One of the important factors that make a business environment excellent for new businesses is the incentives and benefits they will enjoy. A start-up company in North Dakota can enjoy a variety of incentives and can get financial aid through grants with ease and this is why the state is ranked high when it comes to “best business environment”. The state enjoys a robust economy where the energy development sector is flourishing; agriculture is still going strong, a variety of financial resources are also easily accessible, there is a high-quality standard of living, and there are highly skilled and motivated workforce. North Dakota is the only state in the nation that is home to a state-owned bank (Bank of North Dakota in Bismarck) and a state-owned flour mill. The second largest Microsoft campus with 1,700 employees is situated in Fargo and ND is currently the largest producer of different types of cereal grains in the nation.

Drivers of Business Growth for Start-ups

Are there any drivers of business growth for a startup company in North Dakota? Yes, there are several different drivers and most of all; it’s the advantages and benefits that a business can derive in the state is what provides the initial thrust. Let’s look at some of the basic advantages that an LLC or business corporation in North Dakota can leverage:

Advantage#1: The benefits of Incorporation or LLC formation

C or S Corporation

• Tax Exemptions: If you register a new company in North Dakota then you will be able to benefit from the variety of tax exemptions available and these include:
  – North Dakota exempts different types of items from sales tax normally taxed by other states, like electricity, groceries, and natural gas.
  – All personal property is exempted from taxation except certain types of gas refineries and oil utilities.
  – There is no tax on items like inventory, office equipment, materials in process, or accounts receivable.
  – Primary sector businesses may be eligible for sales and use tax exemption as well as refund on purchase of computer and telecommunication equipment.
• Federal taxation: If you register a new company in North Dakota as an S corporation then the corporation or firm will not pay any income tax. Instead, each shareholder or owners in the company will be liable to pay tax on their personal tax returns.
• Independent life: When you register a new business in North Dakota as an S Corporation, it will enjoy an independent life. This means that the incapacitation or death of a stockholder will not have a negative impact on the business operations.

Limited Liability Company

• Sales and Service Tax Exemptions: If you register a new business in North Dakota then it can be eligible for several
  types of sales tax exemptions on products and services. Let’s take a look at some of them:
  – The products that are exempted in ND from sales tax include Livestock and Poultry Feed, Prescription Drugs, Commercial Fertilizer, Farm Machinery Repair Parts, Seeds for Planting, Gasoline and Combustible Fuels, Food and Food Products, Medical Devices and Equipment, and Used Mobile Homes among others.
  – The services that are exempted in ND from sales tax include Transportation Services including public transportation companies, hospital and nursing home Services, and services that involve repairing, restoring, altering, or cleaning tangible personal property.
  Note: Rental of Hotel and Motel Accommodations as well as Rental of Mobile Homes are exempt from sales tax under the ND sales and use tax law and is categorized under “Conditional Exemptions”.
• Flexible Profit Distribution: A start-up company inNorth Dakota LLC has the benefit of being able to select different ways of distribution of profits unlike a partnership where the distribution is 50-50.
• Limited Liability: As an owner of a North Dakota LLC, you will be able to enjoy limited liability protection quite similar to what a corporation enjoys.

Advantage#2: North Dakota Business Incentives

Once you register a new company in North Dakota, there are several business incentives and programs that your business entity can benefit from. Let’s take a look at some of the most popular programs:

• North Dakota Renaissance Zone: A start-up company in North Dakota as well as its individuals are eligible for leveraging the tax incentives provided under the Renaissance Zone program. The renaissances zones are designated areas situated within a city and are approved by the Department of Commerce Division of Community Services. The tax incentives are available on purchasing or leasing, or making certain improvements to real properties situated in the renaissance zone. There are a variety of tax incentives available including state income tax exemptions, local property tax exemptions, and tax credits. Renaissance Zone Program Guidelines
• New or Expanding Business Income Tax Exemption Program: A tourism business or primary sector business entity is eligible to apply for this tax incentive program. You have to apply to the Corporate Income Tax Section, c/o State Tax Commissioner to benefit from the tax exemption. Download sample application
• Wage and Salary Credit Program: This is a credit program through which a corporation or a start-up company in North Dakota that has set up a business in the state will be allowed income tax credit equal to 1 percent of the salaries and wages paid during the tax year for the first three years of operation. In order to get the tax credit, you will be required to fill and submit Schedule ME.

Are there any Disadvantages of Incorporating in North Dakota?

What disadvantages could possibly be there for a startup company North Dakota? In reality there are none except a few that are common to different types of businesses. For example, processing of incorporation can be time consuming and require more paperwork while LLC formation has the disadvantage of limited life. These are small disadvantages as compared to the many incentives the Flickertail State has to offer.

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Once you have registered your business entity in North Dakota, the next step is to check if your business requires a license or a permit in the state of North Dakota. A business license or permit is required by most states for businesses to operate. Some businesses require a single license while others require multiple licenses or permits.

There are different types of licenses and permits in North Dakota and they are mostly issued by different state agencies. Some of the agencies responsible for issuing a North Dakota company license or permit are:

• Secretary of State (SOS)
• State Attorney General
• Regulatory boards or commissions

How to Get a Business License in North Dakota

Where and how do you apply for a business license in North Dakota? Do you need permits as well or license? Does your business entity require multiple permits or licenses? Who is the issuing authority for these licenses or permits? The only way to answer these questions is by understanding the process of business licensing.

Here is a step-by-step approach towards acquiring a business license in the state of North Dakota:

Step#1: The Industry or Business Type

How would you know what type of business or professional license is required to operate in North Dakota? The type of industry or the activities of a business entity helps in identifying the type of business license required.

Let’s take a look at some examples to understand this better:

Industry or Type of Business

• Food and Beverage Establishments, Bed and Breakfast Facilities, Lodging Establishments and Assisted Living Facilities, Tattoo and Body Art Facilities – These include restaurants, lodging facilities, bars, campgrounds, mobile home parks, bed and breakfast facilities, meat markets, retail food stores, salvage food establishments, bakeries, tanning facilities, small food manufacturers/ processors, tattoo and body art facilities, and electrologists. A business license in North Dakota for these types of industries or businesses is issued by North Dakota Department of Health, Division of Food and Lodging. So, if you are planning to establish your business in the food establishment industry then you will require a license to be issued by the DHHS.
• Alcoholic Beverage, Tobacco, Amusement Games Fireworks, Manufacturing or Distribution of Gaming Equipment and Supplies, Gaming – These include Coin Operated or Other Amusement Games and Devices, Retail Alcoholic Beverages, Fireworks Wholesalers, Tobacco Distributors, Tobacco Sellers, Cigarette Making Machines, manufacturers of charitable gaming equipment and supplies, and North Dakota Lottery among others. A North Dakota company license for the above industry or business activity is issued by the office of the North Dakota attorney general.
• Aircraft Dealer, Aerial Applicators – The ND license is issued by the North Dakota Aeronautics Commission.

Step#2: Licenses issued by City/County

If you were to establish a business focusing in Soft serve ice cream or a Mobile Food Vendor then you will require a North Dakota company license from the Environmental Division of Fargo Cass Public Health. This license and the regulations will be applicable to your business if it is situated in the cities of Fargo and West Fargo.

Some of the other licensed establishments in the cities of Fargo and West Fargo include Food Event Vendors, retail establishments selling groceries, bakeries, establishments that prepare and serve food at venues of entertainment, and manufacturing, processing, preparation, storage, handling or selling of meat.

The license fee will depend on the tier classified for your business type e.g., Food Tier 1 has a fee of $200 while the fee for Food Tier 3 is $400. The license gee for soft serve ice-cream is $100.

Read more about different tiers.

Step#3: Issuance of a Business License

How is a business license in North Dakota issued? You have to identify the following to complete the process:

1. The type of business or industry
2. Do you need a license or a permit or multiple licenses?
3. Will it be issued by the state or the city?

Once you have identified the above, all you need to do is either download the application online or contact the concerned state department or city of clerk office.

It is important to note that a business license or permit will have to be renewed annually unless specific dates have been mentioned, to keep the business operational.

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The economy is one of the primary reasons for increase in incorporation in North Dakota but some of the other factors include the variety of industries that businesses can grow in and expand. One of the largest industries is the agricultural industry and it plays a key role in the economy as well. Manufacturing is another industry that is ranked among the best in the nation and generates revenue in food processing, construction machinery, farm machinery, aircraft and motor vehicle parts among others. The new entrant in the list of top industries is the travel industry and is considered the third biggest in the state thanks to a revenue generation of $4.6 billion in 2010

Why Choose North Dakota for Incorporation?

What makes incorporation in North Dakota a good business decision? A report by WalletHub has ranked North Dakota #1 best state to start a business using a variety of key indicators like overall business costs. The “Flickertail State” is ranked #11 in Business Costs by Forbes and is ranked #4 in terms of Labor Supply. The business climate along with a stable economy and variety of tax incentives provides small businesses with the opportunity to grow and expand.

Now let’s take a look at some of the salient benefits that are responsible for fuelling growth of small businesses:

• North Dakota Opportunity Zones: The ND Opportunity Zones is a program aimed at especially those that have set up companies in North Dakota or any new business. This is a community development program that was established by Congress in the Tax Cut and Jobs Act of 2017. The objective of the program is to encourage long-term investments in low-income tracts as well as urban communities in the state. North Dakota has 25 opportunity zones and forming your business in this zone will open doors for a variety of tax incentives. List of Tracts
• North Dakota Tax Incentives: There are several tax incentives including exemptions and tax credits that you can benefit from post company incorporation in North Dakota. These tax incentives are being made available by the North Dakota Department of Commerce and the most popular incentives include:
  – Corporate Income Tax Exemption
  – Sales & Use Tax Exemption
  – Property Tax Exemption
  – Renaissance Zones Tax Incentives
  – Research Expense Credit

How do you incorporate in North Dakota?

What is the process of incorporation in North Dakota? What type of documentation is required? These are some of the common questions that you will be confronted with if you are planning to start a new business in the state. The following steps will enable understanding of the entire process:

Business Type

The first step towards incorporation in North Dakota is choosing the type of business you want to form. The different types of business structures that you can form in the Flickertail State include Sole Proprietorship, General Partnership (GP), Limited Partnership (LP), Limited Liability Partnership (LLP), Limited Liability Limited Partnership (LLLP), Professional Limited Liability Partnership (PLLP), Limited Liability Company (LLC), Farm Limited Liability Company, General Business Corporation, and Farm Corporation among others.

The type of business entity you want to form can be domestic or foreign entity. The forms and fee will be different for each type of entity.

Business Entity Name

One of the most important steps towards incorporation in North Dakota is naming your business entity. You have to start by identifying, searching, reserving, or registering the business entity name. There are 3 steps towards business name formation and they are:

• Naming Requirements: A corporate name governed by ND CENT CODE § 10-19.1-13 and an LLC name under North Dakota Century Code, Chapter 10-32.1-11 should contain words like “corporation”, “incorporated”, “limited liability company” or abbreviations like “corp.”, “inc.”, “ltd.”, “L.L.C.” or similar abbreviation.
• Business name search: You need to search for a business name that is not currently in use. You can conduct name search here.
• Name Reservation: Once you have identified a business entity name, you can reserve a corporate name pursuant to ND CENT CODE § 10-19.1-14 and an LLC name pursuant to North Dakota Century Code, Chapter 10-32.1-12. The form for reservation of name has to be submitted with the Office of the Secretary of State and it will be effective for a period of 12 months.

Choose a Registered Agent

Whether you form a corporation or an LLC business entity, in order to transact business in the state of North Dakota, you will have to maintain a registered agent pursuant to North Dakota Century Code, Chapter 10-32.1-16 for LLC and ND CENT CODE § 10-19.1-15 for Business Corporations.

We are one of the respected registered agents in North Dakota and will be responsible for initiating incorporation in North Dakota through processing of your “Articles of Organization”, and “Articles of Incorporation” for domestic entities and “Certificate of Authority” for foreign business entities. Know more.

Articles of Incorporation and Certificate of Authority

You will be required to submit “Articles of Incorporation” pursuant to ND CENT CODE § 10-19.1-11, if your business is a domestic corporation. If your business entity is a foreign corporation then you will have to submit a “Certificate of Authority” pursuant to ND CENT CODE § 10-19.1-134 through 136. In order to streamline the process of incorporation in North Dakota, we can file documents on your behalf.

Date Stamped Copies

As a part of the process of company incorporation in North Dakota, we will ensure, you receive date-stamped and filed copies that verifies the state has filed as well as formed your corporation.

Costs and Fees associated with North Dakota Incorporation

What would it cost to set up company in North Dakota? Check Fees here!

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Once your company is set up, you will need:

1. Tax ID (EIN) – free over the Internet or phone.
2. Yearly Requirements and Fees for Illinois companies – Within 15 days after the Secretary of State mails your filed Articles of Incorporation, you must record it with the Office of the Recorder of Deeds of the County in which the registered office of your corporation is located. If recording cannot be accomplished within 15 days, record the Articles of Incorporation as soon as possible
3. Company Minutes & Stock Certificates – are included in incorporation. You will have access to documents generated on your client account.

Illinois additional services

• Registered Agent
• Annual Report
• EIN (Tax ID)
• More Additional Services

• Why Illinois?
• Illinois Registered Agent
• Illinois Annual Requirements
• Illinois Corporation Statutes: Illinois Statutes: 805 ILCS 5 (Corporations) and 805 ILCS 180 (Limited Liability)

• Why Illinois?
• Illinois Registered Agent
• Illinois Annual Requirements
• Illinois Corporation Statutes: Illinois Statutes: 805 ILCS 180 (Limited Liability)