How to start a business in North Dakota in 14 steps (2025 guide)

Launching a business is a rewarding journey filled with opportunities to turn your passion into a thriving enterprise. Whether you're inspired by North Dakota's booming industries like agriculture, oil, or renewable energy, or you're creating something entirely unique, the Peace Garden State is an excellent place to begin your entrepreneurial path. In this guide, we’ll cover the 14 essential steps to start your business in North Dakota, from picking your industry to setting up your business bank account.

Why start a business in North Dakota in 2025?

For two consecutive years (2023 and 2024), Forbes named North Dakota the best state to open a small business. Entrepreneurs have a strong foundation for success thanks to a low formation fee of $135 and one of the highest business survival rates in the country at 77%. North Dakota also boasts a lower-than-average cost of living, which means your money goes further for both your business and personal life. On top of that, 64% of the population is working-age, so you’ll have access to a skilled and ready workforce.

Here are the topics we’ll cover in this step-by-step guide:

• 14 steps to starting a business in North Dakota
• Step 1: Decide what type of industry is best for your business
• Step 2: Conduct industry research
• Step 3: Create a business plan
• Step 4: Choose your business entity: Types of business entities in North Dakota
• Step 5: Secure funds: North Dakota small business funding, loans, and grants
• Step 6: Choose your North Dakota business name and North Dakota DBA
• Step 7: Pick a business location in North Dakota
• Step 8: Find a North Dakota registered agent 
• Step 9: Get a North Dakota EIN and file your tax and employer identification documents 
• Step 10: Register as a small business in North Dakota
• Step 11: Register for your business license and permits in North Dakota 
• Step 12: Secure insurance for your North Dakota small business 
• Step 13: Prepare to pay taxes on your business in North Dakota
• Step 14: Set up your business bank account
• Additional resources to get your business started
• Frequently asked questions 

14 steps to starting a business in North Dakota

When you decide to go down the path of entrepreneurship in North Dakota, there are various steps that you'll need to take. From deciding on what industry your business will operate into creating an extensive business plan, you need to set your new business up for success. Follow these steps below to get started and use small business resources to support your journey.

Step 1: Decide what type of industry is best for your business

The type of industry that your business is in will determine the licensing, permitting, taxing, and other regulations you must follow. The most active sectors in North Dakota are oil drilling, gas extractions, farming, and farm and gardening equipment.

Need help getting started? Explore small business ideas to spark inspiration.

Step 2: Conduct industry research 

Identify your target market and understand their needs and preferences. Conduct a competitive analysis to ensure there’s healthy demand and room for your business to stand out. This process will help you identify market trends, potential barriers to entry, and opportunities to differentiate your business.

Step 3: Create a business plan

In its simplest form, a business plan outlines the business goals and the steps to achieve them. This should include the products or services you want to offer, desired sources of funding, your target market, mission statement, financial projections, and much more. Think of your business plan as a guideline for your future business decisions. It's also imperative to receive most sources of financing.

Include the following sections in your business plan:

• Executive summary: Offer a snapshot of your business plan and summarize key points from each section.
• Company description: Highlight your mission statement, company background, and long-term goals.
• Market research and potential: Examine your target audience and explore industry trends.
• Competitive analysis: Evaluate your competitors and emphasize your unique advantages.
• Products and services: Outline what you’re offering and explain the value it provides to customers.
• Marketing and sales: Describe your approach to attracting and retaining customers
• Business financials: Present detailed financial forecasts, including income statements and cash flow forecasts.
• Management and leadership: Introduce your team and showcase their skills, expertise, and experience.
• Funding request: Specify the funding you need and how you’ll use it.
• Appendix: Include relevant supporting documents, such as research data, contracts, or other materials

Take time to flesh out your business plan, as this will be your roadmap to achieving success. To get started, use a free business plan template and reach out to the North Dakota Small Business Development Center for assistance.

Step 4: Choose your business entity: Types of business entities in North Dakota

The business entity structure you choose will have a significant impact on things like your taxes. There are four main legal structures you can classify for your new entity.

Sole proprietorship

A business owned and operated by one person, with no legal distinction between the owner and the business.

General partnership

A business owned by two or more people who share profits, losses, and management responsibilities.

Corporation

A legal entity separate from its owners, with shareholders who have limited liability for the company's debts and obligations.

Limited liability company (LLC)

A hybrid business structure combining the limited liability of a corporation with the tax flexibility of a partnership. Learn more about LLCs.

Step 5: Secure funds: North Dakota small business funding, loans, and grants

Secure funding to help get your business started and expand its growth over the coming years. Starting a business comes with various costs, from registration fees and equipment purchases to marketing and operating expenses. In North Dakota, typical startup costs can include business formation fees ($135 for an LLC), office space, inventory, and insurance. 

Financing is available in many formats, including QuickBooks Capital loans, small business grants, SBA loans, and self-funding. Here’s a quick rundown of your options:

You should also explore state-specific funding options, including:

Workforce Development Grants

North Dakota offers a wide variety of workforce development grants that help to support things like training programs, finding solutions to workforce challenges, and expanding the number of internships in the state.

Economic Development and Finance Grants

These grants are available for businesses facing a workforce shortage and for entrepreneurs to conduct customer and market research.

Step 6: Choose your North Dakota business name & North Dakota DBA

Choose a name for your North Dakota business. This name should be easy to understand and link your business with your chosen industry. If you opt to have your legal business name as your own, such as with a sole proprietorship, you can also get a DBA. This assumed business name differs from your business's legal name and allows you to legally operate underneath the new name.

Reserve your business name

As with all states, North Dakota requires all businesses to have a unique name. You can search the North Dakota Secretary of State's website for name availability. If your desired business name is available, you can easily apply online to register your business with that specific name.

Filing a DBA (Doing Business As)

Apply for a DBA if your business will be operating in North Dakota under a name other than your full legal name. When a DBA is used for a partnership, it's referred to as a fictitious business name. In all other instances, it's referred to as a business trade name.

Depending on its structure, here are some of the benefits a DBA provides for your small business:

• Sole proprietors: With a sole proprietorship, your business name will automatically default to your personal name. A DBA will allow you to operate under a different name that can be more appealing to your target market and enhance your privacy.
• LLCs: Any time an LLC decides to offer services or products outside of their primary LLC, they must obtain a DBA to do so.
• Corporations: With a DBA, corporations are free to operate multiple businesses in different industries. In North Dakota, a corporation that runs a business under a trade name that differs from the company name must have a DBA.
• Franchises: When opening a franchise, your legal business name will be #### McDonald's. To operate under the shortened name of just McDonald's, you'll need to apply for a DBA.

File for a trade name or fictitious name online via the North Dakota Secretary of State’s FirstStop Website. Alternatively, sole proprietors, LLCs, and corporations can file the North Dakota Trade Name Form via mail or fax. Forms required for filing a DBA may include the North Dakota business search, North Dakota Secretary of State business forms, and Trade Name Form (sole proprietorships, LLCs, Corporations).

Pay North Dakota filing fees

Filing for a new DBA for your small business will cost $25.00. You'll be given the legal DBA for a period of five years from your official date of registration. About 60 to 90 days before your DBA expires, you'll receive a renewal notice from the Secretary of State. You can renew for a fee of $25.00.

North Dakota assumed business name restrictions

There are some restrictions you must follow when deciding on a trade name. You can't use entity suffixes like corp or LLC unless your entity is actually that particular structure. Also, you may not use words implying your business is organized for unlawful reasons.

North Dakota DBA tax considerations

It's essential to realize that a DBA only affects the name of your business. It doesn't affect your business entity when it comes to tax purposes. You'll use the same EIN for your DBA, as your DBA isn't considered a separate legal entity.

Step 7: Pick a business location in North Dakota

Consider where you’ll be operating your business in North Dakota. When you're starting up, your business's location is going to impact your available target market, operating costs, and overall success. North Dakota offers a range of options, from bustling urban centers like Fargo to smaller communities with lower overhead costs. If you’re looking to minimize expenses, running your business from home can be a cost-effective option, especially in the early stages.

Below are some key locations in North Dakota to consider for your business:

Fargo

Fargo is a great place for businesses. It has a strong economy, skilled workers, and excellent transportation options thanks to its location at the crossroads of I-94 and I-29. The city’s diverse industries, access to over 21,000 college students, and business-friendly policies make it an ideal spot for startups and established companies alike. Fargo also provides plenty of business incentives and resources to help grow your business.

Bismarck

Bismarck, the capital of North Dakota, is an ideal location for businesses looking to grow, especially in retail and healthcare. With low utility costs and various business incentives, it’s a cost-effective choice for entrepreneurs. The area’s strategic location, with access to rail, river, and interstate systems, also makes it easy to move goods and materials.

Step 8: Find a North Dakota registered agent

A registered agent is a person or entity responsible for accepting all legal documents for a company. A registered agent must have a business address located within the state that is available during normal business hours. All LLCs, corporations, and partnerships (except general partnerships) are legally required to have a registered agent. All cooperatives must either maintain a principal office in the state or elect to have a registered agent. You can opt to be a registered agent for your business if you have a physical address within the state's borders.

Step 9: Get a North Dakota EIN and file your tax and employer identification documents

An EIN (Employer Identification Number) is a nine-digit number the IRS uses to identify your business for tax purposes. Although North Dakota doesn't require a state EIN, you'll need one to file payroll taxes and federal tax returns, open a business bank account, and apply for loans. You can apply for a free EIN through the IRS website.

Step 10: Register as a small business in North Dakota

Register your new small business in North Dakota. It's best to start by determining your desired business structure and name. The state's FirstStop portal lets you complete the registration process easily online. Here are the requirements and fees for common business structures.

Step 11: Register for your business license and permits in North Dakota

The North Dakota Secretary of State and Attorney General issues different business licenses depending on your specific industry. It's important to note that you may need a local license and/or permit depending on where your business is located within the state.

Do you need a business license in North Dakota?

There is no singular business license that every business in the state must apply for. Rather, licenses and permits are required for businesses that partake in certain business activities. In some cases, this licensing or permitting may be necessary at the federal, state, or local levels.

Occupational North Dakota business licenses

Certain occupations require you to obtain licensing in North Dakota. Some of the most common include the following:

• Contractors
• Notaries
• Gaming
• Alcohol beverages
• Tobacco
• Charitable solicitors

You should check with the Secretary of State to determine if you need an individual operating license for your business's industry when starting a business.

Step 12: Secure insurance for your North Dakota small business

Just as people purchase different types of insurance to protect their financial well-being, businesses can purchase insurance to do the same thing. Some insurance is mandated by the state, and there are other types of insurance that you can purchase for your business at your leisure.

Types of small business insurance in North Dakota

The following are other types of business insurance:

Step 13: Prepare to pay taxes on your business in North Dakota

The North Dakota Office of State Tax Commissioner both administers and collects taxes from different types of businesses throughout the state. Your business's structure will heavily impact the type of tax assessed on its annual profits.

Here are the frequent types of North Dakota business taxes:

Corporate income tax

A graduated structure ranging from 1.41% to 4.31%.

Fiduciary tax

This type of tax is necessary for estates and trusts that manage assets on behalf of beneficiaries.

Income tax withholding

An employer must withhold a set amount from each employee's paycheck and submit it to the state, with a total amount dependent on their annual earnings.

Sales and use tax

North Dakota requires a 5% sales tax that must be collected by businesses and submitted to the state.

Federal taxes

In addition to state and local taxes, all businesses must pay applicable federal taxes, including:

• Federal income tax
• Self-employment tax (for sole proprietors and partners)
• Employment taxes (if you have employees), including the Federal Unemployment Tax Act (FUTA tax)
• Excise taxes (for certain industries)

To ensure you understand your federal tax obligations, check out these IRS resources: Publication 334, Tax Guide for Small Business and Publication 583, Taxpayers Starting a Business and Keeping Records

Step 14: Set up your business bank account

To handle your operational funds and business income, you'll need to establish a unique business checking account. Here are the steps you need to take:

1. Gather all necessary business documents, such as your EIN, formation papers, registrations, permits, and licenses, to set up your small business bank account.
2. Select a bank or credit union that meets your needs, offering features like business loans or high-yield savings options.
3. Build business credit by using a dedicated business credit card for operational expenses.
4. Organize your financial records with accounting software tailored to your business
5. consult a professional accountant with expertise in local tax regulations and your industry to manage your finances and bookkeeping.

Additional resources to get your business started 

There are several state and federal resources that can support your business with guidance, training, potential funding and more. 

State resources

• North Dakota Secretary of State: This is your go-to for registering your business, filing trade names, and accessing the FirstStop portal for online filings.
• North Dakota Department of Commerce: They provide resources for economic development, workforce programs, and funding opportunities to help your business grow.
• North Dakota Small Business Development Centers (ND SBDC): Get free advice, workshops, and tools from experts who can guide you through everything from writing a business plan to finding funding.
• North Dakota Economic Development & Finance (EDF): EDF connects you with grants, workforce programs, and other resources to help your business thrive.

Federal resources

• Small Business Administration (SBA): The SBA supports small businesses through various loan programs, including the 7(a) loan, provides resources for government contracting, and offers counseling and training programs to help entrepreneurs start and grow their businesses.
• Grants.gov: This centralized platform simplifies the process of searching for and applying for federal grants across various sectors. It also provides grant writing tips and has a Grants Learning Center featuring the basics of grants, eligibility, and more. 
• Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR): SBIR and STTR programs provide research and development funding to innovative tech companies. 
• SCORE: SCORE is a national nonprofit organization that partners with the U.S. Small Business Administration (SBA) to provide free mentoring and educational resources to entrepreneurs and small business owners. While not a direct federal agency, SCORE is an independent organization with a network of volunteer business mentors across the United States.
• U.S. Department of Agriculture (USDA): The USDA website lists grants, loans, and other programs and resources for farmers and other businesses serving rural America. 

Disclaimer: 

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