How To Start A Limited Liability Company In North Dakota
Do you want to know how to start a limited liability company in North Dakota? Do you want to know what to expect? SW&L Attorneys’ Business Law Group in Fargo will help you every step of the way.
What Type Of Business Should I Form?
Your first step is to confirm you have the correct business type. SW&L Attorneys Business Law Group will work with you and your other professionals (such as your accountant and insurance agent) to make sure a limited liability company is right for you. If you do not have these professionals, we will refer you to the appropriate people. Before we can make a recommendation on the type of business, we need to know your particular circumstances and objectives. Sometimes you may not know your objectives, and we can help you clarify them. The right type of business for you may be a C Corporation, S Corporation, Nonprofit Corporation, Limited Liability Company, Nonprofit Limited Liability Company, General Partnership, Limited Partnership, Limited Liability Partnership, or Limited Liability Limited Partnership. Each different form has its place and purpose. Each has different liability protection, filing requirements, and form of taxation. Choosing the right form minimizes your risk, administrative charges, and taxation. Each form is not the same, and it is crucial to choose the right form from the outset.
What Can I Name My LLC?
After we’ve confirmed with you a limited liability company is the right type of business for you, you need to find a name. North Dakota law requires the name to satisfy a number of requirements, and we will guide you through these requirements. Also, the North Dakota Secretary of State will not accept any limited liability company name that is “deceptively similar” to another name already filed. SW&L Attorneys’ Business Law Group will assist with name searches to minimize the risk your name gets rejected. If it is deceptively similar and the other similarly named business is willing to consent, we will work with that business to obtain consent to use a name. If your limited liability company intends to operate under another name, we will also assist with obtaining a trade name.
How Do I File Articles Of Organization?
After you’ve settled on an acceptable name, SW&L Attorneys’ Business Law Group will prepare the initial paperwork and make the filing with the North Dakota Secretary of State. For a limited liability company, the initial paperwork is called the Articles of Organization. The Articles of Organization is a public document available to be viewed by anyone who wants to view it, so getting it right is important. SW&L Attorneys’ Business Law Group works with you to maximize your privacy. It is also the charter document – the document by which your business runs and by which any other limited liability company is bound to.
After the North Dakota Secretary of State accepts the Articles of Organization, it will deliver an accepted copy of the Articles of Organization along with a Certificate of Organization. These documents mean your limited liability company has been formed. It is not ready for business, however. You will need to organize your LLC.
How Do I Organize My LLC?
Organizing your business means making a series of decisions and memorializing these decisions. You may hold an organizational meeting and record organizational minutes. SW&L Attorneys’ Business Law Group will assist with running the meeting and preparing the minutes. Alternatively, you can choose to sign a written action in lieu of an organizational meeting to memorialize your decisions. We’ll give you advice on the most efficient method to organize your business.
How Do I Accept New Members?
These decisions include accepting contributions and issuing Membership Interests to Members. A member of a limited liability company is the name of the owner. A Member ordinarily has governance rights and financial rights to the limited liability company. Governance rights mean the Member has the right to make decisions and influence the company. Financial rights mean the Member has the right to receive distributions if they are declared. The Organizational Meeting can set each Member’s rights and preferences.
Who Directs My Limited Liability Company?
In your organizational meeting, you will determine who directs the limited liability company. You will choose if you want your LLC to be managed by the members or by a board of governors. This decision is based on your LLC’s operations, and we will work with you and make recommendations based on your operations. If your LLC is member-managed, then the Members themselves vote on and make decisions affecting the business. If you decide to seat a board of governors, then the members will determine the number of governors, the term length for each board seat, and the identity of each governor. Once seated, the board of governors makes most decisions for the limited liability company.
Who Manages My Limited Liability Company?
You must also decide who manages the limited liability company. In a member-managed LLC, the members direct the company. In a governor-managed LLC, the governors direct the company. They do not, however, take action on behalf of the limited liability company. For this, you need managers. In North Dakota, you must have three managers: (1) a president; (2) a treasurer; and (3) a secretary. A president (which may also be known as the chief executive officer or “CEO”) has general active management for the business of the limited liability company. The president is also responsible for seeing that all orders and resolutions of the board of governors (or the members, if member-managed) are carried into effect. The president also signs most documents on behalf of the LLC. The treasurer (which may also be known as the chief financial officer or “CFO”) is responsible for the business’s money: making deposits, making disbursements, and keeping accurate financial records. The secretary is responsible for recording the meetings and decisions made by the LLC. The limited liability company may also nominate one or more vice presidents and decide on the duties of each. SW&L’s Business Law Group will guide you name the right people for the right positions.
How Does My Limited Liability Company Make Decisions?
Chapter 10-32 of the North Dakota Century Code is the Limited Liability Company Act. It provides default rules for all LLCs. A primary benefit to an LLC form, however, is flexibility. Under North Dakota law, you can change many of those default rules. If the members agree about how to how to operate their LLC, they enter into an Operating Agreement. The Operating Agreement dictates how an LLC arrives at decisions. This may include defining how and when a meeting may be called, the location of the principal executive office, how to accept new members, the rights and classes of membership, how to accept additional capital contributions, how to make distributions, how to allocate profits and losses for taxation purposes, how to elect governors, how to elect or appoint managers, how to compensate governors and managers, amongst others. SW&L Attorneys’ Business Law Group helps you sort through which provisions are the default and which are mandatory and gives you guidance on how to set up rules for your business.
What Is A Member-Control Agreement?
A member-control agreement is a contract defining how the members deal with one another. Member-control agreements are often combined with the operating agreement into one contract. Member-control agreement issues include what is sometimes called the buy/sell agreement. For example, the member-control or buy/sell agreement dictates what happens when one member dies, becomes incapacitated, goes bankrupt, or quits working for the business. SW&L Attorneys will assist you in preparing this very important document.
Do I Have To File Anything With The Securities And Exchange Commission (“SEC”) Or North Dakota Securities Commission?
Depending on your limited liability company and how you have obtained members and membership contributions, you may have to make the appropriate filings with the United States Securities and Exchange Commission or the North Dakota Securities Commission. From Fargo, SW&L Attorneys’ Business Law Group will provide guidance to you about your responsibilities with each of these commissions and will assist you with the paperwork to make the appropriate filings.
What Are My Responsibilities For Workers Safety & Insurance (“WSI”), Job Service North Dakota, And Other North Dakota Filings?
Every new business must make filings with North Dakota’s Workers Safety & Insurance (“WSI”), Job Service North Dakota, and other entities, depending on the LLC’s operations. WSI is North Dakota’s state-run workers’ compensation system. To summarize, WSI requires each business to complete the appropriate form so it can determine whether premiums must be paid and if so, how much premiums will cost. Job Service North Dakota, in part, is responsible for North Dakota’s unemployment insurance coverage. Job Service North Dakota needs to know all employees in order to determine whether premiums must be paid, and if so, how much premiums will cost. Several other filings may be required, as well, depending on the LLC’s operations. SW&L Attorneys Business Law Group will assist with preparing and submitting the appropriate paperwork.
How Does My Limited Liability Company Get Taxed?
You will also need to decide on how you want to be taxed. The Internal Revenue Code and the North Dakota Century Code do not have a separate code scheme for limited liability companies. Instead, you elect how to be taxed. An LLC can be taxed in three basic ways: (1) as a partnership; (2) as a corporation; or (3) if your LLC only has one member, as a disregarded entity. If your limited liability company decides to be taxed as a corporation, there are two types of ways it can be taxed: (1) as a C-Corporation; or (2) as an S-Corporation. The type of taxation your LLC elects is highly dependent on the circumstances. No one size fits all. SW&L Attorneys Business Law Group will work with your accountant to find the best fit for you.
How Do I Maintain Liability Protection?
Forming your limited liability company is only the first step. As a member of an LLC, you will not automatically get liability protection. It needs to be maintained in the right way. If you operate it in the wrong way, a creditor may pierce the corporate veil and hold its members personally liable for the limited liability company’s debts. This could include breach of contract, torts, and negligence. It is important to form and organize an LLC in the correct way, but it is just as important to operate your LLC the right way in order to minimize this liability risk. SW&L Attorneys’ Business Law Group will help you maintain corporate formalities, maintain required records, and help minimize your personal liability exposure.
How Can I Learn More About Limited Liability Companies In North Dakota?
This is only a brief overview of the issues regarding limited liability companies. Please contact us or another attorney for specific guidance as to your limited liability company. If you are interested in further reading, you can review limited liability company terminology here. You can also visit North Dakota’s Limited Liability Company Act located in Chapter 10-32 of the North Dakota Century Code. The North Dakota Secretary of State also has information regarding forming a new business. If you have questions, please give our attorneys a call at 701-297-2890.
