How to Form an LLC in North Dakota | Guide on North Dakota LLC

Forming an LLC (Limited Liability Company) in North Dakota is easy and affordable. The following are few procedural steps on how to start an LLC in North Dakota. LLCs can be formed in two ways, domestic and/or foreign. If you are planning to set up an LLC in states other than North Dakota, visit How to Start an LLC.

North Dakota LLC

Why an LLC in North Dakota

There are plenty of tax benefits and income-boosting opportunities available in the North Dakota state for new LLCs. Due to these incentives, the number of companies opening up in the state is enormous. If you, as an entrepreneur, are also thinking of considering it as an option for your business, then here are some detailed benefits.

Sales and Service Tax exemptions 

There are several exemptions that the government decides for those businesses that are thinking of incorporating as an LLC in North Dakota. These exemptions are based on the products and services which are mentioned in detail below.

  • There is a sales tax exemption provided on all the livestock and poultry products, commercialized fertilizers, gasoline and fuels, food and its products, medicinal equipment, etc. The start-up which is based on these products sales is eligible for getting a return on the sales tax that they will give to the government.
  • The next exemption is provided to those who are giving up services like public transportation, hospital and nursing services, repairing and restoring services, and cleaning of tangible personal property. They are liable to file a service tax which is returned to them as a business incentive by the government.
  • The Hotel- Motel rental and mobile homes renting services are also provided an exemption of sales tax but are covered under conditional exemptions.

North Dakota Renaissance Zone

In the North Dakota state, there are many renaissance zones formed by the Commerce Division of Community Service. An LLC, when chooses this zone to Start an LLC in North Dakota then they are eligible for some incentives on tax paid. These taxes are purchase or leasing of the property in the zone bundled along with many other exemptions like state income tax, local property tax, etc. All this is provided to choose the special zone as the LLC will improve and develop in the special zone.

New Business Income Tax Exemption Program 

This package is available for the tourism business or some primary sector entities. In this program, the income that is generated from the business is not taxable, and one can reinvest it back for their expansion. The only condition is that for application, one needs to visit the state tax commissioner and get all the business details verified from them to enjoy the benefits.

Wage Credit program 

To boost up the companies hiring procedure, the government of North Dakota is providing a 1% tax rebate on the income tax to the LLC. The value will be based on the wage that the company pays to the employees. This benefit will last for 3 years from their establishment as North Dakota LLC.

How to Start a North Dakota LLC

Suppose you’re planning to invest in some profitable form of business or maybe about to set up your corporation in North Dakota. In that case, forming an LLC in North Dakota is the simplest option for you.

An LLC or a Limited Liability Company a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. This section gives you a step-by-step guide on How to Start an LLC in North Dakota. 

Step 1: Decide a Name for Your LLC

If you are to start an LLC in North Dakota, the first thing you do is decide on a business or company name, and how to name your LLC may be tricky. Thus, you have the option to choose a name that complies with North Dakota’s business naming requirements. It must also be easily searchable for potential clients. Here is a step-by-step guide to follow when naming your North Dakota LLC. 

Why do you need a proper business name?

If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.

Because of this, here are some of the major benefits of choosing the best LLC corporate names.

  • To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
  • After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
  • You can only get the EIN number when you have your name registration certificate with you.

What are the requirements when deciding a name for your LLC? 

name search is vital to make sure your business’ name is unique. Check the availability of your name with Business Entity Search on the North Dakota Secretary of State’s website. Reserve the name by completing the Name Reservation Request Form for Domestic Entities.  

  • Don’t include words that could confuse people about your company. Words like ‘treasury, state department.’
  • You should also avoid restricted words like ‘bank, attorney, university,’ because they may require a lawyer and more paperwork.
  • As for a business website and your URL name, check if your name is still available for domain use with NameCheap.

Reserve a business domain

Even if you don’t have plans to set up a website today, it will help if you buy a domain to avoid others from using your name for their website, so do visit NameCheap for your domain name and Kinsta for web hosting.

If you have decided on your URL name and have reserved it, set up a professional email account with Google GSuite.  

Step 2: Assign a Registered Agent in North Dakota

A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will receive significant tax forms, legal forms, legal documents, a notice of lawsuits, and other official government correspondence in North Dakota. Choosing North Dakota-registered agents for your LLC is required. 

Make sure your registered agents are residents of Alabama. It could also be a business. Here are the recommended agents and employees for you:

These five LLC formation services are recommended agents’ registered services as they are authorized to conduct business in North Dakota. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years. 

Step 3: File Articles of Organization in North Dakota

A Certificate of Name Reservation is needed to file Articles of Organization, as other states call it. You need to make reports of this certificate with the North Dakota Secretary of State, which costs $135. You may file them online or by mail. 

This Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in North Dakota, like if it is a member-managed or managers-managed

Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your North Dakota Limited Liability Company will offer.

How to File Online

Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county.

Step 4: Create Your North Dakota LLC Operating Agreement

An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts. 

Starting an LLC in North Dakota does not require you to have an operating agreement, but it is ideal to have one that contains all your details of business operation.

Step 5: Filing a North Dakota LLC EIN

The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes. It is like a Social Security number dedicated to a business. 

It is also called a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). You will need this number for tax filing and to determine tax classification options.

Mail to:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

Fax: (855) 641-6935

Fee: Free

After Starting your North Dakota LLC 

After forming your LLC, there are still some things that you will need. Take note of the following:

  • Get a company business account
  • File North Dakota business permits & licenses
  • Get liability for business insurance with coverage for employees
  • File a North Dakota LLC annual report or biennial report
  • Already existing LLCs that wish to operate in North Dakota must register as a foreign North Dakota LLC.  

This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.  

Leading Businesses Of The North Dakota State

Are you looking forward to forming an LLC in North Dakota? For that, it is essential that you have complete economic statistics knowledge of the state and its top businesses. Here is the list of the best businesses in North Dakota.

Energy Businesses

The North Dakota state is known for the oil reserves along with mines of coals and shale gas. The coal that can be procured from North Dakota’s mines is lignite, out of which 90% is used in power generation of the state and nearby states. If we talk about the oil production, then the average oil, then the average production in the state is 50,000 barrels every day that has helped the energy sector to contribute $8.51 billion.

An interesting fact about the energy businesses is that there is a rise in wind energy due to the continuous flow of wind at 10 miles/hr.

Tourism In North Dakota

Exceptionally few people choose the state for going on a vacation, but it is still the best economy driver. Only the state’s tourism sector contributes around $3 billion, which is huge for this small state. About 24 million visitors that North Dakota caters to and the biggest reason for their visit are Clark’s historic tail and Theodore Roosevelt National park.

Agriculture

It is the leading sector which is known for trading for fur. Approximately 10% of the state is handling the farm area of North Dakota, which is around 90% of the state’s total area.  State agriculture has a significant share in oilseed production also which is described below.

·         94% of flaxseed of the USA is produced in Dakota farmland.

·         92% of canola seed is grown in North Dakota

·         62% of the whole mustard seed of the USA is also produced in North Dakota with 53% of sunflower oil.

Some small business ideas that are currently booming in the state are:-

  • Home-based oil production
  • Graphic designing
  • E-commerce business

North Dakota LLC Formation Review

Time needed: 1 hour and 5 minutes.

 Just to recap, here are the easy steps again when forming an LLC in North Dakota. Click on the steps in this list to read the full detail.

  1. Name your North Dakota LLC

    The first thing you must do is to choose a company name, which should include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
    name llc

  2. Choose a registered agent

    In North Dakota, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
    get registered agent

  3. File a formation certificate

    Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
    file formation certificate

  4. Create operating agreement

    An operating agreement is not a strict requirement but something encouraged when you start an LLC.
    create operating agreement

  5. Get an EIN

    The Employer Identification Number (EIN), also called  Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
    get an ein

F.A.Qs

What is the difference between ‘domestic LLC’ and ‘foreign LLC’?

A “domestic LLC” is one that conducts business in a state where it was formed. Meanwhile, a “foreign LLC” is an existing LLC that extended business to another state.

What do I need for Domestic and Foreign LLCs?

For Domestic LLCs, it is vital to have a Certificate of Name Reservation and Certificate of Formation. For the foreign LLCs, you must have a Certificate of Good Standing.

Is the cost to form an LLC the same across states?

The cost to form an LLC varies per state.

Does an LLC need to use a DBA?

Seldom do L.L.C.s use D.B.A. or a ‘Doing Business As’ name nor a fictitious business name. However, if you want to have one, you make read more about DBAs here

Why are operating agreements important?

This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.

Is there anything else I should keep in mind when naming my LLC?

>Your name should have “L.L.C. or LLC” or the phrase “limited liability the business.” 
>Do not include words that could create confusion between your LLC and any government business. 
>Words like ‘bank, attorney, university’ are restricted as well. 
>Lastly, your name should distinguish from other limited liability corporations, limited partnerships, or registered limited liability partnerships.

Where can I file my LLC name?

Typically, you can file your LLC name online or by mail. Check with the state where you will set up your LLC name. Take note that the fees for business names may also vary per state.  

How can I know if my URL name is available?

As for a website and your URL name, check if your name is still available for URL use with NameCheap to see if your name is available as a web domain. Even if you don’t have plans to set up a website today, it will help if you buy a URL. Buying it can help to prevent others from getting your name; check out WPEngine, Kinsta, and GoDaddy for hosting and building your website. 

Can I mail the LLC Certificate of Formation to the Secretary of State?

No. Never mail these documents or payments to the Secretary of State directly. 

Why do I need an EIN?

The reason you might need an E.I.N. is that it would help for three reasons:
>Opening a business bank account
>Filing and managing federal and state taxes
>Hiring employees or agents

How do I get an EIN when I do not have a Social Security number?

You are not required a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.

I already have an EIN for a sole proprietorship; what now? 

Note that an LLC is different from a sole proprietorship. If you already have an EIN for your sole proprietorship, the IRS will require you to get a new one when your convert to an LLC. 

Do foreign applicants need an SSN to get an EIN?

International EIN applicants do not need an SSN to get an EIN.

What is an IRS?

The IRS is the one that will issue your EIN. You can request an EIN from the IRS ONLINE or download the FORM, fill it out, and send it by mail or fax.

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