A North Dakota foreign corporation registration will allow your company to conduct business in this state although incorporated in a different state. Not every business activity requires a foreign corporation registration.

What Are Foreign LLCs?

In North Dakota, a foreign LLC is a limited liability company that's incorporated somewhere else but does business within the borders of North Dakota. Contrary to what it sounds like, foreign LLCs are not companies from other countries. Instead, they are simply companies formed based on another state's laws.

A domestic LLC is a company that does business in the same state that it was formed. Almost every state uses this terminology. Under the North Dakota LLC Act, any company that does business in this location but was not formed in the state must complete a foreign corporation registration. Unfortunately, there is no clear definition of what constitutes doing business as a foreign corporation in this law.

Generally, if your business is physically represented North Dakota, you will need to register as a foreign company. The following would constitute having a physical presence:

  • Owning a warehouse or store In North Dakota.
  • Maintaining an office in North Dakota.
  • Having a representative of your company operating in North Dakota.

There are certain exceptions to the foreign company registration requirement, and internet sales can make complying with these rules even more complicated. The foreign registration requirements for corporations are similar to those of an LLC. The only real difference is the form that you will need to use to register your company.

Exempt Activities

While the LLC Act fails to define what counts as doing business, the Act does describe certain exempt activities a business can perform without needing to register as a foreign entity:

  • Dealing with a lawsuit.
  • Handling business activities such as convening member meetings.
  • Owning a business bank account.
  • Possessing an office or representative that deals with your company's securities.
  • Managing or holding property as the executor of an estate, a person's guardian, or the conservator of a person or estate.
  • Debt collection.
  • Conducting a single transaction in a 30-day period that is not related to other recurring transactions.

You can search the LLC Act for a full description of exempt activities.

Consequences for Not Registering

If you transact business in North Dakota without completing your foreign corporation registration, your company will have several limitations. For example, you will not be able to file a lawsuit in the state. Failing to register as a foreign corporation will also subject your business to a $5,000 civil penalty. You may be restricted from doing additional business until you have paid this penalty.

In addition to the civil penalty that applies to your corporation, another penalty of $1,000 can apply to individuals in your company, including:

  • Governors of your LLC.
  • LLC members.
  • Company agents that direct or authorize business activities.

Not having a Certificate of Authority, the document that allows you to operate as a foreign entity, will not make your company's contracts invalid. Failing to obtain this document also will not keep you from defending yourself in a lawsuit filed in this state.

Consequences for Not Registering

If you want to register your business as a foreign entity in North Dakota, you need to complete and submit a Certificate of Authority Application: Foreign Limited Liability Company. You should file your application with the North Dakota Secretary of State.

The information that you include in your Certificate of Authority Application will be almost identical to the information you added to your original formation documents. Because every state will have its specific rules, however, it's possible you will have to provide information that wasn't required when incorporating your LLC.

The most important information to add to your Certificate of Authority includes:

  • A statement that your company is a professional LLC, if applicable.
  • Your company's EIN.
  • Your business's name. You should use the exact same name as listed on your formation documents.
  • The trade name you plan to use in North Dakota, if applicable.
  • Your principal office address.
  • Your formation state.
  • How long your LLC will last.
  • Your principal office's telephone number.
  • The contact information of your Registered Agent.
  • A statement describing your planned business activities.
  • Contact information for your LLC managers.
  • A statement affirming that the signatory has read and understood the application.
  • A signature by an authorized representative and date.

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