How To Start An LLC In South Dakota
To start an LLC in South Dakota, you must file Articles of Organization with the South Dakota Secretary of State. You can file the document online or by mail. The Articles of Organization cost $150 to file. Once filed with the state, this document formally creates your South Dakota LLC. However, to actually ready the LLC to do business, you must complete several additional steps.
Starting a South Dakota LLC Guide:
South Dakota LLC Filing Options
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South Dakota LLC Articles of Organization free download. When you're done filling out the form, submit it to your state.
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South Dakota Articles of Organization Requirements
To form a South Dakota LLC, you must complete and file the Articles of Organization with the South Dakota Secretary of State. See the document below and click on any number to see what information is required in the corresponding section.
Your name must include “Limited Liability Company,” “Limited Company,” or an abbreviation. Most businesses keep it simple with “LLC.”
This section is optional (and only on the paper form). It’s not as existential of a question as it sounds—your business purpose is what activities your business was formed to do. A general business purpose stating that your LLC was organized for any lawful purpose in the State of South Dakota is sufficient. Tip: Most LLCs skip this section.
This is your official address, which much be a street address (no PO Boxes). Hire Northwest and you can list our South Dakota address throughout your Articles. Email addresses and phone numbers are optional (and will be part of the public record if you include them). Tip: Many LLCs prefer to avoid landing on loads of email and telemarketing lists and just put the street address.
You can either list a noncommercial agent (such as yourself) or a commercial registered agent (like us). If you list a noncommercial agent, the South Dakota street address where the agent will be available will become part of the permanent public record of your South Dakota LLC. Prefer a commercial agent? We’re big fans of Northwest Registered Agent.
It’s less fancy than it sounds—your organizer is just the person who signs and submits your Articles of Organization. It doesn’t have to be anyone in the LLC, but your organizer does have to include their name and address. Hire Northwest, and we’ll be your organizer.
Skip this section if you want your South Dakota LLC to continue indefinitely. Prefer a self-destruct timer? Enter an end date here.
Your South Dakota LLC can be managed either by members or managers. Most LLCs are member-managed. If you’d like to pass off the day-to-day decision-making to someone else though, you can appoint or hire one or more managers. If you have managers, you’ll need to include their names and addresses in this section as well.
While one of the perks of an LLC is limited liability (it’s even in the name!), if you want one or more members to be liable for specific debts or obligations, you can list their names and liabilities in this section. Tip: Most LLCs skip this section.
How much does it cost to start a South Dakota LLC?
The state filing fee for your South Dakota LLC Articles of Organization is $150. The state also has a “paper processing” fee of $15 if you file by mail.
Hire Northwest, and your total, out-the-door cost is $375, including state fees, registered agent service, and loads of useful forms and resources to help get your South Dakota LLC up and running.
How long does it take to start a South Dakota LLC?
Your filing is processed right away if you file online. If you mail your filing, it’ll not only take longer (3-5 days), it’ll cost you $15 more. It’s a lot more work for the Secretary of State Office to decipher and enter all your data by hand, so they discourage paper filings with extra fees. Unless you have to pay by check, there’s really no reason to file by mail.
If you hire Northwest to start your LLC, we file online and typically have your South Dakota LLC formed within 24 hours.
Does a South Dakota LLC need a registered agent?
Yes, your LLC is required to have a South Dakota registered agent. South Dakota categorizes registered agents as “noncommercial” or “commercial.” A noncommercial agent can be pretty much any South Dakota resident or business. You can even be your own agent. The downside? There’s a few.
Noncommercial agents have to list the address where they’ll be available. That address becomes part of the permanent public record of your South Dakota LLC—and a prime target for data sellers. And each time your agent moves (or flakes out), you’ll have to pay a fee and file a form to update your information. Also, you’ll have to trust this agent to actually be available during business hours. Are they really going to be tied to a desk 9-5? And are you really going to be their top priority?
Commercial registered agents, like Northwest, specialize in agent service—they have to be registered with the South Dakota Secretary of State as commercial agents. At Northwest, our address goes on your public formation documents. (We don’t mind sorting through the spam and waving off solicitors.) And that address stays consistent, so you don’t have to update as your business grows and changes. Our clients are our top priority—we’re ready and waiting to accept your legal documents. We even scan and send them the same day.
Create the South Dakota LLC Operating Agreement
Do I need an Operating Agreement?
Your operating agreement doesn’t have to be submitted to any state agency, but that doesn’t mean you don’t need one—you absolutely need an operating agreement for your South Dakota LLC. Because it’s not a mandatory filing, it may be tempting to skip or put off writing your operating agreement. Don’t fall into that trap. Your operating agreement is one of your LLC’s most critical internal documents.
Why is an Operating Agreement important?
Why? Your Articles and other public filings are really just keeping track of your LLC—acknowledging you exist. Your operating agreement, on the other hand, sets the terms of your business. It says who actually owns the business. How much each member invested. How profits and losses will be allocated. What happens if there’s a member dispute. What happens if the whole business goes belly up. It may be a private, internal document, but the information you put in your operating agreement holds legal weight. You’ll find that a lot of people will want to see your operating agreement. You’ll likely need it just to open a bank account. Potential lenders, investors and partners will want to see it to before doing business with you. Your operating agreement is something you should spend time on—not hurriedly throwing together after someone requests it.
Do I have to write the Operating Agreement?
We can help you get started on the right foot. When you hire Northwest to form your South Dakota LLC, we give you a free operating agreement specific to your management style. We give you other free LLC forms too—resolutions, membership certificates and more. We take pride in our forms here at Northwest—so much so that we were the first website to hand out free LLC forms. Our free LLC forms have since been used by over a million LLCs to help form and maintain their businesses.
Get a South Dakota LLC EIN
Do I have to get a tax ID number (EIN)?
Almost certainly. Your impulse may be to think that with so few tax requirements in South Dakota, an EIN may be unnecessary, but there are plenty of reasons why you might need (or just want) an EIN. On the federal level, you’re required to have an EIN if you have employees or if you file certain federal excise returns. If you have to pay sales, use or other common state taxes, you’ll need to fill out a South Dakota Tax Application with the Department of Revenue. The application—you guessed it—requires your EIN. Just opening a bank account typically requires an EIN as well. EINs are free from the IRS, and you can fill out an application on their website. Want to skip this step? Hire us to get your EIN for you when you sign up for Northwest services.
Open a Bank Account for Your South Dakota LLC
To open a bank account for your South Dakota LLC, you will need to bring the following with you to the bank:
- A copy of the South Dakota LLC Articles of Organization
- The LLC operating agreement
- The South Dakota LLC’s EIN
If there are multiple members in the LLC, you may also want to bring an LLC resolution to open a bank account that states that the person going to the bank is authorized by the members to open the account in the name of the LLC.
We recommend calling your bank ahead of time before going in and asking what their requirements are. Most banks don’t open business accounts nearly as frequently as personal accounts, so some bankers may be unfamiliar with their own bank’s requirements. As frustrating as that may be for you, calling ahead will help save you from being super annoyed when you walk into the bank.
Obtain a Business License
Does a South Dakota LLC need a business license?
South Dakota doesn’t have a general statewide business license. Most businesses will need a South Dakota Tax License, however, which you can get from the Department of Revenue. Cities and counties often have licensing requirements for specific activities as well, from dealing secondhand goods to operating a movie theater.
File South Dakota LLC Reports
What is a South Dakota LLC Annual Report?
Your South Dakota LLC Annual Report is a form you submit each year to the Secretary of State to confirm your current contact and ownership information. It’s due at the end of your “anniversary month” (the month you first registered your business), which can make it hard to remember. And just like your wedding anniversary, there are penalties if you forget. In this case, you’ll see your fee double as the state tacks on an additional $50 late fee. These kinds of late fees are annoying and expensive—which is why Northwest sends you free reminder notifications for your reports when you sign up for our services. Or, free yourself from these filings entirely and hire Northwest to file your Annual Report for you.
How much does an LLC in South Dakota cost each year?
There is a $50 fee to file your South Dakota LLC Annual Report online. Paper filings are $65.
Pay the LLC Taxes
What are the South Dakota LLC taxes?
South Dakota is one of the few states that has no personal income tax. It gets even better—there’s also no corporate income tax, personal property tax or even franchise tax (with the exception of financial institutions).
The state sales tax rate is 4.5%. City sales taxes and specialty rates can increase the sales tax total, making the average total rate around 5%.