Sections of this topic
Establishing an LLC in North Dakota is a strategic and uncomplicated endeavor that provides entrepreneurs with a platform to establish and develop their businesses. As one of the most business-friendly states in the country, North Dakota offers a streamlined and efficient framework for entrepreneurs to create a Limited Liability Company (LLC).
From selecting an original business name to submitting the necessary paperwork to the Secretary of State, establishing an LLC in North Dakota is characterized by clarity and simplicity.
This comprehensive guide will lead you through the crucial steps, ensuring that you navigate the process seamlessly and lay down a solid foundation for a prosperous business venture in the Peace Garden State.
>> Start Your LLC With ZenBusiness >>
How to Start an LLC in North Dakota: Key Steps & Tips
1. Naming Your North Dakota LLC
Once you have conducted extensive research and decided to move forward with forming an LLC, the next important step is to select a suitable name for your business. This may seem like a straightforward task, but it actually requires careful consideration. You cannot simply choose a catchy or meaningful name and start building your brand.
It’s essential to ensure that the desired name is available and distinct from other protected names. After confirming its availability, you must take the necessary measures to protect your chosen name.
Availability and Distinctiveness
The state has implemented regulations prohibiting multiple companies from using identical names to protect the branding and intellectual property rights of businesses operating in North Dakota. New companies are restricted from adopting names that closely resemble those already used.
Here’s a helpful tip: Let’s say you want to name your new restaurant “Anne & Gilbert,” but a company in North Dakota is already operating under the name “Anne and Gilbert’s.” Replacing the word “and” with an ampersand will not be enough to differentiate your desired name from the existing one. Therefore, you will need to search for available LLC names in North Dakota and consider alternative options.
Remember that your company’s formal name must include the term “Limited Liability Company” or one of its abbreviations (“L.L.C.” or “LLC”). Please comply with this requirement to ensure your chosen name is accepted according to state laws.
Interested in a Trade Name?
If you find the idea of giving your business a formal name unattractive, North Dakota offers the option to register a trade name instead. A trade name, also referred to as a fictitious name or a “doing business as” (DBA) name, typically represents a less formal version of the company’s registered name and is often used in branding and marketing endeavors.
For example, although The Walt Disney Company is the official name for the renowned studio and theme park giant, it commonly operates and markets itself under its “Disney” DBA.
The same level of research into availability and distinctiveness required for your formal name should be applied to your trade name. Failing to do so could lead to the rejection of your desired trade name.
Checking the availability of a matching URL before finalizing your company’s name is advisable, as online marketing efforts can significantly impact your business.
Protecting Your Chosen Names
One often disregarded aspect of launching a successful North Dakota LLC involves addressing intellectual property rights. There are two crucial factors to consider:
It’s imperative to ensure that your branding endeavors don’t infringe upon the rights of other companies, as this could cause legal action against your business even before it begins.
Safeguarding your branding efforts is essential to prevent competitors from exploiting your hard work. They might pursue legal action to secure protection for your name, logo, etc., and subsequently sue you for its unauthorized use.
Before committing to a formal name in your company’s articles of organization form or registering a DBA with the state, conducting a comprehensive national trademark search is prudent. This step ensures that no other U.S. company already uses your preferred name(s).
Once you ascertain the broad availability of your chosen name, you can trademark it and safeguard your intellectual property rights accordingly.
2. Choose a Designated Representative
Before filing your articles of organization, select an individual or business entity as the representative for your LLC. In North Dakota, this representative must be an adult resident of the state or a business that’s authorized to operate in North Dakota. Their role will be to receive legal documents and government paperwork on behalf of the LLC.
It’s important that the designated representative maintains a physical address within North Dakota and remains accessible during regular business hours. This ensures prompt receipt and handling of any relevant documents.
Here’s an insider tip: You have the option of appointing yourself or another LLC member who lives in North Dakota as your company’s designated representative. However, it’s not permissible for the LLC itself to serve as its own designated representative.
By carefully selecting a suitable agent for service on behalf of your LLC, you can ensure efficient communication with legal entities and government authorities.
Our Picks of the Best-Registered Agent Services
There’s no need to be concerned about dealing with paperwork when you join forces with ZenBusiness. This organization offers an array of LLC services, all designed to guarantee that your business is established accurately, with all the necessary documentation filled out and submitted to the relevant department of your state government.
Although ZenBusiness has fees for its services, clients affirm that they receive exceptional worth for their investment.
Starting a new business venture can be overwhelming for entrepreneurs, especially for dealing with the paperwork mandated by the state. Northwest understands this challenge and offers business services to guide business owners through the process of identifying, completing, and submitting all required documentation accurately and on time to the government agency.
Besides assisting with LLC formation, Northwest also provides valuable services, such as registered agent services, that benefit new business owners. These services ensure businesses stay compliant with legal requirements and have access to professional guidance every step of the way.
Bizee offers a comprehensive collection of materials to assist inexperienced entrepreneurs in identifying the most suitable business structure. By following these guidelines, Bizee simplifies the paperwork and filing procedures, clarifying concepts like a registered agent, articles of organization, and EIN.
Renowned for its credibility and favorable feedback online, Bizee is a reliable partner for aspiring business owners who are venturing into entrepreneurship for the first time.
3. Crafting Articles of Organization for your North Dakota LLC
After you have completed choosing an official name for your LLC and selecting a registered agent, the subsequent step is to file the articles of organization with the state. When you submit this document along with the required filing fee of $135, the state will review your paperwork and formally recognize that your company exists.
Prior to beginning filling out this form, please confirm that you have the following details readily available:
- The official name of your LLC
- The name and address of your LLC’s registered agent
- The primary address of your North Dakota LLC
- The names and addresses of all organizers for the LLC (along with the signature of at least one)
- A statement elucidating the purpose of your company
Should you opt to delay the establishment of your LLC, you may choose to do so for a maximum duration of 90 days by specifying an alternate effective date on your form.
>> Start Your LLC With ZenBusiness >>
4. Create an Operating Agreement
Creating an operating agreement for your North Dakota LLC is a critical step in the formation process, despite it being an internal document that doesn’t need to be filed with the state. Although North Dakota doesn’t require LLCs to have an operating agreement, it’s advisable for those running multiple-member LLCs to consider this step carefully.
An operating agreement serves as a contract and can be legally enforced in court if disputes arise between members. By drafting this contract before launching your business, when all members are on the same page, you can avoid internal conflicts and protect your interests if another member attempts to infringe upon them.
Since this is a legally binding document, it’s wise to have a lawyer review it before signing. This ensures that you take necessary precautions and receive professional guidance throughout the process.
Your operating agreement serves to clarify and formalize several vital operational understandings within your LLC. Typically, these terms encompass the following areas:
- The powers, responsibilities, and roles of each member and/or manager
- The tax structure governing your LLC
- Guidelines for distribution and managing losses
- The percentage ownership of each member in the company
- Procedures for buyouts, member modifications, and dissolution
- Provisions for indemnification and liability
5. Obtain a Business Identification Number
If you’re forming any type of business entity other than a single-member LLC and don’t plan on hiring employees, obtain a federal Employer Identification Number (EIN). This process is straightforward, free of charge, can be completed quickly online, and serves as a vital identifier for your business.
Like an individual’s Social Security number (SSN), an EIN is a unique nine-digit code only assigned to your business. No other entity will be given the same EIN until your business ceases operations.
The EIN plays a significant role in various aspects, such as recruiting employees, filing taxes, opening bank accounts, and seeking funding. When creditors or lenders need to evaluate the creditworthiness of your LLC, they use this number to verify the corporate identity of your business. It functions similarly to how the government uses it during tax filings.
Although single-member LLC operators can use their SSNs for the same purposes as those with EINs, obtaining an EIN is recommended. Depending solely on your SSN for tasks such as opening a bank account or applying for business funding can lead to personal and business finances. Exposing your SSN to unnecessary parties increases the vulnerability of identity theft.
To ensure the security of your personal information, maintain a clear separation between your personal and business finances by utilizing an EIN instead.
Send to:
Internal Revenue Service
Attention: EIN Operation
Cincinnati, OH 45999
6. Annual LLC Report Submission
Be prepared to fulfill the obligation of submitting an annual report for your LLC to the Secretary of State. This report examines various information, including the company’s name, address, registered agents, and details about its members. The fee for filing this form with the North Dakota Secretary of State amounts to $50 and must be paid by or on November 15th of every year.
You have the option to complete the form using the online portal; however, some people may choose to print it out and send it along with payment via mail to the Secretary of State.
Rectifying Filing Errors
In case you come across any inaccuracies in the filing of your articles of organization, such as a misspelling or an incorrect address, there’s a solution available. You can rectify these errors by submitting an amendment through the provided online portal. Note that this form has a filing fee of $50. Be aware that the processing time for the amendment can take up to four weeks.
Dissolving Your North Dakota LLC
To properly close a business that has finished its operations in North Dakota, follow the correct procedures. This includes closing any applicable bank accounts and fulfilling all necessary tax reporting requirements. Assets should be distributed to members based on the guidelines outlined in the operating agreement.
To dissolve the business with the Secretary of State, you must complete a Notice of Dissolution using the online portal FirstStop. Please note that this form has a filing fee of $10, and it may take up to four weeks for your request to be processed.
>> Start Your LLC With ZenBusiness >>
Ensure Your Company’s Compliance
North Dakota Business Licenses & Permits
To run your LLC effectively, it’s crucial to comply with the regulations set by federal, state, and local governments. The fees and requirements for licenses and permits will differ depending on the particular type of business license that’s needed.
North Dakota LLC Tax Filing Obligations
To uphold the positive reputation of your business, it’s imperative to stay up-to-date with the tax requirements for North Dakota Limited Liability Companies (LLCs). Depending on your business, you may be obligated to register for one or multiple forms of taxation.
Sales Tax
If your business revolves around the sale of tangible goods, it’s necessary to acquire a seller’s permit from the North Dakota Taxpayer Access Point.
The typical sales tax rate for most retail transactions in North Dakota stands at 5%, and there may be an additional local sales tax rate ranging from 1% to 3%.
Employer Taxes
To comply with the regulations in North Dakota, employers who have workers in the state are obligated to complete the registration process for unemployment insurance tax using the North Dakota Unemployment Insurance Employer Account System. It’s also required to enroll in Employee Withholding Tax by using the North Dakota Taxpayer Access Point.
Income Tax
State:
The individual income tax in North Dakota is a graduated system that varies from 1.1% to 2.9%, depending on the income of your LLC. State tax returns must be filed annually by April 18th. To calculate your taxes or determine your tax bracket, you can refer to the North Dakota Office of State Tax Commissioner website.
Federal:
To comply with tax regulations, report federal income tax. This can be done by utilizing either Form 1065 for multi-member LLCs or Form 1040 Schedule C for single-member LLCs.
Hiring Employees
To ensure legal compliance when hiring employees, follow these procedures:
- Confirm the eligibility of new employees to work in the US
- Report new hires to the state as required
- Provide workers’ compensation insurance for your employees
- Withhold employee taxes as necessary
- Display workplace compliance posters prominently in visible areas of your workspace
>> Start an LLC With ZenBusiness >>
