- Step 1. Setting Up Your LLC in North Dakota
- Step 2. File Your Articles of Organization
- Step 3. Create an Operating Agreement
- Step 4. Get an EIN/Tax ID Number
- Step 5. Keeping Your LLC Running
- North Dakota LLC Resources
For new or existing business owners in North Dakota, the process of starting an LLC can seem overwhelming at first. After all, there are regulations and filings that are required to ensure your business follows LLC law in the state. To help you understand the LLC set up process more easily, we’ve created a guide that lays out each step you need to take.
Below we will discuss the first steps in setting up your business and the necessary paperwork to be filed to establish your LLC. Then, we will give you information on how to keep your business running in the state, along with answers to some frequently asked questions. Read on to learn how to start your LLC in North Dakota for as little as $135!
Step 1. Setting Up Your LLC in North Dakota
The steps involved in setting up your North Dakota LLC include naming your business, establishing operations guidelines, and following several LLC-creation rules.
Naming Your North Dakota LLC
Naming your LLC is one of the most important steps in starting your business. The name you choose must be unique and completely distinct from other businesses in North Dakota. It must also follow a few naming rules.
Legally Required Designation
Adhering to North Dakota LLC regulations, the name of your LLC must have the phrase “limited liability company” in it or contain one of the following approved abbreviations:
As you search for an LLC name, be sure to pick one that is different from other businesses in the state. You can do this by performing an available name search with the North Dakota Secretary of State’s office.
If you see a name that you would like for your LLC, you can file a Reserve Name Application with the Secretary of State’s office. This form will reserve your chosen name for up to 12 months before your LLC’s official establishment. The filing fee is $10, and you can use the North Dakota First Stop business portal to file your reservation or mail the completed document to the address listed on the form.
You may also want to perform an available domain name search when deciding on your LLC’s name. Even if you don’t want to set up a website immediately, it can save you stress when it comes time to reserve the perfect domain name.
As you select an LLC name, you should be careful not to include words that may risk confusing your business with a state or federal government entity. This includes, but is not limited to, words like “Treasury,” “IRS,” and “State Department.”
You also need to keep in mind that words such as “bank,” “trust,” “attorney,” or other professional indicators may require the presence of a properly licensed individual in your LLC — along with additional paperwork. North Dakota does allow the formation of professional LLCs, so if you know you will be offering professional services, you may want to consider this type of LLC set up instead. More information on this can be found here.
Using a Trade Name
North Dakota LLC law allows you to use a trade or DBA (doing business as) name for your LLC in the state. This means that while you can continue using your legally registered LLC name on all official state and federal documents, you can use your DBA name when interacting directly with the public.
To register your DBA name, you need to file a Trade Name Registration form with the Secretary of State’s office. This can be done online through the North Dakota First Stop portal or by mailing the completed document to the address on the form. The Trade Name Registration has a $25 filing fee and is good for 5 years before requiring renewal.
Appoint a Registered Agent
North Dakota requires every LLC in the state to have a registered agent appointed. Your registered agent is responsible for receiving all legal documents, government communications, and tax documents for your LLC; they essentially act as a contact between your business and state or federal agencies. They are also the party that is contacted in the event of a lawsuit against your LLC.
You can appoint any North Dakota resident, including a member of your LLC, or a business that is authorized to conduct operations in the state as your registered agent. As long as your appointee has a valid North Dakota address and is available during regular business hours, they are eligible to be your registered agent.
You can access a list of commercial registered agents through the North Dakota Secretary of State’s website.
Step 2. File Your Articles of Organization
To fully establish your LLC, you need to file Articles of Organization with the Secretary of State’s office. This document should include essential information about your business, some of which you can preview below.
- Your LLC’s name
- Your LLC’s principal office address
- Your LLC’s registered agent’s name and address
- Your LLC’s establishment date, if not immediate
- Your LLC’s time of existence, if not perpetual
- Your LLC’s purpose
- Your LLC’s organizers’ names and addresses
- The signatures of any LLC organizers
The Articles of Organization must be filed online through the North Dakota First Stop business portal. To use the portal, you need to navigate to the “forms” section and click on the option that states “Business Limited Liability Company Articles of Organization.” From there, you will be prompted to create an account and follow the instructions to file your form.
There is a $135 filing fee to file your Articles of Organization.
Step 3. Create an Operating Agreement
It is not required by North Dakota for LLCs to create an operating agreement, but you should probably form one anyway. An operating agreement sets clear guidelines for how your LLC’s business is managed. It also defines the rights of members and managers and gives instructions on how to conduct any dissolution operations. Operating agreements can also give guidance for what to do if your LLC experiences a lawsuit.
Keep in mind that if you don’t set these guidelines ahead of time, North Dakota LLC law will determine how your business is handled in the case of disputes, and this might not be in your best interests.
Additionally, if you are applying for LLC financing, most business bank accounts, loan applications, and other business services will require you to send a copy of your operating agreement along with your application to demonstrate your LLC as a separately operating business entity.
Step 4. Get an EIN/Tax ID Number
After your Articles of Organization have been filed and processed, any LLC that has more than one member — or any single-member LLC that wants to either hire employees or be taxed as a corporation — must apply for a Tax ID number, also known as an EIN (Employer Identification Number). This number is obtained through the IRS and is free to apply for.
You will use your EIN to identify your business to the IRS on all tax documents and necessary government filings; the number acts like a social security number for your LLC. If you want to hire employees, file federal taxes, open business bank or credit accounts or apply for business funding, you need an EIN.
You can file the EIN application online or by mailing it in. Keep in mind that if you are a foreign filer or do not have a social security number, you must file for your EIN through the mail.
The quickest and easiest way to apply for your EIN is online; you will receive your number once your application is completed. Visit the IRS website to apply for your EIN for free.
You must fill out this form when applying for your LLC by mail. If you are a foreign filer or do not have a social security number, leave section 7b blank. Mail the completed form to the address below. You can follow up on any questions with the IRS at (267) 941-1099.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Step 5. Keeping Your LLC Running
Even after your LLC has been established, there are some tasks that you must complete to ensure that your LLC stays running as smoothly as possible.
File Annual Reports
All LLCs in North Dakota are required to file an annual report with the Secretary of State. The first report is due November 15th each year, starting with the year after the LLC was established. The annual report must be filed online through the North Dakota First Stop portal and carries a $50 filing fee.
Separate Your Business Finances
North Dakota does not require LLCs to create separate bank accounts, but you may want to consider doing so anyway. A business credit or debit account can help keep your LLC’s finances separate from any personal ones. This establishes your LLC as an independently operating business, which is especially helpful in the case of lawsuits or other legal issues surrounding your LLC.
When opening a debit or credit account for your LLC, you most likely need to show your Articles of Organization, operating agreement, EIN, or other LLC documents. You should also compare all your banking options before making a choice on where to open an account. Different banks have varying minimum required balances or credit spending limits, and you want to be sure that you select what is best for your LLC’s needs.
Keep Up With Federal and State Taxes
It is essential that you keep up with both federal and state taxes while running your LLC if you want to avoid major tax penalties and fines.
Federal Tax Requirements
There are several tax structures you can choose from that meet different company needs, as each structure comes with its own unique federal taxation. This article can help you gain an in-depth understanding of the differences between each type of tax structure and help you decide which is best for you.
In general, most LLCs are taxed as sole proprietorships or partnerships. This means you are expected to file Schedule C along with your individual income tax return to declare any income that you receive through your LLC (your LLC acts as a pass-through entity in this situation).
When using this tax structure, you should keep in mind that you most likely need to pay self-employment tax (which has a rate of 15.3%), in addition to any income tax. You may also need to make quarterly estimated tax payments to avoid any IRS fines; the IRS website gives more details on this.
You can also choose to have your LLC taxed as a corporation, like an S Corporation or a C Corporation. You must fill out IRS Form 8832 and IRS Form 2553 to declare this. After these forms have been processed, your LLC will be treated as a corporation and expected to file a separate corporate tax return with the IRS.
North Dakota Business Taxes
There is no general business tax in North Dakota, but LLCs must pay state income taxes. For LLCs that are taxed as sole-proprietorships and partnerships (and are considered pass-through entities), these taxes are reported on your individual state income tax return.
LLCs that elect to be taxed as an S or C corporation may be liable to pay corporate taxes through the Office of the Tax Commissioner. More information about that can be found here.
Sales and Use Taxes
If your LLC sells goods or services, you may need to pay sales and use taxes to the Tax Commissioner’s office. More information on who is liable to pay these taxes and the current taxation rate can be found here.
State Employer Taxes
If your LLC has employees, you are liable to pay withholding taxes and unemployment insurances taxes. Keep in mind that you may also need to pay these taxes on a state level.
More information on state withholding taxes can be found through the Office of the Tax Commissioner’s website, while information on unemployment insurance taxes can be found through Job Service North Dakota’s UI Easy portal.
Acquire Necessary Permits and Licenses
While there isn’t a general business license requirement in North Dakota, you may be required to obtain permits and licenses on a city or county level. Check with the County Clerk’s Office in the area your LLC is operating in to ensure you are meeting all licensing requirements for your business.
If you are offering professional services through your LLC, you may need to meet additional state and local licensing requirements. More information about business permits and licensing can be found here on the North Dakota State Government portal.
Additionally, your LLC may need to obtain permits or licenses on a federal level, though whether this is needed depends on the type of business you are running. For help determining if you need to meet additional federal requirements, you can use the licensing directory on the U.S. Small Business Administration’s website.
North Dakota LLC Resources
The below list of resources can guide you through every step of the North Dakota LLC establishment process.
- Available LLC name search
- Reserve an LLC name
- Available domain name search
- Register a DBA name
- North Dakota Commercial Registered Agents
- Articles of Organization online file
- North Dakota First Stop business portal
- IRS EIN free online application
- North Dakota Office of the Tax Commissioner
- North Dakota UI Easy portal
- State licensing information
- U.S. Small Business Administration
The answers to these frequently asked questions can reassure any remaining worries about the LLC formation process in North Dakota.
In North Dakota, it costs $135 to file the Articles of Organization, $10 to reserve an LLC name, and $25 to register a DBA name.
The cheapest way to start your LLC in North Dakota is to file your Articles of Organization online without first reserving an LLC name or registering any type of DBA name. Doing it this way will only cost you $135.
In North Dakota, you must file state reports on an annual basis. This report is due by November 15th each year, starting with the year following the one your LLC was established in. It costs $50 to file the annual report, and it must be filed online through the First Stop business portal.
If you are finished conducting business under your LLC, you must file Articles of Dissolution with the North Dakota Secretary of State’s office. This can be done by accessing the “Terminate Business” option on the First Stop business portal and following the filing instructions. There is a $30 fee associated with filing this form.
You may also need to consult your LLC’s operating agreement, if you have one, and follow the agreed-upon steps for paying off debts and terminating your business’s operations.