Forming a Single-Member LLC in North Dakota | A Guide For Business Owners

Forming a Single-Member LLC in North Dakota

If you would like to start an LLC in North Dakota, also known as The Peace Garden State, there are a few things that you should consider. In North Dakota, putting up a single-member limited liability company (LLC) will benefit you and your business since it protects your assets, and maintain good standing. It also combines a corporation’s limited liability protection with a sole proprietorship’s simplicity and flexibility.

In this article, Webinarcare Editorial Team will walk you through the step-by-step process of forming a Single-Member LLC in North Dakota and provide valuable tips to help you succeed in your entrepreneurial journey.

Understanding Single-Member LLCs

A single-member LLC in North Dakota is a business entity with only one owner, also known as a member. This business structure offers several advantages, including limited liability protection, pass-through taxation, and ease of management. In North Dakota, single-member LLCs are subject to state-specific regulations and requirements, which may vary from other states. The formation process typically involves choosing a unique business name, registering with the Secretary of State, and completing other required steps to comply with North Dakota laws and regulations.

A Limited Liability Company is subject to state-specific regulations and requirements, which we will cover in this guide. Before that, we reviewed some of the Best LLC Services for you to check out.

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It is suggested that you speak with a legal professional before you begin setting up your single-member LLC. 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 for your business.

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How to Form a Single-Member LLC in North Dakota

To form a single-member LLC for your business, you must follow the guidelines, including research and planning, registering your single-member LLC, establishing your business operations, and maintaining compliance with North Dakota regulations.

Step 1: Research and Planning

Before you can form your single-member LLC in North Dakota, conducting thorough research and creating a solid business plan is crucial. This stage involves the following steps:

Research State-Specific Requirements

Each state has its own regulations for maintaining and forming an LLC. To ensure you comply with North Dakota law, familiarize yourself with the state’s LLC requirements, such as filing fees, Annual Report requirements, and ongoing compliance obligations.

Choose a Business Name

Selecting a name for your LLC is an essential part of the formation process. Your business name should be unique, memorable, and reflective of your products or services. There is a complete guide on Business Name Search in North Dakota for you to have a proper LLC business name. 

In North Dakota, your single-member LLC name must:

  • Include the words “Limited Liability Company,” “LLC,” or “L.L.C.”
  • Not contain any words or phrases that are prohibited by state law
  • Be distinguishable from the names of other businesses registered in the state

If you do not wish to file your LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for 1 year. You must file a name reservation application in the North Dakota Secretary of State to keep the name. 

You can register your business under a different legal name if your preferred name isn’t available.  Once you have chosen a name, you can submit an application for a DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA in North Dakota, you can file it in two methods, by mail and in person.

However, before filing a DBA, you should know that you need to renew your DBA for up to five years, which costs around $25. You can check the availability of your desired business name by searching the North Dakota Secretary of State Business Records Search‘s website.

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Determine Licensing and Permit Requirements

Depending on the nature of your business, you may need to obtain certain licenses and permits to operate legally. Research the specific requirements for your industry in North Dakota by consulting the state’s business licensing portal, contacting your local Chamber of Commerce, or seeking advice from North Dakota Business Attorney.

Create a Business Plan

A well-crafted business plan will guide your single-member LLC’s growth and success. Your business plan for your North Dakota single-member LLC should cover key aspects such as:

  • Executive summary
  • Company Description
  • Market Analysis
  • Competitive Analysis
  • Products and Services
  • Marketing and Sales Strategy
  • Organizational Structure
  • Financial Projections

Step 2: Registering Your Single-Member LLC

Once you have completed the initial research and planning, it’s time to register your single-member LLC with the North Dakota Secretary of State. Here are the steps involved:

File the Articles of Organization

To officially form your single-member LLC in North Dakota, you must file the North Dakota Articles of Organization with the North Dakota Secretary of State. This document includes essential information about your LLC, such as:

  • The name of your LLC
  • The address of your LLC’s principal office
  • The name and address of your registered agent
  • The purpose of your LLC (optional in some states)

You can typically file the Articles of Organization online, by mail, or in person. A filing fee is associated with this process, which costs around $135.

Appoint a Registered Agent

A Registered Agent is a person or entity responsible for receiving legal documents and official notices on behalf of your LLC. In North Dakota, your Registered Agent must:

  • Be a resident of North Dakota or a business entity authorized to do business in the state
  • Have a physical address in North Dakota (P.O. boxes are not acceptable)

It’s essential to choose a reliable and responsible North Dakota Registered Agent, as failure to receive and respond to legal documents can have serious consequences for your business. 

You can serve as your own Registered Agent or appoint a friend, family member, or a professional North Dakota Registered Agent Services.

Obtain an Employer Identification Number (EIN)

An EIN, also known as a Federal Tax Identification Number, is used by the Internal Revenue Service (IRS) to identify your business for tax purposes. You’ll need an EIN to open a business bank account, file taxes, and hire employees (if necessary). 

The application of an EIN in North Dakota 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 the 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.

In obtaining North Dakota EIN for your single-member LLC, you should be aware to ensure that your LLC is eligible for an EIN. You need an EIN if you have employees, operate as a corporation or partnership, or meet other specific IRS criteria. Before applying, gather the required information, including your LLC’s name, mailing address, and the responsible party’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Also, you can apply for an EIN through various methods, including online, by fax, mail, or telephone (for international applicants).

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

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Register Your Single-Member LLC

If your single-member LLC will collect sales tax, have employees, or be subject to certain state taxes, you may need to register with the North Dakota Secretary of State. Check the department’s website or consult a tax professional for specific registration requirements.

Step 3: Establishing Your Business Operations

With your single-member LLC officially registered in North Dakota, you can now focus on setting up the operational aspects of your business.

Open a Business Bank Account

Opening a separate bank account for your North Dakota single-member LLC is essential for maintaining a clear separation between your personal and business finances. This separation helps preserve the limited liability protection offered by the LLC structure. You can check out the Best Banks in North Dakota, which offer the best fees, services, and convenience for your business needs.

Set Up an Accounting System

Effective financial management is crucial for the success of your single-member LLC. Establish a reliable accounting system to track income, expenses, and tax obligations. You can manage your finances using spreadsheets and accounting software by becoming a CPA in North Dakota.

Create an Operating Agreement

Although not required by North Dakota law, it’s highly recommended that you create an operating agreement for your single-member LLC. This document outlines your LLC’s management structure, decision-making process, and ownership rights. A clear North Dakota Operating Agreement can prevent disputes and provide a framework for managing your business.

The operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

Step 4: Maintaining Compliance with North Dakota Regulations

Once your single-member LLC is up and running, staying informed and compliant with state regulations is essential. Here are some key ongoing requirements for LLCs in North Dakota:

File Annual Report

LLCs must file Annual Report with the North Dakota Secretary of State. This report typically includes updated information about your LLC, such as its business address, Registered Agent, and member information. 

In North Dakota, the annual report fee costs around $50 which can be paid every 1 year (15th November every year).

Pay Required Taxes and Fees

As a single-member LLC, your business income will be subject to pass-through taxation, meaning profits and losses will be reported on your personal tax return. However, you may still be responsible for other state taxes, such as sales tax, payroll tax, or franchise tax which you can pay in North Dakota Office of State Tax Commissioner.

In terms of franchise tax for your single-member LLC in North Dakota, there is No franchise tax. Consult a tax professional to ensure you meet all your tax obligations.

Maintain Accurate and Up-to-Date Records

Keeping detailed records of your single-member LLC’s transactions, meetings, and decisions is crucial for maintaining compliance with state regulations and protecting your limited liability status. Regularly review and update your records to accurately reflect your business activities.

Cost of Forming a Single-Member LLC in North Dakota

Even if you have a business name and structure in mind, consider whether you can afford the costs of forming an LLC in North Dakota. Articles of Organization costs around $135. The initial filing fee is $135, and the annual fee is $50. 

If you forget to pay the annual fee for your North Dakota LLC, you will have a penalty of $50. However, you can check the North Dakota LLC Cost for additional information. 

Advantages of Starting a Single-Member LLC

Even though some people decide on what to do with their businesses, some choose to put it in their own individual name, while others still choose to set it up via single-member LLC in North Dakota. These advantages will help establish a single-member LLC in North Dakota. 

  • Limited Liability Protection: One of the primary advantages of a single-member LLC is the limited liability protection it provides to its owner. This means that the owner’s personal assets, such as their home and personal savings, are protected from the debts and liabilities of the business. In the event of a lawsuit or financial loss, only the assets owned by the LLC are at risk.
  • Pass-Through Taxation: Single-member LLCs enjoy pass-through taxation, meaning that the business profits and losses are reported on the owner’s tax return. This avoids the double taxation that traditional corporations face, where the company and the owner are taxed separately on the same income.
  • Simplified Management: Single-member LLCs have a simplified management structure compared to other business structures. The owner has full control over the business’s decision-making process and day-to-day operations without needing a board of directors or complex corporate formalities.
  • Flexibility in Business Operations: Single-member LLCs offer flexibility in terms of operational and management structures. The owner can operate the business as a sole proprietor while benefiting from an LLC’s limited liability protection.
  • Credibility: Forming a single-member LLC can enhance the credibility of your business in the eyes of potential customers, suppliers, and financial institutions. An LLC designation can make your business more professional and established than a sole proprietorship.

FAQs

What is a single-member LLC in North Dakota?
It is a business entity that has only one owner and is recognized by North Dakota law as a legal entity separate from its owner.
How can I form a single-member LLC in North Dakota?
You can form it by filing Articles of Organization with the North Dakota Secretary of State and paying the appropriate fees.
What is the filing fee for creating a single-member LLC in North Dakota?
The filing fee for Articles of Organization in North Dakota is $135.
How long does it take to form a single-member LLC in North Dakota?
The processing time for forming a single-member LLC in North Dakota is usually 5-10 business days.
What is the difference between a single-member LLC and a sole proprietorship in North Dakota?
A sole proprietorship is not a separate legal entity from the owner and there is no liability protection, whereas a single-member LLC has separate legal entity status and provides some liability protection.
Do I need a registered agent for my single-member LLC in North Dakota?
Yes, you must appoint a registered agent who resides in North Dakota and has a physical address for service of process.
Can I serve as my own registered agent for my single-member LLC in North Dakota?
Yes, you can serve as your own registered agent if you have a physical address in North Dakota and are available during business hours.
Do I need to provide an operating agreement for my single-member LLC in North Dakota?
An operating agreement is not required by North Dakota law, but it is recommended for single-member LLCs.
What information do I need to include in the Articles of Organization for my single-member LLC in North Dakota?
You will need to provide the name of your LLC, the name and address of your registered agent, and the address of your principal place of business.
Can I change the name of my single-member LLC in North Dakota after it has been formed?
Yes, you can change the name of your LLC by filing an Amendment to Articles of Organization with the North Dakota Secretary of State.
Can I convert my single-member LLC in North Dakota to another business entity?
Yes, you can convert your LLC to another entity such as a corporation or partnership by filing the appropriate paperwork with the North Dakota Secretary of State.
What are the tax implications of forming a single-member LLC in North Dakota?
As a disregarded entity, the single-member LLC is not taxed on its own. Instead, all profits and losses are reported on the owner’s personal income tax return.
Can I dissolve my single-member LLC in North Dakota?
Yes, you can dissolve your LLC by filing Articles of Dissolution with the North Dakota Secretary of State.
Can I re-instate my single-member LLC in North Dakota after it has been dissolved?
Yes, you can re-instate your LLC by filing an Application for Reinstatement with the North Dakota Secretary of State.
Does North Dakota require an annual report from single-member LLCs?
Yes, North Dakota requires all businesses including single-member LLCs to file an annual report with the Secretary of State.
What happens if I don’t file my annual report for my single-member LLC in North Dakota?
If you fail to file your annual report by the due date, your LLC may be revoked or administratively dissolved.
What type of business licenses do I need to operate my single-member LLC in North Dakota?
The types of business licenses your single-member LLC in North Dakota requires depend on your business type.
Can I have multiple single-member LLCs in North Dakota?
Yes, you can have multiple single-member LLCs in North Dakota as long as they serve different business purposes.
Can I have multiple owners in a North Dakota single-member LLC?
No, a single-member LLC is designed for one owner only.
Can I initiate a North Dakota single-member LLC if I am not a North Dakota resident?
Yes.
Does North Dakota have a requirement for a minimum amount of capital to start a single-member LLC?
No, there is no minimum requirement for capital contributions for a North Dakota single-member LLC.
Can I use a PO box as my registered agent address for my single-member LLC in North Dakota?
No, you must provide a physical street address for your registered agent’s address on the Articles of Organization.
Can I form a North Dakota single-member LLC if I have an existing business in another state?
Yes, you can form a North Dakota single-member LLC even if you have an existing business in another state.
Can I legally use the term “LLC” in my business name in North Dakota even it’s just me?
Yes, as long as your business entity is registered in North Dakota, you may use the term “LLC” in your business name.
Can I dissolve my North Dakota single-member LLC even if it has outstanding liabilities?
Yes, you can dissolve your North Dakota single-member LLC even if it has outstanding liabilities.
How can I get started with forming my single-member LLC in North Dakota?
You can get started by downloading the required forms, filling them out, and emailing them(including fees) to ND SOS’s office to register your business with the state.
Do I need to have a business address in North Dakota for my single-member LLC?
No, but you do need a registered agent located in North Dakota with a physical address to receive legal and tax documents for your llc.
Is a foreign LLC different from a national LLC in North Dakota?
If your LLC formed out of North Dakota(regardless if its a foreign LLC or not), you need to register it in ND by the same procedure.
What is the difference between a single-member and multiple-member LLC in North Dakota?
A single-member LLC has only one owner, whereas a multiple-member LLC has more than one owner.
What are the benefits of forming a single-member LLC in North Dakota?
Some of the benefits of forming a single-member LLC in North Dakota include limited liability protection, the ability to separate personal and business assets, and pass-through taxation.
What is the process for forming a single-member LLC in North Dakota?
To form a single-member LLC in North Dakota, you must file articles of organization the North Dakota Secretary of State.
How much does it cost to form a single-member LLC in North Dakota?
The fee to file articles of organization for a single-member LLC in North Dakota is $135.
Can I change my LLC name after formation in North Dakota?
Yes, you can change your LLC name after formation in North Dakota by filing articles of amendment with the Secretary of State and paying a fee.
Do I need an operating agreement for my single-member LLC in North Dakota?
Although an operating agreement is not required in North Dakota, it is advisable to have one to specify the rights and responsibilities of the LLC and its owner.
Can I start a single-member LLC in North Dakota if I am not a resident of the state?
Yes, you can start a single-member LLC in North Dakota even if you are not a resident of the state.
Can my single-member LLC have employees in North Dakota?
Yes, a single-member LLC in North Dakota can have employees.
Do I need to get a business license for my single-member LLC in North Dakota?
The licensing requirements for a single-member LLC in North Dakota vary depending on the type of business conducted and the location. Check with your local government for specific requirements.
Can a single-member LLC be taxed as an S corporation in North Dakota?
Yes, a single-member LLC can elect to be taxed as an S corporation in North Dakota.
Does North Dakota have a franchise tax for LLCs?
No, North Dakota does not have a franchise tax for LLCs.
Does North Dakota require annual reports for LLCs?
Yes, all LLCs in North Dakota must file an annual report with the Secretary of State by November 15th each year.
Can I form a single-member LLC for real estate in North Dakota?
Yes, you can form a single-member LLC for real estate in North Dakota.
What is the liability protection for a single-member LLC in North Dakota?
A single-member LLC in North Dakota provides limited liability protection for the owner, which means that their personal assets are generally not at risk for business debts.
Can I change my LLC structure from a single-member to a multiple-member in North Dakota?
Yes, you can change your LLC structure from a single-member to a multiple-member in North Dakota.
Can I cancel my single-member LLC in North Dakota?
Yes, you can cancel your single-member LLC in North Dakota by filing articles of dissolution with the Secretary of State and paying any outstanding fees and taxes.
Who can form a single-member LLC in North Dakota?
Both U.S. and foreign individuals and entities can form a single-member LLC in North Dakota.
How many single-member LLCs can I form in North Dakota?
There is no limit on the number of single-member LLCs that you can form in North Dakota.
How do I know if a name is available for my single-member LLC in North Dakota?
You can search the North Dakota Secretary of State’s website to see if a name is available for your single-member LLC in North Dakota.
Do I need to disclose my personal information to form a single-member LLC in North Dakota?
Yes, you will need to provide your personal information when you file articles of organization for a single-member LLC in North Dakota.
Can a single-member LLC have more than one owner in North Dakota?
No, a single-member LLC cannot have more than one owner in North Dakota.
Can I form a single-member LLC for a nonprofit in North Dakota?
No, a single-member LLC cannot be formed for a nonprofit in North Dakota.
Do I need to file a North Dakota state tax return for my single-member LLC?
It depends on the type of business and the gross receipts generated and earned taxes. The members may need to file certain returns.
Can I use a PO Box as my LLC’s address in North Dakota?
No, you cannot use a PO Box as your LLC’s address in North Dakota. You will need a physical street address.
What if I have additional questions about forming a single-member LLC in North Dakota?
You can contact the North Dakota Secretary of State for additional information and assistance.

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Conclusion

Starting a single-member LLC in North Dakota can be a rewarding experience that offers numerous benefits for entrepreneurs. By following this guide and staying informed about state regulations, you can successfully navigate the formation process and set your new business up for success. Feel free to seek professional assistance from a lawyer or accountant if you have questions or need help. Your journey as a business owner has just begun – embrace the challenges and enjoy the rewards of your hard work and determination.

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