How to Start a South Dakota LLC
South Dakota LLC Formation – Basics & Helpful Information
This article is meant to be a general overview of the South Dakota LLC formation process; including information about how to start a South Dakota LLC and other basic issues related to South Dakota LLCs.
South Dakota LLC Filing Fees
The South Dakota filing fee for the Articles of Organization (to create an South Dakota LLC) is $150.00 plus and additional $50 to expedite the process.
South Dakota Filing Time
Regular processing time generally takes at least one business day. Expedited processing reduces the turn around time and costs $50.
South Dakota Annual Compliance Requirements
South Dakota LLCs are not required to file annual reports and the cost to file is $50. If the annual report is not filed within the time frame specified by the South Dakota Secretary of State, a charge of $50 is added.File Annual Report Online →
Form an LLC in South Dakota
You can use this checklist to help guide you through the process of forming a South Dakota LLC:
Step 1: Decide on a Business Name
The first step in creating an LLC in South Dakota is naming your business. You’ll need to check with the South Dakota Secretary of State to make sure the name you’ve chosen is available. You can do this online via the South Dakota Business Search.
It is also highly recommended that you check the US Patent and Trademark Office to see if someone has a federal trademark of the business name you want (the South Dakota Secretary of State will not check other state’s databases or the federal trademark database). You can click here to have a comprehensive name availability search performed for you.
Your LLC name must contain the words “limited liability company” or “limited company” or the abbreviations “L.L.C”, “L.C.”, “LLC”,“LC” or “Ltd. Co.”.
South Dakota Fictitious Names
A fictitious name is similar to a “doing business as” (DBA) name. Although a fictitious name is not legally required, it is a wise business practice. The filing fee is $10. South Dakota fictitious names are only applicable in South Dakota and are not substitutes for a national trademark filing.
Step 2: Register your LLC with the State
South Dakota Articles of Organization
Your South Dakota LLC is formed by signing and filing Articles of Organization with the South Dakota Secretary of State. The Secretary of State staff will examine the articles for statutory compliance and will either approve the articles for filing or reject the articles with instructions on how to resubmit the document.
The Articles of Organization must include at a minimum:
- Name of the South Dakota LLC
- Registered Agent’s Name and Address
- Physical or street address of the known place of business of the LLC in South Dakota
- Management Structure of the LLC
- Duration of LLC
- Organizer’s Name and Signature
South Dakota Registered Agent Information
South Dakota requires that the LLC have a Rgistered Agent (same as a Statutory Agent in other states), which is an individual or a business entity the LLC appoints for the purpose of accepting service of process (lawsuit papers or legal documents) for the LLC. An LLC cannot be its own registered agent, but the LLC can appoint one of its members as the registered agent. South Dakota law requires that the registered agent have a permanent, physical address on the records of the South Dakota Secretary of State at all times.Read more about Registered Agents →
Step 3: Create and Sign the LLC’s Governing Document
The governing document for an LLC is called the “company agreement” or sometimes the “operating agreement”. The company agreement is to an LLC like a partnership agreement is to a partnership (or bylaws to a corporation). The company agreement governs the internal operation of the LLC and is typically a private document that is kept in the company book and the principal place of business (it is NOT filed with the state). The company agreement can address many issues, some of the more common concepts found within a company agreement are:
- Limitations on the members liabilities
- The level of consent needed to take various actions (i.e. simple majority required to add new members)
- The percentage of the LLC that each member owns
- How profits and losses are allocated between the members (typically based on ownership percentages)
- Limitations on transferability
- What each member is contributing to the LLC and what happens is such contributions are not made.
- The authority of the members, officers, managers, committees, etc.
- How meetings are conducted
One of the reasons we recommend using an LLC formation company like IncFile is that they can provide you with a company agreement in connection with their LLC formation services.
Step 4: Get an EIN
After you form an LLC in South Dakota, you can get the EIN. There are a few different ways to get an EIN:
- Apply Online Yourself: The IRS has an online EIN Application you can use to get an EIN. The turn around time on the EIN using this method is only a few minutes.
- Use Form SS-4: You can get an EIN the old fashion way by completing Form SS-4 and mailing or faxing into the IRS. How long does it take to get the EIN this way? According to the IRS: if you mail in Form SS-4, it will take 4-5 weeks to get your EIN. If you fax in Form SS-4 you should have the EIN back in a week if you provide a fax number or 2 weeks if you don’t have a fax number.
- Have a Third-Party Obtain: All of the LLC formation companies have the ability to get the EIN for you. The EIN obtainment charge varies by company, but it is generally between $50 and $100. If you get one of the higher priced packages, they will sometimes throw in the EIN for free.
Step 5: Get Licenses and Permits
After you create your new South Dakota LLC, you’ll need to determine if your business/profession requires any licenses or permits to conduct business.Read more about South Dakota Licensing and Permitting →
Registering a Foreign LLC in South Dakota
If you have a non-South Dakota LLC (aka Foreign LLC) and you are doing business in South Dakota, you may need to register the Foreign LLC in South Dakota. Each state has a different definition of “doing business”. In South Dakota, the kinds of activities that would not constitute “doing business” are outlined in the South Dakota Codified Laws, Section 47-34A-1003.
The filing fee for the Application for Certificate of Authority in South Dakota is $750.