Think about your LLC a year from now: raking in profits and taking North Dakota by storm. 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.
While you’re making plans and dreaming big, 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.
Quick Note: If you’d like to keep your costs of starting an LLC as simple and low as possible, consider hiring ZenBusiness – a reliable business formation service. To get a better idea of the value they offer and how it works, we compared them to the two most well known services:
Bare Minimum Cost to Start an LLC in North Dakota
- Optional: LLC Name Reservation Fee
- $10 for online or mailed submissions
- 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 a $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.
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 a $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.
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.
LLC Formation Service
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 opt for an LLC formation service. 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 ZenBusiness and Northwest) offer basic 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.
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 and on-time, 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 Services guide.
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 setting up an LLC, which can range from $500-2000.
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.
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.
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.