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Form an LLC in South Dakota.

$49 + State Fee & 1st Year FREE Registered Agent

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Your LLC’s Name

Your new South Dakota LLC’s name must be readily distinguishable from any other business entity’s name registered or reserved with the state.

Your new LLC’s name must end with the words “Limited Liability Company” or “Limited Company,” or the abbreviations “LLC,” “L.L.C.,” “LC,” or “L.C.” The word “Limited” may be abbreviated as “Ltd.” and the word “Company” may be abbreviated as “Co.”

However, a South Dakota LLC is allowed to use the name of another domestic or foreign company if the other company is authorized to conduct business in South Dakota and the company proposing to use the name has merged with the other company, been formed by reorganization with the other company, or has acquired substantially all of the assets, including the name, of the other company.

An available LLC name may be reserved for 120 days for a $20 fee.

Articles of Organization

The formation of a South Dakota LLC means that you have to file articles of organization (along with the $125 filing fee) with the Corporations Department of the South Dakota Secretary of State’s office. The articles, which must be signed by at least two persons organizing the LLC, must include:

  • The LLC’s name
  • The address of the LLC’s registered office
  • The name of the LLC’s initial registered agent there
  • The names and addresses of the organizers
  • The duration of the LLC if it is not to be perpetual
  • Whether the LLC will be manager-managed or not; if so, the name and address of each initial manager
  • Whether one or more of the LLC members will be liable for its debts and obligations

Your new LLC is officially deemed “organized” after the LLC’s articles of organization and an exact copy are delivered to the Corporations Division of the Secretary of State’s office with the filing fee. The articles must be signed by a manager (of a manager-managed LLC), a member of a member-managed company, an organizer, or an attorney-in-fact. The signed document must also indicate the name and title (i.e., organizational capacity within the LLC) of the signer.

A certificate of organization will be issued and delivered, along with the conformed copy, to the LLC’s representative by the state. The original articles of organization will be filed with the Secretary of State.

Registered Agent and Office

Every South Dakota LLC must maintain both a registered agent and registered office in the state—the person or office designated to receive official state legal and administrative correspondence. An LLC registered agent may be an individual who resides in South Dakota or a business entity authorized to conduct business in the state. The registered agent’s business office must be the same as the corporation’s registered office.

The registered office may be—but doesn’t have to be—the LLC’s place of business.

Operating Agreement

The LLC’s next most critical document is its operating agreement. Having an operating agreement is not officially required by the state, but it’s a very important internal document that sets forth how the LLC will run. The operating agreement should list the LLC’s members, how much each one has invested, how any profits will be distributed, and how much relative weight each member has when voting. It can be amended or repealed as specified in the agreement itself or by state law.

The operating agreement can also include requirements for meetings (notice, quorum, voting rules, etc.) and similar functions, but it doesn’t have to. Often, however, it does include operating constraints and allowances that are already contained in state law and regulations. It also may contain constraints on the members’ authority to change or repeal the operating agreement or any provision thereof.

If any provision of the operating agreement conflicts with the articles of organization, the operating agreement takes precedence when it comes to managers, members, and members’ transferees. However, the articles take priority when dealing with individuals other than managers, members, and transferees who would be at a disadvantage if they relied on the articles.

Membership in the LLC

A South Dakota LLC must have at least one member, who may be a natural person or a business entity. Members may acquire an interest in the LLC either in proportion to their contribution or in some other way that is in accordance with the LLC’s operating agreement.

The contributions of a member to the LLC may consist of cash, property, services rendered, or a binding obligation to contribute cash or property or to perform services in the future.

An LLC member may not resign except in accordance with the operating agreement or articles of organization. A member resignation is wrongful if the member withdraws before the expiration of the LLC, if the member is expelled, or if he enters bankruptcy before the LLC expires—or, if the member is a business entity, if the entity willfully dissolves or terminates its existence before the LLC expires. If a wrongful dissociation causes harm to the LLC, the member is liable for those damages.

A member who wrongfully dissociates from an LLC is liable to the company and the other members for damages caused by the dissociation.

Managers are elected for an indefinite term by a majority of members, unless the operating agreement provides otherwise.

Ongoing Requirements

South Dakota LLCs submit an annual report to the state secretary of state that includes:

  • The LLC’s name and the state or country where it was initially organized
  • The address of the LLC’s principal office
  • The address of the LLC’s registered office in the state
  • The name of the LLC’s registered agent at that office
  • The names and business addresses of any managers

It’s also a good idea to keep copies of the minutes of the various proceedings and committees meetings of the members and managers.

The LLC’s first annual report, which must be included with the official state articles form, must accompany the articles.

Dissolution

A South Dakota LLC is dissolved when any one of the following events occurs:

  • On the occurrence of an event or events specified in the articles of organization or operating agreement
  • Agreement to dissolve by the number or percentage of members specified in the operating agreement
  • An event that makes it unlawful for the LLC to continue, unless the LLC corrects the illegality within 90 days of notification
  • Application by a member or dissociated member and a judicial order
  • Expiration of the LLC’s duration
  • Administrative dissolution

Taxes

An LLC by its nature offers some particular tax advantages over a corporation’s organizational structure, especially when it comes to taxes. This includes access to more deductions, since the LLC is not required to be a separate tax entity like a corporation. Instead, it is considered a “pass-through” entity for tax purposes, meaning that LLC owners report business profits and losses on their individual tax returns.

South Dakota, however, does not have a state income tax.

Learn more about forming an LLC in South Dakota

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silver

$49

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The Basics To Get You Started Preliminary company name clearance and filing of Articles of Organization.

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$149

+ $150 (state fee)

everything from silver+

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EIN / Tax ID Number Providing an EIN is required to open a
business bank account and is required to
file business tax returns.

Personalized Operating Agreement Includes most common provisions to protect members from liability

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$299

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Expedited Filing Expedited processing speeds the turn- around time for your order.

Customized LLC Kit Personalized slip binder and embossed seal with your company name and date of fomation.

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Commonly Asked Questions For Starting a South Dakota LLC

How is an LLC Taxed?
For federal income tax purposes the profits of an LLC (Limited Liability Company) "pass through" to the personal income of the members/owners. In the case of a single member LLC it is taxed the same as a sole proprietorship (i.e. typically filed on the schedule C of the owner's personal income tax filing). In the case of a multi member member it is taxed the same as a partnership (i.e. a 1065 partnership return is filed with the IRS, with a schedule K-1 being supplied to each partner/member showing the proportional profit/loss allocated to them, with this being filed on the schedule C or E).
NOTE: These are general tax explanations and may not apply to everyone. You should confer with the appropriate accounting/tax specialists to make sure you understand your personal tax liability.
What is the Management Structure of an LLC?
An LLC is typically managed by its members/owners (referred to as member-managed). In that respect an LLC is unlike a corporation, which has a much more rigid and defined management structure, including directors and officers. All owners of the LLC are typically referred to as members, and they can have control and voting interest proportional to their ownership interest, or in proportions different from their ownership interest; however the members agree.
Are Non-US Residents allowed to own a Corporation of LLC?
There are no citizenship or residence requirements for ownership of a C Corporation or an LLC. The S Corporation however does not allow nonresident aliens to be shareholders (owner), but any US citizen or resident alien may be a shareholder (owner). You would, of course, require an in state street address for the state to forward official legal and tax correspondence including service of process, known as the registered agent address, but neither residency nor citizenship is required for ownership of a C Corporation or an LLC.
Can I form an LLC with just one member?
There was a time when almost every state required the LLC to have two or more members, but that is no longer the case. This important change came in response to revised IRS regulations that clearly permitted single-member LLCs. As a result, in most states, if you plan to be the sole owner of a business and you wish to limit your personal liability, you can choose between forming a corporation or an LLC.
What is an Operating Agreement?
The operating agreement is akin to a partnership agreement for a General Partnership or Limited Liability Partnership (LLP). It is an internal contract amongst the members/owners of the LLC, and it lays out such things as ownership interest, member responsibilities, accounting method, adding or removing members, terms for concluding the LLC, etc. It is generally not required by a given state for forming an LLC (with the exception of New York), although it is certainly recommended. When dealing with private companies for financing issues (loans, mortgages, etc.) it may be required by that company. A customizable operating agreement is included with the LLC/Corp Kit.
Can another business entity be a member of an LLC?

In the majority of states, The members of an LLC can be individuals, corporations, or other LLCs. These members of the LLC can be out of state residents or even foreign nationals. Furthermore there is no limit to the amount of members that an LLC can have.

The flexibility of an LLC in contrast to an S Corporation is stark considering the S corporations are limited to 75 shareholders who must either be United States citizens or Lawful Permanent Residents.

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