How to Form an LLC in South Dakota in 7 Steps
Forming a limited liability company (LLC) in South Dakota involves choosing a unique business name, appointing a registered agent to handle legal documents, filing articles of organization, obtaining an EIN, and setting up necessary business and tax accounts.
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If you’re launching a new business or hoping to expand an existing venture, you might be interested in starting a limited liability company (LLC). This business structure provides protection to business owners by separating them from the LLC’s business debts and liabilities. Take advantage of these benefits by completing the process to form your South Dakota LLC. Following a step-by-step guide helps ensure your LLC is properly formed in South Dakota.
7 Steps to Form an LLC in South Dakota
Name Your LLC
To start an LLC, you need to pick a name for your South Dakota business that attracts potential customers and satisfies the requirements of state law. Choosing an LLC name involves brainstorming to come up with unique and descriptive name options for your small business. It’s good to start with a list of several names in case some of your choices are unavailable.
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Under South Dakota law, S.D. Codified Laws §47-34A-105, you’ll need to make sure that your LLC name is distinguishable from the other business names registered or reserved with the Secretary of State. You can conduct a company name search on the South Dakota Secretary of State’s website to confirm name availability.
Note that your South Dakota LLC name must include one of the following phrases or abbreviations:
- Limited Liability Company
- Limited Company
- L.L.C.
- LLC
- L.C.
- LC
If you settle on a name that’s available but not yet ready to register your LLC, you can submit an application to reserve a name. Under S.D. Codified Laws §47-34A-106, the name is reserved for 120 days.
Get a Registered Agent
A registered agent is a person or company who has the responsibility of accepting legal documents on behalf of a business. Under S.D. Codified Laws §59-11-1 you must have a registered agent to comply with the laws of South Dakota.
Note that your registered agent must either be a resident of the state of South Dakota, or a business entity authorized to do business in South Dakota. You’ll need a registered agent who can provide a physical street address for service of process. The person or company you choose must also be available during normal business hours.
Some people choose to use a registered agent service. Visit the Secretary of State’s website for a list of commercial registered agents.
File Your Articles of Organization
File articles of organization to create your LLC in South Dakota. To file online, go to the South Dakota Secretary of State website and choose the appropriate option. To file by mail, use the paper form. The state fee to file online is $150 and filing by mail is an additional $15 ($165). Online filers can pay by credit card.
Under S.D. Codified Laws §47-34A-203, South Dakota articles of organization must set forth the following:
- LLC name and address
- Registered agent’s name and physical address
- Whether the LLC will be member-managed or manager-managed
- Manager names and addresses if manager-managed
- Names and addresses of the organizers
- LLC’s duration, if not perpetual
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Draft an Operating Agreement
LLC operating agreements contain rules and procedures for operating a South Dakota LLC. Your operating agreement should be kept on file at your business location. An operating agreement is not required in South Dakota state but can still be important when starting an LLC. An operating agreement can include provisions on:
- Rights and responsibilities of members
- Admission of new members
- Liabilities
- Ownership
- Voting powers
Your operating agreement gives you greater control over your LLC and without it, your business will be governed by South Dakota default LLC laws. With an operating agreement, you create your own rules for your LLC.
Get an EIN
You’ll most likely need to get an EIN (Employer Identification Number) number for your new business. An EIN is a number assigned by the IRS (Internal Revenue Service) to identify your business. It’s like a Social Security number for business entities. Most entrepreneurs find that they need it so that they can hire employees and open up a business bank account. Get your EIN for free on the IRS website.
Set Up Business and Tax Accounts
Once you form your LLC, you’re expected to perform certain steps to comply with South Dakota state laws. Set up an account with the Secretary of State to maintain business filings and receive a business identification number. Check with the South Dakota Department of Revenue to find out if you need to register for state business taxes. You may also want to set up accounts to file state and federal taxes.
Check for Additional Federal or State Requirements
Check state and federal websites to determine if there are any specific rules for your business. For example, some LLCs may have to file a Beneficial Ownership Information Report (BOIR) with FinCEN. Under current law, LLCs created in the United States are “domestic reporting companies” and are exempt from the BOIR requirement.
However, laws may change, so stay up to date with state and federal requirements.
Business and Tax Requirements in South Dakota
Depending on your LLC’s type of business, it may be subject to certain state business taxes.
State Business Tax
Since South Dakota has no state or personal income tax, LLCs typically won’t owe any state tax on tax returns for LLC income in South Dakota.
State Employer Tax
Since South Dakota doesn’t have a corporate income tax, your LLC is only responsible for federal taxes assessed on your business.
Sales and Use Taxes
South Dakota has a single, state-wide sales and use tax rate of 4.2%. You will typically be required to collect sales tax if your business provides goods and services. This rate is in effect until June 30, 2027.
Licenses and Permits
Separate from incorporation, South Dakota requires an LLC to have a business license or permit if you’re operating a taxable business in the state. For a seller’s permit, apply here. There is no fee for a sales tax license. For other types of business licenses, contact the municipal or county government office where your business is registered. Costs vary.
Annual Requirements in South Dakota
South Dakota requires LLCs to file an annual report before the first day of the second month following the anniversary month of your LLC’s formation. The filing fee is $55, if filed online or $70 by paper. Using your business ID, this search tool can help you find out when your annual report is due. To file an original annual report for your South Dakota LLC, use this form. You can also amend an annual report. If your business has been dissolved or revoked, the reinstatement page can help you proceed. Applying for a reinstatement of a dissolved or revoked LLC requires the applicant to file all delinquent annual reports and pay a $125 reinstatement fee.
South Dakota LLC Formation FAQs
The cost of having an LLC depends on the type of business and any taxes, fees, or other costs that apply. A list of fees for LLCs in South Dakota can be found on the Secretary of State’s website.
The South Dakota Secretary of State charges $150 to file an LLC online. The fee is $165 to file by mail.
You can choose between different types of LLCs in South Dakota to form the business structure that works best for your needs.
- Single-member LLC: This is the most popular filing type. It is similar to a sole proprietorship in that a single owner is responsible for company transactions, taxes, and debts. It may also have significantly less paperwork than other LLC types.
- Multi-member LLC: This type of LLC is for two or more members. It combines the flexibility of a partnership with the limited liability of a corporation. An operating agreement is important for multi-member LLCs since it outlines agreed-upon ownership, clear expectations, and governing roles and responsibilities of the members.
- Professional LLC: If you’re a licensed professional, such as a doctor, lawyer, architect, or chiropractor, for example, you may opt for a Professional LLC (PLLC). A PLLC may provide tax advantages for professionals whose occupation requires a license. Forming a PLLC will not protect owners from malpractice claims, and you may still be liable for the actions of the employees you supervise.
A certificate of formation is like a charter document for the initial formation of your LLC. In South Dakota, it’s called "articles of organization." You may need your articles to open a business bank account and apply for business licenses or permits. You should hold on to the initial articles of organization filed when forming your LLC. You can request a certified copy from the Secretary of State. The fee is $15 and $2 per page.
A certificate of good standing verifies your LLC is legally registered in South Dakota and compliant with the state’s laws and requirements for businesses. This certificate is usually required to register as a foreign LLC in a different state or jurisdiction and to obtain financing for your business. You can request your LLC’s certificate of good standing/existence from the Secretary of State. The fee is $20.
The requirements to form an LLC in South Dakota include:
- Choosing a valid name for your LLC
- Getting a registered agent with a physical address within South Dakota
- Filing complete articles of organization with the Secretary of State
LLCs are often used by business owners who want to protect their personal assets. The benefits of an LLC in South Dakota include personal liability protection from business creditors, business protection from personal creditors, simplified transfers, better flexibility, and numerous tax advantages.
To maintain your LLC in South Dakota you must file an annual report before the first day of the second month of your LLC’s anniversary and pay the $50 filing fee.
No. Articles of organization are what you’re required to file with the state to create your LLC. If necessary, you can get a certified copy of your articles of organization from the Secretary of State. An operating agreement is an optional document for internal use by the members of an LLC. You are not required to file an operating agreement with the state.
Yes. A trade name or DBA (doing business as) is a name other than the legal business name stated on your articles of organization. You must register any alternate names you’re using to do business in South Dakota by submitting an application for business name registration to the Secretary of State. Names used as DBAs must have at least one owner. The filing fee is $10.
Yes. Your LLC will likely be required to obtain licenses or permits from the municipal or county government where the business is located. Contact the local authority in your jurisdiction for information.
Yes. Anyone can file online to form an LLC that is not currently registered with the Secretary of State. Apply using the Secretary of State’s online business registration. A business formation service company can also apply for you.
The Secretary of State’s office is open Monday through Friday (excluding holidays). Business day hours are 8:00 a.m. to 5:00 p.m. The address is:
Secretary of State Office
500 E Capitol Avenue
Pierre, South Dakota 57501
Yes. You can use a registered agent service to keep your LLC compliant, avoid penalties, protect your privacy, receive service of process, and many other tasks.
A domestic LLC in South Dakota is a business that is initially formed in the state of South Dakota.
To register your South Dakota LLC in another state, you will likely apply as a foreign LLC there and pay a fee. You will also provide your LLC’s certificate of good standing/existence or otherwise prove your LLC’s compliance in its home state of South Dakota. Check with the Secretary of State or government office that oversees business services to confirm the process for registering as a foreign LLC in that state or jurisdiction.
If your LLC was formed in another state, it’s considered a foreign LLC and needs to register in South Dakota to do business. You’ll need to apply for a certificate of authority with the Secretary of State. The online filing fee is $750 or $765 to file by mail.
To dissolve an LLC in South Dakota, submit articles of termination to the Secretary of State. The cancellation must be signed by a member if the LLC is member-managed and a manager if it is manager-managed. The filing fee is $10.
No. An anonymous LLC is one in which the owners or members are not required to provide their identities on formation documents. Only Delaware, New Mexico, Nevada, and Wyoming permit anonymous LLCs. However, using a registered agent service can help with privacy concerns.
Disclaimer: The information presented here does not constitute legal advice or representation. It is general and educational in nature, may not reflect all recent legal developments, and may not apply to your unique facts and circumstances. Consider consulting with a qualified business attorney if you have legal questions.
How to Start an LLC in Other U.S. States
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