Key Takeaways

  • A South Dakota LLC must include “Limited Liability Company,” “Limited Company,” or abbreviations (LLC, L.L.C., LC, L.C.) in its name.
  • Filing Articles of Organization requires details like the LLC’s name, address, registered agent, management structure, and organizers.
  • The South Dakota Secretary of State processes Articles of Organization, with a standard $150 fee and optional expedited processing.
  • Every LLC must appoint a registered agent with a physical address in South Dakota.
  • While not required, an Operating Agreement is strongly recommended to clarify roles and reduce disputes.
  • Annual reports must be filed each year with a $50 fee; missing filings can result in administrative dissolution.
  • Foreign LLCs must file a Certificate of Authority and pay a $750 filing fee to do business in South Dakota.
  • South Dakota LLC law defines key terms like “Articles of Organization,” “Contribution,” and “Creditor.”
  • Business owners benefit from South Dakota’s favorable tax climate—there’s no corporate income tax or personal income tax.

The South Dakota LLC Act is also known as the South Dakota LLC Statute or the South Dakota Uniform Limited Liability Company Act with codes 47-34A-203 and 47-34A-1002. Under South Dakota law, the name of an LLC must include either the words Limited Liability Company, Limited Company, or the abbreviated versions, which include:

  • L.L.C.
  • LLC
  • LC
  • L.C.

To form an LLC in South Dakota, your first step is choosing its name. The second step is filing the Articles of Organization for your LLC. The Secretary of State's office is where you file this.

What to Include in Your Articles of Organization

Several things must be included when you file your LLC's Articles of Organization, including:

  • The name and address of your LLC.
  • Your registered agent's name and address.
  • A notation stating whether your LLC will be managed by members or a manager.
  • Each organizer's name and address.
  • If the LLC isn't going to be perpetual, you need to know how long it is going to exist.
  • A notation regarding who among the members will be liable for the LLC's debts and other obligations.

Additional Requirements for Naming a South Dakota LLC

When selecting your LLC’s name, South Dakota requires that it be distinguishable from other entities registered with the Secretary of State. You cannot choose a name that is deceptively similar to an existing business. A name reservation can be filed online for a $25 fee, and it will hold the name for 120 days.

Filing Articles of Organization in South Dakota

Your Articles of Organization can be filed either in person or by sending them in the mail. It takes South Dakota about one week to process the paperwork. The filing fee needs to be paid when the Articles of Organization are submitted. The filing fee was $150 as of 2014, but you can confirm the amount through the Secretary of State's office or website. If you need your Articles of Organization to be processed faster, you can pay an extra fee of $50 for processing within two business days.

Processing Times and Filing Methods

South Dakota allows Articles of Organization to be filed online or by mail. Online filing is generally the fastest and most efficient method, with processing completed within 1–2 business days. Mail filings may take closer to a week. Expedited processing is available for an additional $50 fee

Assigning a Registered Agent

Another key step in filing your LLC's paperwork is appointing a registered agent. In South Dakota, each LLC must have a registered agent located within the state to accept service of process. The registered agent can be either an individual or a business entity that agrees to accept legal paperwork on behalf of your LLC if it gets sued. The registered agent must have a street address that's physically located in South Dakota.

Changing or Removing a Registered Agent

If your registered agent resigns, relocates, or you simply wish to appoint a new one, you must file a Statement of Change with the Secretary of State. This filing ensures your LLC continues to meet state compliance requirements. The fee for submitting this form is $10. Failure to maintain an agent can result in your LLC being administratively dissolved

Preparing the Operating Agreement for an LLC in SD

Operating agreements aren't required in the state of South Dakota, but having one can benefit your business. Think of the operating agreement as a rule book for your LLC, because it gives your LLC the structure needed to function well.

Benefits of an Operating Agreement

Even though South Dakota does not mandate an operating agreement, having one offers several benefits:

  • Clarity of Roles: Defines responsibilities of members and managers.
  • Custom Rules: Allows members to set rules beyond default state laws.
  • Dispute Resolution: Provides a clear process to resolve internal disagreements.
  • Protecting Limited Liability: Helps reinforce the separation between the LLC and personal assets.
  • Investor Confidence: Potential investors and lenders often prefer LLCs with written agreements

Other South Dakota LLC Fees and Forms

There are some other forms and fees you need to provide when managing an LLC in South Dakota. These include:

  • The statement change of registered office or registered agent if you name a new registered agent or your registered agent relocates. The fee for filing this form is $10.
  • The amended articles of organization which has a filing fee of $60.
  • The articles of termination if you decide to end the existence of your LLC. This filing fee is $10.
  • The application for reinstatement if your LLC is administratively dissolved. The fee for this is $150.
  • The annual report filing fee which is $50.

South Dakota Annual Report Requirements

All South Dakota LLCs must file an annual report with the Secretary of State. The filing fee is $50 if filed online and $65 if filed by mail. The report is due by the first day of the second month after the LLC’s anniversary month. For example, if your LLC was formed in July, the report is due by September 1 each year. Failure to file can result in late fees and eventually administrative dissolution.

Qualifying as a South Dakota Foreign LLC

Search the database on the South Dakota Secretary of State website to see if your chosen name is available. If it isn't available, choose another name. If it is available, file all the necessary documents along with the foreign LLC filing fee of $750.

Certificate of Authority for Foreign LLCs

Foreign LLCs (those formed outside of South Dakota) must obtain a Certificate of Authority before conducting business in the state. This process requires filing an application, providing a certificate of good standing from the home state, and paying a $750 fee. The LLC must also maintain a registered agent in South Dakota. Doing business without proper authorization can result in penalties and an inability to bring lawsuits in South Dakota courts until compliance is achieved.

Some Terminology Used in the South Dakota LLC Act

There are a number of terms used in the SD LLC Act that can be helpful to understand. These include:

  • Articles of Organization: This term describes the documents used for the initial filing, amending a filing.
  • Business: This includes all types of trade, all occupations, and all professions, whether the transactions are for a nonprofit or for-profit entity.
  • Contribution: Anything a person does that benefits an LLC is considered a contribution.
  • Creditor: Any entity or person the LLC owes is a creditor.
  • Day: The term day in the LLC Act refers to the 24-hour period spanning from midnight one day until the next midnight.

These are just a few of the terms included in this legal code regarding South Dakota LLCs.

South Dakota’s Business-Friendly Environment

One of the reasons entrepreneurs choose to form an LLC in South Dakota is its favorable tax environment. The state has no corporate income tax, personal income tax, or business inventory tax. This makes South Dakota particularly attractive for small businesses and out-of-state companies registering as foreign LLCs. In addition, the state offers straightforward compliance requirements, making it easier for LLCs to maintain good standing.

Frequently Asked Questions

1. How much does it cost to start a South Dakota LLC?

The filing fee for Articles of Organization is $150. If you need expedited processing, you can pay an additional $50.

2. Does South Dakota require an operating agreement for LLCs?

No, it is not legally required. However, having one is highly recommended to clarify ownership and management rules.

3. When are South Dakota LLC annual reports due?

They are due by the first day of the second month after your LLC’s anniversary month, with a $50 online filing fee.

4. Can I reserve a name for my South Dakota LLC?

Yes. You can reserve a name for 120 days by filing online and paying a $25 fee.

5. What are the requirements for a foreign LLC in South Dakota?

Foreign LLCs must obtain a Certificate of Authority, provide a certificate of good standing from their home state, and pay a $750 filing fee.

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