South Dakota LLC
A South Dakota limited liability company (LLC) is a business entity that—if properly formed and maintained—grants its owners significant personal liability protection. LLCs have a flexible business structure and are taxed as pass-through entities by default. To start a South Dakota LLC, you’ll need to file Articles of Organization with the South Dakota Secretary of State. But first, you’ll need to name your business and appoint a registered agent. It usually takes between 3-5 business days for the state to process your paperwork if you file by mail, while online filings are processed immediately. Once the state approves your paperwork, your LLC is official. But you’ll need to take several additional steps before your LLC will be ready to do business. Here, we’ll walk you through the entire process.
Ready to Start an LLC in South Dakota?Get Started
Name Your LLC
Designate a Registered Agent
Submit LLC Articles of Organization
Write an LLC Operating Agreement
Get an EIN
Open a Bank Account
Fund the LLC
File reports + taxes
1. Name Your LLC
- Include an LLC indicator like “Limited Liability Company,” “LLC,” or “Ltd. Co.”
- Be “distinguishable” (different from) any other business name registered in South Dakota.
Already have a business name? Check to see if it’s available.
Can I reserve a business name in South Dakota?
Yes. If you have your heart set on a business name but you’re not ready to pull the trigger on an LLC, you can reserve your business name for up to 120 days in South Dakota. To do so, you’ll need to file the Application for Reservation of a Name and pay $25 to the South Dakota Secretary of State.
What’s the difference between my LLC’s name and a DBA?
Your LLC’s legal name is the business name you list on your Articles of Organization.
A DBA (Doing Business As name) is any name other than your LLC’s legal name or your own first and last name (if you’re operating a sole proprietorship) under which you do business.
LLCs sometimes do business under a DBA to market a specialized product or target a certain audience. For example, a business named Blue Flax Farms, LLC might use a DBA like Pete’s Pumpkin Patch to sell pumpkins in the fall.
South Dakota requires anyone using a DBA to register with the Secretary of State online, via the state’s E-Filing System. Registering a DBA in South Dakota costs $10.
Find out more about How to get a DBA Name for Your Business.
2. Designate a Registered Agent
A South Dakota registered agent is someone you designate to accept legal mail on behalf of your LLC in person. Your registered agent could be you, another member, or someone outside of your LLC altogether—like a professional registered agent. Appointing one is a legal requirement in South Dakota, and you’ll need to have their name and physical address ready before you fill out your Articles of Organization (the paperwork you’ll fill out to officially form your LLC).
Learn why the pros use a registered agent service.
What does a registered agent do?
The legal responsibilities of a registered agent can be found in SD Codified Laws § 59-11-6. Here’s what you need to know. Your registered agent must:
- Have a physical address in South Dakota (a PO box won’t work!).
- Be available at that address during regular business hours.
- Agree to accept legal mail—called service of process—on behalf of your business in person.
- Forward any legal mail to you right away.
It’s important to note that your registered agent’s name and street address will be listed on the public record.
Can you be your own registered agent in South Dakota?
Definitely. If you meet the criteria listed above, and you’re not bothered by the idea of listing your personal information on the public record, you can act as your own registered agent.
The truth is that many business owners aren’t comfortable listing their information on a public website. Once your address is online, it usually ends up in the hands of marketers and re-posted on janky “public records” websites. Hiring a registered agent means you can list their information on this form instead of your own.
Hiring a registered agent can also help with peace of mind. If you’re on a vacation, at the job site or just out getting a coffee and you get served with a lawsuit, your registered agent will be there to handle it.
Can I change my registered agent after I start an LLC?
Yes. You can change your registered agent in South Dakota at any time. Just file a Statement of Change of Registered Agent form with the South Dakota Secretary of State for $10.
3. Submit LLC Articles of Organization
Once you have a name and registered agent, you can fill out your Articles of Organization. This is the paperwork required to officially form an LLC. Once you fill it out, you’ll submit to the South Dakota Secretary of State online, by mail, or in person. It costs $150 to file online and $165 to file a paper form (which takes longer to process).
Note: All of the information on this form will become part of the public record.
South Dakota’s Articles of Organization require the following information:
- Company name. Include the words “limited liability company” or an abbreviation thereof.
- Purpose (optional). The paper form gives you the option to include a business purpose.
- Initial designated office. This is your main business address and it must be a street address. You can also add a mailing address and an email address.
- Registered agent. Whoever will accept legal mail on behalf of your LLC. If you appoint yourself or another individual, you’ll need to list a physical address in South Dakota. If you list a commercial registered agent (like us!) you’ll only need to list a name and a CRA number. You can get the numbef from your registered agent.
- Organizer information. This is whoever signs and submits this form. Your organizer can be someone outside of the LLC, but they’ll need to list their name and address on the public record.
- Duration (optional). You can add a specific end date for your LLC or skip. Hint: Most LLCs skip.
- Management. Check the box to indicate whether your LLC will be managed my members or managers.
- Manager Information. Manager-managed LLCs must list the name and address of each manager.
- Extra provisions (optional). You can attach extra information or provisions to your articles if you’d like. Hint: Most LLCs skip.
- Organizer Signature. Each person completing and submitting this form must sign and date the form.
Ready to start your South Dakota LLC Articles of Organization? File for free with Northwest.
How can I keep my personal information off the public record?
If you want to keep your information off the public record (and save yourself a flood of junk mail), you have to keep it off this form altogether. And that’s a challenge, because you if leave any of the required address fields blank, the South Dakota Secretary of State will reject your filing.
The solution to this problem is to find a registered agent who will list their business address on this form in place of your own across this form. We are that registered agent.
What’s the difference between a member-managed and manager-managed LLC?
LLCs have two management structures: member-managed and manager-managed.
- In a member-managed LLC, members (owners) share the day-to-day responsibilities of running the business. Tasks like hiring and firing employees, opening and closing bank accounts, signing leases and ordering inventory are handled by members.
- In a manager-managed LLC, the members hire one or more managers to handle the LLC’s daily operations. A manager can be a member as long as they’re properly compensated.
For help with deciding which management structure will work for you, see our page on LLC Member Vs Manager.
How do I file the South Dakota Articles of Organization?
You can submit your Articles of Organization to the South Dakota Secretary of State online, by mail, or in person.
By mail or in person:
South Dakota Secretary of State
500 E Capitol Ave.
Pierre, SD 57501
4. Write an LLC Operating Agreement
Your South Dakota LLC needs an operating agreement. An operating agreement is a legally binding document—basically, a contract—that creates a framework for how your LLC is organized and how it will function. It covers important, big-picture stuff like how voting works, how profits are allocated, and how you’ll proceed if you need to dissolve the business. It’s an internal document that you’ll keep on file with your business records.
Check out our attorney-drafted South Dakota LLC Operating Agreement.
Does South Dakota require an LLC to have an operating agreement?
Legally speaking, no. South Dakota has statutes defining the powers and limitations of an operating agreement (see SDCL § 47-34A-103), but it does not have any statutes specifically requiring an LLC to adopt one.
That said, even a first-year law student would tell you that you need an operating agreement. Without one, you won’t be able to open a bank account, you’ll have trouble defending your limited liability status, and you’ll have no road map for fairly resolving disputes. So don’t skip this step!
What should be included in an operating agreement?
A solid operating agreement will plan for every major situation your LLC is likely (and unlikely) to face. Here’s a list of the topics most operating agreements address:
- initial investments
- profits, losses, and distributions
- voting rights, decision-making powers, and management
- transfer of membership interest
- dissolving the business
Does a single-member LLC need an operating agreement?
Yes. Without an operating agreement, a single-member LLC can appear perilously similar to a sole proprietorship (a business type without liability protection) in the eyes of the court, should you ever face a lawsuit. And although you won’t need to resolve a dispute with yourself, you will need an operating agreement to open a bank account for your business.
5. Get an EIN
An EIN (employer identification number) is a nine-digit number assigned to your LLC by the IRS for tax identification purposes. You can apply for an EIN from the IRS for free either online or by mail. Filing online is fastest, but you’ll need to file by mail if you don’t have a social security number.
Do I need an EIN for my South Dakota LLC?
Yes. Legally speaking, your LLC only needs to obtain an EIN if it has employees or elects to be taxed as a corporation. However, you’ll need an EIN to open a business bank account. And your EIN spares you from the need to give out your social security number out to vendors and other business associates.
Drowning in paperwork? We can take it from here.
What To Do After Forming Your South Dakota LLC
6. Open a Bank Account
Every LLC in South Dakota needs to open a business bank account. The reason? To keep your business money separate from your personal money. Letting the two mix endangers your limited liability status and puts your personal assets at risk.
When you open a bank account for your South Dakota LLC, be sure to bring the following:
- South Dakota LLC Articles of Organization (a copy is fine)
- the LLC’s operating agreement
- the LLC’s EIN
- an LLC Resolution to Open a Bank Account (if your LLC has more than one member).
If your LLC has more than one member, use our free LLC Resolution to Open a Bank Account.
7. Fund the LLC
Time to pony up. Each member should make an initial contribution to the LLC’s bank account to pay for their slice of the pie (called membership interest). Typically, members write a check to the LLC’s bank account to make their initial investment, but some LLCs arrange for members to contribute property or services instead. It’s important to note that this form of contribution can trigger tax events.
What is LLC membership interest?
Membership interest is the percentage of the LLC that a member owns. Usually, it is determined by how much a member invests. So if you put $1,000 into your LLC but the other member puts in $3,000, you’ll hold 25% membership interest while they’ll hold 75%.
Membership interest typically determines voting power, although another arrangement may be spelled out in the operating agreement. In the above example, your other member would hold decision-making power in the LLC.
8. File State Reports & Taxes
South Dakota requires LLCs to file a report with the state each year. The purpose of the report is basically to keep the state up-to-date on who owns your LLC and how to get in touch with your business. The report costs $50 to file online or $65 to file by mail or in person.
When is the South Dakota annual report due?
Your South Dakota annual report is due at the end of your anniversary month (the month you first started your LLC) every year. So if you formed an LLC in January 2022, your annual report will be due January 31st of 2023 and every January 31st ever after.
If you forget birthdays and wedding anniversaries, this is not great news for you. But if you have a solid registered agent, they can remind you or even file it for you.
Worried you’ll forget? Let us file your annual report for you.
How are South Dakota LLCs taxed?
By default, South Dakota LLCs are taxed as pass-through entities. This means that the revenue from the LLC “passes through” the business and is distributed among the owners, who report the revenue as income on their personal tax returns. The revenue generated by South Dakota LLCs is subject to the federal self-employment tax (15.3%). LLCs can also file with the IRS to be taxed as an S-Corp or a C-Corp.
Learn more about S-Corp Vs LLC tax designation.