There are so many things to think about when starting a business – from the initial planning stages to figuring out the day-to-day tasks of running your company. If you’re looking for some help in setting up a North Dakota LLC, you’ve come to the right place.

Here, I’ll cover setting up a North Dakota LLC, from why to choose one, how to file the paperwork, and answer some common questions.

Related: How to start a business in North Dakota

Why choose an LLC?

The Limited Liability Company (LLC) is a popular business structure (also referred to as a business entity) because the LLC provides personal liability protection and has the potential to save money on taxes.

Unlike a sole proprietorship or general partnership, where the small business owner can be personally liable for lawsuits against the business, the LLC, like a corporation, is a separate legal structure that helps to protect the business owner’s personal assets.

Besides liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.

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Steps To Form A North Dakota LLC?

Step 1: Choose an LLC Name

Before filling out the LLC paperwork, the first step in forming a North Dakota Limited Liability Company is to make sure the name you want is available. In North Dakota, like all states, the name of each LLC must be distinguishable from other entity names registered in the state, otherwise, you need consent from the original registrant. The North Dakota Secretary of State makes it easy to do a North Dakota LLC name search, so you can verify if your LLC name is available. 

In addition to the name being unique, the entity designator (identifier used at the end of the business name) must be either:

• Limited Liability Company
• L.L.C.
• LLC

A comma may be used after the business name and before the designator.  “Fargo Fashions LLC” and “Fargo Fashions, LLC” are both acceptable.

If there is a name you want to use but aren’t ready to form the LLC, the Name Reservation Application can be filed with the North Dakota Secretary of State to hold the name for up to 1 year.

Before settling on a name, you may want to see if a domain name is also available in order to match your North Dakota business name and website address.

Step 2: Appoint a North Dakota Registered Agent

Every LLC in North Dakota is required to have a registered agent. A registered agent is someone or a company that is the LLC’s central point of contact to receive legal documents, tax notices, summons, subpoenas, etc., on behalf of the LLC.

The basic requirements to be a North Dakota registered agent include:

• The agent must be a North Dakota resident at least 18 years of age or a commercial Registered Agent service that is registered with the Secretary of State.  See the Secretary of State’s Commercial Registered Agent List.
• The agent must have a physical address in the state (PO Boxes aren’t allowed).
• The agent must generally be available during normal business hours at the address provided to receive service of process.

Step 3: File the North Dakota Articles of Organization

The paperwork to officially create an LLC in North Dakota is called the Articles of Organization. To submit the paperwork, file online through the North Dakota Secretary of State, Business Registration Unit’s FirstStop website.

Related: How to fill out the North Dakota Articles of Organization

There are a few sections, and terms that can be confusing when seeing them for the first time, so I’ll explain these to help get your LLC started right.

Purpose of the LLC: In the first section, you are asked whether the LLC is being formed for general business purposes or farming.  Select the one that best applies.

Address of principal executive office: In this section, enter the street address, city, state, and zip code of the initial principal office.  This address must be in North Dakota and can be the LLC’s physical address, or it can be the address where the business records are stored.  You may not use a PO Box for the designated office.

Effective date: If you want the LLC to start on today’s date, choose the box that says, “When filed with the Secretary of State.”  Otherwise, select the box that says “On a Specific Date” and enter a date less than 90 days in the future to start.

The main reason for delaying the LLC start date is when the filing is being done close to the end of a calendar year, and the business will not have any activity until the start of the next year.  By delaying the start, you may have saved yourself from filing a tax return for a partial year.

Term of existence: In this section, you can indicate how long the LLC will remain in existence.  Most LLCs will choose a perpetual (indefinite) existence; however, some businesses (usually investment-related) will have a specific closure date.

Business description: In this article, you can either adopt the default statement “General Business” or provide some basic information about what the business does. It’s generally better to keep a broad statement in case the focus of the business ever changes.

Other provisions: This is an optional section and not used by most LLCs.  Here you would include additional rules for the operation of the LLC.

What To Do After Forming A North Dakota LLC

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare a North Dakota LLC Operating Agreement

The operating agreement is a document that governs the framework of an LLC.  This document covers items like ownership rights, LLC member responsibilities, how profits and losses are distributed, and more.

Most states (including North Dakota) do not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:

• The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
• Member’s personal liability protection may be diminished.
• Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.

Related: North Dakota operating agreement template

Obtain an EIN

If the LLC will hire employees or is owned by more than one member, an EIN is required. 

The EIN or Employer Identification Number (also referred to as a Federal Employer Identification Number, FEIN, or Federal Tax ID Number) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.

Related: How to apply for an EIN

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

• A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
• Copies of the original formation paperwork from the state showing the creation of the LLC.
• Driver’s licenses of the members.
• Occasionally, the bank will request a North Dakota Certificate of Good Standing to prove the LLC is active and in good standing with the state.

Related: How to open a business bank account for your LLC

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, there will likely be various business licenses and permits needed before starting your business. Some common registrations include:

• Business license: There isn’t a statewide business license in North Dakota, some cities require businesses to obtain licensing before they can start.
• Professional license: Certain services, such as home repair, electricians, cosmetology, and others, must be licensed.
• Sales & use tax permit: To sell products and certain services in North Dakota, a sales & use tax permit from the North Dakota Office of State Tax Commissioner will be necessary.

Related: What business licenses are needed in North Dakota?

File the North Dakota LLC Annual Report

LLCs are required to file an annual report with the North Dakota Secretary of State through their FirstStop online filing system.  The annual report Secretary of State fee is $50 and is due November 15th of each year.

Related: How to file a North Dakota LLC Annual Report

File the Beneficial Owner Information Report

Beginning in 2024, any individual who owns at least 25% or has “substantial control” of an LLC or corporation in North Dakota or any other state must file the Beneficial Ownership Information (BOI) form with the Financial Crimes Enforcement Network (FinCEN). BOI reports are filed electronically through FinCEN’s website.

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