How to Start an LLC in South Dakota
Located in the Midwest U.S., South Dakota is a beautiful but sparsely populated state. Retail, healthcare and finance are all major industries, in addition to tourism and agriculture.
If you want to start your own business in South Dakota, one of the best ways to do so is by forming a South Dakota LLC. Limited liability companies (LLCs) are a business entity designed for startups and small- and medium-sized businesses. South Dakota LLCs give you many of the protections and advantages of larger corporations without all the rules, regulations and compliance issues common to larger business entities.
Briefly, the benefits of starting a South Dakota LLC include:
- Separating and limiting your personal liability from your business liability and debts
- Quick and simple filing, management, compliance, regulation and administration of your South Dakota LLC
- Easy tax filing and potential advantages for tax treatment
Six Quick Steps to Forming an LLC in South Dakota
We’ve got lots of useful information on starting a business in SD. On this page, you’ll find the basic steps of how to form a South Dakota LLC, with more in-depth content throughout the rest of our guide.
First, you need to gather basic information about your LLC, including the names and addresses of the managers or members. The LLC members are typically the people who own and run the business. They are also the ones who can take profits out of the business to pay themselves.
You will need a distinctive and original name for your LLC that’s not used by any other business in SD. To find out if another company is using your chosen business name, carry out a South Dakota business entity name search on the Secretary of State website.
There are a few rules you’ll need to follow when choosing an LLC name. You can find out more in our guide to searching for and naming your South Dakota LLC.
Every South Dakota LLC must have a designated street address. That could be your home address (if you’re running the company from your residence), your company’s office building or any physical address of your preference. The address can be outside the state of South Dakota, but it cannot be a P.O. Box.
Every SD LLC must have a “Registered Agent.” This is an official position; the Registered Agent is someone who receives official legal and tax correspondence and has responsibility for filing reports with the South Dakota Secretary of State.
This position can be filled by you, another manager in the business or a dedicated Registered Agent service. Your Registered Agent must have a physical street address in South Dakota and must be present to receive important documents for your company during business hours.
At Incfile, all of our packages include a South Dakota Registered Agent service that is free for the first year and just $119 per year afterward. We also have a dashboard where you can log in and easily view any document your Registered Agent has received on your behalf.
You will need an EIN to identify your business to the IRS. You use this number when filing and paying taxes or when submitting payroll information and payments for your employees. You can obtain one directly from the IRS, or Incfile can get one for you as part of the South Dakota LLC business formation process.
Once you've gathered all the information together for your South Dakota LLC, you’ll need to file a formal document with the SD Secretary of State. This document is known as your “Certificate of Organization,” and filing the document creates your South Dakota LLC. Here’s what is typically included:
- Your business name and address
- Details of your Registered Agent
- Names of organizers of the LLC at the time of filing
- Addresses of managers or members of the LLC at the time of filing
- Purpose of your business
- Name of the incorporator
You can file your South Dakota LLC Certificate of Organization online, mail in a form or have Incfile do it on your behalf. There is a fee to file and start an LLC in South Dakota. You only need to file your Certificate of Organization once.
Review Information from the South Dakota Secretary of State
The Secretary of State has plenty of information on forming and running a business in South Dakota. These are all the basic steps for forming an LLC in South Dakota. You’ll find other useful information below:
Special Types of South Dakota LLCs
A regular South Dakota LLC is suitable for most business needs, but you also have a few other options to incorporate a special type of LLC.
Some states, including South Dakota, allow certain occupations to form “Professional LLCs.” These types of businesses typically have special requirements and licensing. You can find more information here.
What to Do After Forming Your South Dakota LLC
Want to know your next steps after creating a new LLC in South Dakota? We’ve got you covered. Here’s our guide to understanding your ongoing requirements, setting up new bank accounts, protecting your business name, getting accounting in place and more.
Detailed Information for Your South Dakota LLC
You’ll find plenty more insight and guidance on the other pages of this guide, including:
How to search the South Dakota business registry of the SD Secretary of State and find the right name. Includes information on naming rules, fictitious names, reserving a South Dakota LLC name and more.
How to appoint a South Dakota Registered Agent to your new LLC or change to a different Registered Agent. Includes information on Registered Agent rules and searching for South Dakota Registered Agents.
How to understand the various fees you’ll need to pay and the requirements you’ll need to meet for both federal and South Dakota rules. Includes details of Employee Identification Numbers (EINs), South Dakota and federal business licenses, South Dakota annual reports and more.
How to understand the various taxes you will need to pay to the federal and South Dakota government. Includes details of federal taxes like income and self-employment and South Dakota taxes like sales tax and income tax.