How to start an LLC in North Dakota
In order to form an LLC in North Dakota, entrepreneurs must file the Articles of Organization with the North Dakota Secretary of State. However, there is more to it than just that, as the entire process is a bit involved. Fortunately, this guide is here to help point you in the right direction. Below, learn how to start an LLC in North Carolina.
Consider utilizing an LLC formation service
There are basically two ways to go about forming a new LLC. You can do the work yourself, either online or through the mail, or you can use a service.
Using a professional LLC formation service is a good option for many business owners. It will help expedite and simplify the process, while also reducing the risk of errors or oversights. And, these companies offer other services that can benefit your business, like Registered Agent services, marketing features, and more.
Two highly recommended business formation services are Northwest Registered Agent and ZenBusiness. Both are excellent options – Northwest is known for exceptional service, while ZenBusiness is more budget-friendly (with plans starting at $49).
If you use a service, they will walk you through each necessary step – providing templates and resources to help you along the way. If you choose to file on your own, follow the steps laid out below.
Name your new company
Selecting a name for your LLC is the next concrete step to take. You’ll want to think carefully about the name you select; ideally, it should be memorable, relevant to your business, and professional.
But it’s not just about choosing a catchy business name: Your LLC name must also satisfy certain requirements in North Dakota. The most important is that the name is unique/distinguishable from other business names in ND. You can search a database of business names here, in order to confirm availability.
For one, the business name must contain “Limited Liability Company”, or one of the abbreviations “LLC” or “L.L.C.” It also cannot contain any government-related words. And if a word or phrase from a regulated industry, such as banking, is used, it may require additional paperwork.
You will need to decide on a business name before you begin your LLC paperwork. But before you worry too much about selecting the “perfect” name, keep in mind that you will be able to use trade names (see the section below for details).
Using a Trade Name in North Dakota
North Dakota LLCs are allowed to use what is called a trade name, otherwise known as an assumed name or a “doing business as”/DBA name. The process is explained in detail here, but essentially, the trade name is a secondary name that you can attach to your LLC, allowing you to do business under that trade name legally.
This is useful for branding purposes, and for LLCs that are acting as a parent company for several different business operations. Trade names must be registered, but the process is simple as they are simply added on to existing business registrations.
Appoint a Registered Agent
All ND LLCs must appoint a Registered Agent to represent the company. This agent will be the official point of contact for the business, for tax forms, a notice of lawsuits, and various government communications. It will be the registered agent’s address that is publicly listed on the business registration.
This agent can either be a private resident of North Dakota (including yourself or an employee), or a public business registered in the state. Most business owners choose one of two options:
Appoint themselves, or an employee/partner
Use a professional registered agent service
Using a professional service ensures that everything will be handled correctly. Additionally, it helps protect the privacy of the business owner, as the Agent’s address is posted, rather than the owner’s.
Create an operating agreement
Note: This step is optional, but strongly recommended.
An operating agreement is an optional document that is drafted and agreed upon by the business’ owner(s)/stakeholders. It is not submitted anywhere. Instead, it is kept on file by the business.
The reason that an operating agreement is important is that it establishes, in writing, two important things: operating procedures, and ownership structure. This makes it even more vital for multi-member LLCs and any business with multiple stakeholders. Operating agreements help prevent future conflicts over ownership rights because they clearly lay out all the details in advance.
The best way to create an operating agreement is to use a template provided by Northwest Registered Agent, ZenBusiness, or another business formation specialist. A local business attorney may also be able to help.
File LLC Articles of Organization
The Articles of Organization must be filed with the ND Secretary of State in order to form the LLC. This must be done online.
To file online
File the Articles of Organization with the North Dakota Secretary of State First Stop website. Pay the $135 state filing fee by credit card or bank transfer.
Once the Articles have been filed, you will need to wait for the state to process everything. This should take 1-3 weeks, depending on the current backlog.
Apply for an EIN
Almost all LLCs should obtain an employer identification number, otherwise known as an EIN. This federal tax ID is essential for hiring employees, opening business bank accounts, and more.
To apply for an EIN, fill out this application on the IRS website. It takes just a few minutes, and there is no cost to apply.
Apply for business licenses & permits
Many businesses will require additional permits and/or licenses in order to operate legally. There are state-level licenses, as well as federal and even local permits.
North Dakota does not require a general statewide business license. However, there are various permits and licenses required for certain businesses. Examples include alcoholic beverage licenses and gambling licenses.
Likewise, federal agencies may also require licenses for certain business activities. This is mostly for regulated industries, including agriculture, gambling, and alcohol.
Finally, there are permits and business licenses on a local level. Most city/county governments require a general business license in order to do business in the state. Check with your local government for details.
North Dakota LLC Tax Requirements
Now is also a good time to look into the LLC tax reporting requirements that your business will face – on a state and a federal level.
Sales tax is one – ND businesses that plan to sell taxable goods or services will need to obtain a seller’s permit in order to collect sales tax.
There may be additional tax reporting requirements, depending on the type of business.
Keep your business in good standing
Even after you have successfully formed your LLC and started operating, you aren’t done with compliance requirements! There are various ongoing tasks that all business owners need to stay on top of – at the state level, but also at the federal and local levels.
As always, the specifics vary depending on the type of business. You should do some research now to determine all the specific requirements that your business will face. It’s important to start off on the right foot from day one so that you can keep your company in good standing.
Most of these ongoing requirements relating to taxes. On a state level, you will have employer/payroll tax returns, sales tax returns, and potentially more. You will also have the LLC annual report, due each year on November 15th.
On the federal level, you will have federal income tax returns, federal business taxes, and employer/payroll taxes. Certain industries may be subject to other specific taxes, as well.
And finally, on the local level, you may have local sales/use tax returns, or annual reports due. This varies by jurisdiction.
You will also need to stay on top of business license renewals and renewals for various permits that are necessary for your industry.
Open a business checking account
Once you have an EIN, you will also be able to start a business bank account. And this is an important step, because it allows you to keep personal and business finances separate. Business owners should always set up two different accounts, and keep business transactions exclusively in the business account.
Most banks and credit unions now offer business accounts, so it’s simply a matter of finding one in your area that fits your needs. To get started, you will usually need an EIN, business license, and a small opening deposit. There may be other requirements, however, so call ahead to see what the bank requires.
This is also a good time to start looking into other business financial services, including insurance, business lines of credit/credit cards, etc.