Today, each state in the United States has its laws and regulations on creating limited liability organizations, and North Dakota is no exception. Regardless of the state, there is a set of legal documents required to perform commercial activities. This review also contains rules for registering an LLC in the state of North Dakota.
It is worth noting that creating and running a business is a very time-consuming and multi-layered process. Many owners and aspiring entrepreneurs prefer to establish limited liability organizations to avoid mistakes and enormous financial losses. Let us find out what is so special about this particular business model.
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LLC is one of the organizational and legal forms for doing business. In most cases, an LLC is created by those who conduct business with partners to officially share their profits. But to run such a company, sometimes you need to fill out this form.
It is a legal document that allows the firms to carry out various commercial activities. This business model’s primary advantage is the ability to protect each owner from excessive financial losses and risks. Regardless of the circumstances, the operating agreement guarantees the safety of your capital and investments. In other words, you do not need to worry about potential losses, as your liability is limited.
Undoubtedly, every state has its customs and rules. For example, North Dakota does not require each owner to sign the operating agreement. However, without this legal document, you need to prepare yourself for all the risks (including the risk of bankruptcy) and responsibility. If necessary, the state may liquidate all personal and financial assets and accounts to file claims against the subject organization.
Please carefully read the agreement template before proceeding to fill it out. You must fill in accurate information. Like any other legal document, this agreement has its standard structure reflecting the following aspects:
Each state, North Dakota included, provides two Operating Agreement form options: multi-member and single-member operating agreements. Filling out either form depends on the composition of the ruling Board. If you plan to own a company solely by yourself, you need to fill out the single-member Operating Agreement form. If several owners participate in an equity business, then use a different type of operating agreement. Everything is individual and depends on your purposes.
Remember that the state does not oblige you to fill out the agreement. However, it does call on its businesses to consider this opportunity. The document gives you extra protection from financial obligations before the company and tax benefits. All owners will pursue the same goals and therefore cooperate for the common benefit.
Each member of the company receives a copy of the contract, as it has a binding legal force. If you are the owner and act alone, you are fully responsible for your business activity, success, or failure. Below are step-by-step instructions to completing the operating agreement, and the state laws and regulations.
Each owner who invests has a specific interest share level and a responsibility level restricted to that share proportionately. No one will force you to overpay or take more responsibility for your partnership than you should. As for North Dakota, you can only create a limited liability company in full compliance with the North Dakota Uniform act on LLCs (Chapter 10-32.1). Owners should carefully read the respective laws and restrictions contained in that Chapter. The following section has all the necessary data, including the required legal terms.
The Uniform act on LLCs is a universal document that allows you to understand the legal peculiarities of doing business. Besides, it provides you an opportunity to proceed to registration procedures using a structural approach.
Below are primary sections that any LLC operating agreement should include:
As every business tends to grow and change over time, the document allows you to make amendments. You can use our Operating Agreement filling instructions below to make the process a bit easier. Do not forget to provide accurate information to avoid misunderstandings. Also, read the agreement text carefully to prevent errors.
The state of North Dakota has its laws regarding the organizational aspects of the business. You need to understand that when registering a company, you will need to pay for documents.
1. Choose an Appropriate Company Name
Before you even start thinking about creating a company, you need to develop a proper brand name. It must be unique and appropriate. You can check if it is available or taken via an online database search. You can also send a request to the responsible authorities for the suggested name verification.
2. Assign a Registered Agent
In North Dakota, the owners of a limited company must choose a commercial or noncommercial registered agent. This person or entity becomes the LLC’s primary contact in case of servicing the process or dealing with lawsuits. Besides, a commercial agent is required to register with the Secretary of State.
If you want a non-profit agent to represent your company, you can assign either of the following professionals:
3. Complete the Registration Form
Further on, you must fill out the operating agreement and register it. Today, the Secretary of State accepts applications in North Dakota only via online filing. Please do not forget about the registration fee. The registration fee for both domestic and foreign LLCs is 135 US dollars. However, foreign LLCs must also provide a certificate of existence issued within 90 days after applying.
4. Designate the Essence of the Operating Agreement
By the North Dakota law, you can choose not to fill out an operating agreement. Here, it is not a binding legal norm. However, the local authorities highly recommend doing so to avoid unwanted financial risks, losses, and lawsuits. As mentioned above, the agreement distinguishes between your share in the business and personal liability.
5. Obtain the Tax Identification Number
The taxpayer (employer) identification number (EIN) is a mandatory element of any newly established limited liability company. It is typically issued by the Internal Revenue Service to obtain tax information on the subject company. You will need this nine-digit code to conduct various financial transactions and operations, like opening bank accounts or paying salaries. You can get the registration number for free with an online application or download a PDF file right away.
Thus, the operating agreement is a useful document for an LLC that guarantees financial protection of your business entity, your capital, and investments. Besides, this legal form simplifies the lives of its owners and helps avoid lawsuits.