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Editorial 6 MIN READ

North Dakota in mid-2024: the $135 LLC and the tax code behind it

A low formation fee, a November annual report, and an income tax quietly moving toward a flat rate

The Editors
Staff, Incorporator.org
6 min read Updated
Contents 6 sections
  1. What it costs to form
  2. The annual report, and why November 15 matters
  3. The tax picture, and the direction it is moving
  4. Why the numbers pencil out the way they do
  5. Who this state actually makes sense for
  6. Sources

North Dakota LLC costs $135 to form through the state's FirstStop portal and $50 a year to keep, with the annual report due November 15. Those three numbers set the entire operating picture for 2024, and they sit on top of an income-tax code that is visibly moving, one session at a time, toward something flatter.

This is a state-focus guide for someone filing in the second half of 2024. It skips the history lesson and walks the current mechanics, because the mechanics are where founders actually lose money.

What it costs to form

The North Dakota Secretary of State runs entity filings through FirstStop, the online portal at firststop.sos.nd.gov. The standard LLC Articles of Organization filing is $135. That figure covers the formation itself and the initial registered-agent consent; it does not cover a name reservation, which is a separate $10 if you want to hold a name before filing.

The authority sits in North Dakota Century Code Chapter 10-32.1, the Uniform Limited Liability Company Act the legislature enacted to replace the older Chapter 10-32. Formation requirements, registered-agent duties, and member-versus-manager governance all trace back to that chapter. N.D.C.C. § 10-32.1-22 is the provision that requires the filed articles and names what they must contain; § 10-32.1-27 covers registered agents.

Processing through FirstStop is typically same-day or next business day for a clean filing. There is no separate expedite tier the way Delaware sells one. If your filing gets held for a naming conflict or a missing registered-agent consent, the clock resets when you fix it, so it pays to run the name search before you pay.

Foreign LLCs (entities formed elsewhere and registering to do business in North Dakota) pay $135 for the Certificate of Authority plus the registered-agent paperwork. The Secretary of State's fee schedule on sos.nd.gov is the canonical reference; print it the day you file.

The annual report, and why November 15 matters

North Dakota LLCs owe a $50 annual report every year, due November 15. That deadline is not calibrated to your formation date; it is a uniform statewide due date for domestic LLCs. A North Dakota LLC formed in January and one formed in October both face the same November 15 in their first full calendar year.

Miss it and the $50 becomes an additional $50 late fee, and the entity slides into involuntary dissolution if the report stays unfiled. The Secretary of State publishes a notice list of delinquent entities each year; reinstatement is possible but costs more than simply filing on time, and interrupts good standing for anything that depends on it (bank loans, real-estate closings, contract counterparties who run a quick entity check).

The notice North Dakota sends is email-driven if you have a working address on file in FirstStop, and paper otherwise. The email goes to the address the organizer listed at formation, which is frequently a lawyer or a filing service rather than the owner. If you formed through a registered-agent company, verify where the November notice will actually land before the first one goes out.

The tax picture, and the direction it is moving

North Dakota taxes C-corporation income on a graduated schedule under N.D.C.C. § 57-38-30. For 2024, the rates are 1.41% on the first $25,000 of North Dakota taxable income, 3.55% on income between $25,000 and $50,000, and 4.31% above $50,000. Those are among the lowest top-bracket corporate rates in the country, and the brackets are narrow enough that most operating companies of any scale reach the top rate quickly.

The individual income tax, which matters for pass-through entities, is what actually changed. House Bill 1158 from the 68th Legislative Assembly (2023) collapsed the old five-bracket individual schedule into a two-bracket structure with a zero-rate band at the bottom and preserved space for further consolidation. The bill took effect for tax year 2023 and phases its downstream adjustments through subsequent filings. The policy direction, publicly framed by Governor Burgum and legislative leadership, is toward a flat individual rate over successive sessions; 2024 returns are filed under the HB 1158 structure.

That structure interacts with the pass-through entity (PTE) tax election North Dakota enacted in 2021 (Senate Bill 2351, 67th Assembly). The election lets a qualifying partnership or S-corporation pay North Dakota income tax at the entity level, which preserves the federal deduction owners would otherwise lose to the $10,000 state-and-local-tax cap. The mechanics live in N.D.C.C. § 57-38-01.35 and the Office of State Tax Commissioner's PTE guidance. For LLCs taxed as partnerships or S-corps with North Dakota source income and out-of-state owners, the election is usually worth running the numbers on.

Why the numbers pencil out the way they do

North Dakota can afford a $135 formation fee and a 1.41% bottom-bracket corporate rate because severance taxes on oil and gas production fund a sizable share of the state budget. The state's Oil Extraction Tax and Oil and Gas Gross Production Tax, codified at N.D.C.C. Chapters 57-51 and 57-51.1, generate revenue that in most other states would have to come from broader business taxation. The Legacy Fund, established by constitutional amendment in 2010 and capitalized by a 30% set-aside of oil and gas tax collections, is the long-dated version of the same idea.

This is the fiscal logic that lets HB 1158 keep moving. When the legislature cuts individual rates, the counterweight is not a corporate rate increase; it is the Bakken, and the expectation that severance collections plus Legacy Fund earnings continue to backfill. A founder forming in North Dakota in 2024 is filing into that arrangement, which is one reason the business-tax environment looks so different from a similarly sized neighbor like Minnesota.

The operational implication is narrower than the headline. Low corporate rates matter for North Dakota-source income; they do not transform a Delaware holding company or a Minnesota operating company into a North Dakota tax resident by filing an LLC in Bismarck. If your customers, employees, and real property are elsewhere, you are a foreign-qualifying entity in North Dakota, not a North Dakota taxpayer, and the low rates are largely irrelevant to you.

Who this state actually makes sense for

Three kinds of filers belong in North Dakota in 2024.

The first is any business with genuine North Dakota operations: oilfield service, agriculture, manufacturing with plants in the Red River Valley, a Bismarck or Fargo professional practice. For these filers, the formation fee is cheap, the annual report is cheap, the income-tax rates are favorable, and the PTE election is available if the ownership structure calls for it.

The second is a holding entity owned by North Dakota residents that will hold North Dakota real estate or interests in North Dakota operating businesses. The filing economics are straightforward and the state's probate and trust framework is familiar to local counsel.

The third is a family or closely held investment vehicle where the owners are planning around the post-HB 1158 individual rate structure. The arithmetic gets better each session the legislature moves the schedule, and forming in-state keeps the entity inside the regime rather than bolted on from outside.

For everyone else, the cheap formation fee is a nudge, not a reason. Forming a North Dakota LLC to hold California rental property or to operate a consulting practice in Texas produces a foreign-qualification obligation in the real operating state, which costs more than whatever was saved on the North Dakota side. The right question is where the business actually lives, and for North Dakota the answer, pleasantly often for the state, really is North Dakota.

If you are filing this quarter into a North Dakota operating business, run the filing through FirstStop, calendar November 15 in a place you will see it, and ask your accountant before year-end whether the PTE election changes your federal picture for 2024. The Delaware playbook, covered in our April 2016 Delaware LLC formation guide, is a different animal and rarely the right one for a Bismarck bakery or a Williston service company.

Sources

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