Not every limited liability company (LLC) lasts forever. In fact, many LLCs in North Dakota are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of North Dakota has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the North Dakota LLC dissolution process? Are there different processes for businesses based in North Dakota and those expanded from other states? When do you need to dissolve your LLC? We’ll answer all of these questions and more in this article.
How Do You Dissolve a North Dakota LLC?
When closing a business registered as an LLC in the state of North Dakota, you’ll need to take care to dissolve your business exactly as the state outlines. The most important part of this process is filing the correct paperwork with the relevant legal entities, but this is far from the only vital step.
In addition to filing documentation of your North Dakota LLC dissolution, you will need to liquidate the assets of your business, notify all individuals and business entities that have an interest in your company, and resolve any outstanding liabilities with vendors, suppliers, or clients.
There are potentially severe penalties for failing to comply with the North Dakota LLC dissolution process, and you as a business owner could be personally responsible for your LLC’s liabilities and debts. Therefore, it’s extremely important that you complete each step outlined in this guide to ensure an effective and compliant dissolution.
As for the question of when you should dissolve your LLC, you should do this as soon as you’re certain you will no longer conduct business through this entity. This gives you an opportunity to close up shop with the knowledge that you’re not transacting any business after you start the dissolution process.
Dissolution for Domestic North Dakota LLCs
Is your LLC based in North Dakota, and registered as a domestic entity in this state? If your business has not accepted any contributions, you’ll start your dissolution process with a document known as the Limited Liability Company Articles of Dissolution and Termination by Organizers. This form will include some crucial information about your business, so you should fill it out carefully and accurately.
Among the info you’ll need to complete this form is the official business name of your LLC, the date of your LLC’s original formation, your LLC’s federal tax ID number or EIN (Employer Identification Number), the signatures of your LLC’s members or organizers, and contact information in case the state has any questions about your dissolution.
The process for LLCs that have accepted contributions is considerably more complex. This process begins with the filing of a Notice of Dissolution, which you can find on North Dakota’s online business portal. This form requires your LLC’s business name, your federal tax ID number (EIN), the reason for dissolving your LLC, your name, signature, email address, phone number, and the date. The Notice of Dissolution costs just $10 to file.
Next, you’ll need to complete the Articles of Dissolution and Termination by Members document, which is also available on the state’s online portal. This form requires your LLC’s business name, your federal tax ID number (EIN), the effective date of your dissolution, an indication that your LLC either did or did not give notice to its creditors and claimants, your name, signature, email address, phone number, and the date.
Once you’ve finished filling out the relevant forms, you can submit them to the Secretary of State via mail, fax, by hand, or online. No matter how you choose to submit them, the two different Articles of Dissolution and Termination documents both have a $20 filing fee.
According to the Secretary of State’s website, you can expect a wait time of up to four weeks for the state to process your filing. Unlike most states, North Dakota does not have expedited options, so there is no way to speed up this process.
But what does this process look like for a business that was formed outside the state and then expanded to North Dakota?
Dissolution for Foreign LLCs in North Dakota
If you operate a foreign LLC in the state of North Dakota, the dissolution process looks quite different than it does for domestic entities. In fact, it’s actually technically called a withdrawal rather than a dissolution.
To dissolve a foreign LLC in this state, you’ll first complete the Certificate of Withdrawal document. Much of the information for this form is the same as the info provided for the Articles of Dissolution and Termination, but there are some differences for the foreign version.
This form requires your LLC’s official name, the federal tax ID number or EIN of your LLC, the jurisdiction where you originally formed your LLC, contact information for potential future service of process deliveries, the name of your LLC’s contact person, along with that person’s signature, email address, phone number, and the date.
The filing, fees, and turnaround times for this filing are exactly the same as they are for the Articles of Dissolution and Termination. You can submit the form to the Secretary of State via mail, fax, by hand, or online, along with your $20 filing fee.
You can expect a wait time of up to four weeks for the state to process your filing, and North Dakota does not have expedited options available.
Involuntary Dissolutions in North Dakota
We should also discuss the potential for an LLC to be involuntarily dissolved by the state. There are several reasons this could happen, and most of them revolve around significant mistakes made by the LLC’s ownership group.
For instance, North Dakota could involuntarily dissolve your LLC if you fail to file your annual reports, fail to file your dissolution documents, operate your business with no members for at least 90 days, operate your LLC in an unlawful or fraudulent manner, or if it is unreasonable to continue operating your LLC in accordance with your operating agreement or Articles of Organization.
It’s obviously never advisable to operate your LLC in a way that leads to the state dissolving it against your will. However, North Dakota doesn’t have terribly punitive laws for reinstating a dissolved LLC. Within one year of your LLC being dissolved, you will need to file any past due documents, pay any applicable fees, and submit a reinstatement request to the Secretary of State. If you wait for more than a year, you will need a court order to get your LLC back up and running.
Still, if you keep operating your business after the state involuntarily dissolves it, you could open yourself up to all sorts of legal issues due to the continued operation of a non-compliant entity. In general, you should be as careful as possible when it comes to following the rules and regulations in this state.
It’s not that the process for dissolving or withdrawing your LLC in North Dakota is terribly difficult. However, it is a process that you need to take great care to complete in a compliant fashion, or you could expose your business to a wide variety of potential legal complications and financial penalties. Trust us when we say it’s much smarter and easier to simply follow the directions with care to avoid any issues.
Do you need more information about operating an LLC in North Dakota? Take a look at the following resources: