How to Start an LLC in North Dakota: 2024 Step-by-Step Guide

Using an LLC Formation Service

Small business entrepreneurs can benefit from online LLC services to establish their Limited Liability Companies (LLC). These services will help file the necessary documents, allowing small business owners to focus on running their businesses. They have features like guaranteed acceptance by the state, assistance with the EIN application, registered agent service, and drafting of operating agreements. Online LLC services can be a reasonable and worthwhile cost.

Business owners can customize these packages to suit their individual needs. If you want to compare services and costs before deciding, you can choose from several options. Northwest Registered Agent, Swyftfilings, and Bizee LLC services are the most popular choices and have the best ratings.

Starting a Limited Liability Company (LLC) in North Dakota is an excellent way for entrepreneurs to bring their business ideas to life. An LLC combines the liability protection of a corporation with the flexibility and tax efficiency of a partnership, making it a popular choice for business owners. Here’s your step-by-step guide to establishing an LLC in North Dakota in 2024.

 

Step 1: Choose a Business Name

The first step in creating your LLC is picking a unique name. Your LLC’s name identifies your business and plays a vital role in branding. In North Dakota, your LLC name must include “Limited Liability Company” or its abbreviations (LLC or LLC). 

Here are the guidelines you must follow: 

• The name must include “Limited Liability Company” or its abbreviations (LLC or L.L.C.).
• It must be distinguishable from existing names on the North Dakota Secretary of State’s records.
• Some words require additional paperwork or licenses (e.g., Bank, Insurance).

You check the name’s availability on the North Dakota Secretary of State’s website or do a quick, free name check to see if your chosen name is available. If you are considering getting a website name that matches your business name, You can find good deals for your domain names on Namecheap.

 

Step 2: Hire a Registered Agent

Like in other states, your LLC must have a registered agent in North Dakota. A registered agent is a person or company that agrees to receive legal papers on behalf of your LLC, ensuring you get all important legal notices. The agent must have a physical address in North Dakota and be available during business hours. You can act as your registered agent, choose someone you trust, or hire a professional service like Northwest Registered Agent, Swyftfilings, or Bizee.

Check out our blog: ‘Is a Registered Agent Necessary? Your Guide to Finding an Affordable Option‘

 

Step 3: File Your Articles of Organization in North Dakota 

The cornerstone of creating an LLC in North Dakota is filing the Articles of Organization with the Secretary of State of North Dakota. This document registers your LLC with the state and includes important details about your business.

What to Include in Your Articles of Organization:

• LLC Name: Your LLC must include “Limited Liability Company” or its abbreviation “LLC” to comply with North Dakota naming conventions.
• Mailing Address: List a mailing address if it’s different from the LLC’s physical location.
• Registered Agent: North Dakota requires you to appoint a registered agent to accept legal documents on your LLC’s behalf. Include their full name and physical address in North Dakota. The registered agent must consent to this appointment.
• Management Structure: Indicate whether your LLC is member-managed or manager-managed, including the members’ or managers’ names and addresses. A P.O. box may be used for addresses if privacy is a concern.
• Purpose: While a specific purpose isn’t necessary, you may briefly describe your business activities.
• LLC Organizer: The person or entity filing the Articles of Organization should be identified here.
• Formation Date: You can choose the LLC’s start date, either the filing date or a specific date, within 60 days of filing.
• Signing: Ensure all information is accurate before signing. The form must be signed by either an LLC member, manager, or organizer.

How to Send Your Form:

• Online: For the quickest processing, file your Articles of Organization online through the North Dakota Secretary of State’s First Stop website. This platform is designed to submit your paperwork and payment efficiently.
• By Mail: If you prefer, you can also file by mail. Complete the Articles of Organization and send it with the appropriate fee to the Secretary of State, State of North Dakota, 600 E Boulevard Ave Dept 108, Bismarck, ND 58505-0500.
• In-Person: Those who wish to file in person can bring their completed Certificate of Formation to the office at the address provided for mail submissions.
• Filing Fee: The cost is $135 for domestic and foreign LLCs intending to operate in North Dakota.

Ensuring all information on your Articles of Organization is accurate and complete is critical for establishing your LLC in North Dakota without any delays.

 

Step 4: Making an Operating Agreement for Your Business

Let’s discuss setting up some ground rules for your business. This is where an Operating Agreement comes in. Think of it as a handbook that explains how your business runs. It’s important because it helps everyone understand their role and what’s expected in your LLC.

Here’s what an Operating Agreement usually includes:

• Ownership: This part talks about who owns what percentage of the business. 
• Member’s Rights and Responsibilities: Here, you’ll write down what each person in the LLC can and cannot do and what they’re responsible for. It’s like a job description for each member.
• Joining & Leaving: This section covers how new people can enter your business and what happens if someone decides to leave. It’s good to have this figured out so there are no surprises later.
• Dissolution: This might sound a bit gloomy, but it’s practical. It’s about how to close down the LLC if you ever need to. It includes the steps to take and how to handle everything when wrapping up the business.

Creating an Operating Agreement is a smart move. It keeps things clear and organized so everyone knows what to expect, and it can save you a lot of time. 

 

Step 5: Getting Your EIN from the IRS

Your business needs a number called an EIN from the IRS. It’s like an ID number for your business. This number will help you as an identification number when getting bank accounts and credit accounts, filing taxes, and hiring employees.

It’s free, and you can get it from the IRS website.

 

Step 6: Steps After Forming Your LLC 

Open a Business Bank Account 

Keeping your personal and business finances separate is crucial for financial management and legal protection. Opening a business bank account requires your EIN and Articles of Organization. It makes tracking business expenses easier and simplifies tax filing.

 

Get a Business Credit Card

A business credit card is an excellent tool for handling business purchases and can help build your company’s credit history. Just like with personal credit, a good business credit score can make it easier to get loans and may qualify you for better terms. Visit our website to see our favorite business cards review.  

Check out our blog: Novo Review: The Best Business Banking Account in 2024?

 

Hire an Accountant

Managing finances can get complicated, especially as your business grows. An accountant can help you navigate tax laws, handle bookkeeping, and plan for financial growth. This professional guidance can save you time and money in the long run.

 

Create a Professional Website 

A website makes your business look legit. WordPress is a great tool to build your site. You can check out SiteGround or Hostinger for web hosting.

^Make sure to use coupon code STARTUPWISE at checkout for up to 90% OFF!

They’re both good options to get your site up and running.

 

North Dakota LLC: Permits, Licenses, Tax Requirements, and Annual Reporting

Creating an LLC in North Dakota involves more than just filing the initial paperwork; it’s crucial to comply with state regulations for smooth business operations. This includes obtaining necessary permits and licenses, managing tax obligations, and adhering to annual reporting requirements.

Obtain Any Additional Permits and Licenses

Depending on your LLC’s specific activities and location, you may require various permits and licenses:

• Local Business Licenses: Check with the city or county where your business will operate for local business license requirements.
• Professional Licenses: Certain professions may require state-issued licenses. You can find more information on specific requirements on the North Dakota State Government’s website.
• Health Permits: Businesses involved in food service, healthcare, or beauty services might need health permits from the North Dakota Department of Health or local health departments.

Tax Requirements in North Dakota

Properly managing your LLC’s tax obligations is essential for legal compliance and financial health:

• Sales and Use Tax: If your LLC sells goods or taxable services, you must register through the North Dakota Tax Commissioner’s office for a Sales and Use Tax Permit.
• Employer Taxes: If you plan to have employees, register with the North Dakota Job Service for Unemployment Insurance Tax and the North Dakota Tax Commissioner’s Office for Employee Withholding Tax.
• EIN: All LLCs need an Employer Identification Number (EIN) from the IRS for tax purposes, hiring employees, and opening a business bank account.

Annual Reporting in North Dakota

Keeping your LLC in good standing with the state involves submitting an annual report:

• Filing Requirements: All North Dakota LLCs must file an annual report with the Secretary of State.
• Fees and Filing: The annual report filing fee is $50, and it can be filed online through the North Dakota Secretary of State’s FirstStop website.
• Importance: This report is essential for updating your LLC’s contact information and maintaining good standing.

Following these guidelines for permits, licenses, tax obligations, and annual reporting ensures the successful operation of your North Dakota LLC and compliance with state laws. For the most accurate and detailed information, visit the official North Dakota Secretary of State website and the North Dakota Tax Commissioner’s website for comprehensive support regarding your LLC’s compliance and operational needs in North Dakota.

 

New 2024 Reporting Requirements (BOI)

Effective from January 1, 2024

Big news! Starting January 1, 2024, there are new reporting requirements for both domestic and foreign reporting companies. This includes LLCs, corporations, and other entities. Here’s what you need to know:

First Report Deadlines:

• Existing Entities: If your LLC was already around before 2024, you’ve got until January 1, 2025, to submit your first report.
• New Entities: If you’re forming your LLC in 2024, you must file your report within 90 days of your company’s creation.

Who Needs to Report:

• Domestic Reporting Companies: This includes LLCs and similar entities within the U.S.
• Foreign Reporting Companies: Entities registered foreign entities must also adhere to these new rules.

Exceptions to Reporting:

• For specific exceptions, you’ll want to refer to the Beneficial Ownership Information Reporting Regulations at 31 CFR § 1010.380(c)(2) and the Small Entity Compliance Guide.

What Must Be Reported

What you need to report is all about transparency. The exact details can be found in the compliance guide, but it generally involves information about your LLC’s ownership and control.

When Must Reporting File Reports

Remember, if you’re an existing entity, your deadline is January 1, 2025. For new LLCs formed in 2024, it’s within 90 days of creation.

Filing Reports & Noncompliance Penalties

Starting January 1, 2024, all BOI reports must be filed electronically. Here are some critical points:

• Filing Before the Date: You must file on January 1, 2024.
• Accuracy: Filer certification of accuracy is mandatory – you need to double-check that everything you report is correct and accurate.

Penalties for Noncompliance:

• False Information Penalties: Mistakes or misinformation can lead to a fine of up to $10,000 or up to 2 years in prison.
• Penalties: If you slip up here, you could face a fine of up to $10,000 or even imprisonment for up to 2 years.
• FinCEN’s Approach: The Financial Crimes Enforcement Network (FinCEN) focuses on education and outreach to ensure compliance. 
• Safe Harbor Rule: Did you make a mistake? If you discover inaccuracies in your initial report, you have a 90-day grace period to submit a corrected report.
  

If you need more information or specific guidance, please visit the FinCEN website for all the details.

Starting an LLC in North Dakota in 2024 offers numerous benefits, including asset protection, tax advantages, and operational flexibility. Following these steps, you can confidently establish your LLC in North Dakota. Remember to stay informed about changes in North Dakota laws or fees by regularly checking the North Dakota Secretary of State website. If you need help, services like Northwest Registered Agent, Swyftfilings, or Bizee exist. They can handle any legal details your LLC requires, like getting your EIN and sorting out your operating agreement.