How to Start a Limited Liability Partnership in North Dakota | 2024 Guide

Start a Limited Liability Partnership in North Dakota

A Limited Liability Partnership (LLP) is a popular business structure offering the flexibility of a partnership while providing limited liability protection like starting an LLC in North Dakota. LLP structure is ideal for attorneys, accountants, and consultants. If you’re considering starting a Limited Liability Partnership in North Dakota, this comprehensive guide will walk you through the necessary steps, from researching and planning to ongoing compliance and reporting requirements.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your North Dakota LLP, all the steps in this article must guide you.

What is a Limited Liability Partnership?

Forming an LLP is like starting an LLC as well. However, there are differences in terms of it. A Limited Liability Partnership (LLP) is a type of business structure that combines elements of partnerships and corporations. It allows multiple individuals, known as partners, to jointly own and manage the business while providing limited liability protection to each partner. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.

LLPs are popular among professional service providers, such as lawyers, accountants, and consultants, as they allow for flexible management structures and profit-sharing arrangements. The partners in an LLP can directly manage the business, unlike forming a Corporation in North Dakota, where a board of directors typically handles the management.

Each partner’s liability is also limited to the extent of their investment, and they are not personally responsible for the negligence or misconduct of other partners. This is a key difference between an LLP and North Dakota General Partnership, where partners have unlimited liability for the partnership’s actions and other partners.

It is suggested that you speak with a legal professional before you begin setting up your limited liability partnership. They’ll understand what’s best for you and your company. To safeguard your personal assets from business debts, you can always start an LLC rather than a limited liability partnership.

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Steps in Starting a Limited Liability Partnership in North Dakota

To form a limited liability partnership in North Dakota, you must consider following the below guidelines that include research and planning, choosing an LLP name, designating a Registered Agent, filing for Articles of Organization, drafting a partnership agreement, get an EIN, obtaining necessary licenses and permits, the opening of business bank account and maintain ongoing compliance and reporting requirements. 

Step 1: Research and Planning

Before forming an LLP in North Dakota, you must familiarize yourself with the state’s laws and regulations governing LLPs. Conduct thorough research to determine if an LLP is the right business structure for your needs, and create a detailed business plan outlining your goals, strategies, and financial projections.

Step 2: Choose an LLP Name

Selecting a unique and appropriate name for your LLP is crucial. First, check the availability of your desired LLP name with the North Dakota business registry. Ensure that your chosen name follows North Dakota naming guidelines and requirements, which typically include the use of “Limited Liability Partnership” or “LLP” in the name. You can register and reserve the name with North Dakota Secretary of State if desired.

Here are some guidelines you must follow while naming your LLP in North Dakota- 

  • Be distinguishable from other businesses registered in your state
  • Include the words “Limited Liability Partnership,” “LLP,” or a similar abbreviation.
  • Not include words that are restricted by your state
  • Ensure that your chosen name does not infringe on any existing trademarks or intellectual property rights.

However, to check the availability of your desired LLP name, you can also search the North Dakota Secretary of State business name database and North Dakota Business Name Search. If the name is available, you may choose to reserve it for a specific period of 1 year by filing a name reservation application and paying the online name reservation fee of $10 and mail name reservation fee of $10. If your LLP plans to operate under a name other than its legal name, you may also need to register a fictitious or “Doing Business As” (DBA) name. 

The DBA filing can be done by two methods, by mail and in person, which costs around $25. In addition, the DBA’s validity in North Dakota is five years, which you can file in the North Dakota Secretary of State.

You can check out how to file a DBA in North Dakota for clearer understanding.

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Step 3: Designate a Registered Agent

In North Dakota, you’ll need to designate a Registered Agent for your LLP. The Registered Agent is responsible for receiving the partnership’s important legal and tax documents. Choose a qualified individual or North Dakota Registered Agent Services to serve as your LLP’s Registered Agent, ensuring that they meet North Dakota requirements.

However, If you plan to become a Registered Agent of your own LLP, follow the steps below. Also, this applies a guideline in hiring your registered agent.

  • Research the requirements in the state where you want to offer your service. Each state has specific criteria, such as having a physical address and being available during normal business hours.
  • Obtain a physical address in the state(s) if needed.
  • Be familiar with the rules, regulations, and compliance requirements for businesses in your state.
  • Create a business plan outlining your services, pricing, and marketing strategy.
  • Register your business entity, such as an LLP, if required.

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Step 4: File a Certificate of Limited Liability Partnership

To officially form your LLP, you must file a Certificate of Limited Liability Partnership with the North Dakota Secretary of State. Obtain the necessary forms and provide the required information, such as the LLP name, principal office address, registered agent’s name and address, names and addresses of partners, and management structure. Pay the required filing fee and submit the completed forms to the North Dakota Secretary of State’s office.

Step 5: Draft a Partnership Agreement

A well-crafted partnership agreement is essential for governing your LLP and protecting the interests of its partners. This document should cover crucial provisions such as roles and responsibilities of partners, profit and loss sharing, decision-making processes, partner admission and withdrawal, and dispute resolution. Consider having the partnership agreement reviewed by an attorney to ensure its completeness and compliance with North Dakota laws.

A partnership agreement should include the following:

  • Business name
  • Description of the business
  • Contact information of the business and its owners

Ownership of all business partners, decision-making, capital contribution, profits and distribution, death and disability, and withdrawal and addition of partners is one of the key factors to consider when forming or creating a partnership agreement. In this way, all business partners will understand what this is all about and how to proceed if the mentioned scenarios happen. 

Without a partnership agreement, your company will often be subject to the general partnership default laws of North Dakota. The default laws in North Dakota might not be appropriate for your requirements.

Step 6: Get an EIN

Your LLP must obtain North Dakota Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The application of an EIN can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN, you can benefit in several ways. It will give your LLP the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 7: Obtain the Necessary Licenses and Permits

Depending on your specific industry, you may need to obtain North Dakota Business Licenses and permits to operate your LLP. Research your business’s licensing and permit requirements and apply for them accordingly.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in North Dakota.

Step 8: Open a Business Bank Account and Obtain Insurance

Maintaining clear financial records is crucial for any business, so open a separate bank account for your North Dakota LLP. Additionally, obtain the necessary North Dakota Business Insurance, such as general liability insurance, professional liability insurance (if applicable), and workers’ compensation insurance (if you have employees). 

Check the Best Bank for Small Businesses in North Dakota to open a bank account.

Step 9: Maintain Compliance and Reporting Requirements

Stay informed about and comply with relevant laws and regulations to keep your LLP in good standing. File Annual Reports with the North Dakota Secretary of State (if required), maintain accurate financial and operational records, and file and pay required taxes at the federal, North Dakota, and local levels.

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Advantages of Forming a Limited Liability Partnership in North Dakota

While the specific advantages of forming an LLP in North Dakota can vary depending on the state’s unique laws and regulations, several public benefits associated with LLPs often apply across jurisdictions. Here are some advantages to consider when forming an LLP in North Dakota:

  • Limited Liability Protection: One of the main benefits of an LLP is its limited liability protection to its partners. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.
  • Pass-through Taxation: An LLP typically enjoys pass-through taxation, which means that the profits and losses of the business are passed through to the partners, who report them on their personal income tax returns. This avoids the double taxation often associated with corporations.
  • Flexible Management Structure: Unlike corporations requiring a board of directors, LLPs allow for a more flexible management structure. Partners in an LLP can directly manage the business and make decisions without needing a formal board.
  • Profit-sharing Flexibility: The partnership agreement can outline the distribution of profits and losses among partners, allowing for a customized profit-sharing arrangement based on the partners’ preferences and contributions.
  • Easier Formation and Compliance: Forming an LLP is generally less complicated and expensive than forming a corporation. Ongoing compliance requirements may also be less burdensome than other business entities, depending on the specific laws and regulations in North Dakota.
  • Professional Credibility: Forming an LLP can enhance your business’s professional credibility, as it demonstrates a commitment to a formal business structure and can offer reassurance to clients, customers, and potential investors.

Bear in mind that the advantages of forming an LLP in North Dakota may vary based on the specific laws and regulations governing LLPs. Researching the applicable laws and consulting with legal or financial advisors is essential to fully understand the benefits and requirements of forming an LLP in North Dakota.

Cost of Forming an LLP in North Dakota

The cost of forming an LLP in North Dakota may vary depending on the required filing fees and any additional services you may need. The filing fee for a Certificate of Limited Liability Partnership typically ranges from $50 to $200, depending on the state.

Can I Form an LLP in Other States?

You can form an LLP (Limited Liability Partnership) in other states. To form an LLP in a different state, you must follow that state’s specific registration requirements and filing procedures. This usually involves filing an application or certificate of registration, paying a registration fee, and obtaining any necessary permits or licenses.

Additionally, you may need to register your LLP as North Dakota Foreign LLC if you plan to conduct business in multiple states. It is advisable to consult with an attorney or a business consultant familiar with the laws and regulations of the state where you plan to form your LLP.

Can an LLP Need to Have One Owner?

An LLP (Limited Liability Partnership) cannot have just one owner. By definition, an LLP is a partnership, which means it requires at least two partners to be formed. If you want a business structure with limited liability protection and only one owner, you may consider forming a Single-Member LLC in North Dakota instead. An LLC can have one or more owners, known as members, and offers limited liability protection and pass-through taxation. The requirements for forming an LLC will vary by state, so consult your state’s laws and regulations.

FAQs

What is a limited liability partnership (LLP) in North Dakota?
A limited liability partnership in North Dakota is a partnership that has an addition known as “limited liability.” Each partner in the company may avoid personal liability for the malpractice of another partner in certain conditions.
What are the minimum partnership requirements to form an LLP in North Dakota?
North Dakota requires a minimum of two partners to form an LLP.
Is an LLP recognized in North Dakota for tax purposes?
Yes. North Dakota regards an LLP as a “pass-through” entity for federal income tax purposes.
How is an LLP categorized for tax purposes?
The Internal Revenue Service Identification Number (EIN) for an LLP is under the tax classification of Partnership for federal tax reasons.
Is there a set amount for an LLP partner’s liability protection in North Dakota?
No. Liability protection given to the LLP partner relies on the amount of personal liability determined in individual cases.
How can one decide if they need an LLP or another business structure?
Determining the formation status of an entity created in North Dakota can complicated issues given the variance between state and country. Contacting the North Dakota Secretary of State and a professional expert.
How long does it take to create an LLP in North Dakota?
It generally takes close to ten days to establish an LLP in North Dakota. The number of forms to join is required for joining.
Can non-US citizens be an LLP Partner in North Dakota?
Yes. It is equally valid for foreign-bound individuals to set up or obtain LLP ownership as citizens of North Dakota.
What’s the North Dakota LLP Formation Fee?
$135 so set up an LLP in North Dakota.
How do I put together an operating agreement and what should I cover?
It’s recommended that any governing documents surrounding a new partnership should be generated with the assistance of a professional given legal complexities, especially any sharing of profit and services.
Do I need to let an official office know my new business has formed in North Dakota?
Yes, newly formed businesses in North Dakota must inform the Secretary of State’s File Division upon formation.
Are there any annual statutory obligations required for LLPs operating in North Dakota?
Yes. An annual report must be submitted by LLPs to the North Dakota Secretary of State before November 15 every year. Failure to submit this during business and legal complications.
Can in-state businesses access the North Dakota public booking structure?
Yes. A business required to join state civil purposes needing incoming mail delivery needs to rely centrally location the organization provides.
What challenges will my North Dakota LLP face regarding Liquor Licenses?
There can be potential challenges that confront LLP startups seeking liquor selling permission given necessary duty requirements after services engaged by employees.
What it takes for an LLP to obtain a Sales Tax Permit in North Dakota?
LLPs categorized as maintaining obligations for collecting and remitting for the sales tax will need to receive permission from the North Dakota Tax Commissioner.
What would be the result of improper taxation on LLP transferred property in North Dakota?
Unreported contributions or sales in North Dakota in imports or time can lead to penalties levied on companies or, in this case, the state process start over.
What is inn North Dakota LLPs requirement for unemployment tax registration?
You will be needed to register for conduct unemployment insurance tax behavior by the Workforce Safety & Insurance division after receiving ‘liable employer’ verdict.
Can North Dakota professional firms launch a Business over Industries Allowed for LLP formation?
No, because of limitations to access the ‘pllc’ (i.e. expert Limited Liability Company) naming requirement of controlled industry-based business in North Dakota and elsewhere in America.
Should Wyoming or North Dakota be picked for International LLP creation?
Deciding between North Dakota and Wyoming numbering can require extensive analysis by LLP business owners before registering with Secretary of State properly.
Can market control the product names utilization in North Dakota LLP startups?
Limited liability partnerships in North Dakota are united by class allocation regulations between state economy and competition authorities.
Is it a requirement for North Dakota use income or franchise tax policies asking for charge application to LLPS?
There is no presently active income tax or business corporate tax for LLPs established in North Dakota.
Is there an impact if I choose to employ an expert in helping me make an LLP?
Companies depending on external help to establish limited liability partnerships in North Dakota reduces possibilities of time, paperwork, and comprehension of the accepted documents to complete.
What’s the name recognition procedure for North Dakota’s LLP conversion principals?
To be-known for naming objectives of selected choice principles, filings are sent to received approval of testing authorities.
Are there tax formalities required for LLP operating memberships in North Dakota?
Yes, an LLC operating in North Dakota serves as a self-owned company, thereby requiring income tax application rules by which members use deductions to the corporation.
Can LLP owners of physician & dentist contribute to professional obligations examination?
No. Permissible Formation distributioning for expert majority-specific industrial verticals include rights to list affiliating professional owner-presence formation rights.
What are the corporate banking prerequisites to be in place for my IPP startup in North Dakota?
Corporate transactions requirementization relating to business account open-lowering, tracking operations spend incoming / expenses related to the starting LLC interested.
Can over-the-fax contract confirmation be possible for an LLP operating out of North Dakota?
Confir Internet protocols has been improving. Thus documentation requiring deliberate partnering states resolutions become ever application for their formation thereof remain somewhat digital today.
Are North Dakota service LLCs guaranteed success amid technological competition?
Given how governmental regulations and changing market environments affect chances of keeping business together for newcomers with less financially stable LLP supplies aiming to remain future-ready in a highly intensive business event marketplace
What is a limited liability partnership in North Dakota?
A limited liability partnership is a partnership where the partners have limited liability for the business’s debts and obligations.
How many owners can a North Dakota limited liability partnership have?
A North Dakota limited liability partnership can have two or more owners.
What is the process to form a limited liability partnership in North Dakota?
To form a limited liability partnership in North Dakota, you must file a certificate of limited liability partnership with the North Dakota Secretary of State.
Is there a fee to file a certificate of limited liability partnership in North Dakota?
Yes, there is a fee to file a certificate of limited liability partnership in North Dakota.
What are the advantages of forming a limited liability partnership in North Dakota?
The advantages of forming a limited liability partnership in North Dakota include having limited liability for the business’s debts and obligations and being able to split profits and losses according to a pre-agreed-upon formula.
Can a limited liability partnership be taxed as a corporation in North Dakota?
Yes, a limited liability partnership can be taxed as a corporation in North Dakota.
Are there any residency requirements to form a limited liability partnership in North Dakota?
No, there are no residency requirements to form a limited liability partnership in North Dakota.
Do North Dakota limited liability partnerships have to file an annual report?
Yes, North Dakota limited liability partnerships have to file an annual report and pay a fee.
What is the deadline for North Dakota limited liability partnerships to file their annual report?
The deadline for North Dakota limited liability partnerships to file their annual report is every year on the last day of the month in which they were formed.
What happens if a North Dakota limited liability partnership does not file their annual report on time?
If a North Dakota limited liability partnership does not file their annual report on time, they may face penalties, such as fines or dissolution of the partnership.
Can a North Dakota limited liability partnership do business outside of North Dakota?
Yes, a North Dakota limited liability partnership can do business outside of North Dakota.
Does a North Dakota limited liability partnership need a registered agent?
Yes, a North Dakota limited liability partnership needs a registered agent with a physical street address in North Dakota.
Can a North Dakota limited liability partnership have employees?
Yes, a North Dakota limited liability partnership can have employees.
Can members of a North Dakota limited liability partnership be held liable for the partnership’s debts?
Members of a North Dakota limited liability partnership are typically not personally liable for the partnership’s debts.
Can a North Dakota limited liability partnership have different classes of membership?
Yes, a North Dakota limited liability partnership can have different classes of membership.
How is ownership of a North Dakota limited liability partnership transferred?
Ownership of a North Dakota limited liability partnership is typically transferred through the transfer of a partnership interest.
Can a North Dakota limited liability partnership be converted into a different business entity, like a corporation?
Yes, a North Dakota limited liability partnership can be converted into a different business entity, like a corporation.
What are the naming requirements for a North Dakota limited liability partnership?
A North Dakota limited liability partnership must include the words “limited liability partnership” or the abbreviation “L.L.P.” in their name.
How are profits and losses allocated in a North Dakota limited liability partnership?
Profits and losses are typically allocated in a North Dakota limited liability partnership according to a pre-agreed-upon formula.
Can a North Dakota limited liability partnership issue stock?
No, a North Dakota limited liability partnership cannot issue stock.
Are there any restrictions on who can form a North Dakota limited liability partnership?
No, there are no restrictions on who can form a North Dakota limited liability partnership.
Can a North Dakota limited liability partnership be sued?
Yes, a North Dakota limited liability partnership can be sued.
What is required to be included in a certificate of limited liability partnership in North Dakota?
A certificate of limited liability partnership in North Dakota must include the partnership’s name, address, registered agent information, and any other information required by the North Dakota Secretary of State.
Is a North Dakota limited liability partnership required to have a written partnership agreement?
While a written partnership agreement is not legally required for a North Dakota limited liability partnership, it is highly recommended.
Are there any annual meeting requirements for a North Dakota limited liability partnership?
No, there are no annual meeting requirements for a North Dakota limited liability partnership.
Can a North Dakota limited liability partnership take out a loan?
Yes, a North Dakota limited liability partnership can take out a loan.
What are the requirements for dissolving a North Dakota limited liability partnership?
To dissolve a North Dakota limited liability partnership, a certificate of dissolution must be filed with the North Dakota Secretary of State.
What happens to a North Dakota limited liability partnership’s assets when they dissolve?
When a North Dakota limited liability partnership dissolves, their assets are typically sold off and the liabilities are paid off before distributing any remaining assets to the partners.

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Conclusion

Starting an LLP in North Dakota may seem daunting, but you can successfully establish and run your business with thorough research, planning, and compliance with legal requirements. Feel free to seek professional assistance from legal or financial advisors when needed to ensure your Limited Liability Partnership’s smooth operation and growth in North Dakota.

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