Start a South Dakota LLC

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Whether selling goods at Sturgis or hosting tourists on the Missouri River, South Dakota is a place of opportunity. Forming a South Dakota LLC provides liability protection and a separate legal identity for your business. If you’re wondering how to set up an LLC in South Dakota, we’re here to help. Our team will walk you through the steps to complete the South Dakota LLC formation process on this page.

How to Start an LLC in South Dakota

A note before you get started — This page only covers the steps to form a domestic, for-profit LLC in South Dakota. If you’ve already registered your LLC in another state, you’ll register as a foreign LLC, which is a different process. Further, South Dakota registers professional LLCs for licensed professionals, such as healthcare or attorneys, and series LLCs (often used in real estate). Forming a PLLC or series LLC in South Dakota has additional requirements that aren’t covered in this article. 

Read on to discover how to start an LLC in South Dakota.

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Step 1: Name your South Dakota LLC

The first step to forming an LLC in South Dakota is choosing a unique name. This is the perfect time to get creative, as your name reflects your brand, culture, and ideal customers. However, the name you choose must meet the state’s legal requirements for naming an LLC. If it doesn’t meet the requirements, the Secretary of State may reject your registration, and you’ll have to file again.

Official Naming Requirements for an LLC in South Dakota

South Dakota requires LLC names to:

  • Be distinguishable from other business names on the record in South Dakota
  • Contain an identifying suffix, like “limited liability company,” “limited company,” “L.L.C.,” “LLC,” “L.C.,” or “LC.” You may abbreviate limited as Ltd. or company as Co.

Once you have some ideas, perform a business name search to see if your name is available in the state. We have detailed instructions to guide you through this search on our South Dakota business name search page. If your name is unique and available, you can reserve the name immediately.

Reserve your business name  

When you find your chosen name is available, you can reserve it for 120 days. A reservation gives you time to prepare your formation documents without worrying about another business using your name. To reserve your name, submit an Application For Reservation of Name with the Secretary of State’s office. You’ll pay a small filing fee when you file this application.

Our business experts can file this form for you when you use our Business Name Reservation Service. The service includes a name check, where we make sure your intended name is available based on the state’s standards.

Find a domain name

Having a website is an important tool for reaching potential and current customers. Whether a domain name is available might influence your name choice. The URL you choose will represent your business on your website, email address, and web hosting as you grow your online presence. When you find a domain name you want, use our Domain Name Registration Service to secure and reserve the URL.

Is your South Dakota LLC name available as a web domain?

When choosing a name for your LLC, consider how you want to represent your business online. If your business name and URL match, it’s easier for customers to remember and find your online presence. Thus, web domain availability might influence your name choice.

Use our domain name search tool to check if your intended company name is already in use as a URL. You might want to reserve the domain name right away if you come across it before someone else does. 

Additionally, you may determine if the social media handles you want are available. Getting the right social network handles can be crucial for successful online marketing because many firms market on sites like Facebook, Instagram, and TikTok.

Register a DBA

If you plan to do business under a name other than the LLC’s legal, registered name, you’ll register a DBA (“doing business as”) name. DBAs can be helpful if you want to abbreviate your name or differentiate a new product line or service. The South Dakota Secretary of State registers DBA names for a small filing fee and requires renewal every 5 years. We can complete this filing for you with our DBA Service.

Register for trademark protection

When you come up with a creative name, logo, or slogan, you can register your trademark for protection. The South Dakota Secretary of State manages trademark registration at the state level. Trademark registration requires a filing fee and a sample showing the use of the mark in commerce. Examples of trademarks include tabs or labels, invoices, brochures, catalogs, letterhead, or business cards. 

Remember that trademarks are also registered on the federal level. Before committing to a name, complete a search with the U.S. Patent and Trademark Office website. A search will let you see if another business has already trademarked the name.

Step 2: Appoint a registered agent in South Dakota

Appoint a registered agent for your LLC. When you appoint a registered agent, that person acts as a contact person for the LLC. They receive legal notices, including service of process, subpoenas, and other information from the Secretary of State. The registered agent then delivers the notice to the appropriate person at the LLC, usually an owner. 

The agent must be available at a physical address (called a “registered office”) within South Dakota during business hours to receive notices in person. The registered office doesn’t have to be the same as the business’s principal address. 

Who can be a registered agent in South Dakota?

You may appoint any person with a physical address in South Dakota as the registered agent for your LLC. South Dakota maintains a list of Commercial Registered Agents in the state. If you use a commercial registered agent, you only need to list the agent’s name and their CRA# on your formation documents. To appoint another person who isn’t registered as a commercial agent, you need to include their name and address. You may also designate an agent by position or office (such as CEO or Secretary) if you include the business office address.

When you choose a registered agent, talk to them and obtain their consent. The consent doesn’t need to be in writing. However, by appointing a registered agent, you legally affirm that you’ve received their consent to serve as your agent.

What if the state can’t find my South Dakota registered agent?

You face legal consequences if the state can’t find your registered agent. 

If you name yourself or a friend as your registered agent, the agent may not be at the office when the notice is delivered. 

In that case, the server will attempt to serve the LLC by mail at the principal office listed in the most recent annual report. By law, service of process may be made by handing a copy to the manager, clerk, or another person in charge of any regular place of business or activity of the entity. 

If served by these alternate methods, you might miss an important notice. In the worst-case scenario, you might find a lawsuit involving your business proceeding without you.

Can I be my own registered agent?

Yes, you can serve as the registered agent for your LLC. However, this isn’t always the best idea. The registered agent must be available at the listed address during all business hours to receive notices. If you’re the registered agent, you risk being served notice of a lawsuit in front of customers or business partners. And worse, you might miss notices if you call out sick or take a vacation, and legal proceedings could move forward without you.

Use a registered agent service

Using a registered agent keeps you in legal compliance and lets you receive notices no matter where you are. You won’t need to worry about keeping your address updated if you move, and you can rest easy knowing you’ll always be informed. To help, we provide a Registered Agent Service that connects you with a commercial registered agent in South Dakota. In addition to forwarding your notices, we also save a copy in your business dashboard to help you stay organized.

ZenBusiness can be your registered agent

Our Registered Agent Service is one of the many services we provide to make running your business easier. We’ll connect you with a registered agent in South Dakota when you use our service. That way, you’ll know that someone is always accessible to receive crucial legal, tax, and other notices.

Not only will this keep your business compliant, but it also prevents situations where you might have to suffer the embarrassment of being served legal documents in front of clients.

Additionally, our service keeps you organized. First, we’ll deliver the documents directly to you. Then, we’ll keep them all on your online dashboard so you can access, download, or print them whenever you need them.

Step 3: File South Dakota Articles of Organization

File your Articles of Organization with the South Dakota Secretary of State. When the Secretary of State accepts your Articles of Organization, they will issue a Certificate of Organization. The Certificate of Organization serves as proof that your LLC is properly formed under the laws of South Dakota. You’ll keep the Certificate and Articles of Organization at the business’s principal office.

What is required in the LLC Articles of Organization?

Filing is one of the most important steps in how to set up an LLC in South Dakota. It informs the Secretary of State and the public of the company’s name and its owners. When filing your Articles of Organization for an LLC, South Dakota requires that you include:

  • The company name
  • The initial business office address
  • Information appointing your registered agent
  • Each organizer’s name and address
  • The duration of the company (if other than perpetual)
  • The initial manager’s name and address if the LLC is manager-managed.

If you plan to form a series LLC, you’ll include authorization to form a series in your Articles of Organization.

Member-Managed or Manager-Managed?

When forming your South Dakota LLC, you can choose how you want to manage the business’s day-to-day operation. If the LLC has only a few members who all want to be involved in business decisions, you might want a member-managed LLC. That way, all owners can share equally in the decision-making process. 

On the other hand, if one owner wants to remain a passive investor or the owners want to appoint a manager, the manager-managed LLC might be for you. The manager-managed LLC allows for a separation between ownership and management. Using the operating agreement, members can limit their ability to make decisions. Instead, the elected manager has the power to make binding decisions.

How to file your Articles of Organization

To help you through the process, we offer Business Formation Services that will have your LLC up and running quickly. In addition to filing your Articles of Organization, our services include expert support and a name search to check that your name is available. You’ll get access to our experts online or by phone, where we provide answers to all your filing questions. 

While our Formation Services help guide you through the process, we’ll explain the steps if you choose to file with the Secretary of State on your own.

File your Articles of Organization with South Dakota’s business online services

When you’re ready to file your Articles of Organization, the Secretary of State provides an online form to register your business. As a business owner, you can complete the registration yourself or have an organizer complete the form on your behalf. There is a $150 filing fee for online filing. On our South Dakota filing fees page, you can find the total cost to start an LLC in South Dakota.

Expedited Services

The good news is that the Secretary of State immediately processes South Dakota LLC formation documents that are submitted online. If you’ve signed up for our Business Formation Services, we offer a faster filing speeds service to skip the line.

Why would I delay my South Dakota LLC filing date?

Some entrepreneurs, particularly those nearing the end of the fiscal year, will postpone their LLC filing date to January 1. They can avoid paying taxes on an LLC in the current year this way. This is especially true if the future LLC owners don’t require the company to be established immediately.

If the South Dakota Secretary of State approves your Articles of Organization, the effective date will be the date of submission. While most online filings are immediately effective, the submission date remains effective even if it takes the state longer to review it and mark it as filed. In other words, if you file on July 1 but the state doesn’t approve it until July 30, your LLC’s effective date will remain July 1.

However, you have the option of telling the state that you want your effective date to be later. You can choose to delay your LLC’s effective date up to 90 days after you file the paperwork.

What if I need to make changes?

Once you file your Articles of Organization and receive your Certificate of Organization, your LLC is officially formed. However, if you change the information in your Articles of Organization, you’ll file the South Dakota Articles of Amendment. Typical changes include appointing a new registered agent or changing to a manager-managed LLC. 

If you do need to file an amendment, we have an Amendment Filing Service that can handle it for you. Plus, our Worry-Free Compliance Service includes two amendment filings every year, compliance reminders, and a professional, organized document dashboard.

Step 4: Create an operating agreement

Draft an operating agreement that sets rules for how the business will be organized and operated. The operating agreement (OA) is an internal document and isn’t filed with the Secretary of State. The OA defines terms for the LLC’s ownership and management, like:

  • Ownership percentages
  • How profits are distributed among members
  • What happens when a member leaves or wants to sell their stake in the company 

Without an OA, you’ll have to follow South Dakota’s default LLC rules to resolve disputes. But the default rules may not reflect your wishes for your LLC. Having an OA lets you customize your experience.

Do I need an operating agreement even if I’m the only owner?

While the OA usually governs ownership disputes, it also can benefit a single-member LLC. The OA sets procedures for transferring ownership in the event of an owner’s death or incapacitation. Potential investors or business partners might want to see an OA, and banks often require them.

Further, if your company is sued, the OA can serve as proof that the LLC has a separate legal identity from its owner. When owners co-mingle their personal assets with the business, they become vulnerable to personal liability. Having an OA can help prove that you deserve liability protection.

If you’re not sure what to include in your operating agreement, we can help. With our LLC Operating Agreement Template, you can choose the provisions you want without missing any details.

Step 5: Apply for an EIN

Register for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). Sometimes called a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number, the EIN identifies your LLC when paying federal taxes, remitting employee wage withholdings, and applying for a business bank account. You can apply for your EIN online with the IRS, or you can let us handle your application with our EIN service.

Register for South Dakota business taxes

If your business engages in a taxable activity, you must register with the South Dakota Department of Revenue (SD DOR). Any business with a physical presence in South Dakota must obtain a sales tax collection license. There is no threshold sales requirement before you must obtain a license. You can register for most tax licenses on SD DOR’s Filing and Tax Payment portal. Finally, South Dakota doesn’t have a corporate income or general privilege tax.

Additionally, all South Dakota businesses must register with the Reemployment Assistance Tax Unit of the State Department of Labor. Your business will pay reemployment assistance (RA) tax if you meet certain employment criteria. The RA tax rate depends on the years you’ve been in business and the current usage of RA funds.

Can filing as an S Corp lower my taxes?

The S Corp isn’t a separate business structure — it is an elective tax treatment. To make the S Corp election, you’ll file for corporate taxation with the IRS and submit the S Corp election form.

Filing as an S Corporation is an option for LLC owners to potentially lower their taxes. By default, the LLC is taxed as a sole proprietorship or partnership. The owners pay self-employment taxes on their share of company profits. 

An S Corp also uses pass-through taxation but allows for a bifurcated income tax rate. In an S Corp, the business owners are “employee-owners.” As such, they pay income tax on their salary from the business and a potentially lower tax rate on distributions or profit.

For Employers

South Dakota doesn’t require employers to have workers’ compensation insurance coverage. However, it’s strongly recommended. An injured employee can file a civil suit against an employer who doesn’t have this insurance. A business owner may choose to enroll in the South Dakota Workers’ Compensation program to receive coverage for work-related injuries and illnesses.

We can help

We offer fast, comprehensive South Dakota LLC formation services online. Our team can help you launch, manage, and grow your company.

Whether you want to offer services to tourists visiting Mount Rushmore and the Crazy Horse Memorial or start a vineyard in Sioux Falls, we can help. Our specially-tailored products and services can help you meet your business goals. Rest easy knowing that our team of business experts will guide you on how to set up an LLC in South Dakota and beyond.

Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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