This article provides three key state business startup requirements for self-employed sole proprietors and general partners who run residential house cleaning businesses. Information from the Secretary of State, the North Dakota State Tax Commissioner and selected city and county government sources were used to research this article.
Be aware that sole proprietor and general partner startup requirements in this state are always changing. Some requirements even vary from county to county. It is important that you call or visit your local county or city government to find out local requirements for residential house cleaning businesses and home-based businesses. This article is not intended to be exhaustive or a substitute for qualified legal or tax advice.
Business Name Registration
Sole proprietors and general partners who want a business name that does not include the owner(s) first and last names (for example, Janice Smith’s Cleaning Service or Martha Harris and Tom Graham’s Maid Service) need to find out whether the name they want to use is available in the state. Start with a statewide corporate business name search to avoid legal problems and customer confusion.
In addition, do an online search for names similar to the one you plan to use. For example, if you want to use the name, Crystal Clean Maid Service, do simple Google searches for “Crystal Clean Maid Service+North Dakota” plus Crystal Clean Maid Service+your county” and “Crystal Clean Maid Service+your town or city”. Search beyond the first page of results. Go at least five pages deep into the search results to see if the name you want or similar names are being used in your state, county or city.
Sole proprietors in North Dakota must register Trade Names or DBA (“doing business as” names) with the Secretary of State to obtain a license or permit to operate a business. The registration of the Trade Name:
• Gives 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 that identifies the owner of the business.
General partnerships must register a Partnership Fictitious Name Certificate (trade name) with the Secretary of State if a fictitious name is used by the partnership. The Partnership Fictitious Name Certificate grants a partnership the same legal name protections that a registered Trade Name grants to sole proprietors.
The state of North Dakota operates under a “distinguishable on the record” standard. Under this standard, if the requested name is too similar to an already registered name that could confuse the public, it will be rejected.
Trade Name information and forms: Trade Name Registration/Franchise Name Disclosure (SFN 13401)
Partnership Fictitious Name Certificate information and forms: General-Partnership Partnership Fictitious Name Certificate (SFN 7006)
Business License Registration
Sole proprietors and general partners do not have to apply for a state business license in North Dakota. Residential house cleaning businesses should check with the local city or county clerk’s office for licensing requirements. Businesses must be registered and have trade names registered with North Dakota Secretary of State before they can be granted a local license. Find a North Dakota County Recorder.
In North Dakota, a general partnership is created when two or more owners form an oral or written agreement to start a business together. A written partnership agreement drawn up by a lawyer is important for both or all partners. Partnership agreements do not have to be filed with the state.
Sole proprietors and general partners may apply for an Employer Identification Number (EIN) from the IRS even if they do not plan to hire employees. Getting an EIN may make it easier to open a bank account and reduce your risk of identity theft. You can apply for an EIN online. In addition, some business registration forms will require a NAICS business classification number for the house cleaning industry.
Business Tax Registration
Housecleaning service businesses do not have to apply for a North Dakota sales, use, gross receipts tax permit if purchases of business equipment, supplies and materials are made from retailers that collect North Dakota state sales tax and local sales tax. If a house cleaning business purchases equipment or supplies from retailers out of state, a sales and use tax permit is required.
Register for a Sales and Use Tax Permit through the North Dakota Taxpayer Access Point (TAP).
Residential housecleaning services are not taxable in North Dakota. House cleaning services do not have to collect and send sales taxes to the State Tax Commissioner.
Sole proprietors and general partners pay tax on business income to the state of North Dakota through their personal state tax return. Sole proprietors and general partners are responsible for paying estimated self-employment income taxes in North Dakota (on Form ND-1ES) similar to the way self employment taxes are paid to the federal government. Get more information about estimated tax requirements by calling the North Dakota State Tax Commissioner at (701) 328-1247.
North Dakota general partnerships that file a Federal partnership information Form 1065, may need to file state income tax Form 58. Get more information from a CPA or qualified tax preparer to find out if your partnership must file those returns.
Selected North Dakota City Licenses
Bismarck Business License: The city of Bismarck does not require a business license for housecleaning services.
Fargo Business License: The city of Fargo does not require a business license for housecleaning services.
Grand Forks Business License: The city of Grand Forks does not require a business license for housecleaning services
Minot Business License and Home Occupation Business Information: Call 701-857-4102