Want to learn how to form an LLC in North Dakota? You’ve come to the right place.
Forming a Limited Liability Company (LLC) in North Dakota can be a complicated and time-consuming task, but we’ve made it easy.
In the step-by-step guide below, we break down the process of forming an LLC in North Dakota, from choosing a name to filing an article of organization to opening a bank account.
Start by Choosing a Name for Your North Dakota LLC
The first and most critical thing you must do when forming your North Dakota LLC is to choose a perfect name for your business. Be sure to choose a name that authentically conveys your business idea and reflects your business activities. The chosen name should also be memorable and easy to pronounce.
That’s not all you need to do, however. You also need to make sure your name abides by North Dakota’s naming guidelines and requirements, which include the following:
- The chosen LLC name should be distinguishable and unique.
- Your North Dakota LLC name should include a phrase that denotes the structure of your business. That is, “limited liability company” or one of its abbreviations: “LLC” or “L.L.C.”
- The chosen North Dakota LLC name must not include words or phrases that can be mistaken for a government agency, such as the State Department, CIA, Treasury, TBI, etc.
Once you’ve got a name in mind, make sure that it is available in North Dakota by performing a name search on the Government of Dakota website.
If it’s available, we recommend purchasing a web domain name, especially if you plan to establish a business online presence. You can also trademark your chosen LLC name or submit a name reservation to the North Dakota Secretary of State. This protects your LLC name from being grabbed or acquired by another business entity.
Hire a Registered Agent
After choosing a name for your North Dakota LLC, the next step is to appoint a registered agent. All LLCs in North Dakota are required to nominate a registered agent by law.
A North Dakota registered agent is any individual or company who receives and forwards all official state and legal correspondence documents on behalf of your company.
There are specific requirements that one must meet to qualify as a registered agent in North Dakota. One must be over 18 years old, be available during regular working hours, and be a North Dakota resident.
You can appoint yourself, a family member, or another LLC member as a registered agent for your business. However, we recommend hiring a professional registered agent service provider.
Here are our top three recommendations for the best registered agent companies in North Dakota:
ZenBusiness is one of the most reputable and popular registered agent service providers in the country. It is ranked #1 on sites like MarketWatch and Forbes. They deliver the full range of registered agent services, including mail forwarding, email notifications, and document scanning. In addition, ZenBusiness has a $5K Grant Program to help first-time entrepreneurs grow their businesses.
ZenBusiness registered agent services cost $199 per year.
If you want to buy registered agent services together with an LLC formation service, IncFile is the perfect choice. With IncFile, you get a complimentary first year of registered agent services when you use them to form your company. Their registered agent service includes automatic mail forwarding, customized SMS and email notifications, and access to all your correspondence documents on a digital dashboard.
Their registered agent services are relatively affordable. For instance, one year of registered agent service costs $199.
If you are interested in an affordable and well-rounded registered agent company, consider Northwest. Popular for its incredible customer support and Corporate Guides, Northwest will give you access to all the essential compliance and registered agent features. These include pre-filled state forms, compliance notifications, and scanned documents.
Additionally, their Privacy by Default Practice ensures that your data and privacy remain protected.
The Northwest’s registered agent services cost just $125 per year. You can even get a discounted fee of $100 if you use their registered agent services in more than four states.
File an Article of Organization
Once you’ve picked your name, it’s time to file an article of organization with the state of North Dakota to form your company officially.
The easiest way to register your business in North Dakota is to file your Article of Organization online through the North Dakota Online Business Formation System. It’s pretty simple to do, and you’ll need to pay a fee of $135 to do so.
Your Article of Organization must include essential information about your North Dakota LLC, including the following:
- Name and address of your business
- Name and street address of the appointed registered agent
- The effective date of your LLC
- Purpose of your LLC
- The names, signatures, and addresses of the initial LLC owners/members
- The location and type of your LLC.
Consider Creating an Operating Agreement
Unlike the Article of Organization, creating an Operating Agreement for your North Dakota LLC is completely optional. However, drafting one presents many benefits.
An Operating Agreement is an internal legal document that includes information about the liability clauses, loss and profit distribution, and management structure of your LLC.
It also details the duties and roles of each member and what they can expect if the LLC is dissolved. Since it defines the rules of how your North Dakota LLC will run, an Operating Agreement can prevent conflicts between LLC owners and members in the future.
Creating an Operating Agreement for your North Dakota LLC is a straightforward process. You can find a free template online or you can hire an LLC formation company that provides an operating agreement as part of its services.
Obtain any Relevant Licenses and Permits
Depending on the type of business you are forming in North Dakota, your LLC may require certain business licenses and permits to operate.
At the state level, LLCs in North Dakota are not required to obtain a general business license. However, almost all North Dakota LLCs must acquire a seller’s permit, also known as a sales tax permit. For instance, every business that intends to sell tangible services and goods that would be subject to sales tax must obtain the seller’s permit. This can be acquired through the North Dakota Business Licenses System.
If your LLC offers professional services, you must obtain industry-specific professional licenses to operate at state and local levels legally.
Get Federal and State Tax IDs
The next step in forming your North Dakota LLC is to acquire a Federal and State Tax ID. You can think of this as an Employer Identification Number or a Social Security number for your LLC.
A Federal and State Tax ID is required for multi-member LLCs and business entities taxed separately from the owner, file certain tax returns, and have employees.
Even if your business entity is not required to acquire a Federal and State Tax ID, we recommend getting one because of the many benefits that come with it. For example, you will need a Federal and State Tax ID to open a business bank account for your North Dakota LLC. It also identifies your LLC with the Internal Revenue Service (IRS) for tax purposes.
You can apply for your LLC’s Federal and State Tax ID via the IRS website. The application process is straightforward and completely free of charge.
Open a Business Bank Account
An LLC separates business assets from your personal assets. This separation is referred to as the corporate veil. This corporate veil ensures that your personal finances and assets will be protected from liability if your North Dakota LLC incurs debts or gets sued.
Opening a business bank account is the only way to prevent piercing the corporate veil and commingling funds. Fortunately, opening a business bank and credit account in North Dakota is easy. Simply visit your preferred financial institution. You may be required to provide a small deposit amount, your LLC’s Federal and State Tax ID, Article of Organization, and Operating Agreement.
The following three banks in North Dakota may be suitable for your needs:
- Security First Bank of North Dakota
- Farmers and Merchants Bank of North Dakota
- Starion Bank | ND Bank
Purchase North Dakota Business Insurance
LLCs in North Dakota are not required to have liability insurance. However, we recommend purchasing at least one basic insurance policy.
The most common type of insurance in North Dakota is general liability insurance. It protects your LLC from lawsuits resulting from property damages or bodily injuries.
LLCs that offer professional services may need to purchase a professional liability insurance policy to protect themselves from malpractices and business errors.
Another common insurance for North Dakota LLCs is the workers’ compensation insurance. It provides coverage for employees who die, get ill, or are injured in their line of job. Every LLC in North Dakota with more than one employee must purchase a workers’ compensation insurance policy.
You can get a competitive quote for your business insurance needs by visiting a comparison site like Insureon.
Buy an LLC Formation Package to Speed Up the Process
If you don’t have time to go through the steps we’ve listed above or find the process complex and would like to form your North Dakota LLC as fast as possible, you can buy an LLC formation package.
LegalZoom is one of the top companies offering free and paid LLC formation packages. You can get your LLC formed at essentially no cost with LegalZoom’s Basic package. You just need to cover the state filing fee. You can get more LLC formation tools and services by purchasing their Pro package at $249 or Premium package at $299.
If your budget is around $100, consider buying the MyCorporation LLC formation package. This package includes all the essential tools and resources required to streamline and speed up the formation of your LLC in North Dakota.
Another company that offers an appealing LLC formation package is Northwest. You will be guided through all the basic LLC formation steps at only $125.
FAQs About Forming an LLC in North Dakota
How Long Will It Take to Form My North Dakota LLC?
You can get your LLC formed in North Dakota in five working days if you file your Article of Organization online Or two to three weeks if you file via mail. You can also pay for expedited processing if you want your North Dakota LLC formed faster.
How Much Does It Cost to Set Up an LLC in North Dakota?
The cost of forming an LLC in North Dakota is $135. This is the state fee for filing your Article of Organization. You may also need to pay additional costs to expedite filing, reserve your LLC name, and purchase relevant insurance and licenses.
Can I Act as my Own Registered Agent in North Dakota?
Yes. You can act as your North Dakota LLC’s registered agent if you meet the requirements of being one. For instance, you must be 18+ years old, a resident of North Dakota with a street address, and be available during regular business hours.
Can I Form a Single-Member LLC in North Dakota?
Yes. You can form a single-member LLC in North Dakota by following the step-by-step guide discussed in this article. You must also adhere to the guidelines and requirements of forming a single-member LLC in North Dakota.
Form Your North Dakota LLC Today
We hope you found our step-by-step guide informative. As you can see, forming an LLC in North Dakota yourself isn’t all that difficult. But if you find the process time-consuming or daunting, you can always hire an LLC formation company to streamline and expedite the process.