How to Start an LLC in North Dakota (Step-by-Step Guide)

When starting a new company, choosing a business entity is the most important decision that the founders must make. For most businesses with more than one founding member, forming as an LLC is often the best option for a number of reasons.

An LLC is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Moreover, LLCs often enjoy a lower tax rate than corporations. Nevertheless, creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.

Starting an LLC in North Dakota step-by-step

1. Select a name for your North Dakota LLC

Follow naming requirements

There are two major guidelines to follow when naming your LLC in the State of North Dakota:

1. An LLC’s name must be distinguishable from the names of existing business entities on file with the North Dakota Secretary of State.
2. An LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “LLC”, or “L.L.C.”

Need help coming up with a business name? Check out our free business name generator.

Check name availability

To confirm that your chosen business name is available to use in North Dakota, perform a search with the Secretary of State Archived Business Records Search.

Reserve your LLC name with the Secretary of State

Many LLCs in the process of organizing opt to reserve their LLC name to prevent another business entity from using it before it is ready to file Articles of Organization.

File a Reserve Name Application with the North Dakota Secretary of State online, by fax, or by postal mail to reserve your chosen LLC name for up to a year. The reservation filing fee is $10.

2. Designate a registered agent

As in every U.S. state, forming an LLC in North Dakota requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.

The registered agent must either be a state resident or business entity with a street address in North Dakota OR if the individual or business is based out-of-state, they must have a business office in North Dakota.

3. File Articles of Organization

An LLC is formed in North Dakota through the filing of Articles of Organization with the North Dakota Secretary of State.

The Articles of Organization must provide the following details:

• LLC’s name, principal office address
• LLC’s purpose (what business it does)
• Whether the LLC is perpetual or will end at a set date
• Registered agent name and address
• Date the LLC becomes effective (if not immediate)
• Names, addresses, and signatures of LLC organizers

You can file online using the Secretary of State FirstStop application or by mail. The filing fee is $135.

4. Create an operating agreement

Although not a legally mandated step for forming an LLC in North Dakota, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

1. Describe the LLC’s business structure
2. Establish the individual responsibilities and obligations of LLC members
3. Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN) 

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs). The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

6. Fulfill your legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

File annual reports

All LLCs active in North Dakota must file an annual report with the Secretary of State each year. This includes foreign LLCs doing business in the state. An LLC’s first annual report is due in the year following its legal formation.

An annual report is due every year by November 15 and can be filed online using FirstStop. The filing fee is $50.

Obtain business licenses and permits

In North Dakota, LLCs do not need a general business license at the state level, simplifying the initial steps of setting up a business. However, this doesn’t mean that all LLCs can operate freely without any licenses or permits.

Seller’s permit: If an LLC plans to engage in retail sales or lease tangible personal property in North Dakota, it must obtain a seller’s permit, or sales and use tax permit. This permit is essential for collecting sales tax on goods and services sold within the state, ensuring compliance with state tax regulations. Almost all LLCs will need this permit.

Occupational licenses: Other requirements for business licenses in North Dakota vary significantly depending on the specific industry and the nature of the business. Occupational licenses are a key area where state-level requirements come into play. Professionals in fields such as healthcare, legal services, real estate, and construction may need these licenses.

The ND.gov state’s website provides a Business Licensing website that can aid in determining which state licenses are necessary (if any) and explains how to apply for them.

Local licenses: At the local level, license requirements can differ from one municipality to another. Cities and counties may have their own set of regulations governing business operations.

For example, a restaurant in Fargo might need health permits, building permits, and signage permits, which may differ from those required in Bismarck or Grand Forks.

Local licensing regulations vary from area to area, so it is best to contact a city or county clerk in the region where your LLC is located for instructions on how to comply with local laws.

Understand state taxes

LLCs operate under a favorable tax structure where they are not directly subject to state income taxes, as they are considered “pass-through” entities. This means that the profits or losses of the business are passed through to its members, who then report the income on their personal tax returns. This principle applies to both single-member and multi-member LLCs.

No state income tax: While there is no direct state income tax for LLCs in North Dakota, there are other tax considerations that business owners must be aware. Although LLCs are exempt from the franchise tax, typically applicable to corporations and some LLPs, they are required to contribute to the state’s unemployment insurance tax. Owners may also need to pay self-employment taxes.

Register with the North Dakota Office of the State Tax Commissioner: Certain LLCs active in North Dakota must register with the North Dakota Office of the State Tax Commissioner in order to satisfy state tax obligations. This includes LLCs that collect sales tax on retail goods and services and LLCs with employees.

You can register to pay state taxes online using the North Dakota Taxpayer Access Point (TAP).

Understand BOI reporting

As of 2024, a new rule around Beneficial Ownership Information reporting has been enacted at the federal level. This rule mandates certain corporations, limited liability companies (LLCs), and similar entities, both newly established and existing, in the United States to disclose information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).

Beneficial owner defined: A beneficial owner is someone who owns or controls more than 25% of the entity’s ownership interests or has substantial control over the entity.

Filing deadlines:

• The initial reporting deadline for entities created or registered before January 1, 2024, is set for January 1, 2025.
• For entities established on or after January 1, 2024, they must file their initial BOI report within 90 calendar days following their creation or registration notice.
• In 2025, this will change to 30 days.

Learn more about BOI Reporting.

Post LLC tasks

Set up business bank accounts

Part of the benefit of an LLC is the personal liability protection it offers business owners. However, that protection can be called into question if you are mingling finances. To demonstrate that your business and personal money are never being mixed, setting up a business bank account under your company name is critical. It also makes things like tax reporting and expense management much simpler.

Banks to consider: You can use almost any banking institution for your business bank account, though local and online options will usually have better rates for small businesses. Options like Found, Relay, and Mercury all offer plans specifically for new LLCs that can make the process straightforward and ensure you are well-protected.

Obtain a Certificate of Good Standing

The Business Certificate of Good Standing is a crucial document in North Dakota, as it verifies that the company is compliant with state requirements, including the filing of necessary reports and payment of all applicable state fees. This certificate can be obtained through the North Dakota Secretary of State, online, or through written request. If you apply online, it is a total of $20 and can be paid by credit card. For written and phone requests, there is an additional $5 fee for any mailing requirements.

Build a website

Even before you have finalized your LLC, you can start thinking about your website. It will likely be your most important piece of marketing, allowing new customers to find you and securing your brand on the web.

While every LLC owner knows a website is necessary, you might not know where to start. Follow these steps to get started:

1. Search for and purchase a domain name.
2. Sign up for web hosting.
3. Pick a web builder like Domain.com or GoDaddy to create a site with no coding experience necessary.
4. Tailor your site to your customers, adding appropriate pages, content, and images.
5. If you’re selling goods, add an e-commerce section to your site.
6. Review, test, and publish your site.

Costs to set up an LLC in North Dakota

Average cost to start an LLC in North Dakota: $185-$385

While LLCs are known for being a cost-effective business structure, you will want to consider exactly what investments are right for your small business. Some costs will be required, while others can be opted into based on your needs.

• Incorporation fees: The main, mandatory cost is filing for your North Dakota Articles of Organization. This has a $135 fee paid directly to the Secretary of State. You may also be required to pay for certain license and permit applications, which will vary based on your exact type of business and location.
• Annual Report filing fees: In North Dakota, you’ll need to file an annual report fee, which is $50 each year.
• Registered agent service fees: During formation, you may also choose to use professional services that can add on costs. The most common is a registered agent service, which acts on your behalf to receive documents and can remove the burden of acting as your own registered agent. This service is available for you during the required business hours and typically costs between $50 to $200.

Foreign LLC registration

An LLC formed outside of North Dakota that plans to do business in the state must register with the North Dakota Secretary of State.

Follow these steps to do business in North Dakota as a foreign LLC:

1. Comply with North Dakota LLC naming restrictions and make sure that your LLC’s name is available for use in the states with the Archived Business Records Search.
2. Appoint a North Dakota registered agent.
3. File a Certificate of Authority For Limited Liability Company Application with the North Dakota Secretary of State. The form is available through FirstStop. The application can be filed online, by fax, or by postal mail. The filing fee is $135.  The certificate must be accompanied by either a Certificate of Good Standing or a Certificate of Existence from LLC’s state of origin that is 90 days old or less.