Setting up a series LLC in North Dakota is quite easy, but because this business structure is still fairly new, you may need some help. Luckily, with our guide on how to form a series LLC in ND, the whole process – from start to finish – will take neither effort nor time.
Further down, we will describe how to start a series LLC in North Dakota, including all the important steps, from creating a business name to filing the documents to planning the tasks once the SLLC is already created, so you know exactly what to do when you get started.
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Before we move on, however, it’s worth noting that while North Dakota recognizes the series LLC, its laws are quite confusing, particularly in the sense that they provide no protection from liability, which kind of defeats the point of creating a series LLC in the first place.
So, even if you create a series LLC, the cells will be sharing liabilities, making choosing this business structure over a traditional LLC pointless. But hopefully, this law will change soon. For further information, follow our guide below.
First things first, you should select a name that best resonates with your branding and is quite easy to remember so that people have it at the top of their minds. In addition, it’s necessary to take into account a few law requirements that a company name should meet:
Every state in the US requires a business entity to appoint a designated registered agent to handle correspondence on its behalf. North Dakota isn’t an exception. No matter what business structure you decide to open, you’ll need to have a resident agent (RA).
In simple terms, an RA is a business representative that receives and accepts all legal documents and business notes of the company and informs the government upon receipt of them. Who can be a registered agent in North Dakota? You’ve got a number of options:
The main requirement is that the company or person you hire is at least 18 years old and has a registered street address within the state of North Dakota, at which he or she can be found during business hours.
As we’ve stated, even you can act as your own statutory agent. In that case, however, you’ll be void of a few remarkable advantages, including:
So, as you can see, for most companies, hiring a third-party agent for the service of process is far more beneficial than handling this work on their own. What’s more, it also saves you from those awkward situations when you have clients and need to receive your notes in front of them.
Now it’s time to settle up your SLLC in ND, which is done by simply filing your Articles of Organization with the Secretary of State (SOS). If you have difficulty filling out the form, you can always reach out to a local attorney. In general, however, it’s all fairly easy.
When you open a series LLC, you’ll be asked to provide the following information:
Once you get the certified copy of your Articles of Organization, your SLLC is officially established and you can legally operate the business in the state. The form can be filed online or by mail, and the filing fee is $135.
Unlike the Articles of Organization, creating an operating agreement isn’t a law requirement. Nevertheless, it’s still good to have it. Basically, this document acts as your business plan, which outlines the internal rules of the company, including the obligations of each of its members.
If you start an SLLC without an operating agreement, your company will be automatically treated under state law. However, an operating agreement allows you to play by your own rules.
More to that, it helps settle down disputes should those arise when you start running an SLLC.
A well-written operating agreement can also be a great tool to attract investors. By setting out the strategy for your business as well as going through each of its key steps, you’re more likely to attract the attention of investors and tip the scale in favor of joining you.
Next, you’ll need to apply for an Employment Identification Number (EIN), known as a tax or federal number. This nine-digit number is appointed to all business entities for tax purposes and is needed to hire employees.
Even if your company doesn’t have employees and you’re not planning to recruit anyone in the future, obtaining an EIN can still be a good idea. You’ll need to provide it when opening a business account, which is necessary to protect your personal assets.
The EIN number can be applied through the IRS website by filing the form online, by mail, or by fax, and there’s no filing fee to pay.
When it comes to the SLLC cost in ND, there’s no fixed value, as the price will greatly vary depending on the services you use and who you appoint as your resident agent. In general, the cost can be broken down into two groups, which are:
To give you a better idea of how much creating a series LLC in North Dakota will cost, we’ve put together a brief guide that you can find below.
|The Articles of Organization fee||$135|
|Registered agent fee||$0-$300|
|Annual report fee||$25|
|Certified copies of documents fee||$15 + $5 (search of record fee)|
|Certificate of Good Standing fee (optional)||$15 + $5 (search of record fee)|
|Name reservation fee||$10|
|DBA name fee (optional)||$25|
|Articles of Amendment fee (optional)||$20|
|Articles of Dissolution fee (optional)||$20|
While you won’t need to acquire a Certificate of Good Standing at the beginning, you may need it at some stage. As the document name suggests, this certificate proves the fact that your company’s records are properly handled and that it’s authorized to do business in the state.
Here are a few examples of when the Certificate of Good Standing may be required:
You may also want to get yourself a trade name (known as DBA), which can be beneficial in case your legal name is too long or you want to operate under a different name.
As your business grows, it may trigger the need to amend certain information in your Articles of Organization. If this happens, you will be able to do so by filing the Articles of Amendment that will notify your Secretary of State of the recent changes.
Once you’ve completed the paperwork and received a certified copy of your Articles of Organization, it means that your SLLC has been created and you are now authorized to do business in the state. Yet, there are a few more tasks to see into after an SLLC registration.
Before you get started, make sure that you sort your business bank account first. Doing so is crucial to draw the distinction between your personal assets and business income and keep them protected from any kind of liabilities.
Besides, it’s much easier to keep track of your taxes when you have your business gains in a separate account. Therefore, if you’ve not obtained an EIN number, it’s time to get it.
Opening a bank account is fairly easy to do. All you need is to provide your certified copy of the Articles of Organization, EIN number, and the operating agreement (if you have it). You can opt for any bank of your choice, and the whole process doesn’t take longer than an hour.
You may also want to hire a professional accountant or business consultant to help you prepare reports and manage business finances. This will help you keep your company compliant and avoid any penalties pertaining to not paying taxes in due time.
Even if you’ve made a decision to manage your finances yourself, it may still be a good idea to have someone who can assist you with setting up the software and giving financial advice.
By analyzing your company’s performance, an accountant can give you insight into how best to invest and what expenses can be cut out without affecting your business.
Any company in the state that has employees must acquire workers’ compensation insurance. This type of insurance covers expenses associated with illnesses and accidents that may occur at work and is important to protect your business against any claims.
Another type of insurance to see into is general liability insurance. As the name suggests, this policy is intended to cover all general claims that can be made against your SLLC as you conduct business, including property damage, bodily injuries, and so on.
If you have a vehicle that you use for commercial purposes, it’s highly advisable to get car insurance, too.
Once you’ve completed all of the steps above, all you’re really left to do is ensure that your company’s kept compliant. One of the best ways to do so is to resort to a professional who’d provide expert support at all stages. Even so, understanding your reports is necessary.
By and large, there are two types of reports to take care of:
The first annual report must be submitted the same year when the SLLC has been established, after which you’ll need to file them each year before November 15. The filling cost is $25.
Aside from that, any business entity in ND, regardless of whether it’s made any profits from the business or not, is required to send income reports.
In general, unless you choose to be treated as a corporation, income taxes are going to fall on each member of an LLC, meaning the LLC itself doesn’t have to pay any income taxes. In the case of a corporation, you’ll also need to pay a separate income tax.