Start an LLC in North Dakota

Quick facts about forming a North Dakota LLC

Filing Fee	$135
Processing Time	2-5 business days
Annual Report Fee	$50, due each year by November 15
Registered Agent Required	Yes, must have a physical North Dakota address
State Franchise Tax	None for LLCs
Business License	No statewide business license, local or industry-specific permits may be required
Managing Authority	North Dakota Secretary of State

How to start an LLC in North Dakota in 5 steps

When you decide to start a business, the next decision you should make is what type of legal structure is best for your business. Traditionally, the law only recognized three legal entities: sole proprietorship, partnership, or corporation. Today, we have hybrid options that combine many of the benefits of those traditional options. One of those is a limited liability company, commonly referred to as an LLC. An LLC offers many of the benefits found in a corporation without the difficulty and complexity involved in forming and operating a corporation. 

A limited liability company is a distinct legal entity owned by “members,” although it shares some characteristics with both partnerships and corporations. One of the primary advantages of registering an LLC is that, as the name implies, an LLC offers limited personal liability to the members for debts and liabilities of the company.

Specific benefits of forming your LLC in North Dakota include:

• North Dakota has comparatively low filing fees associated with forming an LLC
• North Dakota allows the formation of both foreign and professional LLCs
• A North Dakota LLC can be member-managed, manager-managed, or board-managed
• North Dakota has a comprehensive law governing the operation of LLCs in the state
• You can form a single-member or multiple-member LLC

In this guide we’ll cover all steps necessary to start your LLC, as follows:

1. Name your North Dakota LLC
2. Choose your registered agent
3. File articles of organization
4. Create an operating agreement 
5. Apply for an EIN

Let’s explore each in detail below or with a easy to follow video:

Step 1: Name your North Dakota LLC

After choosing a limited liability for your company structure, you must decide on an official name for your business. The name of your North Dakota LLC must include the phrase “limited liability company” or the abbreviation “LLC” or “L.L.C.”

The name of your North Dakota LLC cannot contain the following words/phrases or their abbreviations: corporation, incorporated, limited partnership, limited liability partnership, or limited liability limited partnership. Furthermore, the words “limited” or “company” cannot be used in your business name without association with the words “limited liability company” or one of the acceptable abbreviations (LLC or L.L.C.).

If you plan to form a professional LLC, defined as a limited liability company made up exclusively of licensed professionals, the name must contain the words “professional limited liability company” or “limited liability company,” or the abbreviations “P.L.C.,” “PLC,” “P.L.L.C.,” “PLLC,” “L.L.C.,” or “LLC.”

In addition, your North Dakota business name must not be the same, or deceptively similar to, the name of the following entities already registered to do business in North Dakota:

• Another limited liability company
• A corporation
• A limited partnership
• A limited liability partnership
• A limited liability limited partnership

The last step before officially naming your business will be to make sure another business is not already using the name you have chosen. You can conduct a ND Secretary of State business search using the database, which includes all active records and those records inactivated within the past twelve months. To be certain that your name does not conflict with an existing name, try several variations of the name when conducting your search. For example, if your chosen name is “Best North Dakota Widgets, LLC” you might also search for “North Dakota Best Widgets, LLC” and “Best Widgets North Dakota, LLC.”

Step 2: Choose a registered agent

You must designate a North Dakota registered agent for your LLC. A limited liability company cannot designate itself as its registered agent. An LLC must continuously maintain a registered agent to receive all legal documents for the LLC, including service of process if a lawsuit is filed against the company. The registered agent is expected to forward these documents to the LLC. A registered agent may be:

• An individual resident residing in North Dakota
• A domestic or foreign corporation that is registered with the Secretary of State and has a business office in North Dakota; or
• Another domestic or foreign limited liability company registered with the Secretary of State and has a business office in North Dakota

Step 3: File articles of organization

Used to form an LLC, Articles of Organization are similar to the Articles of Incorporation used to form a corporation. Articles of Organization provides the framework for operating the business by outlining the rights and powers of the members, the duties, liabilities, and obligations between the LLC and the members, and the obligations, liabilities, and duties that the members have to each other.

Once your Articles of Organization are filed and approved, your LLC will be officially registered with the state. To maintain good standing, you’ll need to submit your North Dakota annual report each year and keep your business information current with the Secretary of State.

State fees

Several mandatory fees will be required when forming your LLC in North Dakota. Because not every business will file the same forms and documents, the total North Carolina LLC cost will vary; however, some of the most common fees you can expect to pay when forming a North Dakota LLC include (most are optional, the articles of organization filing fee is mandatory):

• State filing fee for the articles of organization $135
• Amendment to articles of organization $50
• Name reservation $10
• Transfer or cancellation of name reservation $10
• Registered agent/office change $10
• Annual report $50
• Trade name registration $25
• Service of process $25

Requirements

The requirements for a North Dakota LLC are governed by Chapter 10-32 of the “Limited Liability Company Act.” One or more members are required to form a North Dakota LLC, and all members must be over the age of 18.

An LLC may be organized to transact any business except banking and insurance (insurer backing claims); however, an insurance agency selling insurance products may be formed as an LLC. Farming is permitted if the LLC complies with the provisions of Chapter 10-06.1 of North Dakota’s Corporate and Limited Liability Company Farming Act.

If you are forming a professional LLC, you must provide certification from the respective licensing board evidencing the licensure of all members. A professional LLC is one created by “licensed professionals” defined as “people who have been legally authorized to provide a professional service to the public that requires a license prior to rendering the service.”

A foreign LLC is one that has filed articles of organization under laws other than the laws of North Dakota. To transact business in North Dakota, a foreign LLC must obtain a certificate of authority from the Secretary of State.

To form an LLC in North Dakota, you must file Articles of Organizations that may include additional information but must include the following:

• Type of entity being formed (LLC, foreign LLC, PLLC)
• The name and address of the LLC, including proof of licensure if a PLLC
• Purpose of the LLC
• Duration of the LLC (perpetual or for a specific term of years)
• Name and address of the registered agent
• The effective date of formation
• Name, address, and signature of the organizing member(s)

How to file

You can file your North Dakota LLC Articles of Organization online using the First Stop website, by mail addressed to the Secretary of State of North Dakota, Business Services, 600 E Boulevard Avenue Dept 108, Bismarck, ND 58505-0500, or via fax at 701-328-2992.

Step 4: Create an operating agreement

Although you are not required to file an operating agreement with the SOS when registering your North Dakota LLC, creating one is an essential step in the formation and operation of your LLC. Governed by the provisions of the North Dakota Uniform Limited Liability Company Act (ULLCA), an operating agreement provides the framework for how your LLC will be financed, managed, and operated once formed. According to the ULLCA, the North Dakota LLC operating agreement will govern the following:

• Relations among the members as members and between the members and the limited liability company
• The rights and duties under this chapter of a person in the capacity of manager or governor
• The activities of the company and the conduct of those activities
• The means and conditions for amending the operating agreement

The operating agreement (“OA”) will specify how the LLC is to be managed. A North Dakota LLC can be member-managed, board-managed, or manager-managed. The default form of management is a member-managed LLC in North Dakota unless the Operating Agreement specifically states that the LLC is to be manager or board-managed.

In a member-managed LLC, management authority is equally shared among all members. In a manager-managed LLC, a separate manager or group of managers (who may or may not also be members) is designated to manage the company. A board-managed LLC is managed by a board of governors chosen by members holding a majority of the voting power of the members.

The OA may go into great detail regarding the management of the LLC or simply provide a general management structure; however, including detailed management terms and provisions in the OA reduces confusion and the likelihood of disputes in the future.

The OA should also include information about ownership shares, initial financial contributions, and future profit allocation. You may also decide to include a buy-sell agreement within your OA that addresses what happens if certain triggering events occur, such as the death, disability, divorce, or bankruptcy of a member.

One of the primary reasons to create an LLC is to “limit” the financial responsibility of members for debts and liabilities of the company. As such, your OA should include provisions that address the protection intended to be bestowed on members to reduce the likelihood that a member could be held personally liable for company debts/liabilities down the road.

There is no legal requirement to create an Operating Agreement for your North Dakota LLC, nor are you required to file one with the SOS. If you do create an Operating Agreement, however, the North Dakota Uniform Limited Liability Company Act will govern the agreement.

Step 5: Apply for an EIN

As an individual taxpayer, your Social Security number is used by the Internal Revenue Service (IRS) to identify you. A business is identified by the IRS using an Employer Identification Number (EIN), also referred to as a Federal Tax Identification Number, for tax and related purposes. Applying for licenses and permits, opening a bank account for the business, and financing loans will also typically require you to have an EIN.

You can apply for an EIN online at the IRS website as long as your principal place of business is located in the United States or one of the U.S. Territories. To apply, you need a valid Taxpayer Identification Number (SSN, ITIN, EIN).

If we assist you in creating your North Dakota Limited Liability Company, we can take care of submitting an EIN application for you.

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