Business Formation Documents: A Complete Guide for Small Business Owners

Introduction

Key Things to Know

1. 1

   Your choice of business structure (sole proprietorship, partnership, LLC, corporation) determines which formation documents you need and affects taxation, liability, and operational requirements.

2. 2

   MWBEs should prepare additional documentation for certification programs that can provide access to special contracting opportunities and resources.

3. 3

   Formation documents should anticipate future growth and include provisions for adding investors, changing ownership, or expanding operations.

4. 4

   State requirements vary significantly, so research your specific state's filing procedures, fees, and ongoing compliance obligations.

5. 5

   Working with a business attorney to draft or review your formation documents is an investment that can prevent costly legal issues in the future.

6. 6

   Proper formation documents not only establish your business legally but also create the foundation for business relationships, financing opportunities, and eventual business sale or succession.

7. 7

   Keep your formation documents updated as your business grows and changes to ensure they continue to serve your needs and comply with current laws.

North Dakota Requirements for Business Formation Documents

• Business Entity Selection (N.D.C.C. Title 10)

  North Dakota law allows for various business entity types including corporations, limited liability companies (LLCs), partnerships, and sole proprietorships. Each has different formation requirements, liability protections, and tax implications.

• Articles of Organization (LLC) (N.D.C.C. § 10-32.1-20)

  For LLCs, Articles of Organization must be filed with the North Dakota Secretary of State, including the company name, registered agent, principal address, management structure, and duration of the entity.

• Articles of Incorporation (N.D.C.C. § 10-19.1-10)

  For corporations, Articles of Incorporation must be filed with the North Dakota Secretary of State, including the corporate name, registered agent, authorized shares, and incorporator information.

• Business Name Requirements (N.D.C.C. § 10-19.1-13 (corporations), § 10-32.1-11 (LLCs))

  Business names must be distinguishable from other registered entities in North Dakota and must include appropriate designators (e.g., 'LLC', 'Inc.', 'Corporation') based on entity type.

• Registered Agent Requirement (N.D.C.C. § 10-01.1-13)

  All formal business entities must maintain a registered agent with a physical address in North Dakota who can receive legal documents and service of process.

• Operating Agreement (LLC) (N.D.C.C. § 10-32.1-13)

  While not required to be filed with the state, an LLC operating agreement governs the internal operations, management structure, member rights, profit distribution, and dissolution procedures.

• Bylaws (Corporation) (N.D.C.C. § 10-19.1-31)

  Corporate bylaws establish the internal rules for corporate governance, including meeting procedures, officer duties, shareholder rights, and other operational matters.

• Federal Tax ID (EIN) Requirement (26 U.S.C. § 6109)

  Most businesses must obtain an Employer Identification Number (EIN) from the IRS for tax filing and reporting purposes, even if they don't have employees.

• Business Licenses and Permits (N.D.C.C. Title 43 (Professional Licensing))

  Depending on the business type, various state and local licenses or permits may be required to legally operate in North Dakota.

• Securities Compliance (N.D.C.C. § 10-04 (State); 15 U.S.C. § 77a et seq. (Federal))

  When issuing ownership interests or shares, businesses must comply with federal and state securities laws, including potential registration or exemption requirements.

• Annual Report Requirements (N.D.C.C. § 10-19.1-146 (corporations), § 10-32.1-89 (LLCs))

  North Dakota requires annual reports to be filed with the Secretary of State to maintain good standing, including updated information about the business and payment of required fees.

• Tax Registration Requirements (N.D.C.C. Title 57)

  Businesses must register with the North Dakota Tax Commissioner for applicable state taxes, including sales tax, income tax, and employer withholding taxes.

• Workers' Compensation Insurance (N.D.C.C. Title 65)

  Businesses with employees must obtain workers' compensation insurance through Workforce Safety & Insurance (WSI), North Dakota's exclusive provider.

• Unemployment Insurance (N.D.C.C. Title 52)

  Employers must register with Job Service North Dakota for unemployment insurance tax purposes if they have employees.

• Foreign Business Registration (N.D.C.C. § 10-19.1-134 (foreign corporations), § 10-32.1-73 (foreign LLCs))

  Out-of-state businesses operating in North Dakota must register as foreign entities with the Secretary of State.

• Trade Name Registration (N.D.C.C. § 47-25-01)

  Businesses operating under a name different from their legal entity name must register their trade name (DBA) with the Secretary of State.

• Americans with Disabilities Act Compliance (42 U.S.C. § 12101 et seq.)

  Businesses must comply with federal ADA requirements regarding accessibility and non-discrimination for individuals with disabilities.

• Equal Employment Opportunity Compliance (42 U.S.C. § 2000e et seq. (Federal); N.D.C.C. § 14-02.4 (State))

  Businesses must comply with federal and state laws prohibiting discrimination in employment practices based on protected characteristics.

• Environmental Compliance (N.D.C.C. Title 23.1; Various Federal Environmental Statutes)

  Depending on the industry, businesses may need to comply with federal and state environmental regulations and obtain necessary permits.

• Franchise Tax Requirements (N.D.C.C. Title 57)

  North Dakota does not impose a franchise tax, but businesses should be aware of this potential tax in other states if they expand operations.