How to Create an LLC in South Dakota

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How to Form an LLC in South Dakota:
5 Simple Steps to Get Started
According to the IRS, each state may use different regulations around forming an LLC, and you should check with your state if you’re interested in starting a Limited Liability Company. To simplify the process of forming an LLC in the state of South Dakota, we’ve put together a step-by-step guide to detail each step of the process and answer any questions you may have.

Step 1
Name Your South Dakota LLC

Your first consideration when choosing a name for your LLC is that it be unique from any other business in the state of South Dakota. You can quickly and easily do a name check on the South Dakota Secretary of State website business name database to verify the business name you want is available. For a $25 fee, you can reserve a name for 120 days by filing an Application for Reservation of Name by mail.

In order to comply with South Dakota state law, your company’s name must end with the term “Limited Liability Company” or one of the following abbreviated forms: “Limited Company,” “LLC,” “L.L.C.,” “LC,” or “L.C.”; you can also abbreviate “Limited” as “Ltd.” and “Company” as “Co.”

Step 2
Appoint a Registered Agent in South Dakota

The state of South Dakota requires all LLCs to have a registered agent for service of process. This means your LLC must have an entity that agrees to physically accept any legal papers on the company’s behalf should it be sued. This entity does not have to be an individual person. The registered agent can be any resident of the state of South Dakota or a business entity authorized to do business in South Dakota so long as the agent has a physical street address within the state.

Step 3
File South Dakota Articles of Organization
To officially create your LLC in the state of South Dakota, you’ll need to complete the Articles of Organization paperwork and file it with the South Dakota Secretary of State. For a $150 fee, this can be done online or by mail, though there’s an additional $15 paper filing fee if done by mail. To complete this form you will need to know the following:
  1. The final name and address of your LLC
  2. The name and address of the company’s registered agent
  3. Whether the LLC will be member-managed or manager-managed
  4. The name(s) and address(es) of any managers associated with your LLC
  5. The name(s) and address(es) of each organizer
  6. Whether one or more of the members of the company are to be liable for its debts and obligations as set forth under SDCL 47-34A-303(c)
  7. The duration of the LLC

Step 4
Create an Operating Agreement

You may want to consider preparing an operating agreement to outline the ownership and operating procedures for your LLC.

Though not required by the state, an operating agreement will set the guidelines for running your company. This does not need to be filed with the state, but it can go a long way toward ensuring your company’s success.

Step 5
Apply for an EIN and Review Tax Requirements

An IRS Employer Identification Number (EIN) is required of your LLC unless it is a single-member LLC with no employees. Obtaining an EIN is as easy as completing the application on the IRS website.

It’s possible your company will need to register with the South Dakota Department of Revenue (DOR). Whether or not your company needs to follow this step will depend on the exact types of taxes it will be collecting and/or has been collecting from the state. Start by registering online with the DOR. Most businesses will also need a tax license issued by the South Dakota Department of Revenue and Regulations.

If your LLC will be selling a physical product, you’ll need to register for a sellers permit through the South Dakota Department of Revenue website. This will allow you to collect sales tax on taxable sales. Additionally, if you have employees, you’ll need to register for Reemployment Assistance Tax (formerly known as Unemployment Insurance Tax) on the South Dakota Department of Labor and Regulation website.

Other Considerations
Foreign LLCs and Business Licenses
Foreign LLCs

If your company is a foreign LLC, also referred to as an out-of-state LLC, wanting to do business in the state of South Dakota, you’ll need to follow all the steps outlined above with a few minor differences.

You will need to file an Application for a Certificate of Authority online or by mail with the South Dakota Secretary of State as well as a Certificate of Existence (known in some states as a Certificate of Good Standing) from your LLC’s domestic or home state.The filing fee is $750 or $765 if done by mail.

Business Licenses

Some industries will require you to secure federal, state, and/or local licenses to legally operate in the state of South Dakota.

Although there isn’t one central location where you can check to see if your business has everything it needs to be compliant, this document from the Governor’s Office of Economic Development will help you find the state-level licensing you need while this page from the U.S. Small Business Administration can aid your search on the federal level. Some cities and counties have their own licensing requirements, as well.

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