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North Dakota: Legendary. Follow the trail of legends
Secretary of State, Business Services North Dakota Secretary of State
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Business Services
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Sole Proprietorship

The sole proprietorship

  • Most common
  • Simplest form of business organization
  • Easily formed; easily discontinued
  • Least regulated
  • Most flexible in response to business requirements

Legally, and for tax purposes, the individual owner is the business. A business that is jointly owned by husband and wife who file a joint tax return is generally operated as a sole proprietorship.

The liabilities and profits of a sole proprietorship are personal to the owner. All of the sole proprietor's personal and business assets are at risk.

The sole proprietor has total control of the business. When the owner dies, the business ceases to exist with the assets and liabilities passing to the estate.

There are no administrative requirements other than obtaining appropriate licenses and registration of the trade name.

Trade Name

A trade name is a name assumed by the sole proprietor that does not include:

  • The surname of the individual proprietor; or
  • The first name and surname of the individual proprietor when a license is required to transact business.

According to North Dakota law, NDCC, Section 47-25-01, a sole proprietor may not engage in business using a trade name unless it is registered with the Secretary of State. To obtain a license or permit to operate a business, a sole proprietor must register the trade name with the Secretary of State.

The registration of the trade name:

  • Affords exclusive right to that name in the State of North Dakota. No other business may file a name with the Secretary of State that is the same as, or deceptively similar, to any registered name.
  • Establishes a public record from which the name of the owner of the business can be identified.

If the ownership of a business name changes during the five-year registration period, the ownership of the trade name is assignable to the new owner. The Trade Name Assignment does not extend the registration period of a trade name, but rather affords ownership to the new owner for the remainder of the registration period.

Franchise Name

A franchise name is a name to which an independent operator has secured the rights from a franchiser or licensor to use and distribute products or services, techniques, and trademarks for a percentage of sales or royalty fees. Franchise agreements often convey additional support services, advertising and training from the franchiser or licensor.

Franchise Name Disclosure: An individual or organization that is a franchisee does not usually gain ownership to the franchise name and could therefore not file a Trade Name Registration. However, a franchisee must file Franchise Name Disclosure information with the Secretary of State before using the franchise name in the State of North Dakota. The Franchise Name Disclosure is made on the same form used for filing a Trade Name Registration The filing of the disclosure information does not extend any trade name protection provided by N.D.C.C., chapter 47-25.

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