How to Start an LLC in North Dakota (August 2024 Update)

A limited liability company (LLC) is one of the most popular business structures for small business owners because it offers personal liability protection like a corporation along with the pass-through taxation flexibility of a partnership or sole proprietorship. Forming an LLC in North Dakota can help shield your personal assets if your business is sued while also providing tax advantages.

This comprehensive guide will walk you through the key steps for starting an LLC in North Dakota, from naming your business and appointing a registered agent to obtaining licenses and filing annual reports. Even if you’re not quite ready to launch, you’ll learn valuable information about LLC requirements in North Dakota, like registered agent rules, filing fees, and notable compliance regulations. Read on to find out everything you need to know to establish an ironclad North Dakota LLC.

Name Your North Dakota LLC

Choosing the right name for your LLC is an important first step when starting a business in North Dakota. Not only does your name need to meet state requirements, but it should also reflect your brand identity.

Brainstorm and Research Names

Come up with a list of possible names for your North Dakota LLC based on your business purpose, industry, location, values, or other defining characteristics. You can use an online business name generator tool to discover creative options.

Once you have a few contenders, thoroughly research them to avoid legal issues down the road. Search the North Dakota Secretary of State business database to see if another business entity is already using your preferred name. You can also investigate possible trademark conflicts through the United States Patent and Trademark Office.

In addition to legal availability, check if domain names are available that match your top business name candidates. Securing the proper domain will allow you to create an intuitive website URL in the future.

Review North Dakota Naming Rules

In North Dakota, LLC names must adhere to certain regulations, so double check requirements before settling on a final choice. Specifically:

• The name must contain the words “limited liability company,” the abbreviation LLC, or L.L.C.
• It cannot duplicate another North Dakota business name already on record with the state.
• Restricted words that imply you are a different business type cannot be included without proper approvals and licenses.
• Deceptive or intentionally confusing names are prohibited.

See North Dakota Century Code 10-32.1-11 for full details. If your desired name complies, you can move forward with LLC registration.

Consider a Trade Name/DBA

A trade name or DBA (“doing business as”) provides more flexibility for branding and marketing your North Dakota LLC. You don’t necessarily have to operate under your formal legal name. For instance, “Bob’s Construction, LLC” could use “BobCo Builders” as its DBA name.

Registering a trade name also gives you exclusive use rights in North Dakota. Just like your main LLC name, you must ensure availability and file the appropriate paperwork with the state (a Trade Name Registration form).

Appoint a Registered Agent in North Dakota

A key requirement for starting a North Dakota LLC is designating a registered agent, which is an individual or business authorized to receive official mail and legal forms on behalf of your LLC. They must have an in-state physical address (not a P.O. box) and be available during normal business hours.

You can serve as your LLC’s registered agent if you meet residency and availability regulations. However, most entrepreneurs prefer to use a professional registered agent service. Working with an expert third-party helps maintain privacy since your personal home address won’t be listed on public records. It also gives you reliable coverage if you’re ever out of town or unable to accept legal documents in person on behalf of the business.

File Articles of Organization

To formally register your North Dakota LLC with the state, you must file Articles of Organization and pay a $135 filing fee. This documentation essentially confirms the creation of your business entity. It requests basic information like:

• Your LLC’s name and main office address
• Registered agent’s name and service location
• Effective formation date
• Principal business purpose
• Organizer names and signatures

You can submit the paperwork online through North Dakota's FirstStop portal or mail physical forms to the Secretary of State office. Processing times average one week for online filings and up to four weeks for mailed submissions.

Operating Agreement

Although not mandated, drafting a detailed North Dakota LLC operating agreement is highly recommended. This governing document outlines internal business practices and financial/managerial workflows in a binding contract. Even single-member LLCs can benefit from putting procedures and contingency plans for adding members or dissolving the company in writing.

Typical operating agreement contents include:

• Member capital contributions and ownership percentages
• Tax structure election (default = pass-through taxation)
• Accounting and record-keeping procedures
• Profit/loss distribution plan
• Process for selling shares or adding/removing members
• Voting procedures
• Dispute resolution tactics
• Dissolution protocol

Keep your operating agreement private since it does not need to be filed with the state of North Dakota or any other government agency. Make sure to review it carefully and vote to ratify it one it’s finalized.

Obtain an Employer Identification Number (EIN)

Nearly all North Dakota LLCs need an Employer Identification Number (EIN), which serves as a unique business identifier for tax and employment purposes. Also referred to as a federal tax ID number, applying for an EIN is free through the IRS website and only takes a few minutes.

Single-member LLCs without employees can use their Social Security Number instead. However, most banks require an EIN to open business accounts. Obtaining one also helps maintain privacy by separating your LLC’s records from your personal finances and tax information.

Additional Startup Considerations

Finalizing a few supplementary items will help ensure your North Dakota LLC begins on the right foot. Be sure to:

• Open a business bank account using your LLC formation paperwork and EIN. For more information, take a look at our article on the key benefits of business checking accounts
• Register for state and local tax accounts like sales tax permits as necessary
• Familiarize yourself with North Dakota business taxes
• Determine relevant licenses and permits for your LLC’s industry and location(s)
• Purchase business insurance to safeguard your assets and earnings

Keep Your North Dakota LLC Compliant

Maintaining good standing is important for preserving your liability protection and avoiding administrative dissolution. Primary ongoing North Dakota LLC responsibilities include:

File Annual Report

All North Dakota LLCs must submit an annual report detailing any changes to name, purpose, management, etc. by November 15 each year following initial registration. Reports are submitted to the Secretary of State and cost $50 if you meet the deadline (fees rise to $100 after mid-November). Consider authorizing a registered agent service to handle your filing.

Stay Up to Date on Taxes

Even though North Dakota does not levy state personal or corporate income tax, you must adhere to federal self-employment and payroll tax rules. Depending on your LLC structure and activities, you may need to collect and remit sales tax as well. Review all requirements with a small business accountant.

Comply With Business Licensing

Research federal, state, and local licensing needed for your LLC’s industry niche and geographic areas of operation. Regulations vary significantly based on location and business type. Compliance services can help you identify and track necessary permits and approvals if you find the process overwhelming.

Conclusion

Launching a North Dakota LLC provides small business owners with liability protection and favorable tax treatment compared to other entity options. Although forming an LLC requires various legal and compliance processes, this guide breaks down key steps from naming your business to fulfilling ongoing regulations so you can feel fully prepared.

Be sure to thoroughly research all statutes related to LLCs in North Dakota as well as specific rules pertaining to your desired industry niche. If any aspect of the formation or ongoing maintenance process seems unclear or overly burdensome, don’t hesitate to enlist help from a small business lawyer or LLC formation service. Investing in professional expertise can help prevent costly regulatory missteps down the road.

With a reliable registered agent, detailed operating agreement, proper business licenses in place, and commitment to staying compliant, your North Dakota LLC will be well on its way to prosperity. Best of luck with your new business venture!