Steps to Dissolve Your North Dakota Business
- Establish a valuation of your North Dakota business
- Compile a full account of your North Dakota business’s debts
- Identify North Dakota’s official dissolution document
- Follow instructions in your North Dakota business’s operating document
- Cancel your North Dakota business’s permits, licenses, and registrations
- Wrap up your North Dakota business’s legal and financial obligations
- File dissolution documents for your North Dakota business
Nothing lasts forever, including businesses. Chances are, you’ve come to this guide because you want to dissolve your North Dakota business. Maybe you want to learn how to dissolve a business in North Dakota because you’ve changed your business plans. Or perhaps you’ve simply entered a new phase in life or want to retire.
There are many reasons why you may want to dissolve your North Dakota business. Dissolution is a critical step regardless of what your business’s financial situation or debt profile looks like. If you don’t properly dissolve your North Dakota corporation or Limited Liability Company (LLC), the state will continue to view the business as an ongoing enterprise. Consequently, the North Dakota state government will expect your business to pay taxes, file annual reports, and otherwise remain in compliance. Failing to properly close your doors can result in financial penalties both for your business and for you personally. Additionally, abandoning your business rather than dissolving it may negatively impact your and your business partners’ credit scores. This may make it far more difficult to start a business or engage in commercial activities in the future.
Before dissolving your North Dakota business
Before starting the North Dakota voluntary dissolution process, keep in mind that being proactive now can save you a significant amount of hassle and work further down the road. Specifically, make sure that you have a complete and thorough record of your corporation’s or LLC’s dealings, activities, and procedures.
That said, let’s discuss how to dissolve a North Dakota business.
Step 1: Establish a valuation of your North Dakota business
You need to know what you have before dissolving your North Dakota LLC or corporation. This includes all the businesses assets, including but not limited to:
- Real estate
- Intellectual Property
Feel free to hire a professional consultant to assist you with this process, especially if your business’s assets are sizable or complicated. Moreover, make sure you collect any and all documents related to business operations. This includes documents like third-party contracts, tax records, and general financial records.
Worried about how to organize all this information? It is best to remain organized from the inception of your business. With our Worry-Free Compliance Service, we can help you keep all of your business documents squared away. Our dashboard is another one of our tools that can help you keep everything organized and handy throughout the life of your enterprise.
Step 2: Compile a full account of your North Dakota business’s debts
The next step in dissolving your North Dakota business is gathering together any and all records of debt and financial liabilities. You need to know who your business owes money to and how much it owes them. Dissolving a business is a far cry from declaring bankruptcy, so don’t expect debts to simply disappear when you dissolve your business. Failing to pay off your business debt’s can have serious financial and legal repercussions. In some situations, you and your business partners may become personally liable for the business’s debts.
Step 3: Identify North Dakota’s official dissolution document
North Dakota’s process for dissolution varies based on whether the business involved is a corporation or an LLC.
North Dakota law requires that a for-profit corporation file a Notice of Intent to Dissolve before winding up. North Dakota does not offer a standard template for corporations to complete. Instead, corporations have to draft the notice themselves. The Notice of Intent to Dissolve has to include several items. Specifically, it must include the corporation’s name and the date and place of the shareholder meeting wherein the corporation declared an intent to dissolve itself. Furthermore, the Notice of Intent to Dissolve must include a statement that the required shareholder vote in favor of dissolution was received or that all shareholders entitled to vote signed a written action. Once completed, a corporation should submit the Notice of Intent to Dissolve to the Secretary of State.
After the Notice of Intent to Dissolve has been filed, the corporation must file Articles of Dissolution in North Dakota. The information contained in the Articles of Dissolution varies based on whether the corporation gave a written notice to its creditors and claimants about its upcoming dissolution.
When LLCs dissolve, they can file either a Notice of Dissolution or Articles of Dissolution and Termination by Organizers with the state. A Notice of Dissolution must include the name of the LLC and a statement that it dissolved. Articles of Dissolution and Termination by Organizers must include the same information, as well as the LLC’s Federal ID number. .
Both corporations and LLCs can deliver their dissolution documents by mail, fax, in person, or online. File online by using the Secretary of State’s online filing system, FirstStop.
If filing online or in person, credit cards are accepted. If filing by mail, checks are acceptable. To learn more about payment options that are accepted when faxing, contact the North Dakota Secretary of State’s office.
Step 4: Follow instructions in your North Dakota business’s operating document
Once you have identified the correct form and process for dissolving your business, review your business’s foundational operating documents for dissolution instructions. If your business is an LLC, look for this information in an operating agreement. If your business is a corporation, then review its bylaws.
If your business’s operating document lays out a specific dissolution process, then you must follow it. Otherwise, you need to follow whatever default process is outlined by state law. Please remember that you still have to file the required dissolution forms with North Dakota regardless of the method of closure dictated in your business’s operating document.
Step 5: Cancel your North Dakota business’s permits, licenses, and registrations
It’s likely that your business needed several licenses and permits to operate. You’ll need to cancel these permits and licenses before dissolving your business. They can relate to almost any aspect of your business — and some even renew automatically. Consequently, you’ll need to carefully and methodically research which business licenses and permits you need to cancel.
Step 6: Wrap up your North Dakota business’s legal and financial obligations
If your business has any employees, check to make sure that you are following all applicable federal and state guidelines about employee pay and benefits. Once that is done, file your business’s final state and federal income tax returns. Also contact the Internal Revenue Service and cancel your business’s Taxpayer Identification Number (EIN).
Step 7: File dissolution documents for your North Dakota business
Now that you’ve carefully researched and prepared your business for dissolution, it’s time to file the dissolution document identified in Step 4 with the North Dakota Secretary of State.
With that done, give yourself a pat on the back for all your hard work. You’ve now successfully dissolved your business and are ready to start a new chapter in life.
We are here to help you throughout the life of your North Dakota business
Now that you know how to dissolve a business in North Dakota, remember that we’re here to help you complete the process. Whether you want to dissolve a North Dakota business that’s an LLC or corporation, we offer several tools to help you get through the process with minimal problems. Don’t hesitate to reach out to learn more about our Worry-Free Compliance Service or any other services we offer. Let us help you today!
Disclaimer: The content on this page is for information 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.
- How do I dissolve a business in North Dakota?
The main step for dissolving a business in North Dakota is filing the correct dissolution paperwork with the North Dakota Secretary of State. The exact form can vary based on your business entity and several other circumstances.
- How much does it cost to dissolve an LLC in North Dakota?
The cost to dissolve an LLC can vary according to several factors and the filing method. To learn more about filing fees, contact the North Dakota Secretary of State.
- How long does it take to dissolve an LLC in North Dakota?
That depends on your business. It may take several weeks or months to prepare your LLC for the dissolution process. Once you’re ready to file your dissolution paperwork, the filing method you choose can affect how long the dissolution process takes. For obvious reasons, it’ll take longer for the North Dakota Secretary of State to process your business’s dissolution paperwork if you file by mail versus filing online or in person.
- How do I dissolve a nonprofit organization in North Dakota?
A nonprofit organization will likely require different dissolution documents than a for-profit corporation or an LLC. Contact the North Dakota Secretary of State to learn more about what dissolution documents are required.