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, pay a $150 filing fee, and get an EIN from the IRS. The complete steps to forming a South Dakota LLC are as follows:
- File South Dakota LLC Articles of Organization
- Pay the South Dakota Secretary of State $150
- Wait to receive your Certificate of Organization
- Get a Federal EIN tax ID for the LLC
- Create a South Dakota LLC Operating Agreement
- Take these documents to the bank and get a South Dakota LLC bank account
- Register with the South Dakota Department of Revenue
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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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1 Day South Dakota LLC For $375 Total
How to File South Dakota LLC Articles of OrganizationTo form a South Dakota, you file the LLC Articles of Organization in the following steps:
What is the Cost of 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.
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.
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%.
Is a South Dakota LLC Registered Agent Required?
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.Get Started
South Dakota LLC Versus South Dakota Corporation:
Costs are pretty much dead even for both South Dakota LLCs and corporations. State fees to file Articles and Annual Reports are the same. And since South Dakota has no corporate income tax, even default tax obligations are similar.
While there aren’t significant cost differences, there are some differences in how LLCs and corporations operate. Unlike corporations, there are no requirements for LLCs to have multiple levels of management or annual meetings—but there’s also nothing stopping you from having these either. This simplicity and flexibility is pretty appealing to small businesses and new business owners. Corporations, on the other hand, are popular for businesses that hope to grow quickly (and maybe join the ranks of Wall Street). Considering a corporation in the Mount Rushmore State? Here’s information on South Dakota incorporation.
Do I Need a Tax ID Number (FEIN) for a South Dakota LLC?
Almost certainly. Your impulse may be to think that with so few tax requirements in South Dakota, a FEIN may be unnecessary, but there are plenty of reasons why you might need (or just want) a FEIN. On the federal level, you’re required to have a FEIN 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 FEIN. Just opening a bank account typically requires a FEIN as well. FEINs 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 FEIN for you when you sign up for Northwest services.
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.
What is an 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 Reports for you each year.
South Dakota LLC Articles of Organization Requirements:
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.
Initial Designated Office
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.
South Dakota LLC Organizer
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.