How to Start an LLC in South Dakota (2025 Guide)

How to Form an LLC in South Dakota in 5 Steps

In order to form your LLC in South Dakota, there are certain steps you’ll need to complete:

1. Name Your South Dakota LLC
2. Choose a Registered Agent in South Dakota
3. File Your Articles of Organization
4. Create an Operating Agreement
5. Obtain an EIN

Step 1: Name Your South Dakota LLC

Before you get started, you will need to pick a suitable name for your South Dakota LLC. 

This will need to comply with all applicable naming requirements under South Dakota law and be both succinct and memorable, as this will make it easily searchable by your potential clients.

1. South Dakota LLC Naming Guidelines

• Your name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.).
• Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
• Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.
• Your LLC’s name must be clearly distinguishable from all existing business names, reserved names, and fictitious names (DBAs) on record with the South Dakota Secretary of State.

We recommend checking out South Dakota’s Legislature guidelines for a complete list of naming rules in this state.

2. South Dakota Name Availability Search

To check whether your desired name has already been taken by another business entity in South Dakota, you can perform a South Dakota LLC Name Search on the state’s website.

If you’re not going to start your LLC right away, it might be a good idea to consider reserving your name for up to 120 days (included a $25 filing fee). 

For more information, you can have a look at our South Dakota LLC Name Search guide.

3. Finding the Right Domain

You should check online to see if your business name is available as a web domain. Even if you don’t plan to make a business website right away, this is an extremely important step as it will prevent others from acquiring it, potentially saving you both time and money in the long term. 

Once you have verified your name is available, you may now select a professional service to complete the LLC formation process for you.

FAQ: Naming a South Dakota LLC

Step 2: Choose a Registered Agent in South Dakota

After you find the right name for your LLC, you will need to nominate a South Dakota registered agent. This is a necessary step in your Articles of Organization (i.e., the document used to file and register your LLC with the Secretary of State).

What is a registered agent?

A registered agent is an individual or business entity responsible for receiving important tax forms, legal papers, notice of lawsuits, and official government correspondence on your LLC’s behalf. You can think of your LLC’s registered agent as your business’s primary point of contact with the state.

Who can be a registered agent?

A registered agent must be a resident of South Dakota or a corporation, such as a registered agent service, authorized to transact business in the state of South Dakota. You can choose to elect an individual within the company (e.g., yourself, etc.), use an attorney (not recommended due to the high cost), or go with a registered agent service.

FAQ: Nominating a Registered Agent

Step 3: File the South Dakota LLC Articles of Organization

To register your South Dakota LLC, you’ll need to file the Articles of Organization with the South Dakota Secretary of State. You can do this by mail or online.

Before filing, make sure you have completed your Articles of Organization correctly. You will need to have filled in the following sections:

• The purpose for which your LLC Is being organized
• The address of your LLC’s initial designated office
• The name and address of your South Dakota registered agent
• Your registered agent’s CRA# (if using a commercial registered agent)
• The names and addresses of each organizer
• The duration of your LLC (if not perpetual)
• Your LLC’s management structure (i.e., member-managed or manager-managed)
• Any additional provisions 

File the Articles of Organization

OPTION 1: File Online With the State of South Dakota

File Online

– OR –

OPTION 2: File by Mail

Download Form

State Filing Fee: $150 online and $165 for paper filings, payable to the Secretary of State. (Nonrefundable)

Mailing Address:
Secretary of State Office
500 E. Capitol Ave.
Pierre, SD 57501

For help with completing the form, visit our South Dakota Articles of Organization guide.

Note: If you’re expanding your existing business to the state of South Dakota, you’ll need to register as a foreign limited liability company (LLC).

FAQ: Filing South Dakota LLC Documents

Step 4: Create a South Dakota LLC Operating Agreement

An operating agreement isn’t required for forming an LLC in South Dakota, but it’s a good practice to have one.

What is an operating agreement? An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.

Why are operating agreements important? A comprehensive operating agreement ensures that all business owners are on the same page and reduces the risk of future conflict.

You can use the free tool in our Business Center to create a custom operating agreement in minutes — or download our free templates:

• South Dakota Single-Member LLC Operating Agreement
• South Dakota Multi-Member LLC Operating Agreement

FAQ: Creating a South Dakota LLC Operating Agreement

Step 5: Get an EIN for Your South Dakota LLC

You can get an Employer Identification Number (EIN) from the IRS for free. It is used to identify a business entity and keep track of a business’s tax reporting. It is essentially a Social Security number (SSN) for the company.

Why do I need an EIN? An EIN is required for the following:

• To open a business bank account for the company
• For federal and state tax purposes
• To hire employees for the company

Where do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail.

FOR INTERNATIONAL APPLICANTS: You do not need an SSN to get an EIN. Learn more here.

Get an EIN

Option 1: Request an EIN from the IRS

Apply Online

– OR –

Option 2: Apply for an EIN by Mail or Fax

Download Form

Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999

Fax: (855) 641-6935

Fee: Free

FAQ: Getting an EIN

Best LLC Services in South Dakota Compared

For a comprehensive comparison, read our Best LLC Service guide. We reviewed and ranked the top LLC formation services to help you determine the best fit for your new business.

Important Next Steps to Protect Your South Dakota LLC

After you’ve formed your LLC, you’ll need to complete several key steps in order to:

• Separate your personal and business assets
• Stay compliant with state and federal laws

1. Get a Business Bank Account and Credit Card

Getting a dedicated business bank account is an essential part of operating legitimately as it keeps your personal and business assets separate, and therefore helps shield your personal limited liability. 

Skipping this step can often lead to:

• Courts determining that you haven’t been treating your LLC as a separate entity
• Your “corporate veil” being pierced, meaning that you will no longer benefit from limited liability in law. 

Recommended: Have a look at our Best Business Bank Accounts for LLCs in 2025 review. 

You can also choose to acquire a corporate credit card if you’re interested in building your credit and potentially raising capital down the line. 

2. Check If You Need a South Dakota Business License

South Dakota does not require LLCs to hold a “general” business license in order to operate. 

Even so, you should know that business licensing is regulated at a local, state, and federal level, so your licensing needs will ultimately depend on your exact location and industry:

• Local Licenses: You’ll need to check with your city or county clerk’s office to identify any local licensing requirements, such as zoning permits or health department approvals you’ll need. 
• State-Level Licenses: You can check with the South Dakota Department of Labor and Regulation to find out if your business activities may require a professional license or occupational permit from the state.
• Federal Licenses: While most South Dakota LLCs will not be subject to federal regulation, those involved in heavily regulated industries (such as agriculture, alcohol, and firearms) will. You can have a look at this Small Business Administration article for the relevant federal agency you’ll need to contact.

A few questions to ask yourself when deciding whether you need a license include:

• Will you sell, lease, or rent taxable goods or services? If so, you’ll need to obtain a Sales Tax License from the South Dakota Department of Revenue. You can find more information on this on our  South Dakota Sales Tax guide. 
• Will you work as a licensed professional? If your LLC will focus on regulated fields — such as medicine, law, insurance, or real estate — you’ll need to ensure that you or a member of your LLC is appropriately licensed.
• Will your LLC’s activities negatively impact the environment? If so, you might need to obtain a business license or permit from the South Dakota Department of Agriculture & Natural Resources.

For more information, you can have a look at our South Dakota Business License guide; If you’d rather have a service handle this step for you, we recommend checking out LegalZoom’s Business License service.

3. Understand Your South Dakota LLC Tax Obligations

South Dakota LLCs are not all taxed in the same way; this is because LLCs are taxed as pass-through entities by default, meaning that they are largely taxed similarly to sole proprietors — the business gets paid, the profits pass to you as the owner, and you get taxed. There is no “corporate” tax involved. 

This means that:

On a Federal Level

You’ll need to submit personal income tax returns using either Form 1040 (for single member LLCs) or Form 1065 (for multi-member LLCs). If you have employees, you will also be subject to federal income tax withholding. 

On a State Level

While South Dakota does not impose a personal income tax, your LLC may still be responsible for several state-level taxes. These include a 4.2% state sales tax on most goods and services, a 2% contractor’s excise tax on construction-related work, a 1.5% tourism tax on lodging and amusement services, and various other industry-specific taxes on items like fuel, alcohol, and tobacco.

On a Local Level

South Dakota cities and municipalities may impose additional local taxes, including up to 2% local sales tax and a 1% municipal gross receipts tax on industries like lodging, restaurants, and telecommunications; your LLC may also need to pay property taxes if it owns real estate.

For more information on the South Dakota-specific LLC tax obligations that may apply to you, we recommend having a look at our in-depth South Dakota LLC Taxes guide. Alternatively, you can schedule a free online consultation with 1800-Accountant for all your tax-related questions. 

4. Get Business Insurance for Your LLC in South Dakota

Even though an LLC offers limited liability, you’ll still likely need to purchase some form of business insurance to protect your LLC’s assets. 

This is because an LLC’s default limited liability protects your personal assets, not the business’s. Some of the most common types of business insurance include:

• General Liability Insurance: This is a broad insurance policy that protects your business from lawsuits. Most small businesses end up getting general liability insurance.
• Professional Liability Insurance: This is a business insurance policy for professional service providers (consultants, accountants, etc.) that covers against claims of malpractice and other business errors.
• Workers’ Compensation Insurance: This insurance covers medical costs and lost wages if an employee is injured on the job. In South Dakota, coverage isn’t required, but the DLR strongly recommends securing a policy, as uninsured employers may face civil lawsuits.

Want to learn exactly what coverage your business may need? Read our full South Dakota Business Insurance guide.

5. Learn How to Properly Sign Your LLC’s Legal Documents

Improperly signing a document as yourself and not as a representative of the business can leave you open to personal liability. 

When signing legal documents on behalf of your company, you we recommend following this formula to avoid any problems:

• Formal name of your business
• Your signature
• Your name
• Your position in the business as its authorized representative

It’s important to be consistent and sign all official documents using this format; this will help protect your personal assets by clearly showing that the agreement is with the LLC, not you as an individual.

6. Submit an Annual Report for Your South Dakota LLC

South Dakota requires all LLCs to file an annual report with the Secretary of State. This keeps SOS business records up to date and allows the government to track the payment of your LLC’s state taxes.

Annual reports can be submitted online through the South Dakota Secretary of State website or by mail using the state’s Annual Report Form. The deadline for submission is November 15 each year, alongside a $50 fee for online filings and a $65 fee for submissions made by mail.

Your LLC’s first annual report will be due within a year following its formation. In order to submit your first report, you’ll need your Business ID, which you can find by doing a Business Information Search.

Note: The state charges a $50 penalty for failure to file annual reports on time. In addition, South Dakota can revoke an LLC’s business registration after it has failed to file an annual report for 60 days.

To stay on top of this deadline and other important compliance tasks, we recommend hiring a professional registered agent service — they can help ensure you never miss a filing.

South Dakota Business Resources

Business Center

Check out our business center for regular updates, vetted reviews, free downloadables, and video guides that aim to help you start and grow your business. 

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Local Resources

Have a look at South Dakota’s local business resources:

• South Dakota State Government Business
• South Dakota Small Business Resources
• South Dakota LLC Statutes

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