Sioux Falls. Mount Rushmore and the Badlands. The Crazy Horse Memorial. South Dakota is known for many things and has a strong tourism and agricultural economy.
Many ambitious company owners choose South Dakota as the location to incorporate their LLC and access the state’s resources. Read our advice below to learn what you must do to get your South Dakota LLC firing on all cylinders.
A limited liability corporation, sometimes known as an LLC, provides small companies with a number of benefits, including protection from personal responsibility and tax breaks. If an LLC is the perfect company structure for you, take these steps to form one in South Dakota.
You have the option of forming the LLC yourself or hiring a professional company formation agency to handle the legwork.
1. Name Your South Dakota Limited Liability Company
Names ought to be in accordance with the state’s name standards. The below are the most essential factors that must be taken into consideration:
- It is required that the terms “Limited Liability Company,” “LLC,” or “L.L.C.” be included in the name of your company.
- It is required that your company’s name not be identical to one already in use inside the state.
- On the website of the Secretary of State, you may do a search to learn whether or not a certain company name is in use. See this page for information on the availability of names in South Dakota.
- It is not permissible for the name of the company to incorporate any components of the name of a public institution (such as the State Department, Federal Bureau of Investigation, Treasury, CIA.)
- It is possible that some prohibited terms, such as “bank,” “lawyer,” “attorney,” “credit union,” and so on, may call for further verification and license papers.
2. Set up a South Dakota Registered Agent
A registered agent in South Dakota is required of every limited liability company operating in the state. If the limited liability company (LLC) is taken to court, this refers to a person or company that has agreed to accept service of process on its behalf.
It is possible for the Registered Agent to be either a resident of South Dakota or a business entity that is permitted to conduct operations in the state. The Registered Agent is required to provide a South Dakota street address where they may be reached.
What exactly is the role of a Registered Agent?
A company’s Registered Agent is the individual or company that will receive official government mail on the company’s behalf, including tax forms, legal paperwork, notification of litigation, and other such items. Consider the role of the agent as that of the point of contact for your company with the state.
Who can serve as a South Dakota Registered Agent?
A Registered Agent in South Dakota must either be a person who lives in the state on a permanent basis or a company that is permitted to carry out business in the state. A Registered Agent business is an example of a corporation that meets these requirements. You have the option of selecting anybody who works for the organization, including yourself.
3. South Dakota Articles of Organization
Send the South Dakota State Secretary a copy of the Articles of Organization for your company. After the Articles of Organization have been reviewed and approved by the Secretary of State, you will be given a Certificate of Organization.
Proof that your limited liability company (LLC) was founded in accordance with the laws of South Dakota is included inside its Certificate of Organization. You should store the Certificate of Organization and the Articles of Organization in the primary office of the company.
What should be included in a company’s Articles of Organization?
When learning how to establish a limited liability company in South Dakota, the filing process is among the most crucial phases. It gives the Secretary of State and the general public information about who owns the firm and what its name is.
South Dakota mandates the following be included in the Articles of Organization for a limited liability company (LLC) when they are filed:
- The name of the firm
- The first location of your company’s office Information on naming a registered agent for your business
- The names and addresses of every organizer
- The length of time that the firm has existed (if other than perpetual)
- The name and address of the first manager, if the limited liability company is controlled by managers.
Online filing of your organization’s articles of incorporation
The Secretary of State offers an online form for you to fill out in order to register your company when it is time for you to submit your Articles of Organization.
You, as the owner of a company, have the option of filling out the registration form on your own or having one of the organizers do it on your behalf. Online filing comes with a filing cost of one hundred fifty dollars.
4. Obtain a Certificate From the State
After the formation paperwork of the limited liability company has been submitted with the state and been given its approval, the state will offer you a certificate that verifies the LLC’s official existence.
You will get a receipt from the Secretary of State of South Dakota, as well as a Letter of Acknowledgement and a copy of your Articles of Organization that has been postmarked.
It is probable that these papers will be sent to the postal address that is recorded for the registered agent by the Secretary of State.
5. Draft an LLC Operating Agreement
Even while establishing a detailed LLC operating agreement is not a legally required step for founding a limited liability company in South Dakota, it is highly suggested for all new limited liability firms to do so.
The following items should be included in the operating agreement:
- Describe the business structure of the limited liability company.
- Determine the specific duties and commitments that each member of the limited liability company (LLC) has
- Operational structure of the LLC.
If a limited liability company (LLC) doesn’t have an operating agreement that spells out the exact responsibilities of its members, it could face major legal and organizational problems.
6. Obtain a number that identifies you as an employer (EIN)
A number of limited liability companies (LLCs) will be required to get a Federal Employer’s Identification Number (EIN), often known as a tax ID number.
An Employer Identification Number (EIN) is a nine-digit number that identifies your company to the Internal Revenue Service. You need an EIN in order to pay government employment taxes, open a bank account or recruit staff.
On the website of the IRS, which is accessible without charge, you may check to see whether you need an EIN and submit an application for one online.
The vast majority of companies are required to obtain an EIN, although a significant exception is provided for single-member limited liability companies, which are permitted to use the owner’s Social Security number instead.
If a company is going to engage in taxable activities in South Dakota, such as making sales, the company is required to register with the Department of Revenue.
In addition, new companies are required to register with the Reemployment Assistance Tax Unit of the South Dakota Department of Labor regardless of whether or not they anticipate having to pay RA taxes in the future.
You may also need to apply for licenses at the local or federal level, in addition to the licenses required by your state. The Business License Report that we provide may assist you in locating all of the necessary licenses to do lawful business.
7. Filing of Annual Company Renewals
In order for your firm to continue to operate within the parameters of the applicable state laws, the annual report for the limited liability company (LLC) must be submitted each year prior to the beginning of the month that marks the anniversary of the LLC’s establishment.
You may access the form using the company’s business site, which is located online. Sign in to get access to it, and then file it away annually.
To submit the yearly report, you will need to pay a charge of $50. You also have the option of filing a printed annual report, which will cost you $65.
By submitting an Application for Amended Articles of Organization, you will be able to rectify any errors that may have been made on the Articles of Organization. This form must be submitted to the Secretary of State, and there is a fee of $60 associated with its processing.
The form is a straightforward one-page document that collects the distinguishing information about the firm and then gives a box in which you may specify the modifications to the LLC that you need to make.
What are the costs and next steps?
In the state of South Dakota, filing the Articles of Org. with the Secretary of State will cost you $150. If you submit your application over the mail, a processing charge of $15 will be applied to the filing cost.
To maintain compliance with applicable regulations, your business will need to pay additional fees, such as the Secretary of State’s Annual Report Fee of $50 and the Registered Agent Fee.
What Comes Next?
When you register a limited liability company (LLC), you establish a legal basis upon which to operate your firm. Companies should make it a priority to maintain their limited liability company in compliance with state regulations and in an active position on the state’s website.
In addition, having a registered limited liability company enables you to perform the following:
- Obtain any relevant permits or licenses, such as those from the health department, zoning department, department of home occupations, dept of professional licensing, etc. In some states, a seller must have permission to sell.
- Register your company with the department of revenue in your state.
- Create a bank account for your company (Bluevine or Kabbage)
- Create a credit card account for your company.
- Invest in insurance coverage for your company.
- Create a trademark to protect both your company’s name and its logo.
DIY LLC setup or hire an incorporation service?
To establish a limited liability company (LLC), you are not required by law to consult a lawyer. The majority of states enable the establishment of LLCs via the process of registering the business entity on the website of the secretary of state and with the Internal Revenue Service. (IRS).
If you are not acquainted with the process of forming an LLC, your best bet may be to secure an incorporation services provider so that you can be certain that the creation will go smoothly and quickly.
When entrepreneurs start a new firm, they may save startup costs and save valuable time by using a professional agency that specializes in company forms. They can take care of the details you probably won’t think about for a fee ranging from $50 to $500, including:
- Developing an operating agreement for an LLC that details your company’s details and putting it into writing (required in some states).
- Putting together articles of incorporation that identify the management of the LLC, the registration agent, and the date the company was formed.
- Taking up the role of registered agent for your firm.
- Keeping careful records in the event that there are investigations or litigation.
- Payment of filing fees and registration with the appropriate parties.
- Registering the name of your company and ensuring that the name you choose for your limited liability company is accessible.
- Finishing up and turning in all of the necessary legal and formation documentation.
How exactly does one go about creating an LLC in South Dakota?
To start an LLC in South Dakota, you need a registration fee, name, Registered Agent, Articles of Organization, Operating Agreement, and IRS EIN number.
How much does it cost to establish an LLC in South Dakota?
South Dakota’s Articles of Organization cost $165, plus $15 if mailed. In addition to this, you will be required to pay $25 to the South Dakota Secretary of State in order to reserve the name of your limited liability company.
How much time does it take to form an LLC in South Dakota?
Mail-filed LLC applications in South Dakota take 3 weeks to approve. This accounts for the processing period, which may take between three and five working days, as well as the time your papers spend in the mail.
Tom is the founder of Gottagrow.io. He reads the offers, deciphers the details including features, pricing, included services and more to find you the best products and services.