North Dakota Business License

Starting a business in North Dakota can seem like quite a confusing process because there’s no single, generic business license available to remain compliant with all requirements. Instead, it’s up to the business owner to figure out which of the state’s 950 regulatory licenses and permits their business may need.

To make this process a little clearer for new business owners, this North Dakota Business License guide will help you identify the specific licenses your business may need and how to secure them.

Do I Need a Business License in North Dakota

For businesses in North Dakota, there’s no single business license that’ll work in all situations. Instead, the licenses and permits you’ll need depend on your location and the kind of business you plan to start.

Type of Business

Below, we’ve detailed common ways in which your business type can dictate the licenses you’ll be required to obtain, as well as specific examples of these:

• Sales and Use Tax Permits: If your business will sell taxable tangible personal property, access to recreational activities, or rental accommodations, it must have a permit in order to collect sales tax. You can obtain this permit online using the North Dakota Taxpayer Access Point portal and registering your business with the Office of the State Tax Commissioner
• Professional Licenses: Specific licensing boards regulate certain professions in North Dakota, such as law, architecture, and veterinary sciences, among others. If you plan to offer licensed speech and language pathologist services, for example, your business will need to apply for licensure from the North Dakota State Board of Examiners on Audiology and Speech-Language
• Environmental Permits: Depending on your business’s activities, it may need to secure one of several different environmental permits. If a facility you plan to open in North Dakota could emit air pollutants, for example, you’ll need to obtain an air pollution control permit from the North Dakota Air Quality Division in order to build and operate it legally

However, this is not the only factor influencing the exact combination of licenses you’ll need — the location of your business within North Dakota plays an important role as well.

Location

In this section, we’ve provided a succinct overview of the potential licenses and permits that your business may need due to local, state, and federal requirements:

• Local: In North Dakota, you might also need to obtain additional licenses and permits at the local city or county level. In the city of Fargo, for example, pawnshops must apply for a pawnbroker’s license in order to operate legally
• State: North Dakota regulates a significant number of occupational and business licenses at the state level. For example, a contractor license — granted by the North Dakota Secretary of State — allows businesses to engage in the construction, alteration, and demolition of personal property
• Federal: While most small businesses in North Dakota are exempt from federal licenses or permits, businesses involved in sectors regulated by the federal government must obtain specific credentials. These sectors primarily include agriculture, alcoholic sales, and firearms, among others

Since the exact permits and licenses your business will need are entirely unique to your situation, you’ll have to conduct thorough research into your own local, state, and federal regulations to smoothly launch your business.

Alternatively, many entrepreneurs opt to leverage the expertise of third-party services to handle this on their behalf.

How to Get a Business License in North Dakota

In order to get your business license(s) in North Dakota, you will need to complete the following steps:

• Form Your Business
• Obtain an Employer Identification Number (EIN)
• Apply for the Required Licenses and Permits

Let’s take a look at each step in more detail below.

Step 1: Form Your Business

Before setting out to obtain a business license in North Dakota, it’s pivotal that you first choose an appropriate structure for your business. Sole proprietorships, general partnerships, and corporations are all common choices, however, it’s often seen as the most advantageous for small businesses in North Dakota to form a Limited Liability Company (LLC). There are a few reasons why:

• Limited Liability: Members are protected from personal liability for business debts, safeguarding personal assets
• Tax Benefits: LLCs typically enjoy a pass-through tax treatment, avoiding double taxation that corporations are subjected to
• Management Flexibility: LLCs allow for flexibility in management structure, either being member-managed or manager-managed based on the preferences outlined in the certificate of formation
• Ease of Formation: With the North Dakota Secretary of State providing forms that meet the minimum state law requirements and the option to file online, setting up an LLC is relatively straightforward

Many small business owners opt to avoid the tricky process of forming an LLC by instead leveraging the help of third-party LLC formation services.

Step 2: Obtain an EIN

The second step you’ll need to complete before applying for your business license is to obtain your EIN. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses in the United States so that their financial transactions can be identified and tracked.

An EIN is often necessitated when applying for various permits and licenses as it allows local and state governments to ensure your business is operating within the confines of the law. You can obtain it in a number of ways:

• Online: You can apply for your EIN on the IRS’s official website by using the EIN Assistant. You should be granted your EIN shortly after completing this application
• By Fax/Mail: After completing Form SS-4, you can apply for an EIN by submitting it to the IRS via mail or fax
• By Phone: International applicants and businesses located outside U.S. Territories are required to call the IRS at 267-941-1099 to obtain their EIN — which they should receive during this call

Note: If you are a sole proprietor, you will be able to use your Social Security Number (SNN) instead.

Step 3: Apply for Licenses and Permits

After settling on the appropriate structure for your business and initiating the application for your EIN, the next step is to focus on securing the necessary licenses and permits to operate legally within your locale and industry.

• Local Licenses: Every region has its own set of local licensing requirements, which makes it essential to thoroughly research the specific regulations of the city where you intend to set up your business. For instance, businesses operating in the city of Fargo that offer transportation vehicles will need to submit a “vehicle for hire” application
• Statewide Licenses: The North Dakota state government manages many common business licenses. Two common examples include sales and use tax permits and professional licenses
• Federal Licenses: While the federal government doesn’t mandate licenses for general business operations, if your business falls under any government-regulated category, such as agriculture, fishing, firearms, and alcohol sales, it may be required to obtain additional federal licenses or permits

Note: To learn more, visit the North Dakota government website to browse an alphabetical list of business licenses.

Step 4: Renewal of Licenses and Permits

Many business licenses must be renewed periodically in order to keep them valid. If you’re uncertain whether you need to renew any of your business licenses, make sure to reach out to the agency that issued it for clarification.

Alternatively, due to how complicated each step of applying for and renewing business licenses is, third-party services that handle this entire process are becoming an increasingly popular option.

How Much is a Business License in North Dakota

In North Dakota, figuring out how much it’ll cost to get your business licenses can prove tricky because there’s no one-size-fits-all license. Instead, the total amount you’ll have to spend will largely depend on the specific licenses your business needs, as they will each have an individual filing fee and cost of renewal.

Two of the most common licenses businesses need include sales tax permits and professional licenses. While it’s free to apply for a sales tax permit in North Dakota, other business licenses come with a range of fees. This can make it difficult to pin down the exact cost of licensing because, ultimately, it’ll depend on your business type and location.

To make this process easier, consider hiring an expert to help you determine all of the possible licensing costs.