How to Start an LLC in South Dakota
Here are the 7 steps to start a limited liability company (LLC) in South Dakota
For more information on how to form an LLC in any state, see the article How to Form an LLC.
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Learn about South Dakota LLC formation, including information on Registered Agents, naming rules, business licenses, and more.
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Creating an LLC in South Dakota
A limited liability company (LLC) offers many benefits to small businesses, including liability protection and tax advantages.
In order to form a South Dakota LLC, you must file the Articles of Organization with the South Dakota Secretary of State, which costs $150 online.
However, you’ll first need to choose a name and registered agent for your South Dakota LLC.
Mail filings: Approval of mail filings for South Dakota LLCs takes 3 weeks in total. This includes the processing time of 3-5 business days as well as the time your documents are in the mail.
Online filings: South Dakota LLC online filings are approved immediately. There is no additional transit time because you can download your documents as soon as they are approved.
An LLC can be easily formed in South Dakota. Our step-by-step guide on How to Start an LLC in South Dakota will help you get started today. Find out more about LLCs and their benefits in our What is an LLC guide.
Step 1. Choose a Name for Your LLC South Dakota
Creating an LLC in South Dakota requires you to choose a business name before you can file a Articles of Organization. Be sure that your business name complies with the South Dakota naming requirements and can be searched by potential customers.
- South Dakota law requires an LLC name to contain the words “Limited Liability Company” or “Limited Company,” or the abbreviations “Ltd.,” “LLC,” or “LC.” “Limited” may be abbreviated as “Ltd.” or “LTD,” and “Company” as “Co.”
- It is not acceptable for your South Dakota LLC to have words associated with a government agency (FBI, Treasury, State Department, etc.).
- You should avoid using words or abbreviations that may make your LLC South Dakota appear to be a different type of entity, such as “LP” or “corporation”.
- There may be additional documentation and licensure paperwork required for certain restricted words (bank, lawyer, attorney, credit union, etc.).
- Check the state’s business name database to ensure the name you want is not already taken(including businesses no longer in operation)
See a complete list of South Dakota’ naming rules here.
Check URL availability: You are likely to need a web page even if you don’t think you do. Buying your domain name now will at least give you the option of having one in the future. It’s a good idea to check the URL availability before finalizing your South Dakota LLC name.
By filing an Application for Reservation of Name with the South Dakota Secretary of State, you can reserve a name for 120 days. The reservation must be sent through the mail.
An LLC stands for a Limited Liability Company. A simple business structure that is more flexible and offers many of the same benefits as a traditional corporation. For more information, see “What is a Limited Liability Company?”.
A DBA isn’t required for most LLCs. The LLC’s name can also be used as your company’s brand name, and you can accept checks and other forms of payment under that name. If you want to do business under a different name, you might want to register a DBA. To learn more about DBA, read our “What is a DBA” Guide.
Step 2: Appoint Your Registered Agent in South Dakota
Your next step in forming an LLC in South Dakota is to appoint a Registered Agent, an individual or company authorized to receive legal and state mail on your behalf.
All South Dakota LLCs must have a registered agent. Please include your registered agent’s name and address on your Articles of Organization.
Registered Agent Requirements in South Dakota
To comply with South Dakota law, your LLC’s registered agent must be a resident or business entity that maintains a physical address in South Dakota. The “registered address” cannot be a P.O. box. It must be a real physical address that can be visited in person.
Although you do not have to submit this form to the Secretary of State, your business must record it. Learn more about South Dakota Registered Agents by reading our full guide.
A Registered Agent must be a South Dakota resident or a corporation authorised to do business in the state, such as a registered agent service. You have the option of electing someone from your company, including yourself.
By filing a Statement of Change (online) or a Statement of Change of Registered Office or Registered Agent or Both form (by mail) with the Secretary of State, you can change your registered agent in South Dakota.
Are You looking for a Registered Agent?
Wise Business Plans offers a free year of registered agent service when forming an LLC in South Dakota.
Step 3.Prepare and File the Articles of Organization
To create a South Dakota LLC, you will need to file Articles of Organization with the Secretary of State. You may apply online, by mail, or in person.
If you choose one of our business formation services, we can handle this step for you.
The following information is typically required to create a Articles of Organization:
- Your LLC name and principal place of business.
- Name, address, and signature of the LLC’s registered agent
- Decide whether your South Dakota LLC will be member-managed or manager-managed. Indicate the names and addresses of each member and manager.
- The reason for forming the LLC in South Dakota.
- Name and address of the LLC’s organizer.
- The effective date of the certificate,
- The person forming the LLC must sign the Certificate.
Foreign LLCs: LLCs that are based in another state but intend to conduct business in South Dakota must complete a form called the Qualification of Foreign LLC.
If you file the Application for Certificate of Authority online, it will cost you $750, and if you file it by mail, it will cost you $765.
Two Ways to File the Articles of Organization
The 1st option is:
File Online with the State of South Dakota
The 2nd option is:
Filing the Articles of Organization by Mail
There is a state filing of $150 Online, $165 By Mail payable to the South Dakota Department of State. (nonrefundable)
Address to Mail
Secretary of State Office
500 E Capitol Ave
Pierre, SD 57501
In a member-managed LLC, the members (owners) take on the business’s daily responsibilities. Manager-managed LLCs are managed by managers who are elected by the members. Those who manage your LLC will have the authority to do a wide range of tasks-from hiring staff to opening bank accounts.
When an LLC conducts business in the state where it was formed, it is referred to as a “domestic LLC.” Normally, when we talk about an LLC, we’re talking about a domestic one. When an existing LLC wants to expand its operations to another state, it must form a foreign LLC.
Step 4. Get a Certificate From the State
Upon filing your Articles of Organization, the secretary of state will review it. As soon as the Articles of Organization is approved, the LLC becomes a legal entity.
By obtaining this certificate, LLCs will be able to obtain an Employer Identification Number (EIN), licenses, and business accounts.
Step 5. Write an South Dakota LLC Operating Agreement
An operating agreement is a legally-binding document that sets out how your LLC will operate, from the voting process to mergers.
Operating agreements are not required in South Dakota, but they are an essential part of your business.
Written operating agreements are helpful for different reasons, including resolving disputes over financial agreements and other potential litigation.
The LLC declaration can prove that your LLC is a separate entity, which can help preserve your limited liability.
An operating agreement ensures that all business owners are on the same page and reduces the possibility of future conflict.
How should an operating agreement be drafted?
The operating agreement should detail the LLC’s overall business purpose and other important matters, such as how the company will be taxed and how new members will be accepted. Legal agreements can clarify several important concerns, such as:
- Who makes decisions for the company, especially those who decide if partners disagree.
- Who is responsible for different aspects of the business as well as for strategic decisions.
- If a partner leaves the company, what will happen to their ownership interests in the corporation.
- The members and their contributions
- How profits and losses will be divided
- Procedures for admitting new members and removing outgoing members
In South Dakota, you can include just about anything in your operating agreement, as long as it doesn’t violate the state law or the Articles of Organization.
It can ensure that you are protected from liability. It’s essential to consider this because it’s the major reason your single-member LLC has an operating agreement. Even if your state doesn’t require an operating agreement, operating your business without one could risk your LLC registration.
Nope. Your operating agreement does not need to be filed with the Secretary of State in South Dakota. Your operating agreement is a internal document that you should keep on file.
Step 6. Get an EIN for Your South Dakota LLC
Basically, an employer identification number (EIN) is a social security number for your LLC in South Dakota.
To identify your LLC for tax purposes, the Internal Revenue Service assigns a nine-digit Employer Identification Number (EIN). You can apply for your EIN either by mail or online.
An EIN is used for the following purposes:
- Manage state and federal taxes
- Create a business bank account
- Hire employees
Get an EIN Number in South Dakota
Getting an EIN number is easy and free, There are two ways to get an EIN number in South Dakota.
The 1st option is:
Apply online for an EIN from the IRS
The 2nd option is:
Get an EIN by Mail or Fax
Address to Mail
Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
When you apply for an EIN, you will be informed of the various tax classification options available to you. The default tax status is chosen by the majority of LLCs.
Some LLCs, on the other hand, can reduce their federal tax liability by electing the S corporation (S corp) status.
When converting from a sole proprietorship to an LLC, the IRS requires a new EIN.
An EIN can be obtained from the IRS for free. The process of obtaining an EIN is easy and can be done online or by mail.
Step 7. File Annual Report
The South Dakota Secretary of State requires all South Dakota LLCs and foreign LLCs authorised to do business in the state to file an Annual Report.
The first annual report must be filed no later than the first day of the second month following the year in which the LLC was authorised to conduct business. Annual reports must be filed on the same date each year after that.
Fee: The filing fee online $50; $65 for paper filings (Nonrefundable)
Due Date: Each year, the deadline is November 15th. The first annual report is due the following year after the LLC is formed.
Late Filings: Failure to file on time in South Dakota carries a $50 penalty. In addition, if an LLC fails to file an annual report, South Dakota can revoke its business registration after 60 days.
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What to do After Forming Your South Dakota LLC
Keep your personal and business assets separate
Your personal assets (such as your home, car, and other valuables) may be at risk when your South Dakota LLC is sued if they are mixed with your business accounts.
Here are some steps you can take to protect your LLC in South Dakota:
1. Create a Business Plan:
If you have decided that a South Dakota LLC will be a good choice for your business in South Dakota, your next step is to create a business plan (although it is not required), so that you have a roadmap for what you will do and how you will accomplish it.
Free: Business Plans Examples
Do you need help creating a business plan? Check out these six free, proven business plan examples from different industries to help you write your own.
2. Open a Bank Account
As soon as your LLC is officially formed, you should open a business bank account. Why? Keeping separate bank accounts will help you maintain the legal distinction between the LLC and you (the owner).
Because LLCs are limited liability companies, creditors and litigants can’t take your assets.
It is essential for small business owners to partner with the right bank. Find out which banks offer the best business checking accounts, have low or no fees, ATM accessibility, and interest-earning accounts as well as online or mobile banking tools.
Recommended: Check out our business bank account page to learn which banks offer the best business check accounts, ATM access, interest-bearing accounts, and online and mobile banking options for businesses.
3. Obtaining a business credit card:
- Allows you to separate personal and business expenses.
- Develops your company’s credit history, which can be helpful to raise capital (e.g., small business loans) later.
4. Hiring a business accountant:
- It prevents your business from overpaying taxes while preventing penalties, fines, and other costly tax mistakes.
- Gives you more time to focus on your growing business by simplifying bookkeeping and payroll.
- Manage your business’s funding more effectively. Find out where extra profit or loss can be made
Getting Business Insurance for Your LLC
You can manage risks and grow your LLC with business insurance. Here are the most common types:
- General liability insurance protects your business from lawsuits. Most small businesses purchase general liability coverage.
- Professional liability insurance protects professionals and businesses from claims of negligence from their clients or customers. Liability insurance typically covers negligence, copyright infringement, personal injury, and more.
- Workers’ compensation insurance: Covers illnesses, injuries, and deaths resulting from a worker’s work.
Pro Tips: Want to learn about small business insurance costs? Read about 10 types of small business insurance and their costs in a comprehensive article.
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Let us help you with your business insurance needs.
- General business liability insurance
- Medical insurance
- Term life insurance
- Workers’ Comp
- Surety bonds
- Commercial auto
Create Your Business Website
A website is an important step in legitimizing your business. It is essential for all businesses. You are missing out on a large percentage of potential customers and revenue if you don’t have a website, even if your business is too small or in an offline industry.
More than 90% of consumers begin their search for products and services online. If you don’t have a website that is ready to welcome your customers, then they will simply find your competitors.
Here are the main reasons why you shouldn’t delay building your website:
- Every respectable firm has a website. When it comes to getting your firm online, size or sector isn’t a concern.
- Creating a basic website has never been easier, thanks to website builder tools like the GoDaddy Website Builder. To design a website, you don’t need to hire a web designer or developer.
Recommended: If you want to enhance your conversion rates and maximize revenue in order to help expand your business and meet objectives, you should always hire a professional business website design company to build your business website.
Wise Business Plans is a leading web design company, We have created over 2000 + websites across 20 countries for our clients but we are physically based in 7 major cities in the United States including Alabama web design, Pennsylvania, Las Vegas, Colorado Springs, Iowa, Michigan and San Diego.
South Dakota LLC FAQs
The $150 fee for filing your LLC’s Articles of Organization with the South Dakota Secretary of State online is the most expensive part of forming an LLC.
Mail filings: Approval of mail filings for South Dakota LLCs takes 3 weeks in total. This includes the processing time of 3-5 business days as well as the time your documents are in the mail.
Online filings: South Dakota LLC online filings are approved immediately. There is no additional transit time because you can download your documents as soon as they are approved.
Expedited LLC: For mail-in LLC filings in South Dakota, there is only one option expedited. For an additional $50, 24-hour processing is available.
Articles of Dissolution should be filed with the state – In order to dissolve your LLC in South Dakota, you must submit fully completed Articles of Termination. The Articles of Dissolution must be used by a corporation. By mail or in person, submit the appropriate form in duplicate along with the filing fee to the Secretary of State.
A South Dakota Limited Liability Company may amend any article of organization that has been approved by the management, except for a change of registered agent.
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