How a Foreign Corporation Qualifies in North Dakota

A corporation is foreign in North Dakota when another jurisdiction's law created it, and that includes other countries. NDCC 10-19.1-134 forbids a foreign corporation to transact business in the state, or to obtain a license or permit the state requires, before it holds a certificate of authority. Business Services at the Secretary of State issues the certificate when the application conforms to law and the fees are in.

The certificate leaves the corporation's internal affairs alone. Its home state's law still governs how it is run, and North Dakota may not refuse a certificate because the two states' corporate laws differ. A qualified foreign corporation has the same rights as a North Dakota one and no more, and it may not exercise a power that a domestic corporation is barred from using.

The statute never defines the term, and the Secretary of State's own corporation page concedes that it can be hard to tell. That page says you may be treated as transacting business if you:

• Have a store, office or shop in North Dakota
• Have employees working in the state
• Have a liability to collect sales tax here
• Need a license or permit to carry out activities or work here
• Win a state contract by bidding to supply goods or services to state agencies

NDCC 10-19.1-143 supplies a non-exhaustive list of activities that do not count by themselves:

• Defending, bringing or settling a proceeding
• Meetings of shareholders and other purely internal matters
• Keeping bank accounts
• Running a transfer office, or using trustees or depositories, for the corporation's own securities
• Selling through independent contractors
• Seeking orders that cannot bind anyone until they are accepted beyond North Dakota
• Borrowing, lending against collateral, or acquiring mortgages and security interests
• Pursuing debts owed to it, and enforcing mortgages or other collateral
• One isolated deal wrapped up within thirty days, not repeated in a like manner

Property works differently here

Subsection 3 of that section deserves attention. If a foreign corporation owns land, buildings or movable goods in North Dakota that bring in income, and the property is not covered by the list above, the corporation is considered to be transacting business. A rental building, farmland let to a tenant, or equipment hired out to local customers would be caught. Property that earns nothing is not mentioned, and the list is not exhaustive, so a corporation in that position should ask a North Dakota lawyer.

The Secretary of State describes FirstStop as the place where most business registrations and maintenance are handled, and the foreign corporation application is submitted there. The office's corporation pages show no numbered paper form and no processing time. NDCC 10-19.1-147 sets the filing and certificate fee at $145.

What the application states

• The corporation's name, plus a different name if it will operate under one in North Dakota
• Its jurisdiction of incorporation, incorporation date and duration
• The address of the principal executive office
• The registered agent and, for a noncommercial agent, that agent's North Dakota address
• The purpose it intends to pursue in the state
• Directors and officers, with addresses
• Whatever more the Secretary of State needs to decide on the certificate

An authorized person signs. A corporation that wants to operate under something other than its home name has to register that name as a trade name under NDCC chapter 47-25 when it applies. The name may be any one available to a domestic corporation.

Under NDCC 10-19.1-135(2) the application and fee travel with a status document from the incorporating officer, either one showing good standing or one showing existence. Your home filing office issues it on request.

Nothing in the statute or on the Secretary of State's corporation pages caps its age. A fresh one avoids any doubt, so request it near your filing date. Keep the name on the application consistent with the name on the certificate.

Chapter 10-01.1 governs agents, and NDCC 10-19.1-138 requires a qualified foreign corporation to maintain one continuously. The state recognizes two kinds:

• A commercial registered agent, meaning a person or business that is on the Secretary of State's commercial agent list. If you name one, the filing does not need the agent's address
• A noncommercial registered agent, which can be a North Dakota resident, or else a corporation or LLC with a physical street address in North Dakota that is on the state registry and in good standing. The filing must show that address

A corporation is not allowed to be its own agent. Whoever you name has to agree to it beforehand. The only statutory duties of an agent are to forward what is served on it and to keep its own listing current. Replacing an agent or changing the agent's address is a statement of change at $10.

Each foreign corporation owes an annual report, due by May 15. The first falls due the calendar year after authorization. Filing costs $25. The form reports the registered office and agent, the principal executive office, a short description of what the corporation actually does in North Dakota, and its officers and directors with addresses.

A corporation that misses the date is no longer in good standing once three months have passed, and the Secretary of State sends a notice. Late fees are $20 within ninety days of the due date and $60 after that. If a full year goes by without the report and fees, the authority is forfeited, but the corporation may be reinstated within a year of the revocation by filing the latest past-due report and paying the fees.

An amended certificate, needed when the application changes, costs $40. A corporation that leaves the state applies for withdrawal for $20, stating that it has stopped transacting business and agreeing that process can be served as chapter 10-01.1 provides. Taxes are separate and are not part of this filing.

NDCC 10-19.1-142 attaches several consequences:

• Until it has the certificate, the corporation cannot bring or pursue a claim, action, suit or proceeding in any North Dakota court
• It owes the state every fee it would have been charged if it had qualified, filed its reports and paid its penalties, and the attorney general brings the proceedings to collect
• The corporation can be fined up to $5,000, and each director, officer or agent who authorizes or participates in the business can be fined up to $1,000
• The attorney general sues in the Burleigh County district court, and a finding of violation brings an injunction that stays in place until the money is paid and the corporation complies with the chapter

The statute preserves the corporation's position in other respects. None of its contracts or acts becomes invalid, and nothing prevents it from defending a lawsuit. By operating without the certificate it designates the Secretary of State to receive notices and process. The members of the corporation are not liable for its debts merely because of the missing certificate.

Mainstay Filing's foreign qualification product registers a corporation formed elsewhere. It completes the North Dakota application, submits it, and names a North Dakota agent at no charge for twelve months, with renewal at $149 per year. The home-state certificate comes from you, since Mainstay Filing does not order it. Annual reports and taxes are not part of the service.

See the North Dakota foreign qualification page for the checkout lines and total as they stand today. To read only about the agent, use the North Dakota registered agent page. Mainstay Filing supplies paperwork help and an agent but no legal advice, so deciding whether an activity counts as transacting business is work for your attorney.