Start an LLC In North Dakota 2023: The Real Guide

Start An LLC In North Dakota

Do you want to learn how to start an LLC in North Dakota? This article will take you step-by-step through the whole process.

This article focuses on costs, the steps to take, what to do after formation, and much more. Let’s get started.

But first, let’s compare North Dakota to its neighboring states as a place to form an LLC.

State	North Dakota	Minnesota	Montana	South Dakota	US Average
Population	779,094	5,707,390	1,084,225	886,667	6,619,825
LLC Filing Fee	$135	$155	$70	$150	$130.38
LLC Annual/Biennial Fee	$50 (every year)	$0 (however, an information report must be filed every year)	$20 (every year)	$50 (every year)	$89.34 (every year)
Corporate Tax Rate	1.41-4.31%	9.80%	6.75%	0%*	5.60%
Nominal GDP per capita	$81,795	$72,187	$53,703	$68,357	$64, 773.08

Before You Set Up An LLC In North Dakota

Before forming an LLC in North Dakota, it’s important to get everything organized. This means finding the forms necessary, filling them out, and talking with the other members.

Everyone should be on board and understand their duties and expectations. This list gives you all the forms and information necessary, so you can print them out or visit the respective websites to see what data you require.

How Much Does It Cost To Start An LLC In North Dakota?

Most people want to know how much to start an LLC in North Dakota. Some of you are probably asking how to start an LLC in North Dakota for free. Unfortunately, that’s not possible.

We’re here to break down the costs associated with creating a limited liability company in this state.

$135 (Articles of Organization)

This is primarily the only charge for starting an LLC in North Dakota. However, there are likely other things to consider, such as:

Registered agent service – $99
Foreign LLC (for some people) – $135

Generally, you only have to create a domestic or foreign LLC. There’s no need for both. Therefore, you can expect to pay about $234 total.

Steps To Start An LLC In North Dakota

Learning how to start an LLC in North Dakota is often the hardest part of it all. You need to do things legally to avoid issues later. Here are the steps to take:

Pick A Name For Your LLC

The company name is the most important aspect of your LLC. Make sure that it complies with the naming requirements in North Dakota and is searchable by your potential customers.

Here are a few guidelines:

The name must include “limited liability company” or “LLC.” This is usually at the end and looks like this: “Company Name, Limited Liability Company.”
Your chosen name can’t include words that might associate it with a government agency, including Treasury, FBI, and State Department.
Restricted words include things like a university, bank, and attorney. If you use them, you might have to fill out more paperwork and have a licensed individual as part of the LLC to be legal and protected.

You should check to make sure your name is available in your state. The Secretary of State’s website offers a North Dakota LLC Search option.

Consider checking online to make sure the URL you wish to use is available. You might not set up an eCommerce site now, but it’s best to buy it so that others can’t take it.

Find A Registered Agent In North Dakota

Registered agents are responsible for getting legal documents on behalf of the business. It can be a business entity or an individual, and they are the point of contact for your brand and the state.

An individual can be yourself or anyone else listed as a member, but they must be residents of the state. Corporations must be authorized to do business in North Dakota.

Registered agent service is likely the best choice. ZenBusiness and LegalZoom are the top options here. However, you can check online to find others.

Do You Need A Registered Agent In North Dakota?

Yes, you must have a registered agent for your North Dakota LLC. However, that could be you, other members, or a corporation. Registered agent services often help with formation, too.

ZenBusiness – $49 + state fees to register your LLC (read review)

Incfile – $0 + $50 state fees to register your LLC (read review)

Articles Of Organization

You’ve got to register the North Dakota LLC with the Secretary of State. Therefore, you should file your Articles of Organization online. There’s a non-refundable fee of $135, which is payable to the Secretary of State.

Operating Agreement

North Dakota LLCs don’t require an operating agreement, but it’s wise to have one. It’s a legal document that outlines the operating procedures and ownership of a limited liability company.

Having a comprehensive operating agreement ensures that everyone’s on the same page. This leads to fewer conflicts and issues.

Get An EIN

The IRS assigns each business a nine-digit EIN or Employer Identification Number. This helps them figure out tax needs and is similar to an individual’s Social Security Number.

EINs are needed to:

Hire employees
Open a business banking account
Manage and file your state and federal taxes

You may already have an EIN for a sole proprietorship, but you must get a new one when you convert to an LLC.

There’s no charge for an EIN, and you can do it through the IRS online or by mail.

The Forms You Need To Register An LLC In North Dakota

Did You Know?
North Dakota offers hybrid business structures, so you have an LLC, a farm LLC, and a PLLC (Professional Limited Liability Company). The Secretary of State doesn’t record members and owners of the LLC. Revoked LLCs cannot operate legally in the state. Likewise, a dissolution is impossible until the limited liability company is reinstated.

LLC Taxes In North Dakota

LLC taxes are slightly confusing. Limited liability companies use pass-through taxation by default, so the profits/losses go to the members. Therefore, single-member LLCs are taxed as a sole proprietorship, but people can change to an S- or C-corporation status.

Multi-member LLCs are taxed as a partnership, though members also have the right to change that to an S- or C-corporation status.

How Much Do LLCs Have To Pay In Taxes In North Dakota?

The amount each member pays is based on many factors, such as:

Whether the LLC is taxed as a sole proprietorship, partnership, C-corporation, or S-corporation
Profits and losses for the year
Percentage of each person’s ownership

Differences Between Federal And State Taxes

Generally, state taxes focus solely on employer and sales taxes. When selling a physical product, you must get a seller’s permit from the North Dakota Taxpayer’s website. That lets you collect sales tax on your taxable sales.

Hiring employees means registering for Unemployment Insurance Tax through the ND Unemployment Insurance System. You should also sign up for the Employee Withholding Tax option.

Federal taxes must be reported to the IRS. You learned earlier about the options and ways that things differ. Typically, multi-member LLCs require Form 1065 Partnership Return, and single-member LLCs use Form 1040 Schedule C.

How Much State Taxes Do LLCs In North Dakota Have To Pay?

LLCs don’t technically pay state or income taxes in North Dakota, but the members do. This varies significantly based on how many members there are, profits/losses for the year, and more.

How Much Federal Taxes Do LLCs In North Dakota Have To Pay?

The current federal tax rate is 15.3 percent for LLCs. Therefore, you withhold 7.65 percent of the taxable wages as the employer, and the employee is responsible for the other 7.65 percent.

Is North Dakota A Good Place To Start An LLC?

Yes, North Dakota is an excellent place to form an LLC. The process is simple, though it could be quicker. Plus, there are plenty of tax benefits to doing so.

How Long To Form An LLC In North Dakota

It’s best to give yourself at least six months when creating an LLC in North Dakota. While it takes up to four weeks to file your Articles of Organization, you’ve got many other things to do.

Expect to spend about eight to 12 hours on paperwork. Then, you should think about what to do after formation, completing as many of those steps as possible.

How Much Does It Cost To Run An LLC In North Dakota?

Every year, you must file an annual report, which costs $50. However, you’ve also got to think about utilities and more.

Other costs depend on the type of business you’re running.

What To Do After Formation?

Getting the LLC registered is just the first step. Here are other things to focus on once your LLC is up and running:

Create a Logo – Let others instantly recognize you with a customized logo.
Build a Website/eCommerce Store – A website works for you 24/7, even when you’re not available or open.
Bank Account – Separate your business and personal expenses with two bank accounts.
Business Insurance – Options to consider include general liability, professional liability, and worker’s compensation insurance.
Annual Reports – Craft annual reports for the members and shareholders to keep everyone on track.

Resources To Start A Successful LLC In North Dakota

Start Marketing Your LLC In North Dakota

A website and a blog are beneficial, but marketing requires more than that. Build authority and credibility with content marketing, producing articles that wow the crowd.

Consider using social media to interact with others through the brand. SEO services and email marketing are also important.

How To Dissolve An LLC In North Dakota

If you want to close your LLC, officially dissolve it by closing your business accounts and filing your Articles of Dissolution, which costs $20.

Conclusion

You’ve just learned how to start an LLC in North Dakota. We’ve talked about prices, the steps necessary, and what forms to fill out. Then, we discussed after-formation goals, marketing, and dissolution.

Good luck on your business journey.

How To Start An LLC In North Dakota