Dissolving a Business in North Dakota 2024: A Step-by-Step Guide

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How to Dissolve a Business in North Dakota

Closing an LLC in North Dakota may be a tough decision, but our comprehensive guide is here to help and make the process smooth and worry-free. Understanding the dissolution process is crucial for avoiding future legal and financial liabilities, whether due to financial circumstances or new ventures. Let us be your trusted partner in this final phase of your LLC journey, ensuring seamless closure and protection against liability concerns.

Embark on this final step confidently, as our expert advice guides you through the requirements, procedures, and best practices of dissolving your business in North Dakota. Navigate legal formalities, manage outstanding obligations, and file the necessary paperwork with ease, all with the support of LLCBase. Tackle this challenge with us and achieve a secure and successful closure in the ever-changing North Dakota business landscape.

What is a Business Dissolution

North Dakota LLC Dissolution refers to the process of legally ending the existence of a Limited Liability Company (LLC) registered in the state of North Dakota. Dissolving an LLC involves several steps, such as following the LLC’s operating agreement, obtaining necessary approvals from members, settling outstanding debts and taxes, and filing the required dissolution documents with the North Dakota Secretary of State.

The dissolution process ensures that the LLC is no longer legally recognized as a separate entity and cannot conduct business activities. Properly dissolving an LLC in The Peace Garden State is essential to avoid potential legal and financial liabilities for the members involved.

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Dissolve Your Business in North Dakota: 4-Step Guide

Let’s walk you through a 4-step guide to help you dissolve your business in North Dakota efficiently and effectively:

Step 1: Follow Your North Dakota Operating Agreement

You should have drafted an operating agreement when you initially formed an LLC. This document outlines the procedures and rules for how the business will be managed and operated. The operating agreement should also include information on how to dissolve the LLC.

Consider hiring one of the best business attorneys in North Dakota for top-notch legal assistance while dissolving a business. You may also seek the help of a professional LLC formation service to help you in this major move of your business.

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Consult Your Operating Agreement

The LLC operating agreement is a crucial document governing your North Dakota LLC’s management, operation, and dissolution. It is a legally binding contract between the LLC members, outlining their rights, responsibilities, and obligations.

When you dissolve your North Dakota LLC, the first step is to consult your operating agreement. Carefully review the specific provisions related to dissolution and winding up the business. This section should outline the necessary steps, conditions, and requirements for the members to dissolve the LLC properly.

Determine the Required Approvals and Procedures

Upon reviewing the operating agreement, you must identify the required approvals and procedures for dissolution.  These may vary depending on the terms agreed upon by the LLC members.  Common approval methods include:

  • Unanimous Written Consent: In some cases, the operating agreement may require all members to provide written consent for dissolution.
  • Majority Vote: More commonly, the operating agreement will require a majority vote of the members to approve the dissolution. The agreement should specify the percentage needed for approval (e.g., a majority of 51% or a supermajority of 66%).
  • Specific Conditions: The operating agreement may outline specific conditions or events that trigger the dissolution process, such as the death or withdrawal of a member, bankruptcy, or reaching a predetermined end date.
Document the Decisions and Approvals

Once you have determined the proper procedure for dissolution, follow the steps outlined in the operating agreement. It is essential to document all decisions and approvals related to the dissolution of your North Dakota LLC. This documentation may include the following:

  • Written consent signed by all members.
  • Meeting minutes reflecting the discussion and vote on dissolution.
  • Any other written records or correspondence related to the dissolution decision.

Maintaining accurate records of the decisions and approvals is crucial. They will be necessary when filing the dissolution documents with the North Dakota Secretary of State. They may be required in case of a dispute or legal issue related to the LLC’s dissolution.

Step 2: Close All Tax Accounts

Before you can dissolve your North Dakota LLC, you must ensure that all outstanding debts and taxes are settled.

Settle Outstanding Debts and Taxes

Before dissolving your North Dakota LLC, settling all outstanding debts and taxes is essential to avoid potential legal and financial liabilities. You must address any balances due to the North Dakota Office of State Tax Commissioner, Job Service North Dakota, and other state or federal agencies that may apply to your business operations.

  • North Dakota Secretary of State: Ensure you have paid any outstanding franchise taxes and fees, including the annual North Dakota LLC tax and any additional taxes that apply to your business.
  • Employment Development Department: If your LLC has employees, ensure you have paid any required payroll taxes and filed all necessary employment tax returns with the Job Service North Dakota.
  • Other Agencies: Depending on your business activities, you may need to settle outstanding debts with other state or federal agencies, such as the Internal Revenue Service (IRS), for federal taxes.
File Final Tax Returns with the North Dakota Office of State Tax Commissioner

After settling all outstanding debts and taxes, you must file your final tax returns with the North Dakota Office of State Tax Commissioner. This process involves:

  • Filing a Final Tax Exemption Application: Complete and submit the Limited Liability Company Return of Income (Tax Exemption Application) for the final tax year of your LLC’s existence. Indicate on the form that it is your final return, and report all income, deductions, and credits associated with your LLC’s activities during the tax year.
  • Paying Remaining Balances: Along with filing your final Tax Exemption Application, ensure that you pay any remaining balances due to the North Dakota Office of State Tax Commissioner, including any late fees or penalties that may apply.
  • Closing Tax Accounts: Inform the North Dakota Office of State Tax Commissioner that you are dissolving your LLC and request the closure of your tax accounts. This is important to avoid any confusion or future tax obligations related to your dissolved LLC.

By properly closing all tax accounts and filing your final tax returns, you can ensure a smooth dissolution process and avoid any potential legal and financial issues arising from unresolved tax obligations.

Step 3: File a Certificate of Dissolution

Once all necessary approvals have been obtained and all tax accounts have been closed, you can officially dissolve your North Dakota LLC by filing a Certificate of Dissolution with the North Dakota Secretary of State.

Complete the Certificate of Dissolution 

To officially dissolve your North Dakota LLC, you must complete and file the Certificate of Dissolution with the North Dakota Secretary of State. This form is available on the Secretary of State’s website and requires the following information:

  • LLC Name: Provide the exact name of your LLC as it appears on your Articles of Organization.
  • Secretary of State File Number: Include the LLC’s file number assigned by the North Dakota Secretary of State.
  • Dissolution Date: Specify the effective date of dissolution, which can be the filing date or a future date not more than 90 days from the filing date.
  • Signatures: Include the signatures of all members who have approved the dissolution or their authorized representatives.
Review the Form for Accuracy

Before submitting the Certificate of Dissolution, please review it carefully to ensure all information is accurate and complete. Any errors or omissions may cause delays in processing the dissolution or even result in the rejection of the form.

Mail or Deliver the Form to the North Dakota Secretary of State

After completing the Certificate of Dissolution, you can mail or hand-deliver it to the North Dakota Secretary of State’s office. The address is:

  • North Dakota, 600 E Boulevard Avenue Dept 108, Bismarck ND 58505-0500

Please note that a filing fee may be associated with submitting the Certificate of Dissolution. Check the Secretary of State’s website for the current fee schedule and acceptable payment methods.

Once the Certificate of Dissolution is filed and approved, your North Dakota LLC will be officially dissolved, and you will receive a confirmation document from the Secretary of State. This document is proof of the LLC’s dissolution and should be kept with your business records.

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Step 4: Notify Interested Parties

Once your LLC has been officially dissolved, it is essential to notify all interested parties of the dissolution. This includes creditors, vendors, and customers. Informing these parties will help ensure that all outstanding debts and obligations are settled and any future liabilities are avoided.

Notify Creditors, Vendors, and Customers

After your LLC has been officially dissolved, informing all interested parties of the dissolution is important to ensure a smooth winding-up process. These parties may include:

  1. Creditors: Notify all creditors of the dissolution to settle any outstanding debts or obligations. This may involve paying off loans, lines of credit, or other liabilities.
  2. Vendors: Inform your vendors about the dissolution so they can cease providing goods or services and close any open accounts.
  3. Customers: Notify your customers about the dissolution to address any outstanding orders, contracts, or warranties. Depending on your business, this may involve refunding, fulfilling outstanding orders, or transferring contracts to another provider.
Settle any Legal Matters

If your LLC is involved in any ongoing legal disputes or matters, it is crucial to resolve these issues before the dissolution is complete. Consult with an attorney to address any pending litigation or legal obligations.

Distribute Remaining Assets to Members

After all outstanding debts, obligations, and legal matters have been addressed, the remaining assets of the LLC should be distributed among the members. The distribution process should follow the provisions outlined in the operating agreement, which may specify the following:

  • Distribution percentages: The operating agreement may outline the percentage of remaining assets each member is entitled to receive based on their ownership interest.
  • Order of distribution: The operating agreement may provide a specific order in which assets are to be distributed, such as cash first, followed by tangible property, and then intangible assets.
  • Valuation of assets: In some cases, the operating agreement may require assets to be appraised or valued before distribution to ensure fair and equitable dispersal among the members.

You can bring your North Dakota LLC to an orderly and legally compliant conclusion by properly notifying all interested parties and wrapping up remaining business affairs. This will help protect you and the other members from any potential legal and financial liabilities arising after the dissolution.

Filing Fee to Dissolve North Dakota LLC

It is impossible to predict the exact filing fee to dissolve or cancel your North Dakota LLC in 2023, as fees are subject to change. However, as of  2021, no fee is associated with submitting the Certificate of Dissolution or the Certificate of Cancellation to the North Dakota Secretary of State.

To file a Certificate of Dissolution, you must:

  1. Complete the form with the required information, including the LLC name, file number, and dissolution date.
  2. Obtain signatures from the approving members or their authorized representatives.
  3. Mail or hand-deliver the form to the North Dakota Secretary of State’s office.

To file a Certificate of Cancellation, you must:

  1. Complete the form with the required information, such as the LLC name, file number, and the reason for cancellation.
  2. Obtain signatures from the approving members or their authorized representatives.
  3. Mail or hand-deliver the form to the North Dakota Secretary of State’s office.

Please note that fees may change over time. Confirming the current fee schedule on the North Dakota Secretary of State’s website or by contacting their office directly before filing any documents in 2023 is always recommended.

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FAQs

What is the process for dissolving a business in North Dakota?
To dissolve a business in North Dakota, you need to follow certain steps.
Are there any specific laws that govern business dissolution in North Dakota?
Yes, like other states, North Dakota has specific laws that govern business dissolution.
What type of businesses can be dissolved in North Dakota?
All types of businesses can be dissolved in North Dakota, whether it is a partnership, LLC, corporation, or any other form of business entity.
What happens to the business after dissolution?
After the dissolution of the business, it ceases to exist as a legal entity.
Is it necessary to notify the state before dissolving a business in North Dakota?
Yes, it is necessary to notify the state before dissolving a business in North Dakota.
How do I officially notify the state of North Dakota about dissolving my business?
To officially notify the state of North Dakota about dissolving your business, you need to file a certificate of dissolution with the Secretary of State’s office.
Can I still dissolve a business in North Dakota if I owe taxes or have outstanding debts?
Yes, you can still dissolve a business in North Dakota if you owe taxes or have outstanding debts.
Do I need to file any forms or documentation with the state to dissolve my business in North Dakota?
Yes, you’ll need to file a certificate of dissolution with the North Dakota Secretary of State’s office.
How long does it take to dissolve a business in North Dakota?
It typically takes about four to six weeks to dissolve a business in North Dakota.
Is there a fee to dissolve a business in North Dakota?
Yes, there is a fee to dissolve a business in North Dakota.
Can I dissolve a business in North Dakota if I don’t have any employees?
Yes, you can dissolve a business in North Dakota even if you don’t have any employees.
Do I need to take any steps to dissolve the business with the IRS or other tax agencies?
Yes, you’ll need to take steps to dissolve the business with the IRS and other tax agencies.
Will dissolving my business automatically cancel my business’s tax ID in North Dakota?
No, dissolving your business will not automatically cancel its tax ID in North Dakota.
Can I still dissolve my business in North Dakota if I haven’t filed all my tax returns?
Yes, you can still dissolve your business in North Dakota if you haven’t filed all your tax returns.
Is there a certain order I need to follow when dissolving a business in North Dakota?
It’s recommended that you follow a specific order when dissolving a business in North Dakota to ensure everything is done correctly.
Do I need to notify my business partners or shareholders before dissolving the business?
Yes, it’s important to notify your business partners or shareholders before dissolving the business.
Do I need to cancel my business’s licenses and permits in North Dakota before dissolving the business?
Yes, you need to cancel all licenses and permits when dissolving a business in North Dakota.
Can I still dissolve my business in North Dakota if I have pending legal issues?
Yes, you can still dissolve your business in North Dakota even if you have pending legal issues.
Will dissolving a business in North Dakota affect my personal credit score?
Dissolving a business in North Dakota may affect your personal credit score if you have a personal guarantee on any business debts.
Can I consult with an attorney when dissolving a business in North Dakota?
Yes, it’s always a good idea to consult with an attorney when dissolving a business in North Dakota, especially if you have a complex legal situation.
What happens to the business’s assets after dissolution in North Dakota?
After dissolution in North Dakota, remaining assets must go towards paying any outstanding debts or taxes.
Can I still use my business’s name after dissolution in North Dakota?
No, you cannot use your business’s name after dissolution in North Dakota.
How long does the state of North Dakota hold onto the company’s records for due diligence purposes?
In North Dakota, state law requires the Secretary of State to maintain business records for six years.
What happens to the business’s real estate after dissolution in North Dakota?
The business’s real estate is considered an asset and will be handled according to North Dakota State law.
Do I need to give notice to secured creditors before finalizing the dissolution of the business?
Yes, Notice to secured creditors is required in North Dakota.
Is it mandatory to close business checking account during business dissolution?
Yes, you’re mandated to close your business checking account during business dissolution.
How do I make sure I have paid all of my business’ applicable bills and outstanding loans before dissolution?
Making a final accounting and audit of the business’s books will help ensure all outstanding bills and loans are resolved when you’re dissolving your North Dakota business.
Can a recently dissolved business in North Dakota be re-activated?
It might depend on certain facts such as the time elapsed and formal filings, although the answer is mostly yes.
How can I dissolve a business in North Dakota?
You can dissolve a business in North Dakota by filing the required forms with the North Dakota Secretary of State.
What is the first step in dissolving a business in North Dakota?
The first step in dissolving a business in North Dakota is filing the Articles of Dissolution with the North Dakota Secretary of State.
What information is required on the Articles of Dissolution in North Dakota?
The Articles of Dissolution in North Dakota must include the name of the corporation, the date of incorporation, and the reason for dissolution.
How much does it cost to dissolve a business in North Dakota?
It costs $10 to file the Articles of Dissolution with the North Dakota Secretary of State.
Can I dissolve a business in North Dakota without going through the Secretary of State?
No, you cannot dissolve a business in North Dakota without filing the required forms with the Secretary of State.
Is there a time limit for dissolving a business in North Dakota?
No, there is no time limit for dissolving a business in North Dakota.
What happens to the business’s assets and liabilities after it’s dissolved in North Dakota?
The North Dakota Business Corporation Act dictates that the assets and liabilities of a dissolved business are liquidated to pay off debts and distribute any remaining assets to shareholders.
Is it necessary to notify the creditors before dissolving a business in North Dakota?
No, it is not legally required to notify creditors before dissolving a business in North Dakota.
Can I dissolve a foreign business in North Dakota if it is already dissolved in its home state?
Yes, you can dissolve a foreign business in North Dakota as long as the Secretary of State accepts the foreign business’ Articles of Dissolution from its home state.
Can an LLC dissolve in North Dakota even if it doesn’t have any activity there?
Yes, an LLC can dissolve in North Dakota, even if it doesn’t have any activity there.
What happens to the license/permits of the business after it’s dissolved in North Dakota?
The business’s license and permits will typically remain with the North Dakota Department of Commerce.
Do I have to file for dissolution in North Dakota if my business is incorporated in another state, but has an office in North Dakota?
Yes, if your business has an office in North Dakota, you must register as a foreign corporation, and file for dissolution in North Dakota.
What happens if I don’t file for dissolution in North Dakota?
If you do not dissolve your business in North Dakota, it could result in penalties, annual fees or tax liabilities.
Is it possible to revive the business if I change my mind about the dissolution in North Dakota?
Yes, you can request revival within five years of the dissolution through the North Dakota Secretary of State.
Is it possible to continue business operations after submitting the paperwork for dissolution in North Dakota?
No, once papers have been submitted to dissolve a company in North Dakota, no operations can continue, unless revival is filed in a timely manner.
Can I file the Articles of Dissolution online with the North Dakota Secretary of State?
Yes, you file the Articles of Dissolution online via an electronic registration system, on the North Dakota SOS website.
Can I use my “doing business as” name when dissolving my business in North Dakota?
Yes, you can use your “doing business as” name to dissolve a business in North Dakota.
Can I revoke the Articles of Dissolution if I change my mind in North Dakota?
In North Dakota dissenting shares can be offered to shareholders and the articles of dissolution can be revoked if there enough votes to retain corporate status.
Do I need to notify my employees of the dissolution process in North Dakota?
Yes, you must notify employees of the dissolution process in North Dakota.
Can I recover personal liabilities through dissolving my business in North Dakota?
Dissolution does not necessarily exempt a business’s assets from the claims of creditors.
If my business is no longer issuing stock do I need to submit stock ledger to dissolve my company?
If your corporation is no longer actively issuing shares of stock or retaining transfer records insufficient detail to auction division, then you do not need to submit them.
How far back do I need to keep my company’s records in North Dakota?
It is advised that you should keep your company’s financial records for at least seven years in North Dakota.
Can I use dissolution to get out of an unfavorable contract in North Dakota?
It is necessary to evaluate the termination provisions with the contract closely since some of the consequences may carry over as before.
Once I’ve liquidated all assets of the business, what should I do with the remaining money in North Dakota?
Once the corporation’s assets are fully paid or distributed; Corporate assets that cannot be distributed must be passed on to the state’s State Treasury.
Will dissolving a business in North Dakota help my credit score?
Your credit score essentially extends to your business’s activity; therefore, it is imperative to satisfy any balances before the dissolve.
Can I re-propose my dissolved presidency in North Dakota?
You can restart your business after dissolving because dissolution eradicates future obligations.
If I dissolve my business, do I still name to owe prior taxes to North Dakota?
Outstanding taxes should resolution before passively attempting to dissolve; it is to ensure you have adequate offense to revoke them.
Is there a deadline for closing a North Dakota chapter S corporation created in error?
Your S corporation loses the treatment after the termination date, so it is generally utilized in plans that involve the closing of a potential tax burden before that date.

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Conclusion

Dissolving your North Dakota LLC is an important and often emotional decision that signifies the end of a business journey. While it may be challenging, ensuring that all legal requirements and obligations are met is essential to avoid future complications or liabilities. By diligently following the steps outlined in this guide and working closely with the relevant state agencies, you can smoothly navigate the dissolution process while maintaining compliance with North Dakota regulations.

As you close this chapter in your business journey, remember that new opportunities may lie ahead. We invite you to explore LLCBase with your North Dakota LLC dissolution needs. We wish you the best of luck in your future endeavors and hope to assist in any way we can.

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