Limited Liability Company (LLC)

You may be considered transacting business in North Dakota if you will:

• Have a store, office, or shop in North Dakota
• Have employees working in this state
• Have a liability to collect sales tax in this state
• Need to obtain a license or permit to perform activities or work in this state
• Be awarded a state contract after a successful bid to provide goods or services to North Dakota agencies

NDCC § 10-32.1-82 provides insight as to what does not constitute transacting business for LLCs, including:

• Maintaining, defending, or settling an action or proceeding
• Holding a meeting of its managers, governors, or members or carrying on any other activity concerning its internal affairs
• Maintaining accounts in financial institutions

It should be noted that this is not a complete list but can help provide some insight for LLCs wanting to transact business in North Dakota.  

A business limited liability company (LLC) may be formed by one or more individuals. LLCs are hybrid businesses that combine the characteristics of a corporation with those of a partnership, offering the liability protection of a corporation with the pass-through taxation of a partnership.

This recognizes the LLC as a separate legal entity having its own rights, privileges, and liabilities distinct from those of its members.

NDCC ch. 10-32.1 pertains to LLCs.

Fees:

• Registration (domestic and foreign) - $135
• Annual Report (domestic and foreign) - $50
• Amendment (domestic) - $50
• Amendment (foreign) - $50
• Dissolution/Termination (domestic) - $20
• Withdrawal (foreign) - $20

Naming Guidelines:

• The name of a limited liability company must contain the words “limited liability company” or must contain the abbreviation “LLC” or the abbreviation “L.L.C.”

Annual Report Requirements: 

• Filing Deadline - November 15

A farming or ranching limited liability company is a business structure that may be established under North Dakota laws or the laws of another state by one or more individuals but not to exceed 15 members. 

A farming or ranching LLC:

• Cannot acquire ownership to land and rent it out to be farmed by others.  It must be engaged in the business of farming or ranching, which is defined as “raising or producing agricultural crops, fruit, horticultural products, or livestock or livestock products, or livestock backgrounding, or livestock finishing.” 

• May engage in alternate activities; however, the annual average of at least 65% of the LLC’s gross income over the previous 5 years (or from each year of its existence if less than 5 years) shall have been derived from engaging in the business of farming or ranching. Income from non-farm/ranch rent, non-farm/ranch royalties, dividends, interest, and annuities for the LLC cannot exceed 20 percent of the LLC’s gross income.

• May be organized in another state as long as appropriate documents are filed with the Secretary of State and North Dakota requirements such as those relating to the number and kinship of members; operation of the farm or ranch; and percent of income derived from farming or ranching are met.

NDCC ch. 10-06.1 and ch. 10-32.1 pertain to farming or ranching limited liability companies.

Membership

Members must be related individuals or one of the following:

• A trust for the benefit of an individual or a class of individuals who are related to every member of the LLC within specified degrees of kinship.
• An estate of a decedent who was related to every member of the LLC within specified degrees of kinship.

Degrees of Kinship:

• Parent, Son, Daughter, Stepson, Stepdaughter, Grandparent, Grandson, Granddaughter, Brother, Sister, Uncle, Aunt, Nephew, Niece, Great-grandparent, Great-grandchild, First cousin, Second cousin
• The spouse or surviving spouse of a person so related

None of the members are required to reside on the farm or ranch, and all managers and governors must be members  actively engaged in operating the farm or ranch. “Operating the farm or ranch” means engaging in personal labor or management activities on or off the farm or ranch, which contribute to the farm or ranch operations.

Farming or Ranching LLC Specific Registration Information

A farming or ranching limited liability company is created, operates, and is treated in the same manner as a business limited liability company. However, at the time the articles of organization or certificate of authority is filed with the Secretary of State, the farming or ranching limited liability company must also disclose the following:

• Name of the limited liability company
• Name and address of the registered agent in North Dakota
• With respect to each member:
  • Name and address of each
  • Names and addresses and relationships of trusts and estates that own membership interests
  • Number of membership interests or percentage of membership interests owned by each
  • Relationship of each
  • Statement whether each is a citizen or permanent resident alien of the United States
  • Statement whether each is actively engaged in operating the farm or ranch
• Names and addresses of managers and members of the board of governors
• If the purchase or lease of farmland or ranchland is final at the time of the initial report, a statement listing of the acreage (hectarage) and location listed by section, township, range, and county of all land owned or leased by the LLC in North Dakota.

Fees:

• Registration (domestic and foreign) - $135
• Annual Report (domestic and foreign) - $50
• Amendment (domestic and foreign) - $50
• Dissolution/Termination (domestic) - $20
• Withdrawal (foreign) - $20

Naming Guidelines:

• The name of a farming or ranching limited liability company must contain the words “limited liability company” or must contain the abbreviation “LLC” or the abbreviation “L.L.C.”

Annual Report Requirements: 

• Filing Deadline - April 15

An authorized livestock farm limited liability company (ALF LLC) is formed for livestock backgrounding, livestock finishing, or the production of poultry products, milk or dairy products, and swine or swine products. Unlike farming or ranching limited liability companies, an ALF LLC can own no more than 160 total acres and may not grow crops or graze livestock.

A minimum of 65% of the gross income of the ALF LLC must be derived from farm operations (livestock backgrounding, finishing, poultry, poultry products, milk/dairy products, swine/swine products), and a maximum of 20% of gross income can be from nonfarm rent, nonfarm royalties, dividends, interest, and annuities.

An ALF can have a maximum of 10 members who must be United States citizens or permanent resident aliens and may not commence farming or ranching until registered with the Secretary of State.  

Members

Members holding 51% of membership interests entitled to vote and to distributions must be individuals engaged in the business of farming or ranching or one of the following:

• A farming or ranching corporation
• A farming or ranching limited liability company

Any controlling individual or entity of members that are “persons” (as defined by North Dakota Century Code) must be organized in the United States and 100% of the membership interests must be owned by citizens or permanent resident aliens of the United States or authorized individuals under NDCC § 47-10.1-02.

An ALF may not partner with other individuals, authorized livestock farm entities, family farm corporations or family farm LLCs. If the authorized livestock farm will be an animal feeding or concentrated animal feeding operation, it must break ground within 1 year and be fully operational within 6 years.

Authorized Livestock Farm LLC Specific Registration Information

At the time the articles of organization or certificate of authority is filed with the Secretary of State, the authorized livestock farm limited liability company must also disclose the following:

• Name of the limited liability company
• Name and address of the registered agent in North Dakota
• With respect to each member
  • Name and address of each
  • If an organization - the state of incorporation, organization, or domicile
  • Number of membership interests or percentage of membership interests owned by each
  • Percentage of total membership interests entitled to vote and whether any voting agreement exists
  • Each shareholders percentage of total capital and financial interests
  • If members are individuals – a statement whether each is a citizen or permanent resident alien of the United States
  • If members are individuals – a statement whether each is actively engaged in the business of farming or ranching
  • If an organization – a statement of whether the person, and any controlling person of the person, is incorporated in the United States and 100% of the interests is owned by citizens of the United States, permanent resident aliens of the United States, or individuals or persons in compliance with NDCC § 47-10.1-02
• Names and addresses of managers, members of the board of governors, and members authorized under a statement of authority,
• Statement whether each will be actively engaged in the operation of the LLC
• Statement that the LLC does not own, lease, or hold any interest in more than 160 acres of farmland or ranchland.
• If the purchase or lease of farmland or ranchland is final at the time of the initial report:
  • Statement listing the acreage [hectarage] and location listed by section, township, range, and county of all farmland or ranchland
• If the purchase or lease of farmland or ranchland is not final at the time of the initial report:
  • Statement that there is a bona fide and imminent intent and a plan to purchase or lease farmland or ranchland.
• Statement that no members hold a direct or indirect interest in another authorized livestock farm corporation or authorized livestock LLC, that in combination with the corporation own, lease, or otherwise have interests in more than 640 acres of farmland or ranchland.
  • The 640 acre limit does not include member personal farmland or ranchland acreage.

NDCC ch. 10-06.1 pertains to authorized livestock farms.

Fees:

• Registration (domestic and foreign) - $135
• Annual Report (domestic and foreign) - $50
• Amendment (domestic and foreign) - $50
• Dissolution/Termination (domestic) - $20
• Withdrawal (foreign) - $20

Naming Guidelines:

• The name of an ALF limited liability company must contain the words “limited liability company” or must contain the abbreviation “LLC” or the abbreviation “L.L.C.”

Annual Report Requirements: 

• Filing Deadline - April 15
• The annual report form is not available in the FirstStop Portal. ALF LLCs can contact our office to request the form.

A professional limited liability company (PLLC) is made up of licensed professionals. Licensed professionals are those individuals who have been legally authorized to provide a professional service – that which requires a license as a condition of practice as well as an undergraduate or advanced college degree in the specific field of practice – to the public that require a license prior to rendering the service. An example may be a dentist, veterinarian, architect , or accountant.

A professional limited liability company may render:

• One specific type of professional service and related services
• Two or more kinds of professional services that are specifically authorized to be practiced in combination under North Dakota’s licensing laws of each of the professional services to be rendered 
  • Example: services related to 1) architects/landscape architects combined with professional engineers/land surveyors; or 2) physical therapists combined with occupational therapists

A PLLC is created and otherwise operates in the same manner as a business LLC. However, when filing articles of organization with the Secretary of State, the PLLC must provide certification from the respective North Dakota licensing board evidencing the licensure of all members. An individual may not simultaneously be an executive or owner of more than one professional organization rendering the same professional service.

NDCC ch. 10-31 and 10-32.1 pertain to professional limited liability companies.

Fees:

• Registration (domestic and foreign) - $135
• Annual Report (domestic and foreign) - $50
• Amendment (domestic and foreign) - 50
• Termination (domestic) - $20
• Withdrawal (foreign) - $20

Naming Guidelines:

• The name of a professional limited liability company must contain the words “professional limited liability company” or “limited liability company” or the abbreviations “PLC,” “P.L.C.,” “P.L.L.C.,” “PLLC,” “LLC,” or “L.L.C.”

Annual Report Requirements: 

• Filing Deadline - November 15
• A copy of the report filed with the Secretary of State must also be provided to the North Dakota regulatory board that licenses the members providing the professional service.

An out-of-state limited liability company has filed articles of organization under laws other than the laws of North Dakota. These LLCs are organized in jurisdictions out-of-state as well as out-of-country and are often known in North Dakota Century Code as foreign business types.  

An out-of-state LLC must obtain a certificate of authority from the Secretary of State to transact business or provide professional services in North Dakota, or to obtain any license or permit.

At the time of registration with the Secretary of State, a PLLC must also provide certification from the respective North Dakota licensing board evidencing the licensure of all members, managers, employees and agents practicing in North Dakota. The term ‘employee’ does not include a clerk, secretary, nurse, or anyone who is not ordinarily considered by custom and practice to be rendering professional services to the public.

A out-of-state LLC using a name other than its limited liability company name must file a trade name registration with the Secretary of State.