creating your legal entity
Starting your own business can be an exciting time in your life. There are new things to learn, clients to engage, and hopefully money to be made. However, one aspect that is occasionally overlooked is the legal documents that should be signed with each new business. In North Dakota, there are many different business entities you can create. Some of the most common business entities are called a partnership, a limited liability company, or a corporation. There are different formation and tax considerations for each of the entities. For that reason, an accountant should be one of the first stops you should make when legally creating your business. The second stop should be Kubik, Bogner, Ridl & Selinger. At KBRS, we can help guide you through the business formation process. In doing so, we will work with you to ensure the proper documents are signed so that your business, and you personally, are protected.
Under North Dakota law, a limited liability company (also known as an “LLC”) is legally created when the Articles of Organization are filed with the North Dakota Secretary of State. Similarly, the Articles of Incorporation must be filed with the North Dakota Secretary of State to legally create a corporation.
The Articles of Organization and Articles of Incorporation are relatively similar documents. Each document requires you to provide the name of your LLC or corporation, a registered agent, the business purpose for your LLC or corporation, and the names and addresses of each organizer or incorporator.
Once the Articles are filed with the Secretary of State and your filing fee is paid, the Secretary of State grants a charter which legally recognizes your new business entity. At this point, your new entity begins having its own rights, privileges, and liabilities distinct from its owners or members. You now have all of the benefits and protections of legal entity!
There are many other documents that should be executed once your legal entity is formed such as an Operating Agreement, Bylaws, Buy/Sell Agreement, Member Control Agreement, Bank Resolutions, etc. These documents will be discussed further later. Until then, feel free to contact the attorneys at KBRS to begin the business formation process. Soon enough, you will be open for business!