Skip to main content

I Want To Start A LLC

What is a Limited Liability Company and why do you need one?

A limited liability company is a business entity that protects business owners from personal liability. In addition to personal liability from the actions of co-owners or employees, an LLC provides a business with an operating structure for multiple owners including, but not limited to membership rules, decision making, profit and loss division, buyout agreements, and succession planning. Limited Liability Companies sometimes afford owners additional tax options.

Can an LLC have more than one member?

Yes! An LLC may have more than one member. When an LLC has more than one member, members have a member management agreement or operating agreement that governs the structure of the entity, decision making, profit and loss divisions, buy in and buy out agreements, and succession planning.

How do you start a Limited Liability Company?

1

Choose Your Name

Choose a creative name for your new company. The more original and unique the name of a new company, the better chance the company name will survive the vetting process and will not compete or create confusion with previous companies or competing companies. The North Dakota Secretary of State keeps a record of all the trade names and company names registered and used by past companies. Using a more generic name, such as Big Company, LLC, the less chance the name will be available for use. Strive to have a bench of 3-5 unique names and alternatives that will work for the new company.
2

Nominate a Registered Agent

To receive state correspondence and legal notices, you are required to have a registered agent. Lexline’s registered agent service will walk you through this process. Having a registered agent also ensures you receive paperwork appropriately in the event your company is involved in litigation.

Renewal of annual report. Each year, business entities need to file their annual report with their state’s respective Secretary of State’s office. At Lexline, you don’t have to think about it, we take care of it for you. Lexline will also renew your annual report to avoid a lapse in registration and we take the headache away so that you can focus on your core values and business.

3

File North Dakota Certification of Formation

This process makes your entity official! After your paperwork is accepted and your payments are completed, you are now recognized as an official owner of a limited liability company, which provides you with an additional layer of protection from personal exposure to liabilities. Lexline will oversee this step to confirm everything was handled properly and in conformity with North Dakota law.
4

Draft and execute an Operating Agreement

An Operating Agreement is a key component for your entity, especially when there is more than one member, if you will need to obtain financing, or if you plan on having shareholders or outside investors. This document indicates the rules for managing your company and gives it extra validity.
5

Apply for an EIN

An Employee Identification Number (EIN) lists your business with the federal government which will allow you to open a business bank account, obtain financial services, and hire employees. The IRS website offers EIN, or you can have Lexline do it for you. Normally, you need an EIN to have employees or seek commercial financing. Some banks will require an EIN to open a business checking account.

Types of Limited Liability Companies

LLC

Limited Liability Companies (LLC) A limited liability company combines a partnership and a corporation. A limited liability company may be taxed under the flexible partnership rules rather than the inflexible S corporation rules. A limited liability company provides its members with limited liability regardless of the members’ participation in management.

Farm LLC

Farm Limited Liability Companies Similar to a limited liability company, all members must have a degree of kinship and follow the rules under NDCC, Section 10-06.1-01.

Professional LLC

Professional Limited Liability Company (PLLC) Consists of one or more professionals. Similar to a limited liability company, all members must be licensed professionals legally authorized to provide professional services.

Start your LLC today!

While the process for LLC may be complicated, there are many benefits to doing so. If you elect this business structure, it’s vital to fulfill requirements in order to maintain personhood and liability protection.  Make sure you perform due diligence when filing and seek legal assistance if needed.

Learn More

Questions on Limited Liability Companies

What’s the difference between an LLC and a corporation?

Limited Liability Corporations are owned by members, and each member owns a portion of the business, totaling 100%. Corporations or Inc. are owned by shareholders and have the ability to offer stock to outside investors or traded publicly. LexLine Corporate Services will help you decide what business entity best fits your needs.

How do I form an LLC?

Click on this form, and LexLine Corporate Services will guide you to form a business entity step-by-step.

Why should I create an LLC for my business?

Creating an LLC (limited liability company) for your business can provide several potential benefits, including:

  1. Liability protection: One of the main advantages of an LLC is that it can provide liability protection for the owners, also known as members. This means that the personal assets of the members are generally not at risk if the LLC is sued or incurs debts.
  2. Tax flexibility: LLCs offer tax flexibility in that they can choose to be taxed as a sole proprietorship, partnership, or corporation. This allows the LLC to choose the tax treatment that is most favorable for its specific circumstances.
  3. Simplicity: LLCs are relatively simple to set up and operate, and they generally have fewer formalities and requirements compared to corporations.
  4. Professionalism: Forming an LLC can lend a sense of professionalism and credibility to your business, which can be helpful when working with lenders, suppliers, and customers.

It’s important to note that creating an LLC also involves costs and responsibilities, such as filing fees and the need to maintain records and follow certain formalities. It’s a good idea to consult with a lawyer or other professional to determine whether an LLC is the right choice for your business.