A sole proprietorship is a business owned by only one individual. Owner liability is unlimited, and therefore personal property can be attached by creditors to settle business debts. However, sole proprietorships are not subject to corporate taxation.

1. Sole proprietorships need only obtain a business license before doing business in the CNMI. Sole proprietors are not required to file any documents with the Registrar of Corporations.
2. The sole proprietor is responsible for filing the quarterly business gross revenue tax return with the Division of Revenue and Taxation.
3. The sole proprietor is responsible for filing the annual 1040 income tax return by April 15 of each year. They do not have to file any corporate tax returns.
4. If a sole proprietor employs others, they must file an legal application for a federal employment identification number form SS-4 and comply with all rules and regulations regarding employment of resident and non-resident workers.

General partnerships consist of two or more people who decide to form a business as partners. The details of the partnership relationship are agreed upon by the partners and should be contained in a partnership agreement which is usually prepared by an attorney. In a general partnership the partners have unlimited liability. General partners are jointly and severally liable for obligations of the partnership. Partners are taxed on their share of partnership income, whether or not distributed. Corporate taxes do not apply. Since there are no partnership laws in the CNMI, it is important that all aspects of the partnership be set forth in a written agreement.

1. Although it is not required, a partnership may complete a Partnership Registration Form and file it with the Registrar of Corporations. The partnership registration form should be signed by all partners and acknowledged before a notary public.
2. The cost for filing the general partnership agreement and registration form with the Registrar of Corporations is $25.
3. All partnerships are required to obtain a business license before doing any business in the CNMI. Please submit your business license application along with a copy of your partnership agreement as filed with the Registrar of Corporations. Please refer to the business licensing fees to determine if your business activity falls outside the standard $50 filing fee.
4. All partnerships are required to file the 1065 Partnership annual tax return along with the K-1 schedule which details the partnerships earnings so that each partner will only be taxed on their share. The 1065 return is due on the 15th of April every year. You can pick up these returns at the Office of Revenue and Taxation.
5. All partnerships are required to file a quarterly business gross revenue tax return with the Office of Revenue and Taxation. You can pick up the BGRT returns.

Subchapter S Corporations are usually chosen as the form of business ownership by smaller corporations. Subchapter S Corporations limit the number of stockholders to 35 or less. S Corporations allow each stockholder to pay individual income tax rather than the corporation paying corporate tax. Any net operating loss is deductible by the shareholders.

1. The procedure for establishing a Subchapter S Corporation is exactly the same as that for establishing a standard domestic corporation.
2. Subchapter S Corporations must obtain a business license before doing business in the CNMI. The standard license fee is $50 per business activity. Follow the same procedures as set for corporations. Please contact the Business Licensing Office to determine if your business activity is subject to a different fee.
3. All Subchapter S Corporations are required to file an Internal Revenue Service "Election for Subchapter S Corporation Status".
4. All Subchapter S Corporations are required to file a corporate tax return annually. Please pick up Subchapter S corporation tax return 1120S at the Office of Revenue and Taxation. The 1120S return must be filed by March 15 every year.
5. The Commonwealth requires that all subchapter S corporations file the BGRT return on a quarterly basis. You can pick up these returns at the Division of Revenue and Taxation.