If you're a professional in North Dakota looking to start your own corporation, you've come to the right place. Forming a professional corporation can offer several benefits, including liability protection and tax advantages. In this guide, we will walk you through the necessary steps to establish your professional corporation in North Dakota in the year 2023.
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What is a Professional Corporation?
A professional corporation, often referred to as a P.C., is a professional service organization typically formed by those in fields such as medicine, law, architecture, or engineering. The key characteristic of a P.C. is that the owners, known as shareholders, provide professional services themselves. This distinguishes it from a regular corporation, in which the shareholders cannot participate in providing services.
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Step 1: Choose a Name
In North Dakota, professional corporations must have a unique name that accurately reflects the nature of the professional services they provide. To ensure the availability of your chosen name, you can conduct a preliminary search on the North Dakota Secretary of State's website. It is also recommended to check for any trademarks or registered business names that may conflict with your desired name.
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Step 2: Draft Articles of Incorporation
The next step is to prepare and file the Articles of Incorporation with the North Dakota Secretary of State. The Articles of Incorporation document provides essential information about your professional corporation, including its name, address, purpose, shareholders, and other key details. You can download a template for the Articles of Incorporation from the Secretary of State's website.
When drafting the Articles of Incorporation, make sure to include the following information:
- The professional services to be offered by the corporation.
- The names and addresses of initial shareholders, who must be licensed and authorized to practice in North Dakota.
- The corporation's registered office address and the name and address of your registered agent, who will receive legal documents on behalf of the corporation.
Step 3: Obtain Necessary Licenses and Permits
Before you can operate your professional corporation in North Dakota, you must ensure that all necessary licenses and permits are in place. Depending on the type of professional services you provide, you may need to obtain licenses from the appropriate state licensing board or agency. Examples include medical licenses from the North Dakota Board of Medicine or legal licenses from the North Dakota Supreme Court. Research and fulfill all the requirements mandated by the licensing board corresponding to your profession.
Step 4: File your Documents with the North Dakota Secretary of State
Once you have prepared the Articles of Incorporation and obtained the required licenses, you are ready to file your documents with the North Dakota Secretary of State. You can do this by mail, in-person, or online through the Secretary of State's website. Along with the Articles of Incorporation form, include the filing fee as well. As of 2023, the filing fee for a professional corporation in North Dakota is $135.
Step 5: Create Bylaws
Bylaws are the governing rules and regulations of your professional corporation. They outline the internal operations, decision-making processes, and roles and responsibilities of shareholders, directors, and officers. Take time to carefully draft your bylaws and consider seeking legal assistance to ensure compliance with North Dakota business laws.
Step 6: Hold an Initial Organizational Meeting
After filing your documents and creating bylaws, it is crucial to hold an initial organizational meeting of the incorporators and shareholders. During this meeting, elect directors, appoint officers, and ratify the bylaws established for your professional corporation. Maintain minutes of the meeting, as they serve as official documentation of the company's decisions and actions.
Step 7: Obtain an Employer Identification Number (EIN)
An Employer Identification Number (EIN) is required for various purposes, such as taxation and hiring employees. You can obtain an EIN from the Internal Revenue Service (IRS) either online or by mail. It is crucial to note that even if your professional corporation does not have employees, having an EIN is beneficial as it can help separate your personal and business finances.
Step 8: Fulfill Ongoing Compliance Requirements
Once your professional corporation is formed, you must meet certain ongoing compliance requirements. These may include annual reports and keeping your licenses and registrations up to date. Failure to comply with these requirements could result in penalties or even the dissolution of your corporation.
Conclusion
Forming a professional corporation in North Dakota can be a rewarding step towards establishing your professional practice and protecting your personal assets. However, ensure you follow all the legal and regulatory requirements to avoid any unnecessary complications. By carefully following this guide and seeking professional advice when needed, you can establish your professional corporation successfully in North Dakota in 2023.
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