Corporation

You may be considered transacting business in North Dakota if you will:

• Have a store, office, or shop in North Dakota
• Have employees working in this state
• Have a liability to collect sales tax in this state
• Need to obtain a license or permit to perform activities or work in this state
• Be awarded a state contract after a successful bid to provide goods or services to North Dakota agencies

NDCC § 10-19.1-143 provides insight as to what does not constitute transacting business for corporations, including:

• Maintaining, defending, or settling an action or proceeding;
• Holding a meeting of its shareholders or carrying on any other activity concerning its internal affairs;
• Maintaining accounts in financial institutions;
• Soliciting or obtaining orders, whether by mail or electronic means or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts

It should be noted that this is not a complete list but can help provide some insight for corporations wanting to transact business in North Dakota.  

A business corporation is formed for the purpose of generating profit for its shareholders.

The corporation has its own rights, privileges, and liabilities distinct from those of its shareholders. A corporation exists only by virtue of law and has only those powers conferred on it by statutes, its articles of incorporation, bylaws of the corporation, and the resolutions and decisions of its shareholders. 

A corporation enjoys inherent qualities of limited liability, and possible tax advantages. 

A domestic business corporation must file articles of incorporation with the Secretary of State according to North Dakota's Business Corporation Act (NDCC ch. 10-19.1). 

Fees:

• Registration (domestic) - $100
• Registration (foreign) - $145
• Annual Report (domestic and foreign) - $25
• Amendment (domestic) - $ 20
• Amendment (foreign) - $ 40
• Intent to Dissolve (domestic; if shares have been issued) - $10
• Dissolution (domestic) - $20
• Withdrawal (foreign) - $20

Naming Guidelines:

• The name of a corporation must contain “company,” “corporation,” “incorporated,” “limited,” or an abbreviation of one or more of these words

Annual Report Requirements: 

• Filing Deadline (domestic) - August 1
• Filing Deadline (foreign) - May 15

A farming or ranching corporation is a legal entity that may be established under North Dakota laws or the laws of another state by one or more individuals but not to exceed 15 shareholders.  

A farming or ranching corporation cannot acquire ownership to land and rent it out to be farmed by others. It must be engaged in the business of farming or ranching, which is defined as “raising or producing agricultural crops, fruit, horticultural products, or livestock or livestock products, or livestock backgrounding, or livestock finishing."

The farming or ranching corporation may engage in alternate activities; however the annual average of at least 65 percent of the corporation’s gross income over the previous 5 years (or from each year of its existence if less than 5 years) must have been derived from engaging in the business of farming or ranching. Income from non-farm rent, non-farm royalties, dividends, interest, and annuities for the corporation cannot exceed 20 percent of the corporation’s gross income.

A farming or ranching corporation may be organized in another state as long as appropriate documents are filed with the Secretary of State and North Dakota requirements such as those relating to the number and kinship of shareholders; operation of the farm or ranch; and percent of income derived from farming or ranching are met.

Shareholders

Shareholders must be related individuals or one of the following:

• A trust for the benefit of an individual or a class of individuals who are related to every shareholder of the corporation within specified degrees of kinship. 
• An estate of a decedent who was related to every shareholder of the corporation within specified degrees of kinship. 

Degrees of Kinship:

• Parent, Son, Daughter, Stepson, Stepdaughter, Grandparent, Grandson, Granddaughter, Brother, Sister, Uncle, Aunt, Nephew, Niece, Great-grandparent, Great-grandchild, First cousin, Second cousin
• The spouse or surviving spouse of a person so related

None of the shareholders are required to reside on the farm or ranch, and all officers and directors must be shareholders actively engaged in operating the farm or ranch. “Operating the farm or ranch” means engaging in personal labor or management activities on or off the farm or ranch, which contribute to the farm or ranch operations.

Farming or Ranching Corporation Specific Registration Information

A farming or ranching corporation is created, operates and is treated in the same manner as a general business corporation. However, at the time the articles of incorporation or certificate of authority is filed with the Secretary of State, the farming or ranching corporation must also provide a report disclosing the following:

• Name of the corporation
• Name and address of the registered agent in North Dakota
• With respect to each shareholder
  • Name and address of each
  • Names, addresses, and relationships of trusts and estates that own shares
  • Number of shares or percentage of shares owned by each
  • The relationship of each
  • Statement whether each is a citizen or permanent resident alien of the United States
  • Statement whether each is actively engaged in operating the farm or ranch
• Names and addresses of officers and members of the board of directors
• If the purchase or lease of farmland or ranchland is final at the time of the initial report, a statement listing the acreage (hectarage) and location listed by section, township, range, and county of all land owned or leased by the corporation in North Dakota
• If the purchase or lease of farmland or ranchland is not yet final at the time of the initial report, a statement that there is a bonafide and imminent intent and a plan to purchase or lease the farmland or ranchland in North Dakota

NDCC ch. 10-06.1 pertains to Farming or Ranching Corporations.

Fees:

• Registration (domestic) - $100
• Registration (foreign) - $145
• Annual Report (domestic and foreign) - $25
• Amendment (domestic) - $20
• Amendment (foreign) - $40
• Intent to Dissolve (domestic; if shares are issued) - $10
• Dissolution (domestic) - $20
• Withdrawal (foreign) - $20

Naming Guidelines:

• The name of a farming or ranching corporation must contain “company,” “corporation,” “incorporated,” “limited,” or an abbreviation of one or more of these words

Annual Report Requirements: 

• Filing Deadline - April 15

An authorized livestock farm (ALF) corporation is formed for livestock backgrounding, livestock finishing, or the production of poultry products, milk or dairy products, swine or swine products. Unlike farming or ranching corporations, an ALF corporation can own no more than 160 total acres of farmland or ranchland and may not grow crops or graze livestock.

A minimum of 65% of the gross income of the ALF corporation must be derived from farm operations (livestock backgrounding, finishing, poultry, poultry products, milk/dairy products, swine/swine products), and a maximum of 20% of gross income can be from nonfarm rent, nonfarm royalties, dividends, interest, and annuities.

An ALF can have a maximum of 10 shareholders who must be United States citizens or permanent resident aliens and may not commence farming or ranching until registered with the Secretary of State.

Shareholders

Shareholders holding 75% of shares entitled to vote and to distributions must be individuals engaged in the business of farming or ranching or one of the following:

• A farming or ranching corporation
• A farming or ranching limited liability company

Any controlling individual or entity of shareholders that are “persons” (as defined by North Dakota century code) must be organized in the United States and 100% of the stock must be owned by citizens or permanent resident aliens of the United States or authorized individuals under NDCC § 47-10.1-02.

An ALF may not partner with other individuals, authorized livestock farm entities, family farm corporations or family farm LLCs.  If the authorized livestock farm will be an animal feeding or concentrated animal feeding operation, it must break ground within 1 year and be fully operational within 6 years.

Authorized Livestock Farm Corporation Specific Registration Information

At the time the articles of incorporation or a certificate of authority is filed with the Secretary of State, the authorized livestock corporation must also provide an initial report disclosing the following:

• Name of the corporation
• Name and address of the registered agent in North Dakota
• With respect to each shareholder
  • Name and address of each
  • If an organization - the state of incorporation, organization, or domicile
  • Number of shares or percentage of shares owned by each
  • Percentage of total shares entitled to vote and whether any voting agreement exists
  • Each shareholders percentage of total capital and financial interests
  • If shareholders are individuals – a statement whether each is a citizen or permanent resident alien of the United States
  • If shareholders are individuals – a statement whether each is actively engaged in the business of farming or ranching
  • If an organization – a statement of whether the person, and any controlling person of the person, is incorporated in the United States and 100% of the stock is owned by citizens of the United States, permanent resident aliens of the United States, or individuals or persons in compliance with NDCC § 47-10.1-02
• Names and addresses of officers and members of the board of directors
• Statement whether each will be actively engaged in the operation of the corporation
• Statement that the corporation does not own, lease, or hold any interest in more than 160 acres of farmland or ranchland
• If the purchase or lease of farmland or ranchland is final at the time of the initial report
  • Statement listing the acreage [hectarage] and location listed by section, township, range, and county of all farmland or ranchland
• If the purchase or lease of farmland or ranchland is not final at the time of the initial report
  • Statement that there is a bona fide and imminent intent and a plan to purchase or lease farmland or ranchland
• Statement that no shareholders hold a direct or indirect interest in another authorized livestock farm corporation or authorized livestock LLC, that in combination with the corporation own, lease, or otherwise have interests in more than 640 acres of farmland or ranchland
  • The 640 acre limit does not include shareholder personal farmland or ranchland acreage

NDCC ch. 10-06.1 and ch. 10-19.1 pertains to Authorized Livestock Farms.

Fees:

• Registration (domestic) - $100
• Registration (foreign) - $145
• Annual Report (domestic and foreign) - $25
• Amendment (domestic) - $20
• Amendment (foreign) - $40
• Intent to Dissolve (domestic; if shares are issued) - $10
• Dissolution (domestic) - $20
• Withdrawal (foreign) - $20

Naming Guidelines:

• The name of an ALF corporation must contain “company,” “corporation,” “incorporated,” “limited,” or an abbreviation of one or more of these words

Annual Report Requirements: 

• Filing Deadline - April 15
• The annual report form is not available in the FirstStop Portal. ALF corporations can contact our office to request the form.

A professional corporation is made up of licensed professionals. Licensed professionals are those people who have been legally authorized to provide a professional service – that which requires a license as a condition of practice as well as an undergraduate or advanced college degree in the specific field of practice – to the public that require a license prior to rendering the service.  An example may be a dentist, veterinarian, architect, or accountant.

A professional corporation may render: 

• One specific type of professional service and related services
• Two or more kinds of professional services that are specifically authorized to be practiced in combination under North Dakota’s licensing laws of each of the professional services to be rendered 
  • Example: services related to 1) architects/landscape architects combined with professional engineers/land surveyors; or 2) physical therapists combined with occupational therapists

A professional corporation is created and is treated in the same manner as a business corporation. However, at the time of registration with the Secretary of State, the professional corporation must also provide certification from the respective North Dakota licensing board evidencing the licensure of all shareholders. An individual may not simultaneously be an executive or owner of more than one professional organization rendering the same professional service.

NDCC ch. 10-31 pertains to professional corporations.

Fees:

• Registration (domestic) - $100
• Registration (foreign) - $145
• Annual Report (domestic and foreign) - $25
• Amendment (domestic) - $20
• Amendment (foreign) - $40
• Intent to Dissolve (domestic; if shares are issued) - $10
• Dissolution (domestic) - $20
• Withdrawal (foreign) - $20

Naming Guidelines:

• The name of a domestic professional corporation must contain the word “chartered,” “limited” or the abbreviation “Ltd.,” the words “professional corporation” or “professional association” or the abbreviations “PC,” “P.C.,” “PA,” or “P.A.”

Annual Report Requirements: 

• Filing Deadline (domestic) - August 1
• Filing Deadline (foreign) - May 15
• A copy of the report filed with the Secretary of State must also be provided to the North Dakota regulatory board that licenses the shareholders providing the professional service.

An out-of-state corporation is one that has filed articles of incorporation under laws other than the laws of North Dakota. These corporations are incorporated in jurisdictions out-of-state as well as out-of-country and are often referred to in North Dakota Century Code as foreign business types.

An out-of-state corporation must obtain a certificate of authority from the Secretary of State to transact business or provide professional services in North Dakota, or to obtain any license or permit issued according to North Dakota laws.

At the time of registration with the Secretary of State, a professional corporation must also provide certification from the respective licensing board evidencing the licensure of all shareholders, directors, employees, and agents practicing in North Dakota

A foreign corporation using a name other than the original name registered with the Secretary of State must also file a trade name registration.