How to Start a Driving School in North Dakota: A Step-by-Step Guide

Here you’ll learn everything you need to start your Driving School in North Dakota

Compared to many states, North Dakota makes it relatively easy to establish a driving school. You still need to complete forms, and meet requirements, but the state seems to be driving-school friendly.

North Dakota driver training schools may offer classroom instruction, behind-the-wheel training, or both. Schools which offer a 30-hour classroom instruction and 6-hour behind-the-wheel course may issue a Certificate of Course Completion, which

How to open your driving school in North Dakota

• North Dakota’s regulatory burden on driver training schools is very light, and consistent with running a good school.
• Both the school and instructors need to be licensed.
• You may use most any location for your school.
• You must maintain records for and contracts with all students.
• You do not have to offer classroom instruction, but if you do offer a full 30/6 classroom/behind-the-wheel course, your students who pass will not need to take the road test.

Driving School Licensing and Requirements

General requirements

To operate a driving school in North Dakota, you will need to be licensed by the state. Licenses are valid for one year, and expires on the last day of the year.

Your application package includes the application form which asks for the following information:

• Names of owners and operators
• School location
• Curriculums offered
• Vehicles to be used
• Copy of the lease/rental agreement for your premises, or proof or ownership.
• Your schedule of fees.
• A surety bond in the amount of $5,000

The current regulations for Driver Training Schools are straightforward and clear. Driving school instructors and owners should know and comply with them–they allow a wide range of operation but, since it’s North Dakota, they are probably strictly enforced.

North Dakota requires the following minimum liability insurance coverage:

• $100,000 bodily injury to one person
• $300,000 bodily injury to more than one person
• $30,000 personal injury protection–medical expenses, primarily
• Uninsured motorist bodily injury insurance
• $25,000 property damage

If you have employees, you must carry workers’ compensation insurance covering them–and potentially you–in the event of injury while on the job. You should, of course, consider higher coverages and/or an umbrella policy to cover your operations.

Driving School Owner’s License

North Dakota places few personal requirements on owners of driving schools. The main bar would be conviction for a number of crimes involving fraudulent behavior or moral turpitude.

Driving Instructor’s License

While no specific requirements are set for driving school owners, instructors must demonstrate qualification before they receive a license from North Dakota. Submit the application form and the $25 fee. Instructors must meet the following qualifications.

• Be at least 21 years old, read and speak English, and have normal vision.
• Have at least 3 years’ driving experience in the license class you will be teaching.
• Not have a suspended or revoked license.
• Pass the criminal background check.

In addition, all instructors must pass a written and road test for each class of license you expect to teach.

Instructor licenses must be renewed annually.

Location

You are generally free to establish your business anywhere you see fit–meeting the requirements outlined below. You can choose to have classroom space, or you may conduct classroom driver education at off-site locations, including local public or private schools. Your contract with the school or other location should be included in your license application.

Your school may not operate out of a temporary building or hotel/motel room. You must have adequate facilities for the services you offer.

Your office space must meet local and state building requirements, and it must be accessible to the public during your regular business hours. It must be accessible to persons with disabilities.

Your school license must be posted conspicuously.

Records must be maintained at your main business office.

Classroom facilities must be in a building suitable for instruction. Compliance with local and state sanitation requirements is expected. The classroom must be equipped with suitable desks, tables, chairs and other items appropriate to the setting.

Your school name cannot be substantially similar to that of another driving school, and you may not use the words “State”, “Government”, “Municipal”, “City”, or “County” in the school name, and you must use your school’s name only in advertising and publicity.

Don’t ever give a student or parent the impression that your instruction guarantees receiving a driver’s license–you may mention your pass rate.

Vehicles

Your vehicles need to have dual controls for the brakes as well as an instructor rearview mirror. They must have passed the most recent North Dakota safety and emissions inspections. No training vehicle may be more than 10 model years old.

Signs saying “Student Driver” must be visible to the front and year. Lettering must be between 2” and 5” high.

Records and Contracts

You will need to keep records of all students and instruction. The regulations do not specify the number of years, but contracts must be held for three years–you should hold the records for the same period of time.

Your student records should reflect:

• The student’s name, address, and date of birth
• The contract number
• The dates and types of lessons
• The instructor names and numbers
• Student identification number

Records must be available for inspection during business hours.

Your contract form must be approved by the state before you use it. The contract must include:

• The student’s name, address, and date of birth.
• The kind of training provided under the contract
• The number of hours and rate per hour.
• The date and signature of student and parents, as well as the school’s authorized person.

Contracts may not provide for more than 10 hours of behind-the-wheel training without a new contract being executed.

You must let the Department of Transportation know who your authorized representatives are.

The Driving School Curriculum in North Dakota

A North Dakota driver training school does not have to offer classroom instruction–it may focus on behind-the-wheel instruction only.

If you offer the 30 hour classroom/6-hour behind-the-wheel may offer certificates of course completion, which waives the testing requirement for students seeking their driver’s license.

• Students may take no more than six hours of classroom instruction per day.
• You must offer at least a fifteen minute break after 2 hours of instruction, but that break time never counts as instructional time.
• You may offer no more than one on-road session per day, and the maximum length of the on-road session is two hours.
• If a student has both classroom and on-road instruction on a given day, the total may not exceed 6 hours.

The topics to be covered in your 30/6 hour classroom/behind the wheel course are outlined in the regulations. Simulation use may not be exchanged for any hours of behind-the-wheel instruction.

Your behind-the-wheel instruction may not be conducted on routes used for the state road tests.

Commercial Driver’s License Instruction

Contracts for CDL training may not provide for more than 120 hours of behind-the-wheel training.

CDL training is expected to last for at least 120 hours in a combination of classroom and behind-the-wheel instruction. Simulators may be exchanged for hours of BTW training after a student has 100 hours behind-the-wheel.

Providing instruction for students pursuing a CDL in North Dakota otherwise follows those for the regular driver’s license.

Starting a Small Business in North Dakota

Your driving school is not just subject to the requirements for driver’s education in North Dakota. You also need to establish your Driving School as a small business, and have to consider a number of factors. The form of business you take up, as well as the procedures, are appropriate topics of conversation with your lawyer and accountant. The considerations we offer here are not legal advice, but should provide you with things to think about as you set up your business.

Business Registration

All businesses need to register in North Dakota, especially the business name—the “doing business as” certificate. Banks may not be willing to set up your account until you have that DBA form. We’ll include where to register in the business structures below.

You will also need to obtain a Federal Employer Identification Number. Banks may need it for your business accounts, and you may be wanting to employ people. To obtain an EIN, go to the IRS website and complete the application form you find linked there.

North Dakota details the process on the Secretary of State’s site.

Business name

Before you get going, you’ll want to check to see if the business name you want is in fact available in North Dakota. You can search the North Dakota database, as well as visit the office of the county recorder.

Once you know your business name is available, you can reserve it with the Secretary of the Commonwealth’s office.

Sole Proprietorship

Owning your own business is the easiest one to set up, but also may open you to liability concerns. As a sole proprietor, your business is simply part of your life. You keep a separate set of books, and complete a Schedule C for your 1040 form every April.

Sole proprietorships can expose the proprietor for full liability, even with insurance. That may mean that if you are sued, you may lose your home and property, as well as your personal bank accounts and other assets. This risk may not be worth the ease and independence.

In North Dakota, the big step you have to take is to register your Assumed Business Name with the county or town clerk in which you have a place of business.

Corporations and LLCs

You may set up a full corporation (“Inc.”) as your business structure. Corporations limit your liability for loss to your investment in it, as a general rule (although banks may require you to be obligated personally if you take out a loan to get your business going). This form of business keeps your personal assets safe.

As an owner of a corporation, you’ll have to set up your driving school consistently with the rules for corporations in North Dakota. You’ll also have to decide whether to be an S Corporation or a C Corporation. Generally, the S Corporation form is set up for small businesses. It allows income and taxes to pass through to the owners. You will want to discuss these forms with your attorney and accountant.

You may be able to set your driving school up as an LLC in North Dakota. The LLC form provides the same limited liability as a Corporation, but do not have to comply with the corporate formalities most states require, including items like bylaws, required stockholder meetings, and minutes (although minutes of meetings are probably a good idea).

You’ll have to discuss the advantages and disadvantages for the LLC with your attorney and accountant.

Both Corporations and LLCs file with the Secretary of State. In addition to name reservation, you’ll need to file with the Secretary of State.

Now What Do I Do?

Once you’ve complied with all the legal requirements to be both a driving school and a small business in North Dakota, you need to get students.

Getting students requires marketing—largely on the internet. You will need the following systems set up to obtain students:

• A website—focused on the types of students you want to attract, and aimed at your locality.
• The website should also include a blog, which allows you write about a variety topics and engage in Search Engine Optimization—which will drive traffic to your site.
• A Facebook page, linked to your website, to become noticed and drive traffic.
• Getting testimonials from successful students.

Marketing is something you will have to devote time to. DrivingSchool.Marketing can help you get the best bang for your marketing buck.

Conclusion

Disclaimer: This page is part of DrivingSchool.Marketing’s series of state and provincial pages designed to help entrepreneurs like you start driving schools. States change their regulations, or the web pages they host their forms. While we believe these rules are accurate as of the date of publication, we cannot guarantee full accuracy. Please let us know if you spot any problems.

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Josh Meah

Josh is the CEO of DrivingSchool.Marketing. His goal is to be the marketing and business development partner of driving schools around the world, helping them become thriving businesses while also expanding general awareness for the importance of traffic safety standards and education.

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