North Dakota Startup

Registering a North Dakota startup but not sure how to begin? can help! Let's look at a few of the main business types.

North Dakota Trade Name

A North Dakota trade name is a type of unincorporated business entity owned by either an individual or another business entity, such as a corporation or LLC.

Known as a DBA or assumed name in other states, a North Dakota trade name is one of the simplest types of business to form and the simplest to discontinue. As it is directly tied to its owner, it will cease to exist when the owner dies. In order to continue operating the trade name in North Dakota, the filing must be renewed every 5 years.

In addition to registering the trade name in North Dakota with the Secretary of State's office in Bismarck, you must also obtain any licenses or permits that may be required by your county or city for your industry.

North Dakota Corporation

In contrast to sole proprietorships and general partnerships, a North Dakota Corporation is a legally separate entity from its individual owners, and it provides limited liability to those owners against their personal assets being seized to pay for debts or other financial obligations of the business. Corporations in North Dakota can exist perpetually, provided they remain in compliance and are not involuntarily dissolved by the state.

C Corporation

The default type of corporation is a C corporation. This type of structure experiences "double taxation" by which their corporate income is taxed once at the corporate level, then again at the individual level as shareholder payments. It also has a high degree of flexibility when it comes to the entities or individuals that can act as shareholders.

S Corporation

If a North Dakota corporation does not require so much ownership flexibility but would like a lighter tax burden, it can elect to be treated as an S corporation by the IRS. This enables the corporation to be treated as a pass-through entity, meaning that corporate income is taxed only upon distribution to the shareholders.

North Dakota Foreign Corporation

A corporation already registered in another state may do business in North Dakota as well, but only if they first register as a North Dakota Foreign Corporation. This registration is required prior to transacting business or conducting business affairs in the state, and it is a prerequisite to obtaining any other licenses or permits required for your business.

In order to register as a foreign corporation in North Dakota, two forms must be submitted along with the registration fee: the Certificate of Authority Foreign Corporation application, and a Certificate of Good Standing from the original state of registration (to verify your domestic corporation's existence and standing). Any applicable professional licenses or state, county, or city permits may also be required.

If the legal name of the domestic corporation is already in use in North Dakota, your foreign corporation registration may be required to include a Trade Name registration for use in the state to distinguish it from the entity currently on file.

North Dakota LLC

A North Dakota LLC provides much of the structural flexibility of a C corporation, but it can elect to be taxed in one of a few different ways, depending on its number of owners, by the IRS.

An LLC, or limited liability company, provides (obviously) limited liability to its owners, like a corporation. One of the main differences is that while a corporation is required to distribute profits to its shareholders in proportion to the amount of shares they own (and, therefore, the amount of money they have contributed to the business), an LLC can distribute profits in any proportion the members have agreed on in the LLC Operating Agreement.

North Dakota Nonprofit Corporation

A North Dakota Nonprofit Corporation can be registered with the Secretary of State's office, but in order to form a 501c3 nonprofit and accept tax-deductible donations, the organization must go on to register as a 501c3 nonprofit corporation with the IRS.

The 501c3 registration process cannot be completed until the organization has officially registered in North Dakota, and it can take up to 9 months for the IRS to accept your application, depending on how prepared you are. Bear in mind that the minimum state requirements for the Articles of Incorporation may not meet the IRS's requirements, so it's important to determine your requirements so that your organization does not experience delays in its 501c3 acceptance.