How to Incorporate in North Dakota (May 2024 Update)
Incorporating your business in North Dakota can provide valuable legal protections and benefits compared to other business structures. The process seems daunting, but breaking it down step-by-step makes establishing a North Dakota corporation straightforward. This comprehensive guide will walk you through the essentials of incorporating in North Dakota so you can launch your company with confidence.
Benefits of a North Dakota Corporation
Forming a corporation shields your personal assets if the business is sued or can’t cover its debts. This limited liability is vital for business owners. A corporation also lends an air of credibility and legitimacy that can help you attract investors and get approved for business loans more readily. Other perks include potential tax savings and the perpetual existence of the corporation, meaning it can outlive its original owners.
Step-by-Step Incorporation Process
Follow these key steps to properly set up your North Dakota corporation:
1. Name Availability Search
The first step is making sure the desired corporate name isn’t already taken. Search the Secretary of State database to see if your name is available or too similar to another registered ND business name. Once you find an available name, you can reserve it for a year by filing a name reservation application.
2. Appoint a Registered Agent
Every ND corporation needs a registered agent on record to receive official documents and legal notices. This is usually a trusted company member or hired registered agent service. Whoever fills this role must have an ND address available during normal business hours.
3. File Articles of Incorporation
The articles of incorporation legally establish your corporation with the state. They must include specific components like the corporation's name and address, stock details, incorporators identities, and registered agent information. The filing fee is currently $135 in North Dakota.
4. Write Corporate Bylaws
Bylaws outline internal company processes like shareholder voting procedures, director elections, and officer duties. Though not legally required, having clear bylaws speeds decision making and prevents future conflicts.
5. Obtain an EIN
You must get a federal employer identification number (EIN) from the IRS to open business bank accounts, hire employees, and properly file taxes.
6. Stay Current with Annual Reporting
Don’t forget to file your annual report to keep your North Dakota corporation in good standing. This yearly $50 fee is due on November 15th.
Common Pitfalls to Avoid
During the rush of excitement in launching a business, it’s easy to gloss over important details that can come back to bite you down the road:
- Choosing a name too similar to existing businesses. Do thorough name research to avoid confusing customers or legal issues.
- Not appointing (and maintaining) a registered agent. Failure to keep your RA info current can result in missing important legal notices.
- Forgetting to file annual reports. Without consistent filing, your corporation can lose its active status.
Alternative Business Structures
If forming a corporation doesn’t fit your needs, North Dakota does allow other entities like sole proprietorships, partnerships, and LLCs. Each has different legal and tax implications to consider. Doing diligent research is key to selecting the right structure for your goals and risk tolerance.
Starting a North Dakota Corporation
As this guide lays out, forming a corporation doesn’t have to be an intimidating process with the right information and strategic support. Follow the steps above to lock in your business name, file the articles of incorporation, and establish official company bylaws. Remain diligent with annual filings and other formalities to keep your corporation compliant and protections intact. The vital asset safeguards and professional credibility make tackling these administrative tasks now well worth it. With a methodical approach, you’ll be off and running with your North Dakota corporation.