LLC South Dakota: Everything You Need to Know
Forming an LLC in South Dakota is a good business opportunity for many company owners. The process to form an LLC operating in South Dakota is fairly easy and doesn't cost too much3 min read
2. Forming Your LLC
Forming an LLC in South Dakota is a good business opportunity for many company owners. The process to form an LLC operating in South Dakota is fairly easy and doesn't cost too much. However, the state does have some of its own requirements for LLCs that are specific to South Dakota. The laws governing LLCs operating in the state fall under Chapter 47-34A, which is called the Uniform Limited Liability Company Act.
Naming Your LLC
One of most critical steps you should take in forming an LLC in the state is coming up with a name. Before you file any paperwork, make sure to research existing business names in the state to make sure it's available. The name you choose should also suit the purpose of your business and be easy to search. The South Dakota LLC naming guidelines require any business formed as an LLC to include the words Limited Liability Company or one of the accepted abbreviations (LLC, L.L.C., Ltd. Liability Co.)
If you plan to use any of the restricted words in your business name, such as university, attorney, or bank, you will have to complete some additional forms. Your business may also need to have a licensed person, such as a lawyer or doctor. Certain words are prohibited from use in the name of an LLC, such as treasury, Secret Service, and FBI.
You can check for existing business names in the state to make sure your desired name is available through the South Dakota secretary of state website. You may reserve a business name by completing the application for name reservation and filing it with the secretary of state's office. This form holds your business name for up to 120 days. You can file the form online or by mail, although it does require the payment of a $25 filing fee.
As you're deciding on your LLC name, check to make sure the domain name is available as well. Even if you aren't planning on launching a site for your business immediately, you may want to in the future. Additionally, reserving the name before someone else does can save you money and prevent competitors from making it harder for your company to operate. You should also think about the business email address you might use as you select the name for your company.
Forming Your LLC
An LLC operating in South Dakota must designate a registered agent, which is an individual or company that will manage all legal documents on the company's behalf. Examples of legal documents include state filings and service of process of legal action. In order to serve as the registered agent, the person must reside within the state or the business must have legal authorization to operate in the state. The registered agent can be a member of the LLC, including the business owner.
When you file your LLC's articles of organization with the state, your LLC will become registered. You can file these articles by mail or online. Another step in the registration process is determining whether members or a manager will manage your LLC.
Important information should be included in your LLC's articles of organization, such as:
- Business name
- Legal business address
- Member name(s) and address(es)
- Planned duration (if your company will not be ongoing)
- Name and address of the registered agent
- Type of business management
- Title, name, and signature of the LLC's executing organizer
When you file the articles of organization, you must pay a $150 filing fee. Although South Dakota doesn't require an operating agreement, it's a smart thing to draft and keep on file for your business. Your LLC's operating agreement will include an outline of how the business will operate and be owned.
After you have registered your business in South Dakota, the next step is getting an Employer Identification Number (EIN), also referred to as a Federal Tax Identification Number. This number will identify your company, similarly to how a Social Security number identifies a person. Your company needs an EIN to file federal and state taxes. Additionally, most banks will need your EIN before they will grant you a checking account for the business.
If you need help with forming an LLC in South Dakota, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.