How to Start a Business in North Dakota

Starting a business in North Dakota involves several key steps, including selecting a business structure, registering with the state, and obtaining necessary licenses and permits. Entrepreneurs should also consider market research and business planning to ensure a successful launch.

North Dakota Economy Trends

Small Business Statistics: North Dakota is home to approximately 76,000 small businesses, which employ about 57.1% of the state's workforce. Notable industries include agriculture, energy, and manufacturing. For more detailed statistics, visit the U.S. Small Business Administration.

New Business Application Statistics: In North Dakota, there were 8,927 new business applications filed recently.

Exports and GDP: North Dakota's economy is bolstered by significant exports in agricultural products and energy resources. The state's GDP reflects a strong contribution from these sectors. For more information, refer to the U.S. Census Bureau.

Economic Highlights: North Dakota benefits from a favorable tax climate and is home to large employers in the energy and agriculture sectors. Key cities like Fargo and Bismarck serve as major industry hubs. For more details, visit the North Dakota Department of Commerce.

• Step 1: Perform Market Research
• Step 2: Write a Business Plan
• Step 3: Get Licenses and Permits
• Step 4: Acquire Funding
• Step 5: Choose a Business Entity
• Step 6: Select a Business Location
• Step 7: Register the Company

Step 1: What Kind of Business Should I Start in North Dakota?

Selecting a business type in North Dakota depends on factors such as personal interests, market demand, and regional economic strengths. Dominant industries in North Dakota include:

• Agriculture
• Energy
• Manufacturing

For more information, visit the North Dakota Department of Commerce.

How to Do Market Research in North Dakota: Market research involves gathering information to understand consumer needs and market conditions. Primary research methods include surveys and interviews, while secondary research involves analyzing existing data. Key areas to analyze include consumer demographics, buying behavior, and market gaps. Conducting competitive analysis helps understand other businesses in the area. Research enables entrepreneurs to make data-driven decisions when launching a new business in North Dakota.

Step 2: How to Write a Business Plan in North Dakota

A business plan is essential for clarifying goals, attracting investors, securing funding, organizing operations, and evaluating progress. It is valuable for both new and scaling businesses and can evolve over time.

Executive Summary: This section provides a snapshot of the business, including its mission statement, product or service offerings, and basic information about the leadership team, employees, and location.

Company Description: Detail the nature of the business, the marketplace needs it aims to satisfy, and the specific consumers, organizations, or businesses it serves.

Market Analysis: Include industry insights, target market demographics, and competitive analysis. Highlight North Dakota-specific market trends if applicable.

Organization and Management: Outline the business structure, ownership details, and profiles of the management team.

Product/Service Line: Describe the products or services offered, including the benefits and competitive advantages.

Marketing Plan: Explain the marketing strategy, including pricing, advertising, and promotional plans.

Financial Plan: Provide financial projections, funding requirements, and financial statements. Include examples like income statements, cash flow projections, and balance sheets.

Appendix: Attach any additional documents that support the business plan, such as resumes, permits, or legal documents.

Step 3: Do I Need a Business License in North Dakota?

Yes, in most cases, businesses in North Dakota need to obtain specific licenses or permits. There is no universal business license issued at the state level. Licensing depends on factors such as the type of business, its physical location, and whether it is regulated. Common types of licenses include sales and use tax permits, local city or county business licenses, and regulatory or professional licenses.

Business owners can determine applicable licenses by using state government licensing search tools or portals, consulting the North Dakota Department of Commerce, or accessing centralized online checklists.

How Much Does a Business License Cost in North Dakota?

Business license costs in North Dakota vary based on business type, jurisdiction, and the type of license or permit required. Some licenses may be available at no cost, while others may range from $15 to $100 for a general business license. Certain groups, such as veterans or nonprofits, may qualify for exemptions or fee waivers. Business owners should check with the appropriate issuing agency for exact fee amounts and payment policies.

How to Register for a Seller’s Permit in North Dakota

In North Dakota, a seller’s permit is referred to as a sales tax permit. It authorizes the sale of taxable goods or services. The permit is issued by the North Dakota Office of State Tax Commissioner. Applications can be submitted online through the North Dakota Taxpayer Access Point (TAP), or by paper form. Required information includes the business name, address, ownership details, and expected sales. There is no fee for obtaining a sales tax permit, but annual renewals may be required. For further assistance, contact the Office of State Tax Commissioner.

Mailing Address: North Dakota Office of State Tax Commissioner
600 E Boulevard Ave, Dept 127
Bismarck, ND 58505-0599

Step 4: How Much Does it Cost to Start a Business in North Dakota?

The cost of starting a business in North Dakota varies based on factors such as business type, industry, location, and scale of operation. According to the U.S. Small Business Administration, startup costs can range widely, with larger businesses or those in certain industries incurring higher expenses. Common startup expenses include registration and incorporation fees, licensing and permits, equipment, supplies, office space, insurance, professional services, employee-related expenses, and marketing. Filing fees for LLC formation or corporation registration may also apply.

How to Get Business Funding in North Dakota

Startups in North Dakota have access to multiple funding options. Business owners should estimate their capital needs and choose suitable funding options based on their goals and eligibility. Common funding sources include self-funding, loans, grants, investors, and crowdfunding. State-specific investment or financing programs may also be available.

How to Self-Fund a Business in North Dakota

Self-funding, or bootstrapping, involves using personal financial resources to start or run a business. Common methods include using savings, selling personal assets, earning supplemental income, pre-ordering, or borrowing from friends or family. Advantages include full ownership and control, while risks involve limited capital and personal financial exposure. Entrepreneurs should budget carefully and optimize resources. For assistance, consult the North Dakota Chamber of Commerce or Small Business Administration tools.

How to Find Investors in North Dakota

An investor provides capital and may offer mentorship, networking, or strategic guidance. Compensation may involve equity, dividends, or board positions. Business owners in North Dakota can connect with investors by attending business events, using local investment networks, contacting state-level organizations like the North Dakota Commerce Authority, and preparing a compelling pitch. Types of investors include angel investors, venture capitalists, friends and family, local private investors, and crowdfunding investors.

How to Get a Loan to Start a Business in North Dakota

Business loans are a common funding method for new businesses in North Dakota. Options include traditional bank loans, SBA-backed loans, and non-traditional options like peer-to-peer lending, microloans, and supplier financing. Steps to obtain a loan include choosing the right loan type, meeting eligibility criteria, providing collateral, and preparing documentation such as financial statements, business plans, and tax returns. Required documents usually include:

• Financial statements
• Business plan
• Proof of income
• Tax returns

Consult financial professionals and compare loan offers to find the best terms.

How to Find North Dakota Business Grants

Business grants are funding sources that do not require repayment. Each grant program has different eligibility requirements and application processes. In North Dakota, business owners can find grants through the North Dakota Commerce Authority, local economic development offices, state agency websites, and dedicated grant directories. Use grant search tools and consult local business support centers for assistance in identifying suitable programs.

Can I Start a Business with No Money in North Dakota?

Starting a business with absolutely no money in North Dakota is not possible, as some capital is required for essentials like registration fees, licenses, equipment, and marketing. However, it is possible to launch a low-cost business by starting from home, choosing a service-based business, using free resources, applying for grants, or networking locally. North Dakota offers free or low-cost business tools, such as online registration portals.

Step 5: Choosing a Business Structure in North Dakota

Choosing a business structure in North Dakota is important for taxation, liability, management, and registration requirements. Available structures include sole proprietorships, partnerships, LLCs, and corporations. Each structure has implications for taxation, liability, operations, ownership, and funding. Consulting a tax accountant, attorney, or business consultant is recommended. For more information, visit the SBA.

How to Start a Sole Proprietorship in North Dakota

A sole proprietorship is a business owned and operated by one individual, offering full control and simple tax treatment but with personal liability for debts.

Starting a Sole Proprietorship in North Dakota:

• Step 1: Choose a business name. You may use your legal name or a trade name.
• Step 2: File a DBA (“Doing Business As”) with the county recorder’s office if using a trade name. Required information typically includes the business name and owner’s details.
• Step 3: Obtain necessary licenses and permits. Requirements vary by business type and location. An EIN is required if hiring employees.

Sole proprietorships do not need to be formally registered with the Secretary of State in North Dakota.

How to Start a Corporation in North Dakota

A corporation is a legal entity separate from its owners, providing limited liability to shareholders. It can be sued, taxed, and enter contracts independently. Corporation types include C-Corp and S-Corp, with varying tax treatments.

Core Features:

• Legal separation of owners and business
• Limited liability for shareholders
• Centralized management
• Transferable ownership through stock
• Taxation of profits (double or pass-through)

Steps to Form a Corporation in North Dakota:

• Step 1: Choose a Corporation Name. Ensure it includes words like “Corporation” or “Inc.” and is unique.
• Step 2: Appoint a Registered Agent and Registered Office. This can be an individual or company with a physical address in North Dakota.
• Step 3: File the Articles of Incorporation with the Secretary of State. Include the corporation name, shares, incorporators, address, and agent. Filing can be done online, by mail, or in person. Fees apply.
• Step 4 (Optional): Foreign Corporations must file a Certificate of Authority.
• Step 5 (Optional): File IRS Form 2553 for S-Corp election if applicable.

How to Start an LLC in North Dakota

An LLC (Limited Liability Company) combines elements of corporations and partnerships, offering limited liability, pass-through taxation, fewer formalities, and flexible management.

Steps to Form an LLC in North Dakota:

• Step 1: Name Search/Selection. Use the North Dakota Secretary of State’s website to search for or reserve a business name. Fees may apply.
• Step 2: File Articles of Organization with the Secretary of State. Filing can be done online, by mail, or in person. Fees apply.

Further steps, such as obtaining an EIN or appointing a registered agent, may be required.

How to Start a Business Partnership in North Dakota

A business partnership is owned by two or more individuals. Types include general partnerships, limited partnerships, and limited liability partnerships.

How to Start a Limited Partnership in North Dakota:

A Limited Partnership (LP) includes at least one general partner with full liability and management control, and one or more limited partners with limited liability. Starting a partnership requires filing a Certificate of Limited Partnership with the Secretary of State. Filing can be done online, by mail, or in person.

How to Start a General Partnership in North Dakota:

A general partnership (GP) is jointly owned and managed by two or more individuals who share profits, losses, and liability. Registration is optional, but a Statement of Partnership Authority can be filed with the county recorder’s office.

How to Start a Nonprofit in North Dakota

A nonprofit is a corporation formed for purposes other than profit, such as charity or education. It must comply with state-specific incorporation procedures and file with the Secretary of State. Nonprofits must also file with the IRS for 501(c)(3) status and may need a state tax exemption form. Filing fees and processing options vary.

Step 6: Choosing a Business Location in North Dakota

Choosing a business location is critical for customer-facing businesses. It impacts success, visibility, operations, and compliance. Common setups in North Dakota include brick-and-mortar, online, home-based, and mobile. Key factors to consider are proximity to the target market, accessibility, local competition, cost, zoning laws, and brand visibility. Contact local zoning boards or safety inspection offices for regulations.

What Kind of Business Can I Run From Home in North Dakota?

Running a home-based business in North Dakota is influenced by local regulations such as zoning ordinances and homeowner association rules. Some businesses are typically allowed if they do not affect the neighborhood’s character, while others may be prohibited due to noise or safety concerns. Always check with local zoning or planning departments and review HOA rules.

How Do I Start a Small Business From Home in North Dakota

Home-based businesses in North Dakota must comply with legal requirements, including business formation, registration, licensing, and zoning compliance. Local governments enforce zoning laws, and a Home Occupation Permit may be required. This permit assesses the business's suitability in a residential setting. Contact local governing agencies for compliance.

Starting a Business Online in North Dakota

An online business is conducted over the internet and must follow the same legal requirements as other businesses in North Dakota. Steps include choosing a business name, selecting a legal structure, filing formation documents, obtaining an EIN, and acquiring licenses or permits. Additional regulations may apply, such as consumer protection laws.

Step 7: Legal Requirements for Starting a Business in North Dakota

North Dakota does not limit who can start a business, but all new businesses must follow state laws and local ordinances. Legal requirements depend on business structure, industry, location, and products or services offered. Businesses must file formation documents, obtain licenses, comply with tax obligations, and designate a registered agent and business address.

How to Get an EIN Number in North Dakota

An EIN (Employer Identification Number) is a unique nine-digit number issued by the IRS for tax identification. It is required for hiring employees, opening business bank accounts, filing taxes, and changing business structures. Apply for an EIN through the IRS online, by mail, or fax using Form SS-4. The responsible party must have a valid Taxpayer Identification Number.

How to Get a North Dakota Registered Agent

A registered agent is designated to receive legal documents on behalf of a business. In North Dakota, LLCs, corporations, and limited partnerships must appoint a registered agent. The agent can be an individual over 18 with a physical address in North Dakota or a business entity authorized to operate in the state. Appoint the agent in the formation paperwork. Fees may apply for using a registered agent service.

Patents, Trademarks, and Copyrights in North Dakota

Patents, trademarks, and copyrights are forms of intellectual property protection.

Patents: Provide exclusive rights to prevent others from using, making, selling, or importing an invention. Governed by the U.S. Patent and Trademark Office (USPTO) under Title 35 of the U.S. Code, patents generally last 20 years from the filing date.

Trademarks: Distinguish the source of goods or services. Federal trademarks are handled by the USPTO, while state trademarks are managed by the Secretary of State. Trademarks last 10 years and are renewable.

Copyrights: Protect original creative works, granting exclusive rights to reproduce and distribute. Governed by the U.S. Copyright Office under Title 17 of the U.S. Code, copyrights last the life of the author plus 70 years.

North Dakota Business Tax

The North Dakota Office of State Tax Commissioner oversees business taxation. Tax obligations vary by business structure, industry, and activity. Common taxes include:

• Income or Corporate/Franchise Tax: Levied on business profits.
• Sales and Use Tax: Applied to sales of goods and services.
• Employment or Payroll Taxes: Withheld from employee wages.
• Property Tax: Based on property value.
• Specialty/Excise Taxes: Industry-specific taxes.

Are Business Records Public in North Dakota?

Yes, business records maintained by state or local government agencies in North Dakota are generally public and can be inspected or copied by request, unless exempted by law. Agencies like the Secretary of State, Department of Revenue, and County Recorder maintain such records. Some information, such as Social Security Numbers and trade secrets, is exempt from public access.