To form an LLC in South Dakota, here's everything you need to know.
Here are the steps you need to take to form an LLC in South Dakota. For more information on how to form an LLC in any state, see Nolo's article How to Form an LLC.
1. Choose a Name for Your LLC
Under South Dakota law, an LLC name must contain the words "Limited Liability Company" or "Limited Company," or the abbreviations "L.L.C.," "LLC," "LC," or "L.C." The word "Limited" may be abbreviated as "Ltd." and the word "Company" may be abbreviated as "Co."
Your LLC’s name must be distinguishable from the names of other business entities already on file with the South Dakota Secretary of State. Names may be checked for availability at the South Dakota Secretary of State business name database.
You may reserve a name for 120 days by filing an Application for Reservation of Name with the South Dakota Secretary of State. The reservation must be filed by mail. The filing fee is $25.
2. File Articles of Organization
A South Dakota LLC is created by filing Articles of Organization with the Secretary of State. The articles must include: the LLC's name and address; the name and address of the LLC’s registered agent; whether the LLC will be member-managed or manager-managed; if the LLC is manager-manged, the managers' names and addresses must be provided; the name and address of each organizer; the LLC's duration, if not perpetual. The articles must be filed postal mail. The filing fee is $150.
3. Appoint a Registered Agent
Every South Dakota LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. The registered agent may be an South Dakota resident or a business entity authorized to do business in South Dakota. The registered agent must have a physical street address in South Dakota. A list of registered agents is available at the Secretary of State website.
All of the paperwork and procedural steps to start a limited liability company in South Dakota can be done online using Nolo's South Dakota Online LLC Formation application.
4. Prepare an Operating Agreement
An LLC operating agreement is not required in South Dakota, but is highly advisable. For help creating an LLC operating agreement, see Form Your Own Limited Liability Company, by Anthony Mancuso (Nolo) or use Nolo’s Online LLC. If an operating agreement is created, it need not be filed with the Articles of Organization.
5. Publication Requirements
None.
6. Comply With Other Tax and Regulatory Requirements
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online EIN application on the IRS website. There is no filing fee.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses.
Department of Revenue: In some cases, for example if you will be selling goods and collecting sales tax, you’ll need to register with the South Dakota Department of Revenue (DOR). For at least some purposes, you can register online. For more information on state LLC tax registration, check the 50-State Guide to Annual Report and Tax Filing Requirements for LLCs.
7. File Annual Reports
All South Dakota LLCs and foreign LLCs authorized to do business in the state must file a Annual Report with the South Dakota Secretary of State and pay a $50 filing fee. The first annual report must be filed before the first day of the second month of the year following the year in which the LLC was authorized to transact business. Subsequent annual reports must be filed by the same date each subsequent year. The Secretary of State’s office will mail a reminder to the LLC registered agent’s address on file prior to the filing month.
The annual report may be filed online at the South Dakota Secretary of State website or by postal mail.
8. Foreign LLCs Doing Business in South Dakota
To do business in South Dakota, all LLCs organized outside of the state must register with the South Dakota Secretary of State. Foreign LLCs must appoint a registered agent for service of process. The agent may be a South Dakota resident, or a business entity authorized to do business in South Dakota.
To register, file an Application for Certificate of Authority. The application must be filed by postal mail. The filing fee is $750.
The completed application must be accompanied by a one page certificate of legal existence or good standing from the foreign LLC’s home state .
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