How to Move an LLC to North Dakota

An out-of-state LLC can change its state of organization to North Dakota through statutory domestication. North Dakota domestication is a legal process that changes an LLC’s state of organization, the state whose law primarily governs the company. An out-of-state LLC, also called a foreign LLC, that domesticates to North Dakota becomes a North Dakota LLC governed by the North Dakota Uniform Limited Liability Company Act (N.D. Cent.

Code sections 10-32.1-01 through 10-32.1-103). The LLC is otherwise the same business entity before and after the domestication process. Whether the domestication can proceed also depends on the laws of the state the LLC is leaving. To find out whether your LLC qualifies and what the process involves, request a free analysis of your LLC move.

Some states use the name conversion for the legal procedure that changes an LLC’s state of organization, also called its domicile. North Dakota has two distinct procedures for LLCs. A North Dakota domestication changes a company’s domicile only. A conversion, by contrast, changes a business from one entity form to another, such as a North Dakota corporation converting into an LLC. This article addresses domestications that change an out-of-state LLC into a North Dakota LLC.

Why Business Owners Move LLCs to North Dakota

A North Dakota LLC domestication may make sense if a business owner moves to North Dakota or if the owners prefer to have North Dakota law govern the company. An owner might transfer an LLC to North Dakota for any of the following reasons:

• Taxes are lower in North Dakota. Transferring to North Dakota often reduces a company’s tax burden. North Dakota consistently ranks in the top ten states for business taxation, with lower-than-average rates for corporate income, personal income, and property taxes. The tax savings may be especially large for businesses relocating from high-tax states such as neighboring Minnesota. A domestication can also reduce an LLC’s taxes if it severs the connection, or taxable nexus, between the LLC and the original state, reducing the number of states that must tax the LLC.
• North Dakota law has advantages for the LLC. An LLC that domesticates to North Dakota is governed by North Dakota business law rather than the original state’s law. North Dakota’s legal and regulatory environment is designed to promote economic growth and gives LLC members flexibility in customizing operating agreements, including how those agreements treat members’ fiduciary duties and profit-and-loss allocations.
• North Dakota is more convenient for the owner. A business owner who moves to North Dakota often wants to change the business’s domicile state as well. Having a business governed by North Dakota law allows a North Dakota resident owner to focus on a single state’s legal system. The uniformity helps avoid unnecessary legal issues and can allow for easier dealings with state agencies.
• Domestication reduces the LLC’s reporting obligations. A North Dakota domestication may reduce a company’s annual reporting burden, particularly if the LLC is organized in another state but does most of its business in North Dakota. The company may avoid future reporting and annual fees in the original state if it will no longer do business there.
• Domestication makes hiring professionals easier. Domesticating an LLC into North Dakota streamlines the professional hiring process for a North Dakota business owner. Lawyers, accountants, and other contractors in North Dakota are more likely to be licensed in North Dakota and have relevant experience. This makes identifying the right person easier and allows for greater selection compared to finding a North Dakota-based professional familiar with another state’s law.

North Dakota LLC Domestication Requirements

North Dakota LLC domestication under N.D. Cent. Code section 10-32.1-67 is not available for every out-of-state LLC. An LLC domesticating to North Dakota must comply with both North Dakota law and the current state’s law. North Dakota law controls the process and documents filed in North Dakota and determines the domestication’s legal effects.

The current state’s law governs whether the LLC can domesticate to North Dakota (the state must authorize domestication), the content of the written plan of domestication if required, the standard under which the LLC’s members or managers must approve the plan of domestication, and the effective date for the domestication.

Eligibility for North Dakota LLC Domestication

An LLC considering domestication to North Dakota must confirm that it is eligible for the process. The principal requirement is that the current state must authorize LLC domestications. Not all states do. The current state may call the process domestication, conversion, or another name. The important part is that the state must have a statutory procedure that lets an LLC organized in that state change its domicile to a new state.

Business owners must also review the LLC’s articles of organization and operating agreement to ensure there are no provisions that prevent domestication to a new state. If any restrictions are present, the LLC may need to formally amend the documents to allow the procedure.

An out-of-state LLC must also confirm that North Dakota permits LLCs to engage in the company’s field of business. North Dakota allows most business areas other than acting as an insurance company. Some professional services require a license or comparable authorization. North Dakota recognizes professional limited liability companies, or PLLCs, which provide professional services and are subject to additional legal requirements.

A PLLC must be owned only by licensed professionals and must disclose in its articles of organization the professional service it provides and which members hold the necessary license. An out-of-state LLC must also confirm that its area of business is lawful in North Dakota in general.

Required Documents for North Dakota LLC Domestication

The North Dakota LLC domestication process involves preparing and adopting several domestication documents that must satisfy both states’ requirements. The domestication documents memorialize the terms of the domestication and control the company when the domestication takes effect.

• Plan of Domestication. A Plan of Domestication designed to comply with the requirements of both North Dakota law and the law of the state that the LLC is moving from. The plan must include the LLC’s name and state of organization before and after the domestication, the terms and conditions of the domestication including how membership interests will be converted, and the articles of organization governing the LLC after the domestication.
• North Dakota Articles of Domestication. The North Dakota Articles of Domestication containing information required for filing with the North Dakota Secretary of State’s Business Division. The document must state that the company has been domesticated from another jurisdiction, include the LLC’s current name and state of organization, state the LLC’s name and state of organization after the domestication, specify the domestication’s effective date, and confirm that the domestication was approved as required by the current state’s law.
• Articles of Organization. The North Dakota Articles of Organization for filing with the North Dakota Secretary of State’s Business Division. These articles establish the LLC as a North Dakota domestic entity.
• Domestication Document for Filing in Prior State. Depending on state law, this document may be called Articles of Domestication, Statement of Domestication, Articles of Conversion, Certificate of Conversion, or a similar term.
• North Dakota Operating Agreement. A state-specific Operating Agreement to properly structure the LLC as a North Dakota LLC, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Written Consent. Written consent approving the transaction and adopting the North Dakota organizational documents as the LLC’s governing documents.

Both the Articles of Domestication and Articles of Organization accept electronic signatures under North Dakota law. The Articles of Organization also permit e-filing with the North Dakota Secretary of State’s Business Division. However, the Articles of Domestication require filing by mail or in person rather than through e-filing.

The LLC also completes several administrative tasks to implement the domestication.

• conducting a preliminary name search with the North Dakota Secretary of State’s Business Division to determine whether the LLC’s name is available in North Dakota (if the name is unavailable
• a slight name change may be required)
• obtaining signatures on the Articles of Domestication and Articles of Organization
• filing both documents with the North Dakota Secretary of State’s Business Division
• filing domestication documents with the Secretary of State or equivalent agency for the state that the LLC is moving from

Cost of Moving an LLC to North Dakota

The cost of moving an LLC to North Dakota depends on the scope of work described above. The documents and filings require professional preparation to comply with both states’ requirements, and coordinating submissions with two separate state agencies adds further complexity. Professional involvement typically includes information gathering, planning, drafting and filing domestication documents, and communicating with the LLC members and with state agencies. To find out what your specific move will cost, request a free analysis of your LLC move.

In addition to professional service costs, the North Dakota Secretary of State charges $50.00 for the Articles of Domestication and $135.00 for the Articles of Organization, for a total North Dakota filing fee of $185.00. These fees are in addition to any filing fees that must be paid to the LLC’s original state. Most states charge a separate fee for LLCs domesticating out of state.

An out-of-state LLC that domesticates to North Dakota will also incur labor costs and, if applicable, registered agent fees. Labor costs are the amounts charged by the service provider the LLC retains to manage the North Dakota domestication. Work that goes into a domestication includes obtaining and organizing information, drafting the domestication documents, communicating with the business owners and state agencies, and filing domestication documents with state agencies.

Every North Dakota LLC must have on file with the North Dakota Secretary of State a registered agent with a physical address in North Dakota. The registered agent’s job is to accept service of process, official notices, and other important communications for the company.

An LLC without a North Dakota address can hire a commercial registered agent, a service that charges an annual fee to act as a business’s registered agent. Commercial registered agents in North Dakota typically charge around $100.00 to $150.00 per year and also help keep important communications organized and consistent.

Processing Time for North Dakota LLC Domestication Filings

A North Dakota LLC domestication proceeds in several steps. The length of the process depends on how long each step takes.

Each step depends on the responsible person’s turnaround time: the business owners’ time to organize the necessary information, the service provider’s time to prepare draft domestication documents, the owners’ time to approve and sign the draft documents or request revisions, the service provider’s time to file the final domestication documents with state agencies, and the state agencies’ time to accept and process the filed documents.

The North Dakota Secretary of State’s Business Division reports that processing time for business filings may be as long as four weeks. The domestication becomes effective when the Articles of Organization take effect, which is upon filing with the North Dakota Secretary of State unless a delayed effective date is specified in the Articles of Organization. For a detailed breakdown of each phase in the domestication timeline, see our guide to the LLC domestication process.

Legal Effect and Benefits of North Dakota LLC Domestication

North Dakota LLC domestication moves an out-of-state LLC to North Dakota. The company continues its existence as the same entity with the same date of formation. The company expends substantially less time and money on administrative matters compared to other methods for changing a business’s state of domicile.

An LLC domestication is the simplest and most direct method of transferring an out-of-state business to North Dakota and offers several important benefits compared to alternate ways of moving a business to a new state. North Dakota law declares that the legal effects of a completed domestication to North Dakota are as follows:

• North Dakota law governs the company. An LLC that domesticates into North Dakota is the same company. The LLC keeps the same tax identity and Employer Identification Number, but it is a North Dakota LLC governed by North Dakota law after completing the domestication. The North Dakota Articles of Organization and Operating Agreement that the LLC creates during the domestication govern the LLC’s internal affairs.
• The LLC continues the same business identity. The LLC is the same company after completing the domestication. Its federal Employer Identification Number (FEIN or EIN) and taxpayer history stay the same. State-to-state transfers that change a business’s legal identity often lead to confusion and difficulties with government agencies.
• The LLC can keep its bank accounts and other assets. The North Dakota LLC still owns all the same real estate, financial assets, and other property that the out-of-state LLC owned before the domestication. The domestication does not count as an asset transfer, and transfer documents like deeds are unnecessary. Bank accounts can remain open.
• The business’s contracts are still valid. A North Dakota domestication does not impair or alter the out-of-state LLC’s existing business agreements. The North Dakota LLC keeps the same contractual rights, duties, and obligations. Employment relationships are also unaffected, so there is no break in the business’s employment of its employees. The business can continue day-to-day operations as normal during and after a domestication. There’s no need to pause work or close offices.
• The LLC keeps its debts and liabilities. The North Dakota LLC continues to owe all debts, liabilities, and other obligations that the out-of-state LLC had before the domestication. Domestication does not affect any liability members have or do not have for the LLC’s obligations.
• The LLC’s legal cases continue uninterrupted. The North Dakota LLC carries on all pending legal actions or other proceedings that involved the out-of-state LLC. Legal matters continue forward as though the domestication had not occurred, except that the company substitutes its new name if its name changes during the domestication.
• The out-of-state LLC is not dissolved. Domestication to North Dakota does not result in formal dissolution of the out-of-state LLC in its original state. Dissolution, liquidation, and winding up of affairs are unnecessary. Domestication does not trigger contractual rights that take effect in the event of dissolution, liquidation, or winding up. Filings in the original state are limited to the domestication document. The LLC need not register as a foreign LLC in the original state unless the business will continue operating there. If not, the company simply exits the original state and continues its existence as a North Dakota LLC.

Moving an LLC Out of North Dakota

North Dakota permits outbound LLC domestication under N.D. Cent. Code section 10-32.1-67(2). A North Dakota LLC can domesticate to another state’s jurisdiction, provided that the destination state also authorizes the procedure.

North Dakota Outbound Domestication Requirements

A North Dakota LLC that domesticates to another state must file Articles of Domestication with the North Dakota Secretary of State’s Business Division. The filing must include a plan of domestication approved by the LLC’s members or through written consent in accordance with North Dakota law.

North Dakota also requires a Statement Surrendering the Articles of Organization containing the domesticated LLC’s name, a statement that the articles of organization are being surrendered in connection with the domestication of the company in a foreign jurisdiction, a statement that the domestication was approved as required by North Dakota law, and the jurisdiction of formation of the domesticated foreign limited liability company. The destination state will require its own formation and domestication or conversion documents.

Filing Fees for Moving an LLC from North Dakota

The North Dakota Secretary of State’s Business Division charges $50.00 for an outbound Articles of Domestication and $10.00 for the Statement Surrendering the Articles of Organization, for a total North Dakota filing fee of $60.00. The destination state will charge separate filing fees for its formation and domestication documents.

North Dakota LLC Laws That Apply After the Move

The North Dakota Uniform Limited Liability Company Act (N.D. Cent. Code sections 10-32.1-01 through 10-32.1-103) imposes ongoing requirements on all domestic LLCs, including those formed through domestication from another state. An LLC that domesticates to North Dakota becomes subject to these obligations immediately upon effectiveness of the domestication.

North Dakota Annual Report and Compliance Requirements

North Dakota requires domestic LLCs to file an Annual Report with the North Dakota Secretary of State each year on or before November 15. The filing fee is $50.00. This annual reporting requirement is an ongoing compliance obligation that domesticated LLCs must observe to maintain good standing with North Dakota.

North Dakota Operating Agreement Requirements

North Dakota refers to an LLC’s internal governance document as an “Operating Agreement” under the North Dakota Uniform Limited Liability Company Act. The Operating Agreement governs the LLC’s internal affairs, including the rights and obligations of members and managers, profit distributions, and management structure.

The Operating Agreement is not filed with the state; it is maintained by the LLC as a private document. North Dakota law permits LLC members to customize how their operating agreement treats members’ fiduciary duties and profit-and-loss allocations, giving owners flexibility in structuring the business’s governance.

North Dakota LLC Member and Manager Protections

North Dakota law provides important protections for LLC members. Under N.D. Cent. Code section 10-32.1-45, the charging order is the exclusive remedy by which a judgment creditor of a member may satisfy a judgment out of the member’s transferable interest. This means that a creditor of a member cannot attach or levy against the member’s interest in the LLC except through a charging order process, providing significant asset protection for members.

North Dakota law also recognizes fiduciary duties in LLC governance. Members and managers owe duties of care and loyalty, though the operating agreement may modify or eliminate certain duties. The statute also protects members from wrongful dissociation by making expulsion of members possible but subject to restrictions, and it permits the operating agreement to prevent dissociation under certain circumstances.

Alternatives to North Dakota LLC Domestication

When domestication is not available because the current state’s law does not authorize it, a merger-based reorganization achieves the same result. The reorganization involves forming a new North Dakota LLC and merging the out-of-state LLC into it, with the North Dakota LLC as the surviving entity. The surviving LLC succeeds to all property, contracts, and obligations of the original LLC by operation of law.

North Dakota law authorizes mergers under N.D. Cent. Code section 10-32.1-56, and the North Dakota Secretary of State charges a filing fee of $50.00 for the articles of merger. This would be in addition to the $135.00 formation fee for the new North Dakota LLC.

For a detailed explanation of how the reorganization process works, see our guide to LLC reorganization. For a state-by-state comparison of LLC domestication and conversion laws across all states, see our guide to LLC domestication by state.