How to Start an LLC in South Dakota (2024 Guide)
Wondering how to start an LLC in South Dakota? We’ve got you covered.
To get started, you'll need to pick a suitable business name, choose a registered agent, and file your Articles of Organization with the South Dakota Secretary of State ($150-$165 processing fee).
You can do this independently, consult with a business attorney for specialized legal guidance, or join the other 65% of our readers and hire a specialized South Dakota LLC formation service (recommended).
Northwest ($29 + State Fees)
LegalZoom ($249 + State Fees)
How to Form an LLC in South Dakota in 6 Steps
In order to form your LLC in South Dakota, there are certain steps you’ll need to complete:
- Name Your South Dakota LLC
- Choose a Registered Agent in South Dakota
- File Your Articles of Organization
- Create an Operating Agreement
- Obtain an EIN
- File a Beneficial Ownership Information Report
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. Important Naming Guidelines for South Dakota LLCs:
- 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.
- Except in cases where authorized by the Secretary of State, your LLC’s name must be sufficiently distinguishable from:
- The names of any business currently organized to transact business in this state;
- Any names reserved for future use under South Dakota’s Codified Laws; and
- Any fictitious names used by foreign companies authorized to operate in South Dakota because their legal name was otherwise unavailable.
We recommend checking out South Dakota's Legislature guidelines for a complete list of naming rules in this state.
2. Is the name available in South Dakota?
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. Is the URL available?
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.
Find a Domain Now
Once you have verified your name is available, you may now select a professional service to complete the LLC formation process for you.
Subscribe to our YouTube channel
We reviewed and ranked the best LLC services. Find out which is best for you.
FAQ: Naming a South Dakota LLC
LLC is short for “limited liability company.” It is a simple business structure that offers more flexibility than a traditional corporation while still providing legal protection for your personal assets. Read our What is a Limited Liability Company guide for more information.
Or, watch our two-minute video: What is an LLC?
You must follow the South Dakota LLC naming guidelines when choosing a name for your LLC:
- Include the phrase "limited liability company" or one of its abbreviations (LLC or L.L.C.).
- Do not use words that could confuse your business with a government agency (FBI, State Department, CIA, etc.).
- Receive the proper licensing when using the words such as lawyer or doctor.
If you are having trouble coming up with a name for your LLC, use our LLC Name Generator. That will not only find a unique name for your business but an available URL to match.
Most LLCs do not need a DBA. The name of the LLC can serve as your company’s brand name and you can accept checks and other payments under that name as well. However, you may wish to register a DBA if you would like to conduct business under another name.
To learn more about DBAs in your state, read our How to File a DBA guide.
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.) or use a business attorney to accept legal papers for your LLC.
FAQ: Nominating a Registered Agent
Yes. You can choose to act as your own registered agent, appoint a member of your LLC, work with a business attorney, or hire a professional registered agent service (recommended).
Read more about being your own registered agent.
Using a professional registered agent service is an affordable way to manage government filings and LLC paperwork. For most businesses, the advantages of using a professional service significantly outweigh the annual costs.
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 DakotaFile Online
- OR -
OPTION 2: File by MailDownload Form
State Filing Fee: $150 online and $165 for paper filings, payable to the Secretary of State. (Nonrefundable)
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
The South Dakota Secretary of State normally processes new paper filings within three to five business days and online filings immediately. Additionally, articles filed by paper that could have been filed online will incur an additional $15 processing fee.
An LLC is referred to as a "domestic LLC" when it conducts business in the state where it was formed. A foreign LLC must be formed when an existing LLC wishes to expand its business to another state.
Read our What Is a Foreign LLC article to learn more.
Starting a South Dakota LLC costs $150 online and $165 by mail. However, if you intend to form a foreign LLC, it will instead cost $750 to register your business online and $765 by mail.
Additionally, your formation costs may increase if you’re starting a professional LLC (PLLC), as they are typically required to have a state-issued license to practice their profession.
To learn more, read our guide on the cost to form a South Dakota LLC.
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.
For more information on operating agreements, read our South Dakota LLC operating agreement guide.
FAQ: Creating a South Dakota LLC Operating Agreement
No. The operating agreement is a document meant for internal use and should be retained in your records for reference. While it's not a legal requirement in South Dakota, a number of other states do mandate that LLCs maintain an operating agreement, such as California or New York.
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 number 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
- OR -
Option 2: Apply for an EIN by Mail or Fax
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
FAQ: Getting an EIN
An SSN is not required to get an EIN. You can simply fill out IRS Form SS-4 and leave section 7b blank. Then call the IRS at (267) 941-1099 to complete your EIN application. Learn more here about applying as an international applicant.
All LLCs with employees, or any LLC with more than one member, must have an EIN. This is required by the IRS.
Learn why we recommend always getting an EIN and how to get one for free in our Do I Need an EIN for an LLC guide.
When you get an EIN, you will be informed of the different tax classification options that are available. Most LLCs elect the default tax status.
However, some LLCs can reduce their federal tax obligation by choosing the S corporation (S corp) status. To learn more, read our LLC vs. S Corp guide.
Step 6: File a Beneficial Ownership Information Report
Beginning January 2024, LLC owners will need to file a Beneficial Ownership Information (BOI) Report with the US Financial Crimes Enforcement Network (FinCEN). Existing LLCs can file their report any time between January 1, 2024, and January 1, 2025, while new LLCs will need to file their report within 90 days of formation.
This contains similar information to that of your Articles of Organization, such as your LLC name and member information, and can be filed online for free. Failure to file an accurate report on time can result in a $500 per day fine.
Note: There are certain filing exemptions, such as for large companies (i.e., more than 20 full-time employees), tax-exempt entities, and publicly traded companies.
Considering Using an LLC Formation Service?
We reviewed and ranked the top LLC formation services. Find out which is best for you.BEST LLC SERVICES
Maintain Your South Dakota LLC
After you’ve successfully formed your LLC, there are a couple of steps you’ll need to periodically take in order to maintain it, including:
- Filing an annual report
- Sorting out your tax responsibilities
We’ve broken down how to complete each of these steps in greater detail below.
File the Annual Report
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.
Sort Out Your Taxes
Regardless of where your LLC is registered, you will be required to pay certain federal taxes. This includes corporation and employer taxes (for LLCs filing as a C corporation) and federal income tax and self-employment taxes (for LLCs taxed as pass-through entities).
In addition, there are a number of different taxes you’ll be required to pay at a local and state level, which vary depending on the nature of your business.
Below are some of the most common taxes in South Dakota:
South Dakota's sales tax is imposed at a statewide rate of 4.5% on the gross sales or transactions of tangible personal property and has a maximum additional local sales tax rate of 2%.
Sales and use tax returns are typically filed online through the Filing & Tax Payment portal or by mail using a paper return supplied by the South Dakota Department of Revenue. The Department will inform you of the frequency for filing your sales and use tax returns, which will then be due by the 20th of the following month, regardless of your assigned filing frequency.
Your business can retain a small “collection allowance” of 1.5% of the tax due for a reporting period (up to a maximum of $70) if it files and pays online instead of by mail.
Note: If your LLC will be selling physical products, you’ll typically need to register for a seller's permit through the South Dakota Department of Revenue website.
If your South Dakota LLC has any employees, it will have to register for unemployment insurance tax, known in South Dakota as Reemployment Assistance (RA) Tax, with the Department of Labor and Regulation.
For new businesses, this tax is levied at a rate of 6% for construction businesses and 1.20% for everyone else, though this is soon set to decrease to 3% and 1%, respectively.
These rates are levied on your business’s payroll, specifically on the wages paid up to a certain wage base, which in 2023-2024 will remain at $15,000. This wage base is the maximum amount of earnings of each employee on which your LLC will need to pay this tax.
Note: If liable to pay RA tax, your LLC must file quarterly reports by the last day of the month following each quarter through South Dakota’s online system.
Steps After LLC Formation
After forming your LLC, you will need to get a business bank account and website, obtain a business license, and get business insurance, among other things.
Visit our After Forming an LLC guide to learn more.