How to Start a Business in North Dakota in 2024
Whether you start your business in North Dakota or someplace else, it’s essential to start with a business plan. The State of North Dakota, though, provides you with help and advice that will guide you toward fulfilling your business dreams. Further, the State of North Dakota provides resources that you can use, often free of charge.
What Is a Business Plan?
At its root level, a business plan is a series of goals the business has and its set of strategies to achieve those goals. Should you want to attract sponsorships, investors, or both, then having a good, solid business plan in place is a great way to start?
If investors and/or sponsors want to succeed with their ventures, then they have to know that your business will provide them with such an opportunity. By presenting a worthy business plan, you show them that you’re serious about what you’re doing and that they do, indeed, have a worthwhile opportunity with your business. Even established businesses use business plans to keep their eyes on the prize.
Securing Funding
Unless you have large amounts of cash on hand, in the hundreds of thousands or millions of dollars, depending on what kind of business you wish to create, you’ll need to secure funding from somewhere. This could come from investors, sponsors, friends, family, or even banks or other lending institutions.
There are rules and regulations about the kinds of funds that you can obtain and what kind of taxes you have to pay. Depending on your specific kind of business and industry, these rules could vary.
Registering Your Business
Both corporations and LLCs must have a registered agent who acts on behalf of the business. Some partnerships require a registered agent as well. This agent will answer summonses, respond to possible litigation, or make any other necessary response to relevant communication. Then, the agent will deliver the information to the business. In the State of North Dakota, registered agents who are individuals must live in the state. If the agent itself is a business, then they must operate in North Dakota.
Type of Business
In North Dakota, there are six different kinds of businesses. Each of them has its own rules and challenges. Read on to find out more about each of the six.
Sole Proprietorship
This is where you and your business are synonymous with each other. You have total control over everything, from profits to liabilities. In some cases, if you and your spouse go into business together, then you can operate as a sole proprietorship. If you want to call your business something other than your name, then you need to register a name under which you will operate. This is known as “doing business as” or DBA. You have to pick something that’s not already a trade name.
Partnership
This is a business where two or more people, not including a married couple, create a business together. They can be equal partners, or they can each own different percentages of the business. In the State of North Dakota, the laws governing the establishment of partnerships cover domestic businesses only. Foreign businesses operate under different laws.
Partnerships have two names. There’s the actual name of the business, which can be anything, and then there is the name of the partnership. That name cannot contain any part of the actual name of the business, any of the partners’ first or last names, or the name of any commercial partner. As an example, let’s say that John Smith, Jennifer Jones, and Jim Johnson want to form a roofing company called “Roofers Unlimited.” But they don’t have the capital to do it totally on their own. So, they recruit a local business to be a fourth partner. The fictitious name cannot contain John, Smith, Jennifer, Jones, Jim, Johnson, roofers, unlimited, or any part of the name of the business that is their partner.
Limited Liability Company
With this business type, you need to file articles of organization. Basically, the idea is to separate you from the business when it comes to liability. For example, if someone is injured on your premises, then that person would sue the company. You would not be personally responsible.
In the State of North Dakota, there are four kinds of Limited Liability Companies, which are also known as LLCs:
- Business LLC
- Farm or Ranching LLC
- Authorized Livestock LLC
- Professional LLC
Each of these requires its own separate paperwork in addition to the articles of organization. You can decide to change the name of your business from that which you registered with the North Dakota Secretary of State, but you have to re-register using a trade name to do so. Some LLCs must file annual reports, so check with the Secretary of State to determine if your LLC is one of those that are required to do so.
Corporation
Corporations require incorporation. You also need to hold an annual general meeting for anyone associated with the business to attend, and this would include stockholders if you were to issue stock. All corporations must file annual reports. If you don’t file an annual report, then you and your business are subject to sanctions that may even include the dissolution of your business. In North Dakota, the types of corporations are the same as they are for LLCs.
Cooperative
Cooperatives are different than other businesses in that they exist for the enrichment of the members rather than for the business itself. They can include any number of people greater than four. However, one of them must live in North Dakota. The idea behind a cooperative is to give each of its members services or goods that they need. The only things that a cooperative cannot do are conduct banking or sell or implement insurance.
Franchise
A franchise allows you to start up a business under the umbrella of another business. Chain restaurants, coffee shops, and some clothing stores are good examples of franchises. You operate under the rules and regulations of the parent company, but you administer the day-to-day operations of the location over which you have authority. You can’t pick your own name with this kind of business. Franchisees license everything from the parent company. However, the parent company often provides support, covers licensing fees, and offers other benefits to the franchisee.
Speaking of Licenses …
Many industries require licenses for you to operate.
The following industries require special licenses in North Dakota:
- Alcoholic beverage retailers
- Amusement games and fair boards
- Fireworks wholesalers
- Charitable gaming organizations
- Manufacturers and distributors of gaming equipment and supplies
- Polygraph operators
- Tobacco retailers, wholesalers, and manufacturers
- Transient merchant
- Contractors
- Home inspectors
- Lobbyists
- Athlete agents
- Professional employer organizations
- Professional fundraisers
- Combative sports
It’s possible for your business to require a license even if your type of business doesn’t appear on the list. It would be a good idea to contact both the North Dakota Attorney General’s office and the Secretary of State to make sure.
Information on Collecting Taxes
Most businesses in North Dakota must collect sales tax. The rules vary according to the kind of business, your industry, and whether you have employees to whom you will issue either W-2s or 1099s. There might be other tax laws to which you must adhere as well. The Secretary of State will be able to guide you when it comes to the collection and disbursement of sales tax and any other taxes that apply to your business.
You might also have to collect other federal taxes and fees, such as FICA, state taxes and fees, or local taxes and fees. It behooves you to contact all relevant authorities regarding taxes, the laws regarding which tend to be Byzantine. It’s easy to miss something, so there is no shame in reaching out for help when you need it.
Hiring Employees
Having employees other than your partners requires due diligence regarding the various employee programs and safeguards that exist. These include things like workers’ compensation, unemployment paperwork, dealing with court orders regarding the pay of employees, withholding and remitting income tax under federal, state, and sometimes local laws, complying with federal, state, and local labor laws, and paying your applicable personal or business income taxes. Depending on your situation, other taxes could apply to you, your partners, your employees, or your business itself.
Nonprofit Organizations
Nonprofits have different naming rules than other businesses. They also have to file different paperwork to register than for-profit businesses. However, they still need a registered agent if they’re a corporation or an LLC.
There are federal laws about the tax-exempt status of nonprofit organizations, and these differ by type of organization. You’ll need to do research about any possible tax-exempt status you may have and then file the applicable paperwork to make sure that everything is above board and legitimate.
How We Can Help
At American Business Credit, we provide options for funding when you want to start up a business in North Dakota. Since our inception, we’ve secured more than a quarter of a billion dollars for the more than 10,000 businesses that we’ve helped get off the ground. In many cases, we can lend this money without collateral.
We’ve helped medical businesses, heavy industry companies, businesses owned by the People of the Global Majority, restaurants, agricultural companies, and franchisees of many different restaurants and other companies that offer franchises. For sole proprietors, we’ve also given out personal loans. We want to lend money to savvy and well-prepared prospective business owners, and we won’t make up excuses not to lend it.
By seeking our advice and “testing the waters” about your prospects for a business loan, you won’t damage your credit score in any way. The best part about securing your funds from us is that you’ll have them in as few as seven days. Although we’re located in Florida, we can work with you to get started in North Dakota. In our nearly two decades of experience, we’ve secured an A+ rating and full accreditation from the Better Business Bureau. The bureau has no record of any complaints being filed against us.
So, when you’re looking for funding to start your business in North Dakota, give us a call to set up a video conference. We’ll discuss your situation and figure out the best way we can help you secure the funding you need.
