Do you want to expand an existing LLC into North Dakota with a foreign qualification, but you’re not familiar with the process?
This guide will outline important details when expanding your business and explain how to foreign qualify an LLC in North Dakota.
Your business is growing, and you’re planning an expansion to other states. It’s a good problem to have!
But it’s not quite as simple as choosing another location. Because each state has different rules and requirements for business operations, you may need a “foreign qualification” in each state where you plan to do business.
It’s a common misconception that foreign qualification is only for businesses operating outside the U.S. But in this case, “foreign” refers to any business operating in a state that isn’t the state where the LLC was originally formed.
For example, if your LLC is registered in Minnesota and you are looking to open a second location in North Dakota, you may need to complete a foreign qualification in North Dakota before you can expand there.
Important Note: If you’d like to save time and have the foreign qualification paperwork taken care of for you, many of the best LLC services can handle this task for you.
Foreign qualifying is essentially asking permission to do business in the state of North Dakota. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before starting a business in North Dakota yields consequences that are far costlier than registering in the first place. If you fail to foreign qualify, your business:
So, not only will your LLC owe a hefty fine and lose its revenue stream, but you and your associates will be individually liable as well.
Despite the serious penalties, transacting business without authority will not invalidate your current contracts or stop you from defending a lawsuit in a North Dakota court.
North Dakota Century Code outlines these penalties in more detail in Section 10-32.1-84.
We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in North Dakota? If you go looking for specifics in the state code, you won’t find any; it’s fairly vague on the subject. The Secretary of State’s LLC FAQ page provides a little insight, but more definitively, other state and tax laws tell us that you are considered to be “doing business” in most cases and required to foreign qualify if:
If you’re unsure whether or not you need to file for a foreign qualification in North Dakota, we suggest seeking legal counsel.
The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in North Dakota. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:
Find more detail on these exemptions in Section 10-32.1-82 of the North Dakota Century Code. If your only in-state business activities appear here, you’re likely off the hook with foreign qualification. Even so, if you have questions or hesitations, it’s best to get legal advice.
Foreign qualification in North Dakota is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC in North Dakota, you can take care of the entire process online. Head over to FirstStop, the Secretary of State’s online filing system. On the left side of the page, click “Forms.” Then, select the “Foreign Business Limited Liability Company Certificate of Authority Application” and follow the on-screen instructions.
To streamline the filing process, have your personal and LLC information ready when you begin the form. Here’s what you’ll need:
Additionally, North Dakota requires a Certificate of Good Standing from your home state, certified not more than 90 days before your filing. Contact the state government to request one.
Find step-by-step video tutorials for FirstStop here.
Foreign qualification isn’t free, though. It comes with a $135 fee, which you can pay online with a credit or debit card. Or, if you choose to print and mail the form, write a check addressed to the “Secretary of State” and send it, with your form to:
Secretary of State
State of North Dakota
600 E Boulevard Avenue, Dept. 108
P.O. Box 5513
Bismarck, ND 58506-5513
After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is on its way to foreign qualification, and you’re embarking on another chapter in the life of your business.
As you gather your information and complete your form, don’t forget the little details, like making sure that your LLC name complies with North Dakota’s business name requirements. Check that your name:
You can also reserve your North Dakota business name if you’re not quite ready to foreign qualify your LLC.
We think you should foreign qualify your LLC before you begin conducting business in a new state. If you don’t, your business could be subject to a broad range of fines and penalties for operating an LLC in a jurisdiction where you don’t have permission to do so.
You’ll typically need to wait up to four weeks for North Dakota to process your application.
Chances are, you’ll require at least one license or permit to operate your LLC in compliance with North Dakota state law. For more information about business licenses and more in this state, check out North Dakota’s convenient Licensing Information webpage.
Yes. Whether you operate a domestic or foreign LLC in this state, you are required to file a North Dakota LLC Annual Report.
The overall costs of operating a North Dakota LLC can vary considerably based on the specifics of your business. However, we created a helpful guide to help you identify and plan for every expense your LLC will face in this state.
The answer to this question lies in your personal preferences, but we can give some general pointers. An attorney will cost the most by a mile, but also provides expertise you won’t find with the other options. The DIY route is free of charge but can require quite a bit of legwork and provides no peace of mind that the process is being completed correctly.
Using an LLC service means your business will be foreign qualified by professionals who know what they’re doing, while also costing significantly less than a lawyer. This “best of both worlds” attribute is what makes LLC services our preferred option.
Using an online LLC service removes much of the hassle from the foreign qualification process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your North Dakota registered agent.
The service then registers your Certificate of Authority with the state to qualify your LLC to do business in North Dakota.
Disclaimer: The content on this page is for informational purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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