Procedures to Form South Dakota LLC

A Limited Liability Company (LLC) in South Dakota is a hybrid legal organization with traits of both a Sole Proprietorship/Partnership and a Corporation.

An LLC can do business and keep assets independently, just like a natural person, just like a corporation. Personal liability security is also given to members, managers, and officers of the LLC

LIKE A SOLE PROPRIETORSHIP OR PARTNERSHIP, an LLC is easy to run and control. There is also no double taxation because any gains or losses of the LLC flow through to the personal tax returns of its members.

If your LLC is sued, only the business’s assets can be used to pay off any bills or judgments, not your own.

An LLC is a good choice for most people who run a business or just want to keep their assets safe because it protects them from personal responsibility and is easy to run.

In South Dakota, you can set up an LLC to run a business or to buy and hold things like land, cars, boats, or planes.

A. Name of a South Dakota LLC

Before you file the paperwork to make your LLC, you need to check with the South Dakota Secretary of State to make sure the name you want is available.

Your South Dakota LLC must also have a name that stands out on the Secretary of State’s list. This means that it can’t be the same as any other business name in South Dakota’s company database.

South Dakota Search for LLC Names:

Look for information about a business in South Dakota

LLC Designator: South Dakota law (47-34A-105 of the Uniform LLC Act) says that LLCs have to have a proper designator at the end. The following are examples of acceptable identifiers:

* L.C.

* LLC (most popular)

* Ltd. Company No.

* Ltd. Liability Company

* Limited Liability Company

* Company with limited liability

Your South Dakota LLC name can’t include words like

* Corporation, Corp.

* Inc.

* Incorporated

* Limited Partnership

* L.P.

or Trust that make it sound like a different type of legal organization.

B. South Dakota Agent of Record

A South Dakota Registered Agent is a person or business that agrees to be served lawsuits, legal letters, and other papers on behalf of your LLC This is called the Service of Process.

South Dakota law says that you must have a Registered Agent for your LLC in order to stay in line with the law. By choosing a Registered Agent for your LLC, you help make sure that the U.S. court system and the legal system work well.

If you don’t have a Registered Agent, the South Dakota Secretary of State may cancel your LLC, and you won’t be able to do business in the state.

The Registered Agent for your South Dakota LLC must have a real address in the state where formal papers can be sent. You can’t have a P.O. box.

The Registered Agent for your South Dakota LLC also needs to be available Monday to Friday

9 am to 5 pm.

Who can be the South Dakota Registered Agent for your LLC?

The following can be your LLC’s Registered Agent in South Dakota:

* You can be your own Registrar of Voters.

* “A friend or relative

* “A Business Registered Agent”

Note: If you, a friend, or a family member will be the Registered Agent for your LLC, they must be at least 18 years old and live in South Dakota. They must also have a street address in South Dakota.

C. The Articles of Organisation for South Dakota

South Dakota Articles of Organisation is the official name for the form that is used to set up an LLC The LLC filing fee is $150 if you file this form online. If you send this form in by mail, you have to pay $165.

Learn more about LLC payments by reading LLC Cost in South Dakota.

Approval times: Your South Dakota LLC will be accepted right away if you file it online. If you file your South Dakota LLC by mail, it will be accepted in 1-2 business days (plus the time it takes to get to South Dakota).

Due to the current state of the world and government delays, it may take longer to file. Check out how long it takes to get a South Dakota LLC

File your LLC online (this is the best way to do it):

Secretary of State of South Dakota: Start a New Business

Mail in your LLC paperwork:

Articles of Organisation for a South Dakota LLC

Write “Secretary of State” on your cheque or money order. Send the original and a copy of your Articles of Organisation, along with the filing fee, to the Secretary of State at 500 East Capitol Avenue, Pierre, SD 57501-5070.

If you live near Pierre or are willing to drive there, you can also hand-deliver your Articles of Organisation. The fee for filing is higher ($210), but your LLC will be accepted while you wait on the same day. Bring two copies of your Articles of Organisation and $210 to the State Capitol building to file. The address and suite number are the same as what was said in the previous line.

What your LLC approval will look like Once your LLC has been processed and accepted by the South Dakota Secretary of State, you will get a stamped and signed Certificate of Organisation.

If you don’t get this form or can’t find it, you can search your LLC here to find the form and download it. Look under the “History” part of your LLC’s online record.

D. LLC Operating Agreement

In a South Dakota LLC Operating Agreement, you can find the rules for how your LLC runs, as well as the rights and responsibilities of the members, managers, and other leaders towards each other and the business. Having an Operating Agreement makes it clear what the member(s), manager(s), and officer(s) of the LLC are responsible for. This makes it easier to run the business day-to-day.

Some examples of rules are how the business runs day-to-day, who owns what, and how profits and losses are split. Think of your South Dakota LLC’s “Constitution” as your Operating Agreement.

Whether your LLC has only one person or many, it’s a good idea to have an Operating Agreement. Your Operating Agreement helps show that your South Dakota LLC is a “separate legal entity,” which protects the members from personal liability.

Since this is an “internal document” for your LLC, you don’t have to send it to the South Dakota Secretary of State. Just give each member a copy and keep yours with the business records for your LLC

Choose from PDF, Google Docs, or Microsoft Word to download a free Operating Agreement for your South Dakota LLC

E. Your LLC needs a Federal Tax ID Number (EIN)

A South Dakota EIN Number is like the “social security number” of your LLC It tells the IRS who your LLC is so they can figure out how to tax you. You’ll also need your EIN to open a bank account, get credit cards, apply for a business license, and do other financial things.

FEIN stands for Federal Employer Identification Number, which is another name for the Employer Identification Number. All of them talk about the same thing.

Wait for your LLC to be approved. If the South Dakota Secretary of State rejects your filing, you don’t want a Federal Tax ID Number tied to an LLC that doesn’t exist. So, don’t ask for your EIN until your LLC has been approved.

EINs are free ($0): It won’t cost you anything to get an EIN from the IRS

How to apply: To get an EIN from the IRS, you can either apply online or send Form SS-4 by mail or fax.

We suggest applying online because your EIN will be approved right away. If you file by fax or mail, it will take four days or four weeks, respectively.

If you can’t file online, you can get Form SS-4 from the IRS, fill it out with information about your new LLC, and send it by mail or fax. The address is Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999. The number for their fax is 855-641-6935.

Do not get an SSN? (Non-US Residents): People who don’t have SSNs, which are usually foreigners, can still get an EIN from the IRS, but they have to do it by fax or mail. In this case, we suggest that you file by fax because it will be approved faster.

Tip for people who don’t live in the U.S.: If you want an EIN but don’t have an SSN, write “Foreign” on line 7b, where it says “SSN”

LLCs that are owned by another company also can’t get an EIN through the online application. Form SS-4 must be sent by mail or by fax.

F. The annual report for a South Dakota LLC

Every year, all South Dakota LLCs, no matter how much they make or what they do, have to file a South Dakota LLC Annual Report.

If you file your Annual Report online, the fee is $50. If you file it by mail, the fee is $65.

Date due: Your first Annual Report is due by the end of the anniversary month of the year your LLC was created. Every year after that, your Annual Reports will be due on the same date.

For example, if you started your LLC on May 15, 2023, your first Annual Report is due on May 31, 2024. It will also be due on May 31, 2025. And so on for the rest of the years.

How to file: The Annual Report can be filed online or by mail. We suggest filing online because it is easier and takes much less time to process.

If filing the South Dakota Annual Report online: File an Annual Report Online.

If you want to mail in your South Dakota Annual Report, you can get the Annual Report Form (PDF) here.

Send the Annual Report form and the filing fee to the: 

Secretary of State

500 East Capitol Avenue

Pierre

SD 57501-5070

Payable to “Secretary of State” on a cheque or money order.

Penalty for late filings: If you don’t file your South Dakota LLC’s Annual Report on time, your LLC will lose its good standing and be marked “delinquent.” This means that your LLC won’t be able to do business in the state. To get your LLC back in good standing so you can do business again, you must file all late Annual Reports, pay any unpaid filing fees, and a $50 penalty for each late Annual Report.

G. Account in South Dakota for your LLC

You should open a bank account in the name of your LLC so that your personal assets are protected. This will keep the assets of the business different from your own.

To start an LLC bank account, you’ll need your South Dakota Certificate of Organisation and your Federal Tax ID Number. We also suggest that you bring your Operating Agreement and any other business paperwork. Most likely, the bank won’t need them, but you should bring them just in case. Bring your driver’s license or passport, and call the bank ahead of time to find out what they’ll need.

Having an LLC bank account also makes it easy to keep books, do accounting, and pay taxes.

All members of the LLC who want to be on the account must be there in person. Due to U.S. banking rules, they can’t be added by phone or email.

Shop around. If your amount falls below a certain level, many banks will charge you a monthly maintenance fee. Call around and find out what the most basic type of business checking account is. There are still a few banks that offer LLC bank accounts with no fees at all.

When you open the account, the bank will give you a debit card.

You can also get a credit card for your business to earn points, miles, and other benefits.

H. Licenses and permits for a business

After you start your LLC, you should find out if you need a South Dakota Business Licence or any other permits to run it.

South Dakota does not have a general business license for the whole state. Instead, licenses and permits are based on the type of business your LLC is and where it is located.

You’ll need to look at this Start-up Business Packet from the South Dakota Office of Economic Development and call your county, township, and city to find out what licenses and permits you need.

I. Taxes for a South Dakota LLC

South Dakota LLC Taxes are different for every small business, but we can give you an idea of what you need to do.

LLCs are “pass-through entities” for federal tax reasons. This means that the LLC does not report its own profits or losses on its own federal tax return. Instead, the gains and losses “pass through” to the personal tax returns (U.S. Form 1040) of the LLC owners.

Single-member LLCs in South Dakota will report their income and losses on a Schedule C or other schedule(s) based on how they make money. By default, the IRS taxes single-member LLCs like a Sole Proprietorship.

South Dakota LLCs with more than one owner will have to file an “information return” (Partnership 1065 Form) with the IRS. The owner’s income and losses will be reported on a K-1, which will then flow down to their personal income tax return. By default, the IRS taxes multi-member LLCs like Partnerships.

An LLC can also be treated as either an S-Corp (by filing Form 2553) or a C-Corp (by filing Form 8832), but you’ll need to talk to a good accountant (or more than one) about the pros and cons for your business.

South Dakota does not have a corporate income tax, a personal income tax, a tax on personal property, a tax on business goods, or an inheritance tax.

South Dakota has a sales tax, a use tax, a real property tax (also called a “real estate tax”), an unemployment insurance tax, a motor fuel tax, and a few other special taxes.

Recommendation: If you do your own taxes, you’re likely to mess them up, which can take a lot of time. Work with a South Dakota accountant if you want to make sure you’re meeting all of your LLC’s tax responsibilities. Read our guide on how to find an accountant and look for one on Thumbtack and Yelp.

J. Business Phone

Instead of using your home phone number or your cell phone, you can buy a cheap “virtual business number” for your South Dakota LLC You can set this virtual business phone to forward to your cell phone, go along with voice prompts, or be set up in any way you want.

Getting a different business phone number for your South Dakota LLC is also a good idea if you don’t want “public record” websites to be able to find out your personal number.