North Dakota State Statute Code

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10-19.1-09.

Incorporators.

One or more individuals of the age of eighteen years or more may act as incorporators of a corporation by filing with the secretary of state articles of incorporation for the corporation.

10-19.1-31.

Bylaws.

  1. A corporation may, but need not, have bylaws. Bylaws may contain any provision relating to the management or the regulation of the affairs of the corporation not inconsistent with section 10-19.1-32 or any other provision of law or the articles.
  2. Initial bylaws may be adopted by the first board or by the incorporators, pursuant to section 10-19.1-30. Unless reserved by the articles to the shareholders, the power to adopt, amend, or repeal the bylaws is vested in the board. The power of the board is subject to the power of the shareholders, exercisable in the manner provided in subsection 3, to adopt, amend, or repeal bylaws adopted, amended, or repealed by the board.
  3. Unless the articles or bylaws provide otherwise, a shareholder or shareholders holding five percent or more of the voting power of the shares entitled to vote may propose a resolution for action by the shareholders to adopt, amend, or repeal bylaws adopted, amended, or repealed by the board.
    1. The resolution must set forth the provisions proposed for adoption, amendment, or repeal.
    2. The limitations and procedures for submitting, considering, and adopting the resolution are the same as provided in subsections 2, 3, and 4 of section 10-19.1-19 for amendment of the articles.
    3. The articles or bylaws may impose different or additional requirements for the shareholders to adopt, amend, or repeal the bylaws.

10-19.1-32.

Board.

  1. The business and affairs of a corporation must be managed by or under the direction of a board, subject to subsection 2 and section 10-19.1-83. The members of the first board may be named in the articles or elected by the incorporators pursuant to section 10-19.1-30 or by the shareholders.
  2. The holders of the shares entitled to vote for directors of the corporation may, by unanimous affirmative vote, take any action that this chapter requires or permits the board to take. As to an action taken by the shareholders in that manner:
    1. The directors have no duties, liabilities, or responsibilities as directors under this chapter with respect to or arising from the action.
    2. The shareholders collectively and individually have all of the duties, liabilities, and responsibilities of directors under this chapter with respect to and arising from the action.
    3. If the action relates to a matter required or permitted by this chapter or by any other law to be approved or adopted by the board, either with or without approval or adoption by the shareholders, the action is deemed to have been approved or adopted by the board.
    4. A requirement that an instrument filed with a governmental agency contain a statement that the action has been approved and adopted by the board is satisfied by a statement that the shareholders have taken the action under this subsection.

10-19.1-61.

Authorized shares.

  1. Subject to any restrictions in the articles, a corporation may issue securities and rights to purchase securities only when authorized by the board.
  2. All shares of a corporation:
    1. Must be of one class and one series, unless the articles establish or authorize the board to establish more than one class or series;
    2. Must be common shares entitled to vote and have equal rights and preferences in all matters not otherwise provided for by the board, unless and to the extent the articles have created nonvoting shares or have fixed the relative rights and preferences of different classes and series; and
    3. Must have, unless a different par value is specified in the articles, a par value of one cent per share.
  3. Subject to any restrictions in the articles, the power granted in subsection 2 may be exercised by a resolution approved by the directors as required under section 10-19.1-46 establishing a class or series, setting forth the designation of the class or series, and fixing the relative rights and preferences of the class or series.
  4. A statement executed by an officer setting forth the name of the corporation and the text of the resolution and certifying the adoption of the resolution and the date of adoption must be filed with the secretary of state, together with the fees provided under section 10-19.1-147, before the issuance of any shares for which the resolution creates rights or preferences not set forth in the articles. The resolution is effective when the statement is filed with the secretary of state unless the statement specifies a later effective date within thirty days of filing the statement with the secretary of state.
  5. Without limiting the authority granted under this section, a corporation may issue shares of a class or series which:
    1. Are subject to the right of the corporation to redeem any of those shares at the price fixed for the shares' redemption by the articles or by the board;
    2. Entitle the shareholders to cumulative, partially cumulative, or noncumulative distributions;
    3. Have preference over any class or series of shares for the payment of distributions of any or all kinds;
    4. Convert into shares of any other class or any series of the same or another class; or
    5. Have full, partial, or no voting rights, except as provided under section 10-19.1-20.

10-19.1-69.

Liability of subscribers and shareholders with respect to shares.

  1. A holder of or subscriber for shares of a corporation is under no obligation to the corporation or its creditors with respect to such shares other than the obligation to pay to the corporation the full consideration of which such shares were issued or to be issued. As such, a shareholder is not personally liable for the acts or debts of the corporation.
  2. Any person becoming an assignee or transferee of shares or of a subscription for shares in good faith and without knowledge or notice that the full consideration therefore has not been paid shall not be personally liable to the corporation or its creditors for any unpaid portion of such consideration.
  3. A personal representative, conservator, guardian, trustee, assignee for the benefit of creditors, or a receiver is not personally liable to the corporation as a holder of or subscriber for shares of a corporation but the estate and funds in said person's hands are liable.
  4. No pledgee or other holder of shares as collateral security is personally liable as a shareholder.

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10-32-05.

Organizers.

One or more individuals of the age of eighteen years or more may act as organizers of a limited liability company by filing with the secretary of state articles of organization for the limited liability company.

10-32-29.

Personal liability.

  1. Subject to subsection 3, a member, governor, manager, or other agent of a limited liability company is not, merely on account of this status, personally liable for the acts, debts, liabilities, or obligations of the limited liability company.
  2. However, all persons who assume to act as a limited liability company without authority are jointly and severally liable for all debts and liabilities incurred or arising as a result.
  3. The case law that states the conditions and circumstances under which the corporate veil of a corporation may be pierced under North Dakota law also applies to limited liability companies.
  4. The limited liability described in subsections 1 and 3 continues in full force regardless of any dissolution, winding up, and termination of a limited liability company.

10-32-68.

Bylaws.

  1. A limited liability company may have bylaws, which may be known as an operating agreement. The bylaws may contain any provision relating to the management of the business or the regulation of the affairs of the limited liability company not inconsistent with section 10-32-69 or any other provision of law or the articles of organization. An act of the board under subsection 2 and of the members under subsection 3 will be considered part of the bylaws only if the act expressly states that it is intended to constitute or revise the bylaws.
  2. Initial bylaws may be adopted pursuant to section 10-32-67 by the organizers or by the first board. Unless reserved by the articles of organization or a member-control agreement to the members, the power to adopt, amend, or repeal the bylaws is vested in the board. The power of the board is subject to the power of the members, exercisable in the manner provided in subsection 3, to adopt, amend, or repeal the bylaws adopted, amended, or repealed by the board.
  3. Unless the articles or bylaws provide otherwise, members owning five percent or more of the voting power of the members entitled to vote may propose a resolution for action by the members to adopt, amend, or repeal the bylaws adopted, amended, or repealed by the board and the resolution must set forth the provision or provisions proposed for adoption, amendment, or repeal. The limitations and procedures for submitting, considering, and adopting the resolution are the same as provided in subsections 2 through 4 of section 10-32-16 for amendment of the articles of organization. The articles or bylaws may impose different or additional requirements for the members to adopt, amend, or repeal the bylaws.