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North Dakota LLC Cost

You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.

And we’re not talking about renting office space or paying employees — before you sell a single product, there are startup costs associated with launching an LLC in North Dakota.

Make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common North Dakota startup fees here.

Bare Minimum Cost to Start an LLC in North Dakota

Optional: LLC Name Reservation Fee

    • $10 for online or mailed submissions

Optional: LLC Formation Service

    • $39 for an LLC service like ZenBusiness and $79 for LegalZoom

Required: Articles of Organization Fee

    • $135 for online or mailed submissions

Overall North Dakota LLC Formation Costs

LLC Name Reservation Fee

Reserving a business name is an optional part of the LLC formation process. It’s only necessary if you want to protect your name but aren’t ready to start your business. A “Reserve Name Application” (submitted online or on paper) plus $10 will get you a one-year reservation, renewable for another $10 payment. However, if your LLC is ready to go, you’ll save time and money by filing the Articles of Organization right away instead, as this will successfully register your name.

To clarify, most states don’t require name reservations, and they’re rarely necessary. If you’re concerned about someone else registering the name you want, you could opt to simply form your LLC instead of reserving the name.

 

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Articles of Organization Fee

This is the big one, the most important (and most expensive) form that you’ll file to start your North Dakota LLC. Without a valid Articles of Organization on file with the Secretary of State, your LLC cannot do business in the state. It will set you back $135 to file online or by mail (print the online form), but it’s $135 well spent. But you won’t have to worry about this payment again, because once your Articles of Organization is on file, it doesn’t need to be filed again.

The information you’ll need to file your Articles of Organization includes an indication that your business is or is not a farming LLC, the official business name of your LLC, the name and address of your registered agent, your LLC’s principal office address, the effective date of your LLC formation (if applicable), the intended duration of your LLC (if applicable), the purpose of your business, and the names, signatures, and addresses of each LLC organizer.

If you would rather get some help for this step, you’re in luck! There are plenty of reputable LLC formation services that will prepare and file your Articles of Organization on your behalf. You have plenty of options for this service, but we prefer ZenBusiness. They offer great low rates and well-rounded services, and with our exclusive discount code, you can get 20% off!

 

Business and Professional Licenses

Even with your Articles of Organization on file, you might not be ready to commence business in North Dakota just yet. Certain businesses must acquire licensure from specific state agencies first. Livestock dealers, for example, must apply for licensure with the Department of Agriculture, and restaurants with the Department of Health. Find a full list of required licenses here. In addition, cities and/or counties can have their own licensure laws, so you’ll also need to contact your local government.

What are some of the most commonly required business licenses for North Dakota LLCs? If your business operates in a regulated industry, you will probably need some sort of professional license to operate in compliance with state law. On the municipal level, things like alarm permits, building permits, and zoning permits are all very common.

 

LLC Formation Websites

Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might look into using LLC formation websites. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.

Most of these services (like LegalZoom or ZenBusiness) offer simple LLC formation service like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, operating agreements, and expedited filing.

There are many different companies offering LLC formation services these days, and it can be tricky to tell which one is the right choice for your needs. We think ZenBusiness and IncFile are the two best LLC formation companies, and we wouldn’t hesitate to recommend either of them to our families and friends.

 

Registered Agent Service

Appointing a registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with North Dakota business law. In short, you need an agent you can trust.

While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently, saving you from the penalties of delinquent filings and the stress of having to do it yourself.

Not all registered agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to registered agent services, Northwest also handles LLC formation — and they’ll include a registered agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our best registered agent websites guide.

 

Attorney Fees

If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.

Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for starting an LLC, which can range from $500-2,000.

Cost variations depend on the experience and location of the lawyer. To find the right fit for your LLC, you’ll need to do some research. A site like Avvo can be extremely helpful, giving access to a database full of North Dakota business lawyers, so you can compare rates, locations, and areas of expertise.

If you don’t want to go digging for your own attorney, we compiled the following list of highly rated business lawyers in North Dakota. All of these attorneys are primarily focused on the business world, they all receive five-star ratings from clients, and they all have excellent Avvo ratings.

 

Foreign Qualification Fee

This only applies if your LLC was formed in another state and is now expanding into North Dakota. When commencing business in the state, foreign entities will file the “Certificate of Authority Application” instead of the Articles of Organization.

All foreign business entities are required to foreign qualify in North Dakota, or they could incur some pretty severe penalties. Avoid trouble with the Secretary of State by filing the Certificate of Authority Application online using the FirstStop filing portal, or by printing the online form and mailing it. The filing fee is $135 and, like the Articles of Organization fee, you only need to pay it once.

 

LLC Annual Fees

After all the initial startup fees, your LLC will have annual maintenance fees, namely the annual report. Every North Dakota LLC must file an annual report before Nov. 15 for a fee of $50 each year. Reports filed after Nov. 15 will incur a $50 late fee. File the annual report online using the FirstStop filing portal, and note the $50 filing fee in your annual budget.

The information required to file your annual report includes your LLC’s official business name, your LLC’s business purpose, your LLC’s principal office address, an indication that your LLC is managed by its members or a manager, and the names and addresses of each member and/or manager.

For more info on annual reports for North Dakota LLCs, check out our full article on this topic!

 

Taxes

In most cases, a North Dakota LLC doesn’t have to pay corporate income taxes either at the federal or state level. By default, LLCs are considered “pass-through” entities, so instead of filing separate corporate tax returns, their owners report income and losses on their own personal returns. Plus, North Dakota doesn’t require its LLCs to pay a “franchise” tax or other tax for the privilege of doing business in the state.

But before you start thinking that you won’t need to pay any taxes, know that there are certain circumstances that require LLCs to pay specific business-related taxes. Some common examples include the Sales and Use Tax, mandatory for business entities that sell merchandise, and the withholding tax for those that hire employees. Register for these taxes on the North Dakota Taxpayer Access Point.

If your LLC maintains employees, you’ll also need to register your business with the Unemployment Insurance Employer Account System, so it can pay the Unemployment Insurance Tax.

What if I Don’t Pay?

Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.

Fail to submit any of the necessary startup forms or fees — like the Articles of Organization or the Certificate of Authority Application — and you won’t be able to do business in the state. Miss an annual report and it will accrue a $50 late fee, plus your LLC will fall out of good standing with the state, preventing it from foreign qualifying in most other states, applying for certain business loans, renewing professional licenses, and more. If you don’t reconcile your good standing, the state can involuntarily dissolve your LLC, and you’ll be prohibited from doing business until you file for reinstatement.

Missed tax payments come with a whole different set of penalties. Failing to pay your Sales and Use Tax and it will incur a penalty of 5% of the amount owed, with an additional 5% each month (up to 25%). And other taxes have similar penalties, and you can learn more on the NDTax website. In short, staying on top of your filings, fees, and taxes will save you a lot of money and headaches in the future.

Planning Your Expenses

By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in North Dakota.

Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees — like annual reports — so your business doesn’t fall out of good standing.

 

Key Steps for Starting a North Dakota LLC

  • The first step to forming a North Dakota LLC is to come up with a good name for your business. You’ll want to make sure the name you want is still available and hasn’t already been claimed by another business, so you’ll need to search the state’s business database to verify its availability.
  • Next, you’ll need to choose your registered agent. While you can legally serve as your own registered agent in North Dakota, this role can actually be more of a hassle than you might expect. That’s why we always recommend hiring a reputable registered agent service that can handle the responsibility of this position on your behalf.
  • The third step involves the preparation and filing of your Articles of Organization. You’ll need to fill out the paperwork and pay a $135 fee. Once the state processes this document, your LLC will be officially open for business!
  • That’s not the end of the road for the startup process though, as you’ll also need to create an operating agreement for your LLC. There is no legal requirement for North Dakota LLCs to have written operating agreements, but it’s still an extremely important element of any LLC. The operating agreement is an internal document that outlines how your LLC will operate, and there are several aspects of this document that can prevent messy ownership disputes down the line.
  • You will also need to acquire a federal tax ID number (also known as an EIN, or employer identification number). This is essentially a Social Security number for your business, as it is a nine-digit code used to file taxes, hire employees, open business banking accounts, and more.
  • Next, you’ll need to register for any relevant taxes with the North Dakota Office of the State Tax Commissioner, and also obtain all licenses and permits that apply to your business type. Keep in mind that, depending on the nature of your business, you might require licenses from the federal, state, county, and municipal governments.

Once you’ve finished all of these steps, you’re ready to operate a compliant business entity with the state of North Dakota!

Key Steps for Maintaining a North Dakota LLC

After you’ve completed all of the items in the previous section, you’ll need to focus on maintaining your LLC. The first step in this process is to open a business bank account. This will help you keep your business and personal expenses entirely separate, and it will also help immensely with your accounting and taxation responsibilities.

You should also keep detailed records of every financial transaction that takes place with your LLC. This means maintaining a file of invoices for every purchase and sale you make, along with information regarding your employees or contractors and the work they perform for your business.

As we already mentioned, annual reports are a key component of LLC maintenance in this state, and there are harsh financial penalties for delinquent reports. Additionally, you might want to hold an annual meeting to discuss goals and priorities for your LLC, although this is an optional step.

The Top 3 North Dakota LLC Services

If you want to hire a reputable LLC formation service to handle the heavy lifting on your behalf, these are the three companies we trust and rely on the most.

  • ZenBusiness ($39) – ZenBusiness offers a well-rounded LLC formation package at a great low rate. Their standard LLC package includes a full year of registered agent service, an accounting assessment, and a customizable operating agreement. ZenBusiness also receives stellar customer feedback.
  • IncFile (FREE) – That’s not a typo! IncFile really does form LLCs for free. Even better, they include 12 months of registered agent service in their free package. IncFile has a ton of experience and more than 500,000 satisfied customers, so they’re always a reliable choice.
  • Northwest Registered Agent ($225) – Northwest offers a bit more of a premium service, but if you have the money, we think it’s worth it. Like ZenBusiness and IncFile, Northwest also includes a year of registered agent service with the purchase of any LLC formation package. They also offer the best customer support in this industry, with knowledgeable representatives who are familiar with the details of business formation processes in every state.

Frequently Asked Questions

Before we wrap things up, let’s take a look at some of the most common questions we hear from readers regarding the LLC formation process in North Dakota.

What are the state business tax rates in North Dakota?

If your LLC is taxed like a sole proprietorship or general partnership, you’ll need to pay taxes on your business income at the state’s personal income tax rates (between 1.1% and 2.9%, depending on your income level). If your LLC is taxed like a corporation, you’re required to pay North Dakota’s 1.41-4.31% corporate income tax on your business revenue.

How quickly does North Dakota process LLC formations?

The Secretary of State should be able to process your LLC’s formation within four weeks.

How many small businesses are there in North Dakota today?

The state of North Dakota is home to nearly 75,000 small businesses. Entrepreneurs of all backgrounds and business types find that North Dakota is a great place to own and operate a small business.

What are the top small business resources and websites in North Dakota?

The North Dakota chapter of the Small Business Development Center is a great place to start, as they offer a wide variety of tools and resources for North Dakota LLCs. The U.S. Small Business Administration’s North Dakota District Office is another valuable resource, and the state’s small business resource page also has plenty of good info.

Should I form my LLC in North Dakota, or choose a state like Delaware or Wyoming?

Some people like to form their LLCs in states with favorable legal settings. For instance, Delaware is often seen as the most business-friendly state, as it has an entire court system that’s dedicated solely to business matters. As for Wyoming, this state has some of the most generous anonymity laws for LLC ownership.

However, for most people, your best option is to simply form your business in your home state. Forming in a different state can be a tremendous hassle, and it can add some unnecessary complexity to tax issues as well.