Find out how to qualify your LLC to conduct business in North Dakota.
If you own a company that was founded in a state other than North Dakota, you must qualify or register it in North Dakota in order to conduct business there. The requirements for qualifying your international (non-North Dakota) limited liability corporation (LLC) to conduct business in North Dakota are summarized below.
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What exactly is a Foreign LLC?
If your LLC is founded in a different state, it is referred to as a foreign LLC in North Dakota. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. In Mississippi, for example, an LLC founded in Alabama is a foreign LLC.
Doing Business in North Dakota
If you are “transacting business” in North Dakota, you must register your foreign company with the state, according to North Dakota’s LLC Act. What exactly does this mean? North Dakota’s LLC Act, like most others, does not define the word “transacting business” in respect to overseas registrations.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. To be obligated to collect state sales tax on sales to citizens of a state, a firm must have a physical presence in, or nexus with, that state. In general, physical presence and nexus are synonymous and refer to:
a storage facility in the state
A shop in the state, an office in the state, or a sales representative in the state are all examples of state-based businesses.
Certain exclusions may apply, and the regulations might become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
Some Activities Are Exempt
North Dakota’s LLC Act, like other states’, outlines specific actions that do not constitute doing business in the state. Among the objects mentioned are:
defending or settling a lawsuit dealing with internal business affairs such as holding member or manager meetings having a bank account in the state having an office, agency, or persons in the state for handling your company’s own securities holding title to and managing real or personal property located in North Dakota
Check Section 10-32.1-82 of the LLC Act for a detailed legal definition of each of the mentioned things. If your LLC’s only operation in North Dakota is one or more of the activities mentioned above, you should not be required to register with the state.
Authority Certificate
You must complete a Certificate of Authority Application: Foreign Limited Liability Company with the North Dakota Secretary of State to register your company in North Dakota (SOS). The application form may be downloaded on the SOS website.
To complete the form, you must supply the same information that you would need to incorporate an LLC in your home state. However, since each state is unique, there may be materials that North Dakota requires that you did not need to submit when you initially formed your LLC. You must supply the following information for the North Dakota application:
whether or not your LLC is a professional LLC
optionally, your LLC’s federal identification number (usually this is an EIN)
If applicable, the name of your LLC as it appears in the records of the state where it was formed, the trade name under which you will register your LLC in North Dakota (you may use a trade name for one of several reasons, such as if your LLC’s original name, or something very similar, is already being used by another registered North Dakota business).
the major office location of your LLC the state in which your LLC was created the length of your LLC (which may be perpetual)
the telephone number of your LLC’s primary office, or the name and street address of your North Dakota commercial registered agent, or the name and street address of your North Dakota noncommercial registered agency
a description of the nature of the business or activities that your LLC will engage in in North Dakota
the names and addresses of your LLC’s management, as well as indications of any governors and managing members
a statement that the person signing the application has read it and believes its contents are true (the statement is included on the downloadable application form), and an authorized signature along with a date, the name of the person to contact about the application, an email address, and a phone number.
You must provide a certificate of good standing or certificate of existence verified by the organizational authority (such as the secretary of state) of the state where your LLC is formed with your application. The certificate must have been certified within 90 days of the application’s submission.
You must include a trade name registration, which you may acquire from the SOS website, if you want or need to use a trade name. Review the instructions contained with the certificate of authority application form for further information on trade name concerns.
The filing cost for an application is $135. The registration of a trade name costs an extra $25.
What Happens If You Do Not Sign Up?
If your LLC does business in North Dakota without a certificate of authority, it cannot file a lawsuit there. It will also face a civil penalty of up to $5,000 and may be barred from doing business in the state until the fines are paid. Furthermore, any LLC governor, member, or agent that approves, directs, or engages in the conduct of business in North Dakota without a certificate of power shall face a civil penalty of up to $1,000. However, the lack of a certificate of authority does not render your LLC’s contracts null and void or preclude your LLC from defending a case in North Dakota.
Forming a Foreign Corporation
The criteria and standards for international qualifying in North Dakota are identical whether your company is structured as a corporation rather than an LLC. You must use a separate application form, Form SFN 13100, Certificate of Authority Foreign Corporation Application. Forms and filing procedures are available on the North Dakota Secretary of State’s website.