How to Start a Business in North Dakota
North Dakota Business Facts
North Dakota outranks a number of states in America in various aspects. North Dakota has the lowest rate of unemployment among all 50 states. Its GDP growth in 2009 ranked third. Moreover, the state has a low crime rate and the lowest rate of credit card default.
Major Companies Headquartered in North Dakota
North Dakota is the headquarters of many major companies including Scheels, TMI Hospitality, Altru Health System, Stallion, and University of North Dakota.
Startup Environment
North Dakota ranked first among all states in terms of the best place to start a business. The different categories included in the survey were as follows – business cost, business environment, and accessibility to various resources. In addition, North Dakota has a supportive community for new entrepreneurs.
Step 1: Decide on a Business Structure
There are 3 basic options: a Corporation, LLC or DBA. Click here to learn more about business entities.
- A Corporation is a separate entity (provides liability protection to the owners) with a structure that includes shareholders, directors and officers. It’s more complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
- An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity and provides very easy management (doesn’t require directors or officers) and taxation. The LLC has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.
- A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
Step 2: Choose a Business Name
Choosing a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that the better). In Step 3 we’ll show you how to search for the name in North Dakota, but we highly recommend you do the following before searching North Dakota state databases:
- Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
- Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
- Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if your name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use Google at a fairly advanced level you can reasonably clear a name yourself. Tip: Search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.
- Make sure your company name choice is available by searching the North Dakota Business Entity Database and doing a name search on the State of North Dakota website. NOTE: Make sure to search variations of spelling, plurals and misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).
NOTE: Familiarize yourself with the North Dakota naming guidelines. LLC entity names need to contain the words Limited Liability Company or the abbreviation LLC, and certain words are restricted or prohibited.
Restrictions on North Dakota Business Name & Business Purpose
- Business names should be unique.
- North Dakota corporate names may have the following approved designations:
- Co.
- Company
- Corp.
- Corporation
- Inc.
- Incorporated
- Limited
- Ltd.
- The use of the following words and phrases in corporate names is considered “restricted” in North Dakota:
Step 3: Register the Business
Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and selected your business name, here are the requirements to register your business in North Dakota.
How to form an LLC in North Dakota
- File the “Articles of Organization” with the North Dakota Secretary of State LLC Division.
- Once the articles are filed and approved you will then need to properly organize the LLC (this also applies to “1-person LLC’s”) by holding an “Organizational Meeting” which takes contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more.
How to Incorporate in North Dakota
NOTE: When registering a new company the Secretary of State can take several weeks to file the paperwork. You can expedite the process by hand delivering the documents directly to them or one of their field offices and paying an additional fee.
TIP: Check our order form to see how long North Dakota is currently taking to process regular and expedited orders.
How to File a DBA in North Dakota
- Check the state database of business names.
- Complete the DBA registration form.
- The filing fee is $25.
Optional Considerations when registering a North Dakota business
- Hire a professional Registered Agent. Many people list their home or business address on the Articles of Organization or Incorporation. This can cause issues because it becomes public record (you’ll get lots of junk mail). A professional Registered Agent will provide their address and forward any important documents to you, this is also convenient if you have to move (you don’t have to file forms or pay fees, just update your address with your agent).
Ready to register a business in North Dakota?
- We specialize in registering businesses in North Dakota.
Step 4: Obtain your Federal Employer Identification Number (FEIN or “EIN”)
- Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.
- To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.
- You can read more about corporate tax laws in North Dakota on the North Dakota Department of Revenue Taxation Division site.
Step 5: Open Company Accounts: Bank and Credit Cards
To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork, b) your EIN and c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).
Top 5 Major Banks in North Dakota
- Gate City Bank
- U.S. Bank
- First International Bank & Trust
- Wells Fargo Bank
- Choice Financial Group
TIP: Our business formation service includes a free banking resolution for your use.
Step 6: Obtain Business Licenses and Permits
Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).
TIP: We work with a company that can obtain and prepare business licenses and permits for you. Click here to learn more.
Step 7: Annual and Ongoing Requirements
DBA: Your Fictitious Business Name should be valid for 5 years, with option for renewal.
LLC: North Dakota corporations are required to file a Periodic Report with the North Dakota Secretary of State by November 15 each year, in addition to general taxation. Information on your business’ taxes can be found here. The filing fee is $50.
Corporation: Business in North Dakota should file an annual report by August 1 to the Division of Corporate and Consumer Services. The annual report fee is $25.
Important North Dakota Contacts
North Dakota Secretary of State
Business Services (for Corporation and LLC filings)
State of North Dakota
600 E Boulevard Avenue Dept 108
Bismarck ND 58505-0500
Phone: 701-328-2900
North Dakota Taxation Departments
North Dakota Labor and Employment Departments
North Dakota Startup Resources
1. Small Business Administration (SBA) North Dakota District Offices
2. SCORE North Dakota
3. North Dakota Legal Statutes
4. North Dakota Chambers of Commerce
- Greater North Dakota Chamber
- Bismarck-Mandan Chamber of Commerce
- Oakes Area Chamber of Commerce
- New Town Chamber of Commerce
- Watford City Area Chamber of Commerce
5. ND.gov
6. Angel.co North Dakota Startups
- A list of all 60+ North Dakota Startups and 4,700+ North Dakota angel investors registered with Angel.co. Good research resource.
7. North Dakota Business News
8. Economic Development & Finance
- Business incentives, government accessibility, and workforce performance, combined with North Dakota’s favorable position as one of the lowest cost states for operating a business, are driving top companies to establish operations in North Dakota.
9. North Dakota Small Business Development Center
10. ELPC (Environmental Law & Policy Center)
- North Dakota’s combination of environmental treasures, challenges and opportunities make the state a key part of ELPC’s advocacy to achieve environmental progress and economic development together.
