One way of avoiding any risk for investors is to form an LLC. This article will discuss the basics of how to start an LLC in North Dakota and will provide tips and tricks on how you can get your business going as quickly as possible.
It’s always important to make sure you’re choosing the right business structure for your needs because this can make or break your business in the long run. Here are some things you should know about starting a new LLC.
Starting a new business can be a struggle for many entrepreneurs. It takes a lot of dedication, time, and money to start a business.
Some people decide that the risk just isn’t worth it and start the business with friends or family members. In these situations, there are often plenty of outside investors willing to put money into your business.
Steps to Start an LLC in North Dakota
1. Name your North Dakota LLC
The first step is to decide on the name of your LLC. The first thing you should do is conduct an Internet search of your desired name on North Dakota LLC Search to confirm it’s available. Do not use government agency names or words in your LLC name, as this will subject you to additional state approval and may result in a legal challenge. You should also check with the North Dakota Secretary of State to make sure that your name isn’t too close to another business that’s already registered to avoid any legal issues after you’ve registered your LLC.
You can also choose your company name carefully and ensure it doesn’t include words like “bank,” “law” or “university” because these are terms that are only allowed to be used by businesses with a license in North Dakota.
2. Find a Registered Agent for your North Dakota LLC
In North Dakota, you’re required to have a registered agent. This is the person who will accept legal documents like summons, subpoenas, and other legal notifications on behalf of your LLC. You can easily find a registered agent online and many companies offer this service for a small monthly fee.
The registered agent will also receive copies of the LLC articles, which should be signed and maintained at a private location. A registered agent should be someone who is trusted, has an address in North Dakota, and can accept mail on behalf of your LLC.
3. Form Your North Dakota LLC
You must file the Articles of Organization with the Secretary of State to officially start your LLC in North Dakota. The statutes of the North Dakota Secretary of State state that you must file a “certificate of formation” with them.
The best way to understand the financial requirements for forming an LLC is by reading the statutes yourself or talking to an attorney who is familiar with starting LLCs in North Dakota.
You can do this by visiting the North Dakota Secretary of State website where you can find a detailed list of the requirements for starting an LLC and the statutes that govern them.
4. Draft an LLC Operating Agreement
You must have a written operating agreement for your business that details who is responsible for what, what happens if one of the members wants to resign and how profits will be distributed among the members.
The operating agreement should also provide limited liability protection for members in case of a lawsuit and state how much a member can collect in the event that the LLC is liquidated.
You should always use a lawyer to draft your operating agreement because it’s a legally binding document that dictates how your business will be run and no one wants to end up paying thousands of dollars in legal fees when there is a mistake in the paperwork.
A lawyer can also help you determine the best state of affairs for your LLC and advise you on any additional documents you may need from the Secretary of State.
5. Apply for an Employer Identification Number (EIN)
An Employer Identification Number, or EIN, identifies your LLC as a business to the IRS and other federal agencies so that you can open up a business bank account and apply for other licenses or permits with the state or federal government.
The Employer Identification Number is also the same as the Federal Employer Identification Number (FEIN). It is a unique identifier that is used to file business tax forms and reports with the IRS and a host of other federal agencies. You can apply for your EIN online and you should receive it within a few days.
Starting a new LLC in North Dakota can be a straightforward task if you take the time to set up your LLC properly and file with the correct agencies.
While you can sometimes pay an extra fee to save time, it’s always best to file with the state directly and ensure you have all of the paperwork in order before starting your business.
Otherwise, your North Dakota LLC will be stuck in the state’s legal limbo, which means you’ll have to start over again, so always talk to a licensed North Dakota lawyer who will know all of the specifics about the state’s laws related to your specific business.