N.D. Cent. Code § 10-06.1-12

10-06.1-12. Farming or ranching corporation or farming or ranching limited liability

company allowed to engage in the business of farming or ranching - Requirements.

This chapter does not prohibit a farming or ranching corporation or a farming or ranching

limited liability company from owning or leasing farmland or ranchland and engaging in the

business of farming or ranching, if the corporation meets all the requirements of chapter 10-19.1

or the limited liability company meets all the requirements of chapter 10-32.1 which are not

inconsistent with this chapter. The following requirements also apply:

1. a. If a farming or ranching corporation, the corporation must not have more than

fifteen shareholders.

b. If a farming or ranching limited liability company, the limited liability company

must not have more than fifteen members.

2. Each shareholder or member must be related to each of the other shareholders or

members within one of the following degrees of kinship or affinity: parent, son,

daughter, stepson, stepdaughter, grandparent, grandson, granddaughter, brother,

sister, uncle, aunt, nephew, niece, great-grandparent, great-grandchild, first cousin,

second cousin, or the spouse or surviving spouse of a person so related.

3. Each shareholder or member must be an individual or one of the following:

a. A trust for the benefit of an individual or a class of individuals who are related to

every shareholder of the corporation or member of the limited liability company

within the degrees of kinship or affinity specified in this section.

b. An estate of a decedent who was related to every shareholder of the corporation

or member of the limited liability company within the degrees of kinship or affinity

specified in this section.

4. A trust or an estate may not be a shareholder or member if the beneficiaries of the

trust or the estate together with the other shareholders or members are more than

fifteen in number.

5. Each individual who is a shareholder or member must be a citizen of the United States

or a permanent resident alien of the United States.

6. a. If a farming or ranching corporation, the officers and directors of the corporation

must be shareholders who are actively engaged in operating the farm or ranch.

b. If a farming or ranching limited liability company, the governors, managers, and

members authorized under a statement of authority of the limited liability

company must be members who are actively engaged in operating the farm or

ranch.

7. An annual average of at least sixty-five percent of the gross income of the farming or

ranching corporation or farming or ranching limited liability company over the previous

five years, or for each year of its existence, if less than five years, must have been

derived from engaging in the business of farming or ranching.

8. The income of the farming or ranching corporation or farming or ranching limited

liability company from nonfarm rent, nonfarm royalties, dividends, interest, and

annuities cannot exceed twenty percent of the gross income of the corporation or

limited liability company.

9. The farming or ranching corporation or farming or ranching limited liability company

must own or lease farmland or ranchland.