Starting an LLC (Limited Liability Company) in North Dakota is a smart choice for entrepreneurs looking to protect their personal assets while enjoying flexibility in business operations and taxation.
Whether you’re launching a new business or relocating an existing one to North Dakota, forming an LLC offers several key benefits, including personal asset protection, tax advantages, and enhanced credibility with customers and investors.
In 2025, North Dakota remains one of the most business-friendly states in the U.S., offering a simple and affordable process for forming an LLC. One of the key advantages of an LLC is that it limits your personal liability, meaning your personal assets, like your home or savings, are typically protected if your business faces legal issues or financial difficulties. Additionally, LLCs are generally taxed as pass-through entities, which can help you avoid the “double taxation” faced by corporations.
This step-by-step guide will walk you through the process of starting an LLC in North Dakota in 2025. From searching for the right LLC name to filing the necessary paperwork, we’ll cover everything you need to know.
We’ll also explain important post-formation steps like setting up your LLC’s operating agreement, obtaining an Employer Identification Number (EIN), and keeping your LLC compliant with annual reporting requirements.
Whether you’re an aspiring entrepreneur or a seasoned business owner, this guide will provide the clear, easy-to-follow steps you need to form your LLC in North Dakota. By the end, you’ll have a solid understanding of how to establish your LLC and get your business up and running with confidence. Let’s get started!
Why Choose an LLC for Your North Dakota Business?
Before diving into the steps of forming an LLC in North Dakota, it’s important to understand why many entrepreneurs choose this business structure. Here are some of the key advantages:
- Limited Liability Protection: Your personal assets (such as your home and car) are protected from business debts and lawsuits. This is one of the biggest advantages of forming an LLC.
- Pass-Through Taxation: An LLC is typically treated as a pass-through entity for tax purposes, meaning profits and losses are passed through to members’ personal tax returns. This helps avoid the “double taxation” that corporations face.
- Flexibility in Management: LLCs can be managed by members or managers, offering flexibility in how the company is run.
- Credibility and Professionalism: Forming an LLC can enhance your business’s credibility with customers, vendors, and potential investors.
Steps to Form an LLC in North Dakota
1. Search Your LLC Name
The first step in starting your LLC is choosing a unique name that complies with North Dakota’s naming rules. The name of your LLC must:
- Include the words “Limited Liability Company,” “LLC,” or “L.L.C.”: These designations clearly identify your business as an LLC and differentiate it from other types of business entities.
- Be distinct from other registered business names: Your LLC name cannot be the same as, or deceptively similar to, an existing business name already on file with the state.
- Avoid prohibited words: Certain words are restricted in LLC names, including those that could imply your business is a government agency or engage in illegal activities.
You can check if your desired LLC name is available by performing a search on the North Dakota Secretary of State’s business name database. If your chosen name is already taken, you will need to select another one.
Name Reservation: If you find that your name is available and you want to hold it for a while, you can reserve the name for up to one year. To do this, you’ll need to file a Name Reservation Application with the North Dakota Secretary of State for a $10 fee.
2. Choose a Registered Agent
A Registered Agent is a person or company that acts as your LLC’s official contact for receiving legal documents, tax notices, and other government communications. In North Dakota, your Registered Agent must:
- Be a resident of North Dakota: They must have a physical street address (not a P.O. Box) in the state.
- Be available during business hours: They must be available to accept documents on behalf of your LLC during normal business hours.
You have a few options when choosing a Registered Agent:
- Appoint yourself: If you live in North Dakota and are available during business hours, you can act as your LLC’s Registered Agent.
- Appoint someone else: You can designate another individual as your Registered Agent as long as they meet the residency and availability requirements.
- Hire a professional Registered Agent service: Many entrepreneurs choose to hire a professional Registered Agent service to ensure that their LLC remains compliant with state requirements. One popular service provider is Northwest Registered Agent, which is known for its excellent customer service, data privacy, and compliance support.
While appointing a Registered Agent yourself may save some money, it is often more convenient and secure to hire a professional service, especially if you want to maintain privacy and ensure that important documents are properly handled.
3. File Articles of Organization
The next step in forming your LLC is to file the Articles of Organization with the North Dakota Secretary of State. This document officially establishes your LLC and includes essential details about your business, such as:
- LLC name and address: Your business’s official name and physical address.
- Registered Agent: The name and address of your LLC’s Registered Agent.
- LLC purpose: A brief statement of the business activities your LLC will engage in.
- Duration of the LLC: Most LLCs are set up to continue indefinitely, but you can specify a duration if you have a limited purpose for the company.
- Organizer’s information: The name and address of the person or entity filing the Articles of Organization.
You can file the Articles of Organization online, by mail, or in person. The filing fee is $135. Once your Articles are filed and approved by the Secretary of State, your LLC will be officially formed.
4. Create an Operating Agreement
While the state of North Dakota doesn’t require LLCs to have an Operating Agreement, it is strongly recommended to create one. An Operating Agreement is an internal document that outlines the ownership structure and management of the LLC. It should include:
- Member roles and responsibilities: Specify who the members (owners) are and what their respective responsibilities and duties are within the company.
- Profit and loss distribution: Define how profits and losses will be distributed among members based on ownership percentages or other arrangements.
- Management structure: Decide whether your LLC will be member-managed (where all members participate in daily operations) or manager-managed (where one or more managers handle the day-to-day operations).
- Procedures for adding/removing members: Clearly lay out the process for adding new members or removing existing ones.
- Dissolution procedures: Define the process for dissolving the LLC if it ever comes to that.
Having a comprehensive Operating Agreement helps avoid conflicts among members and provides clear guidance on business operations. It is especially important if your LLC has multiple members.
5. Obtain an EIN for Your LLC
An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify your LLC for tax purposes. Even if your LLC doesn’t plan to hire employees, you will still need an EIN for other important tasks, including:
- Opening a business bank account.
- Filing federal and state taxes.
- Applying for business licenses or permits.
The good news is that obtaining an EIN is completely free. You can apply online on the IRS website, and you’ll receive your EIN immediately upon completing the application.
What to Do After Your LLC is Approved
Once your LLC has been approved, there are several important steps to complete before you start doing business.
Open a Business Bank Account
After receiving your EIN, you can open a business bank account in your LLC’s name. It is crucial to keep your business and personal finances separate to protect your personal assets and maintain accurate accounting records.
To open a business bank account, you will need:
- Your Articles of Organization.
- Your EIN.
- An Operating Agreement (if you have one).
- A valid ID.
Apply for Business Licenses and Permits
Depending on the type of business you are starting and where it will operate, you may need specific licenses or permits. These can range from local business licenses to specialized permits based on your industry (e.g., health permits for food establishments, liquor licenses, etc.).
Check with your local city or county government to determine if any licenses or permits are required.
Set Up Accounting and Record-Keeping Systems
It’s essential to set up a reliable accounting system to keep track of your income, expenses, and taxes. Using accounting software or hiring an accountant can help ensure your financial records are accurate and up-to-date.
Ongoing LLC Maintenance and Compliance in North Dakota
Once your LLC is established, there are several ongoing compliance requirements you need to be aware of to keep your LLC in good standing with the state.
Annual Report Filing
North Dakota requires all LLCs to file an annual report each year. The annual report is due by November 15th. The fee for filing the annual report is $50, and failure to file on time results in a $50 late fee.
You can file the annual report online through the North Dakota Secretary of State’s website. Be sure to update any information, such as your LLC’s address or Registered Agent, when filing the report.
LLC Taxes in North Dakota
By default, LLCs are treated as pass-through entities for federal tax purposes. This means that the LLC itself does not pay income taxes; instead, profits and losses are passed through to the members’ personal tax returns.
However, LLCs can also choose to be taxed as corporations if desired. To do so, you must file IRS Form 8832 to make the election.
In North Dakota, LLCs are subject to state income tax based on the income generated by the business. The state has a progressive income tax system with rates ranging from 1.1% to 2.9%. North Dakota also imposes a sales tax on certain goods and services, so make sure to familiarize yourself with your tax obligations.
Conclusion
In conclusion, starting an LLC in North Dakota is a straightforward and rewarding process for entrepreneurs looking to establish a strong foundation for their business.
By following the steps outlined in this guide—from selecting a unique LLC name to filing the Articles of Organization and obtaining an EIN—you can easily navigate the formation process and set your business up for long-term success.
One of the major benefits of forming an LLC in North Dakota is the liability protection it offers, safeguarding your personal assets from business-related risks. Additionally, the state’s pass-through taxation system helps streamline your tax obligations, saving you from the complexities of corporate taxation.
With a relatively low filing fee and a manageable annual report requirement, North Dakota provides an affordable environment for entrepreneurs to thrive.
Maintaining your LLC’s good standing is crucial, so remember to stay on top of ongoing compliance requirements, including filing your annual report and keeping accurate financial records. With the right preparation and knowledge, you can focus on growing your business and expanding your reach in a state known for its pro-business climate.
Starting an LLC in North Dakota gives you the legal protection, flexibility, and credibility needed to succeed in today’s competitive business landscape.
By following this step-by-step guide and staying proactive with your LLC’s requirements, you’re taking the right steps toward achieving your entrepreneurial goals. Take the plunge and start your LLC today to build a strong and secure future for your business.
Frequently Asked Questions (FAQs)
Can I start an LLC in North Dakota if I don’t live in the state?
Yes, you can form an LLC in North Dakota even if you don’t reside in the state. However, you must appoint a Registered Agent who is a resident of North Dakota.
How long does it take to form an LLC in North Dakota?
The processing time for an LLC formation in North Dakota is typically 5 business days if filed online. Mail filings may take longer.
How much does it cost to start an LLC in North Dakota?
The filing fee for the Articles of Organization is $135. The annual report fee is $50, and additional costs may arise if you hire a Registered Agent or need special licenses or permits.
Do I need an Operating Agreement?
While an Operating Agreement is not required by the state of North Dakota, it is highly recommended to avoid potential disputes and to clarify your LLC’s structure and operations.
Can I form an LLC for a business that operates in another state?
Yes, you can form an LLC in North Dakota and conduct business in another state. However, you may need to register your LLC as a “foreign LLC” in the state where you plan to operate.