Form a corporation in South Dakota.

Articles of Incorporation

Before it can legitimately commence operations in the state, a new South Dakota corporation must file articles of incorporation with the Corporations Department of the state Secretary of State’s office. The articles must be executed (signed) and delivered by at least one incorporator, who must be a natural person of legal age.

The articles must be accompanied by a filing fee of $125. The following information must be included in the articles of incorporation:

• The name and address of each incorporator
• The number of shares that the corporation is authorized to issue, itemized by class
• The street address of the corporation’s initial registered office
• The name of the corporation’s initial registered agent at that office
• Signed acceptance by the registered agent of appointment as such

South Dakota law also allows (but does not require) optional items to be included in the articles of incorporation for those corporations who wish to formally specify additional information, such as:

• The names and addresses of each incorporator
• The purpose of the corporation
• The number of shares the corporation is authorized to issue.
• The par value of shares or a statement that the shares are to be without a par value
• If applicable, the designation of each class of shares and a statement of the preferences, limitations, and relative rights for each class
• If applicable, the designation of each series and a statement of the variations in the relative rights and preferences between series, and a statement of any authority to be vested in the board of directors to establish and change the relative rights and preferences between series.
• A statement that the corporation will not start conducting business until consideration of at least a thousand dollars has been received for the issuance of shares
• The period of the corporation’s duration, which may be perpetual
• Any preemptive shareholder rights
• Any provisions chosen to be included by the incorporators to regulate the internal affairs of the corporation
• The street address of the registered office
• The name of the corporation’s registered agent there
• The registered agent’s written acceptance of the appointment as such
• The number of initial directors and their names and addresses
• A mailing address to which notices may be mailed until an address has been designated by the corporation in its annual report.

South Dakota also permits optional provisions to be included into the articles of incorporation, such as:

• The names and addresses of the initial directors
• The corporate purpose(s)
• Limitations on a director’s or officer’s liability for money damages to the corporation or its shareholders in certain situations

Registered Agent and Office

Every South Dakota corporation must have a registered agent in the state—the person or office designated to receive official state correspondence, both administrative and legal. The registered agent is required to sign the articles of incorporation, indicating acceptance of the appointment as registered agent.

The registered agent must be either a South Dakota resident whose business office is the same as the registered office, or a corporation authorized to conduct business in the Mount Rushmore State that has a business office identical to the registered office.

Bylaws

Bylaws lay out the corporation’s basic managerial and legal operating principles that manage their internal affairs. South Dakota corporations must keep a copy of their bylaws at their principal executive office, but are not required to file them with the state. At its initial meeting, the incorporators or the board of directors should adopt corporate bylaws, and then keep them updated as time goes on.

The board of directors of a corporation may adopt, amend, or repeal bylaws, unless the articles reserve this right to the shareholders. Bylaws normally address:

• Shareholders and directors meetings
• The authority, number, and tenure of directors
• Voting procedures
• The duties, responsibilities, and tenure of officers
• How stock is issued
• How and when annual financial information is provided to shareholders

Directors

Officers are listed in the initial bylaws or elected by the board of directors, and may appoint other officers in accordance with the bylaws. At least one officer has the responsibility of preparing minutes of director and shareholder meetings, and for maintaining and authenticating corporate records.

It is permissible for an officer to hold more than one office in the corporation unless otherwise prohibited by law or by the corporation’s bylaws.

Requiment Reports

South Dakota corporations must file a report with the South Dakota Department of Secretary of State each year before the first day of the second month following the anniversary month of its incorporation, except for the year of incorporation. The report must be current as of the close of business on the day prior to the corporation’s anniversary date of incorporation. This report must indicate:

• The corporation’s name and its state or country of incorporation
• The street address of its registered office
• The name of its registered agent there
• A brief statement of the character of the corporation’s business
• The names and addresses of the corporation’s directors and officers
• A statement of the aggregate number of authorized and issued shares that the corporation is authorized to issue, itemized by classes, par value of shares, shares without par value, and series, if any, within a class
• The stated capital amount of the corporation

Taxes

“S corporation” status is recognized by the South Dakota Secretary of State. A “subchapter S” corporation (frequently referred to as an “S corp”) is treated as a pass-through entity for tax purposes in the same way as a sole proprietorship or partnership. The S corp does not file a tax return on its own behalf; instead, all tax-related data for the S corp is filed as part of the owner’s individual income tax.

South Dakota does not impose a corporate income tax, however, so a subchapter S choice in this state has federal implications for South Dakota corporations, but no state impact.