of money, voting, liability, and fiduciary constraints are at stake here. You may also wish to consult an attorney for advice.
6. File the Articles of Organization.
Your state will probably require you to file a form called the Articles of Organization, providing your company details. The acceptance of your Articles of Organization by the State of North Dakota is the moment of your company's creation.
In order to file your Articles of Organization, you will need the name and address of your company, your LLC organizer, your registered agent, and your management method. You may require the member names to be filed.
SunDoc can file the Articles of Organization for you if time is an issue or if you'd prefer to have a filing service handle your paperwork.
7. Obtain an EIN and Open a Business Bank Account.
Congratulations! You are now a registered North Dakota LLC. Any LLC with more than one member must file with the IRS for an EIN, Employer Identification Number, whether or not you have employees. You can file with the IRS yourself, or SunDoc can file for you.
When you have an EIN, you can get started managing your business’s finances as well. This means possibly hiring an accountant and opening a bank account for your business (which will require that you have an EIN). Use this account when you purchase anything on your business’s behalf. If you’ve used your own bank account in the past, reimburse yourself.
8. Pay North Dakota State Taxes.
It’s possible you’ll have to start paying North Dakota state taxes starting in your first year. From then on, you’ll need to pay yearly as well. Collecting sales tax is something else you’ll have to do if you sell any goods in ND. The State of North Dakota’s tax web site provides additional tax information.
9. Determine Necessary Licenses and Permits.
Most people don’t realize this, but you’ll probably need to have business licenses or permits as a new business in North Dakota. Check the state’s website for businesses to see what’s required of you; often, you’ll be surprised at the licensing you’ll need to obtain. Most of these licenses and permits are needed at the local (city and county) level.
10. File an Annual Report (Biennial Report or Initial List).
Right after you form your LLC in North Dakota, it’s time to file what’s called a Biennial or Annual Report. This report is required every one or two years, but it depends on the state. The form generally requires basic information about your company that the state needs to know. It’s something you’ll probably have to redo should you make significant changes to your company down the line as well.
It is very important to file within the required time. It can cost you as much as ten times the normal filing fee if you file late! If you prefer, SunDoc can file your Annual Report/Biennial Report and other routine filings for you, reliably and on time. All LLC forms, including the report form, can be found on the North Dakota business web site.
Important Notice: It is beyond the scope of this article to discuss your potential insurance needs, or matters relating to employees. You should consult an attorney or accountant with any questions about legal or financial matters. Please note that nothing in this article can be construed as legal, tax or accounting advice.
For additional learning, please visit our LLC FAQs.
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