North Dakota Corporation
A North Dakota corporation is a type of business entity that, once registered with
the Secretary of State's office in Bismarck, exists as a "legal person," separate
from its owners (the shareholders). It can enter into contracts, take out loans,
and take other legal actions.
There are two main types of basic for-profit corporations in North Dakota: S Corporations,
and C Corporations. However, the Bismarck office is not responsible for these tax
classifications; rather, this distinction happens at the federal level, with the
IRS.
C Corporation
A
C corporation is the default tax classification; unless you specify otherwise,
you will be taxed as a C corporation. This type of corporation can have an unlimited
amount of shareholders; those shareholders can be either individuals or other businesses
themselves.
S Corporation
To form an
S corporation, after registering in the state Bismarck offices, you would
submit your S Corporation Election Form to the IRS, alerting them to your wish to
be taxed as an S corporation.
Other types of North Dakota corporations
There are three more specialized types of corporations in North Dakota, each for
certain specific business purposes.
Professional Corporations
A professional corporation is made up of licensed professional individuals who have
been licensed to perform the service in question: a nurse, for example, or an architect.
The license must be from the Board responsible for your industry; Board offices
are primarily located in Bismarck, but some are located in Fargo and elsewhere.
Farm Corporations
A farm corporation is one that is engaged in farming or ranching as the primary
source of income. Its shareholders must all be close relations, and there cannot
be more than 15 shareholders.
Publicly Traded Corporations
Publicly traded corporations are those that hold an initial public offering, sell
shares of stock, and then the stock is traded publicly on the open stock market.
In North Dakota, publicly traded corporations can organize under one of two acts:
the North Dakota Publicly Traded Corporations Act, N.D.C.C., or the Business Corporation
Act, N.D.C.C. (the latter of which governs other for-profit corporations).
Forming a corporation in North Dakota
The first step in forming a corporation in North Dakota is drafting and filing the
Articles of Incorporation, which is a document containing general information
about the corporation, with the Business Services division of the Secretary of State
in Bismarck.
Future requirements for your North Dakota corporation
Sending your Articles of Incorporation to Bismarck is just one step of the process.
There are a few other steps you must take in order to get your corporation started
and to stay in compliance along the way.
Registered Agent
While you do not need to live in North Dakota in order to form a general business
corporation there, you do need to have a registered agent on file who does reside
in the state and can accept legal papers at a North Dakota address. (PO boxes or
mail center addresses cannot be accepted for the Registered Agent's address, unless
in conjunction with a physical address.)
The registered agent can be either an individual or a North Dakota corporation or
LLC itself, but it must agree to act as registered agent, and an up-to-date account
of your business's agent must be kept on file with the state.
EIN
Registering in North Dakota isn't enough; it's also necessary to register with the
IRS. After submitting your IRS Form SS-4, the application for the EIN (employer
identification number, used for tax purposes), the IRS will issue official EIN documentation
to you in 4 weeks.
Annual Report
Each year, your corporation must file an Annual Report with the state. Failure to
do so could result in late fines or other penalties; continued failure to do so
could indicate to the state that you're no longer in business and cause them to
revoke your filing.
Articles of Amendment
If any information provided in your original Articles of Incorporation changes during
the course of your business—you decide to change the name of your business,
for example, or you move to a new location—it is your responsibility to file
Articles of Amendment with
the state's office in Bismarck.
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Other types of businesses in North Dakota
If a corporation isn't the right fit for your situation, there are other types of
North Dakota businesses you can start. Take a look at the following links for more
information: