How to Form an LLC in South Dakota
Knowing how to form an LLC in South Dakota means you should understand the definition first.3 min read
2. What Are the Requirements for a Registered Agent?
3. South Dakota Articles of Organization
4. Federal Tax ID Number (EIN) for an LLC
Knowing how to form an LLC in South Dakota means you should understand the definition first. A South Dakota LLC is defined as a hybrid entity that has specific characteristics of a corporation and a sole partnership or proprietorship. Similar to a corporation, an LLC can conduct business and hold its assets as an individual can.
Advantages of an LLC
Managers, officers, and members can take advantage of personal liability protection. Similar to a sole partnership or proprietorship, an LLC is simple to run and manage. There isn't any double taxation either, as all profits and losses of the LLC pass through to the members' individual income tax. If the LLC gets sued, just the business assets and not the personal assets are used to repay any judgments or debts.
Other advantages include being easy to operate and offering personal liability protection. Due to this, an LLC is popular among many people who run a business or those who simply want to keep their assets protected. You can establish an LLC in South Dakota to run a business. You can also purchase and hold assets with an LLC, including the following:
- Real estate
What Are the Requirements for a Registered Agent?
The registered agent for the LLC in South Dakota needs to have an actual address in the state where legal documents will be delivered. P.O. boxes aren't permitted. The registered agent must be available for contact during regular business hours, which are considered 9 a.m. to 5 p.m. from Monday to Friday.
The registered agent for the LLC can be the business owner, a family member or friend, or a commercial registered agent. If you, a family member, or friend will be the registered agent, they must be a South Dakota resident and at least 18 years old.
South Dakota Articles of Organization
Filing the Articles of Organization online costs $150. When you file the form through the mail, it costs $165. If you file online, you'll get immediately approved. If the LLC is filed by mail, it will take about three to five business days to get approved. If you pay through the mail, you should send a money order or check that's made out to the secretary of state. The finished Articles of Organization and appropriate fee can be sent to Secretary of State, 500 E. Capitol Ave., Suite 204, Pierre, SD 57501-5070.
If you want to deliver it in person, you can also do this. While the filing fee is pricier at $210, you will get approved that day. This is a great option if you're in a rush to get approved.
Federal Tax ID Number (EIN) for an LLC
An EIN, or federal tax ID number, is similar to a Social Security number for an LLC. The IRS uses this to identify an LLC for tax-related purposes. The EIN is used when applying for credit cards, opening up a bank account, applying for any business licenses, and similar finance-related issues.
You should only apply for the EIN after you get approval for your LLC from the South Dakota secretary of state. Otherwise, you might run into the problem of a federal tax ID number being attached to an LLC that doesn't exist if your filing is rejected. There is no cost to apply for an EIN.
To apply to the IRS to get an EIN, you can mail or fax Form SS-4 or apply for it online. It's recommended to apply through the internet once your EIN gets approved compared to the filing by fax, which takes four days to get approved, or filing by mail, which takes four weeks to get approved. If you can't file the form online, download it and complete the form with the LLC's information. It can be faxed to 855-641-6935 or mailed to Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999.
If you're a foreigner and don't have a Social Security number, you can still apply for an EIN. However, this can only be done through the mail or by fax. It's recommended to do this by fax since it's faster.
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