How to Start an Assisted Living Facility in North Dakota: $75 Facility Fee, $10 per Bed for Basic Care and the Two-License Model

If you are learning how to start an assisted living business in North Dakota, the first thing to understand is that the state does not use one license for residential care. It uses two. An assisted living facility is licensed under North Dakota Century Code Chapter 50-32. A basic care facility is licensed under Chapter 23-09.3. The licenses have different fees, different rules and different paths to approval. Choosing the wrong one, or assuming one covers the other, is one of the most expensive mistakes a new operator can make.

This guide walks through the order we recommend: choose the license, form the entity, appoint a registered agent, register your name, set up taxes and employer accounts, confirm local requirements, and then apply to the North Dakota Department of Health and Human Services (DHHS). This is informational content, not legal or tax advice. Talk with a North Dakota attorney and a CPA before you sign a lease, buy a building or take on financing.

What You Need Before You Start

Gather these items before you file anything. Most delays happen when a missing item surfaces in the middle of an application.

• A written business plan that states your number of living units, your number of beds, the residents you intend to serve and the license category you intend to hold
• A proposed business name that you have checked in the Secretary of State’s business search
• A North Dakota registered agent who has agreed in writing to serve
• Entity formation documents: Articles of Organization for an LLC or Articles of Incorporation for a corporation, both filed through FirstStop
• A site with a floor plan showing living units and bedrooms, plus a plan for local zoning review
• An administrator who will complete 12 hours of continuing education each year, as required by NDCC 50-32-05
• A working capital reserve for filing fees, license fees, insurance, payroll and the months before your first resident pays
• An ND TAP account, if your business will make taxable sales

Step 1: Choose the Right License for Your Model

Start here, because every later step depends on this decision.

An assisted living facility must be licensed by DHHS under NDCC Chapter 50-32 if it is a building with at least five living units that serves five or more unrelated individuals. Any entity that uses the term “assisted living” in its advertising must also be licensed. The license costs $75 per facility per year, and you apply for it each year. No more than two people may occupy a bedroom, and the administrator must complete 12 hours of continuing education annually under NDCC 50-32-05.

A basic care facility is a residence for five or more unrelated individuals who need health, social or personal care but do not need 24-hour nursing. It is licensed annually under NDCC Chapter 23-09.3. For facilities that are not state-owned, the fee is $10 per bed. Adding basic care beds is under a moratorium from August 1, 2025 through July 31, 2029, with exceptions set out in NDCC 23-09.3-01.1. In practical terms, a new basic care license generally requires approval or transferred beds, so do not buy a building around a basic care plan until you have confirmed the exception process with DHHS.

Topic	Assisted living (NDCC 50-32)	Basic care (NDCC 23-09.3)
Who must be licensed	Building with at least five living units serving five or more unrelated individuals, or any entity using “assisted living” in advertising	Residence for five or more unrelated individuals needing health, social or personal care but not 24-hour nursing
Annual fee	$75 per facility	$10 per bed (non-state-owned facilities)
Bedroom rule	No more than two people per bedroom	Confirm with DHHS
Administrator	12 hours of continuing education each year (50-32-05)	Confirm with DHHS
Penalty for noncompliance	Fine up to $50 per day, beginning after the 59th day following notification (50-32-02)	Confirm with DHHS
New capacity	Confirm with DHHS	Bed moratorium from August 1, 2025 through July 31, 2029, with exceptions (23-09.3-01.1)

The two-license model is where many operators get confused. If you plan to offer both assisted living and basic care services, you need to understand that these are two separate licenses under two separate chapters. Holding one does not satisfy the other. Ask DHHS in writing which license or licenses your plan requires, and get that answer before you finalize a floor plan or a purchase agreement.

Step 2: Form Your Legal Entity

Most operators form an LLC, though a corporation is also an option. File through the Secretary of State’s FirstStop portal at firststop.sos.nd.gov.

• LLC: Articles of Organization under NDCC Chapter 10-32.1 (Uniform Limited Liability Company Act). Filing fee: $135. Annual report: $50, due November 15 each year. A $50 late fee applies after the statutory due date.
• Corporation: Articles of Incorporation under NDCC Chapter 10-19.1. Filing fee: $100. Annual report: $25, due August 1 each year.

The name must contain “limited liability company,” “L.L.C.” or “LLC” for an LLC. It may not contain “corporation,” “incorporated,” “limited partnership,” or their abbreviations. It must be distinguishable in Secretary of State records from every other registered entity, reserved name and registered trade name, trademark or service mark. It also may not imply a purpose the company is not organized for, so choose a name that does not suggest a licensed service you do not hold.

On taxes, North Dakota has no franchise tax and no separate LLC privilege tax. The only recurring state charge on the LLC itself is the $50 annual report. An LLC taxed as a partnership or disregarded entity passes income through to its owners, who pay individual income tax at 0 percent, 1.95 percent or 2.50 percent depending on bracket. An LLC that elects C corporation treatment pays corporate income tax at 1.41 percent, 3.55 percent and 4.31 percent by bracket. Choose your structure with a CPA, not from a checklist.

Step 3: Appoint a North Dakota Registered Agent

Corporations, LLCs and all partnerships except general partnerships must maintain a North Dakota registered agent with a physical address in the state. Your business cannot serve as its own agent. The agent must be an individual who resides in North Dakota, or a North Dakota or out-of-state corporation or LLC that is registered with the Secretary of State and has a business office in the state. Get the agent’s approval before you name them. Failing to do so may result in involuntary dissolution.

Agent-related filing fees are $10 for a statement of change of address or agent and $25 for service of process. A commercial registered agent pays the state $1,000 to be included in the listing and $500 for termination or removal. Those are the agent’s own state charges, so ask any agent you are considering whether they pass those costs along to you.

Step 4: Reserve Your Name and Register Any Trade Name

If you want to hold a name while you finish paperwork, the Secretary of State offers a name reservation for $10. It lasts 12 months and is renewable for successive 12-month periods. Details are on the register a business page.

If your facility will operate under a name other than its legal entity name, you need a trade name registration. It is filed with the Secretary of State through FirstStop, not with a county. Registration costs $25, amendments cost $25 and renewals cost $25. Registration must be renewed every five years and gives you the exclusive right to that name within North Dakota only. A trade name registration is a filing, not a license, and it does not replace your DHHS license.

Step 5: Set Up Taxes, Employer Accounts and Workers’ Compensation

• Federal EIN: Obtain a federal employer identification number from the IRS before you open a business bank account or run payroll.
• Sales tax: The state sales tax rate is 5 percent, plus any city and county taxes. Any business making taxable sales must hold a sales and use tax permit from the Office of State Tax Commissioner, applied for through ND TAP about 30 days before opening. Do not assume that resident services or items sold on site are exempt. Have your CPA confirm which of your sales are taxable.
• Workers’ compensation: In North Dakota, workers’ compensation is provided through WSI (WorkForce Safety & Insurance), which operates as a state monopoly. Contact WSI about your coverage before your first hire.
• Employer registration: Confirm your employer registration and reporting requirements with Job Service North Dakota before you start payroll.

Step 6: Confirm Local Zoning, Building and Fire Requirements

North Dakota has 53 counties, and counties do not license businesses. Cities license specific activities only, and no major city issues a general business license. That means your real local gate is zoning and building review. Contact the city planning or building office where the site is located before you buy or lease it. Ask whether residential care is a permitted use in that zone, which occupancy classification applies to your building, and what fire and building reviews you will need before opening.

A state license does not resolve local zoning. A facility can hold a valid DHHS license and still be unable to operate at a site that is not zoned for it, so treat this step as a condition of the purchase or lease, not a formality after it.

Step 7: Apply to DHHS for the Correct License

Once your entity exists and your site is confirmed as workable, move to DHHS. Work through the process in this order:

1. Confirm the license category in writing. Use the answers from Step 1 to make sure you are applying for assisted living, basic care or both.
2. Request the current application packet and checklist directly from DHHS. Requirements can change, so do not rely on a checklist that you saw in an older article.
3. Submit the application with the correct fee. Assisted living is $75 per facility per year. Basic care is $10 per bed for facilities that are not state-owned.
4. Build and staff to the plan you submitted. Confirm that no bedroom will house more than two people and that your administrator has a plan for 12 hours of continuing education each year.
5. Calendar the annual renewal. Assisted living licenses are applied for each year, and basic care licenses are annual as well.

If DHHS sends a notice of noncompliance, respond immediately. A fine of up to $50 per day can begin after the 59th day following notification, so the clock matters.

Step 8: Handle Cosmetology and Food Service

Two common add-ons trip up new operators. The first is hair and personal care services. A licensed nursing home, basic care facility or assisted living facility does not need a cosmetology establishment license for services limited to its residents (NDCC 43-11-15.1). If you plan to offer those services to the public or to non-residents, confirm with the state board that licenses cosmetologists before you open.

The second is food. DHHS licenses food establishments. If your facility prepares meals for residents, confirm with DHHS which food license applies to your kitchen and whether the kitchen needs review before you begin serving residents. Do not treat your dining room as an afterthought in the application.

Expected Results and Realistic Timeline

If you complete these steps in order and with complete paperwork, the usual goal is a formed entity, a registered agent on file, a protected name, active tax and employer accounts, and a DHHS application that is ready for review. These outcomes are what the process is designed to produce. They are not guarantees of licensing, occupancy or revenue, and your results will depend on your site, your staffing and your local market.

On timing, the Secretary of State does not publish a guaranteed turnaround. Its business pages list fees and steps but no number of business days. Call Business Services at (701) 328-2900 for current timing. Some secondary sources cite about five business days for FirstStop filings, with longer waits in peak season, but that figure does not appear on a state page, so plan for it to take longer. Confirm DHHS processing times directly with the agency before you set an opening date.

Common Mistakes to Avoid

• Advertising “assisted living” before you hold the license. Any entity that uses the term in its advertising must be licensed.
• Treating basic care and assisted living as one license. They are separate licenses under separate chapters.
• Buying a building for basic care beds without checking the moratorium. Adding basic care beds is restricted from August 1, 2025 through July 31, 2029, except in the cases described in 23-09.3-01.1.
• Allowing more than two people in a bedroom in an assisted living facility.
• Naming yourself as your own registered agent, or naming an agent who has not approved the appointment.
• Missing the November 15 LLC annual report deadline. The $50 late fee comes on top of the $50 report fee.
• Assuming a city business license is required, or that one will cover your activity. North Dakota has no general statewide business license, and cities license only specific activities.
• Assuming the state license resolves zoning. It does not.
• Letting the administrator’s continuing education lapse. The requirement is 12 hours each year under NDCC 50-32-05.

Practical Tips

• Get answers in writing. Put your license questions to DHHS and the Secretary of State in writing, and keep the replies in your file.
• Build a compliance calendar on day one. Include the LLC report on November 15 or the corporate report on August 1, your DHHS renewal, your administrator’s continuing education, your trade name renewal every five years and any registered agent changes.
• Use the Small Business Development Center. The ND SBDC, hosted by the University of North Dakota Nistler College of Business and Public Administration, can help you test your plan before you commit capital.
• Have an attorney review the lease, operating agreement and any transfer of beds before you sign. Those documents determine who controls the license and the building.

Official Resources

• North Dakota Secretary of State
• FirstStop filing portal
• Business entity search
• North Dakota Office of State Tax Commissioner
• ND TAP sales tax permit application
• North Dakota Small Business Development Centers
• U.S. Small Business Administration, North Dakota district

Important Disclaimer

This article is informational only. It is not legal, tax or licensing advice. Fees, deadlines and statute references are drawn from the sources named above and may change. Before you act, confirm current requirements with the Secretary of State, the Office of State Tax Commissioner, WSI, DHHS and a qualified North Dakota attorney or CPA.