How to Dissolve a Business in North Dakota | Essential Steps

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Dissolve North Dakota LLC

Deciding to dissolve a Limited Liability Company can be difficult for business owners. Still, it is sometimes necessary due to changes in the business landscape, financial challenges, or personal reasons. Dissolving a business requires specific steps and regulations to complete the process correctly and legally. This comprehensive guide will teach you how to dissolve a business in North Dakota.

Webinarcare Editorial Team will help you easily dissolve your business. You must be guided by all the factors gathered in this article.

How to Dissolve a Business in North Dakota

If you are starting an LLC in North Dakota, having an operating agreement is one of the key requirements in dissolving a business. Before starting the legal paperwork, there are a few things to remember. Initially, confirm that all LLC members agree with closing the business. Once everyone is ready, voting should be used to document everyone’s assent. They must vote in favor of the dissolution before the legal procedure may begin. The procedures for the dissolution are listed below.

How to Dissolve a Business in North Dakota

Dissolving a business in North Dakota requires following specific steps to ensure a smooth and legally compliant process. The process usually includes the following steps:

Step 1: Make the Decision

Before dissolving your business, ensure this decision is right for your North Dakota business. Consider discussing the decision with your business partners, members, or legal counsel to weigh the pros and cons and determine if dissolving the business is best.

Step 2: Hold a Formal Vote

Once you’ve decided to dissolve your North Dakota business, you’ll need to hold a formal vote among the members to approve the dissolution. This step is important because it ensures that all members know and agree to the decision to dissolve the business.

To hold a formal vote:

  • Review your North Dakota Operating Agreement to determine the required voting procedures, such as the percentage of affirmative votes needed for approval.
  • Notify all North Dakota members of the upcoming vote and give them sufficient time to review the matter and make an informed decision.
  • Conduct the vote according to the procedures outlined in your operating agreement.
  • Record the vote results in your business meeting minutes or a written resolution.

If most members approve the dissolution, you can proceed with the dissolution process.

Get a Professional Service

It’s important to get legal assistance when dissolving an LLC. With that, you must have a Registered Agent. Ensure that the Registered Agent you choose is qualified and legal since they will file the Article of Dissolution for your LLC. We reviewed the Best Registered Agent Services in North Dakota for you to check out.

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Step 3: Settle the Outstanding Debts and Liabilities

You must settle all outstanding debts and liabilities before dissolving your North Dakota business. This includes paying off loans, settling pending lawsuits, paying owed taxes, and fulfilling any remaining contractual obligations. You can inform your North Dakota Business Attorney to ensure it is settled.

To settle your North Dakota business’ debts and liabilities:

  • Review your business’ financial records to identify all outstanding debts and liabilities.
  • Contact creditors, lenders, and other parties to whom your business owes money or obligations, and arrange for payment or settlement.
  • If your business does not have sufficient funds or assets to cover all outstanding debts and liabilities, consult with legal counsel to determine the best course of action for settling these obligations.

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Step 4: Distribute the Remaining Assets to Members

Once all debts and liabilities have been settled, you can distribute any remaining assets to the business members. Your operating agreement should do this or, if no such agreement exists, in proportion to each member’s ownership interest in the business.

To distribute assets:

  • Determine the fair market value of the remaining assets, such as real estate, equipment, or inventory. 
  • Calculate each member’s ownership interest in the business based on the operating agreement or their initial capital contribution.
  • Distribute the assets to each member according to their ownership interest.
  • Keep detailed records of all asset distributions for tax and legal purposes.

Step 5: File the Articles of Dissolution

After settling debts and distributing assets, you’ll need to file the Articles of Dissolution with the North Dakota Secretary of State to dissolve your North Dakota business officially. This document provides the state with notice that your business is ceasing operations and will no longer conduct business.

To file the Articles of Dissolution:

  1. Obtain the appropriate form from the North Dakota Secretary of State‘s website. Visit the North Dakota Secretary of State’s website and navigate to the Business Services section to find the necessary forms and instructions.
  2. Fill out the Articles of Dissolution Form with the required information, including your North Dakota business name, the date of dissolution, and any other necessary details.
  3. Pay the filing fee of $25 in the North Dakota Secretary of State’s office.
  4. Submit the completed form and payment to the North Dakota Secretary of State’s office, either by mail or online, depending on your North Dakota’s filing options.

Once your Articles of Dissolution have been processed and approved, your North Dakota business will officially be dissolved.

Mail to: 
North Dakota Secretary of State
North Dakota, 600 E Boulevard Avenue Dept 108, Bismarck ND 58505-0500

Filling Fee:
$25

Step 6: Notify the IRS and Government Agencies

After dissolving your business with the North Dakota Secretary of State, you’ll need to notify the Internal Revenue Service (IRS) and other North Dakota government agencies of the dissolution. This is important to ensure your business complies with tax laws and other regulations.

To notify the IRS of the dissolution:

  1. File your final federal tax return using Form 1065 and check the box indicating that it is the final return for your business.
  2. Cancel your Employer Identification Number (EIN) in North Dakota by mailing a letter to the IRS at the address where you filed your tax return. Include your EIN, business name, and reason for cancellation in the letter.
  3. Update your North Dakota business status with any other relevant government agencies, such as the North Dakota Department of Revenue, Department of Labor, and local licensing and permitting offices.

Step 7: Cancel Licenses, Permits, and Insurance Policies

To fully dissolve your North Dakota business, you’ll need to cancel any business licenses, permits, and insurance policies associated with your business. This may include North Dakota Business Licenses, professional licenses, sales tax permits, and any other permits required for your industry.

You must contact the issuing agency to cancel your licenses and permits and follow their specific cancellation procedures. You should also contact your insurance provider to cancel any remaining business insurance policies. With the cancellation of the mentioned licenses, permits, and Business Insurances in North Dakota, you also need to remove a Registered Agent since he won’t be able to continue filing documents for your business unless you are the Registered Agent of your business. 

Step 8: Maintain Records of the Dissolution Process

For legal and tax purposes, it’s important to maintain detailed records of the steps taken to dissolve your North Dakota business. This includes documentation of the formal vote to dissolve the business, debt settlements, asset distribution records, and copies of filed state and federal tax returns.

Keep these records for at least seven years, as they may be needed in the event of an IRS audit or other legal issues arising from the dissolution.

Cost of Dissolving an LLC in North Dakota

The cost of dissolving an LLC in North Dakota can vary based upon various factors. The North Dakota Articles of the Dissolution filing fee cost $25. Other costs include any outstanding taxes or debts the business owes and potential costs for settling business contracts or selling business assets.

It’s also important to factor in professional fees, such as if you hire an attorney or accountant to assist with the dissolution process. After the LLC is dissolved, the remaining company assets are divided among the members. The exact breakdown of these costs can often be complex and will depend on the specific circumstances of the LLC, so consulting with a legal or financial advisor can be helpful.

Reasons Why an LLC in North Dakota Dissolves

There are numerous reasons why an LLC in North Dakota dissolves, and these reasons could impact other LLCs. It is best to understand the why’s and how to deal with it rather than knowing that your LLC may dissolve sooner or later. Here is the list of possible reasons why an LLC dissolves.

  1. Expired Duration: In North Dakota, an LLC will automatically dissolve if it reaches the end of its defined duration stated in the Articles of Organization.
  2. Member Vote: An LLC may dissolve in North Dakota if the members vote for dissolution. Usually, the LLC Operating Agreement outlines the percentage of member votes required to dissolve the LLC.
  3. Judicial Dissolution: A court in North Dakota may order the dissolution of an LLC if it is in the best interests of the members, especially in cases of fraud, illegal activities, or oppressive behavior.
  4. Bankruptcy: If the LLC becomes insolvent and cannot pay its debts, it may be forced into bankruptcy. This usually leads to the dissolution of the LLC.
  5. Non-compliance: If the LLC does not comply with state laws or fails to meet legal requirements, such as filing annual reports or paying taxes, the state may forcibly dissolve the LLC.
  6. Merger or Consolidation: If the LLC in North Dakota merges or consolidates with another company and the LLC is not the surviving entity, it will be dissolved.
  7. Death or Withdrawal of a Member: Unless specified otherwise in the Operating Agreement, the death, withdrawal, bankruptcy, or incompetence of a member may cause the LLC to dissolve.

Please note that the process for dissolution typically includes settling all business debts, distributing any remaining assets among the members, and filing a formal notice of dissolution with the North Dakota Secretary of State.

After the North Dakota LLC Dissolution

Once your North Dakota business has been dissolved, it typically cannot be reinstated or “taken back” after a few years. Instead, you would need to form a new LLC in North Dakota if you wish to operate a business under a limited liability company structure again.

To create a new North Dakota LLC, you would need to follow the standard formation process, which generally includes the following:

  • Choosing a Unique Business Name: Ensure that another business does not already use the name you choose in North Dakota and complies with state-specific naming requirements.
  • Appointing a Registered Agent: Designate a Registered Agent who will be responsible for receiving legal correspondence on behalf of your LLC.
  • Filing Articles of Organization: Submit the Articles of Organization with the North Dakota Secretary of State’s office, along with the required filing fee.
  • Creating an Operating Agreement: Draft an agreement outlining the rules and regulations governing your new LLC, including member roles, ownership percentages, and management structure.
  • Obtaining Necessary Licenses and Permits: Apply for any required business licenses, permits, and tax registrations with the appropriate state and local authorities.
  • Registering with the Internal Revenue Service (IRS): Obtain an Employer Identification Number (EIN) from the IRS, which will be necessary for tax purposes and other business activities.

Availability of the Business Name

When a business is in North Dakota was dissolved, the business name becomes available for other business owners to use after a certain period. However, the specific rules and regulations regarding the availability of a dissolved business name can vary. Keep in mind that even if the name becomes available, other factors, such as trademarks or potential confusion with existing businesses, may still impact the ability of another business owner to use the name.

FAQs

What is required to dissolve an North Dakota LLC?
To dissolve an North Dakota LLC, you must file a Notice of Intent to Terminate with the North Dakota Secretary of State.
How do I dissolve a North Dakota LLC?
To dissolve a North Dakota LLC, you need to file a Notice of Intent to Terminate with the North Dakota Secretary of State.
Can I dissolve my North Dakota LLC online?
Yes, you can dissolve your North Dakota LLC online by filing a Notice of Intent to Terminate with the North Dakota Secretary of State.
How long does it take to dissolve a North Dakota LLC?
Typically, it takes around two weeks to dissolve a North Dakota LLC after filing a Notice of Intent to Terminate.
What do I need to do to dissolve a foreign LLC in North Dakota?
To dissolve a foreign LLC in North Dakota, you need to file a Notice of Withdrawal with the North Dakota Secretary of State.
Do I need to file taxes after dissolving my North Dakota LLC?
Yes, you will need to file a final North Dakota tax return for your LLC after dissolving it.
Can I revive my North Dakota LLC after it has been dissolved?
Yes, you can revive your North Dakota LLC within 5 years from the effective date of dissolution.
What is the cost to dissolve a North Dakota LLC?
The filing fee for the Notice of Intent to Terminate is $20.
What will happen if I don’t dissolve my North Dakota LLC?
If you don’t dissolve your North Dakota LLC, you may still be responsible for filing taxes and maintaining necessary licenses and registrations.
Can I dissolve my North Dakota LLC if it has outstanding debts?
Yes, you can dissolve your North Dakota LLC even if it has outstanding debts.
What happens to the assets of an North Dakota LLC after it is dissolved?
After an North Dakota LLC is dissolved, its assets will be distributed according to the operating agreement or North Dakota law.
Do I need to inform my LLC members before dissolving the LLC?
Yes, you should inform your LLC members before dissolving the LLC.
What happens to the North Dakota LLC’s EIN after it is dissolved?
The North Dakota LLC’s EIN will be available to be used again after it is dissolved.
Can I dissolve my North Dakota LLC if it never started operating?
Yes, you can dissolve your North Dakota LLC if it never started operating.
How do I know if my North Dakota LLC has been successfully dissolved?
You will receive a Certificate of Dissolution from the North Dakota Secretary of State.
Can I dissolve my North Dakota LLC if it has pending lawsuits?
Yes, you can dissolve your North Dakota LLC even if it has pending lawsuits.
Can I dissolve my North Dakota LLC if it has a registered agent in another state?
Yes, you can still dissolve your North Dakota LLC even if it has a registered agent in another state.
Do I need to cancel my North Dakota LLC’s business licenses before dissolving it?
Yes, you will need to cancel your North Dakota LLC’s business licenses before dissolving it.
Can I dissolve my North Dakota LLC if it has outstanding state taxes?
Yes, you can dissolve your North Dakota LLC even if it has outstanding state taxes.
What do I need to do to dissolve a North Dakota LLC with multiple members?
You will need to follow the procedures as outlined in the LLC’s operating agreement or North Dakota law.
Do I need to notify the creditors before dissolving my North Dakota LLC?
There is no requirement to notify the creditors before dissolving your North Dakota LLC, but it may be a good idea to do so.
What do I need to do to dissolve a North Dakota LLC with a sole member?
You will need to follow the procedures as outlined in North Dakota statute.
Do I need to file for dissolution if my North Dakota LLC has been inactive for several years?
There is no requirement to dissolve an North Dakota LLC that has been inactive, but you may still be responsible for filing taxes and maintaining necessary licenses and registrations.
Can I personally dissolve my North Dakota LLC?
Yes, you can personally dissolve your North Dakota LLC by filing a Notice of Intent to Terminate with the North Dakota Secretary of State.
Can anyone dissolve my North Dakota LLC?
No, only the registered agent or the members can dissolve a North Dakota LLC.
What should I do with my North Dakota LLC’s books and records after dissolving it?
The books and records of your North Dakota LLC should be maintained per North Dakota law and kept for the required statutory records retention period.
Can I revive my North Dakota LLC after the 5-year deadline?
No, you cannot revive your North Dakota LLC after the 5-year deadline.
Can I dissolve my North Dakota LLC if I’ve missed some annual reports?
Yes, you can still dissolve your North Dakota LLC if you’ve missed some annual reports, but you may owe fees or penalties.
How do I dissolve my North Dakota LLC?
You must file Articles of Dissolution with the North Dakota Secretary of State to dissolve your North Dakota LLC.
When should I dissolve my North Dakota LLC?
You should dissolve your North Dakota LLC if you no longer need or use it for your business purposes or if you plan to cease operations in the state.
Is it mandatory to dissolve a North Dakota LLC?
No, it is not mandatory to dissolve your LLC in North Dakota. However, failure to do so may result in penalties and fees.
Can I dissolve my North Dakota LLC if there is an active lawsuit pending against it?
Yes, but you will need to inform the court and follow all necessary legal procedures before dissolving your LLC.
What happens if I don’t dissolve my North Dakota LLC?
You may be subject to annual report fees and other penalties even if your LLC is no longer operating.
Will dissolving my North Dakota LLC cancel any registered trademarks or patents?
No, dissolving your LLC in North Dakota will not cancel any registered trademarks or patents.
How much does it cost to dissolve my North Dakota LLC?
The filing fee for a Articles of Dissolution for North Dakota LLCs is $15.
What documents do I need to dissolve my North Dakota LLC?
You need to file Articles of Dissolution with the North Dakota Secretary of State to formally dissolve your North Dakota LLC.
Can I dissolve my North Dakota LLC if I have outstanding debts?
Yes, but you are still responsible for paying all outstanding debts and obligations of your LLC.
Do I need to cancel my North Dakota LLC’s business license when dissolving it?
Yes, you should contact any North Dakota agencies where the fictitious name of the LLC was registered to cancel licenses and permits.
Will dissolving my North Dakota LLC cancel any employment contracts?
No, dissolving your LLC in North Dakota does not automatically cancel any employment contracts. You will need to comply with termination policies detailed in contracts made with employees.
What do I do with leftover funds in my North Dakota LLC’s account after dissolving it?
Any remaining funds should be distributed according to the terms of your LLC Operating Agreement.
Will I still be able to access my North Dakota LLC’s legal documents after it is dissolved?
Yes, you should still have access to the LLC’s legal documents after it is dissolved.
Do I need to notify my creditors when dissolving my North Dakota LLC?
Yes, you should notify any outstanding creditors listed in your LLC Operating Agreement that you are dissolving the business.
Can I reverse the LLC dissolution if I change my mind?
Yes, you can still reverse the dissolution until the State processes and dissolves your LLC.
What receipts and returns does my North Dakota LLC have to file before/during the dissolution process?
Your North Dakota LLC must have paid and submitted all fees with annual filings before filing documents for company dissolution.
Who can file for dissolution of a North Dakota LLC?
Members or authorized representatives who represent the LLC can file for dissolution.
What happens to any ongoing legal matters or disputes after my North Dakota LLC is dissolved?
The person who files for the Articles of Dissolution will have to inform the relevant court about the dissolution and develop plans related to issues arising from pending disputes.
Will dissolving my North Dakota LLC have an impact on any administrative penalties imposed against it before dissolution?
No, dissolving your LLC in North Dakota does not affect federal or state taxes and penalties imposed before on the business.
Will dissolving my North Dakota LLC have any impact on my personal liability?
No, dissolving your North Dakota LLC does not change your existing liabilities before dissolution, unless details for limited liability are recorded in historical legal records.
Can I notify others of my company dissolution even without having it formally recognized by State auhtorities?
Technically, this isn’t powerful enough to alert other units/websites about company cessation but is still possible to its legitimacy for customer-cases in the way that LLC maintains transparency.
Who can claim revoked “DBA names” in North Dakota after an LLC is dissolved?
After a LLC clears dues, its previous “doing business as” names are open to further use for unrelated third parties
Should I advertise North Dakota LLC’s dissolution publicly in local newspapers before the dissolving is carried out?
Publication requirement is not mandated in North Dakota. Historically, LLC records associate a publication statement with the request of Dissolution. It is unlikely this will materially affect the outcome without exceptions per a certain set of procedures.
If any legal procedures were ongoing outside state of North Dakota, could they affect my LLC’s ability to be dissolved within North Dakota?
While legal actions may happen at multiple levels of government, North Dakota is responsible for significant legal issues concerning your company’s formation and dissolution that takes place in this state.
What is required when formally “withdrawing” a foreign (looked at as counter-intuitive) ‘foreign filing’ North Dakota LLC?
Foreign LLC should have suspended its agreements of operations for proving successful every year in regard to North Dakota announcements when lacking contracts or wages from its principals, and all requests through Article of Withdrawal are to be filed with the Department of State, Corporate Division.
How do I ensure the correctness of contractual terms with a creditor of dissolved North Dakota LLC?
Dissolution does not end negative credit cycles, inflating criticism from relevant creditors. Designate experts in credit law for surety whether initiated resolution includes negotiated settlement notices well in advance.
Is a revocation worthier than dissolve an LLC to remove foreign banks and government regulations?
Revocation dissolves export prohibitions to organization states, terminates signed-on formation documents from North Dakota records to accelerate proper removal preventing upcoming legal challenges.
What court should rectify internal legal disputes occurring post-dissolution in my North Dakota LLC?
The Wisconsin Attorney appearing before the Wisconsin Director or Commissioner over Company Oversight maintains regulatory determination and open doors for suitable portrayal, arguments for entities requesting a dissolution may also play roles in court jurisdiction legal agreements.
How does the North Dakota LLC dissolution affect international businesses?
Attend interstate settlement agreements when confronting dissolving foreign LLC transfers. EntityState Debt cases, appear to sue foreign businesses might necessary to safeguard regulators on an international level.

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Conclusion

Dissolving North Dakota business can be complex and time-consuming, but following the steps outlined in this guide will help ensure a smooth and successful dissolution. By conducting a formal vote, settling debts and liabilities, distributing assets, filing the Articles of Dissolution, notifying government agencies, and canceling business licenses and permits, you can legally dissolve your North Dakota business and move forward with the next chapter of your professional life.

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