South Dakota LLC Guide | A Comprehensive Write-up For Beginners

When talking about LLC, what really comes to your mind? You might have heard about LLC but you don’t really understand the concept of how it’s been operated.

A limited liability company (LLC) is a business entity that offers certain legal protections and rights to its owners. An LLC is either a corporation or a sole proprietorship/partnership.

Do you know that forming an LLC is the simplest way of structuring your business to protect your personal assets in case your business is sued?

I believe the content is becoming interesting because you have found what you want?

An LLC can be owned by one or more people, who are known as LLC “members”. An LLC with one owner is known as a single-member LLC, and an LLC with more than one owner is known as a multi-member LLC.

South Dakota LLC Information

Forming LLCs in South Dakota is affordable and easy. Unlike other states, the State of South Dakota has some unique LLC requirements.

Interested parties must register with the South Dakota Secretary of State by filing the necessary forms, paying the necessary fees, and meeting all naming and formation requirements.

The specifications required of a South Dakota LLC are:

1. Name Your South Dakota LLC

Choosing a company name is the first and most important step of forming an LLC in South Dakota. Be sure to choose a name that complies with South Dakota naming requirements and is easily searchable by potential clients.

1. Follow The Naming Guidelines For A South Dakota LLC:

• 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.

For a complete list of naming rules in South Dakota, you can read South Dakota’s Legislature guidelines.

2. Is The Name Available In South Dakota?

Make sure the name you want isn’t already taken by doing a South Dakota LLC name search on the State’s website.

2. Choose A South Dakota Registered Agent

You are required to nominate a South Dakota registered agent for your LLC.

What Is A Registered Agent?

A registered agent is an individual or business entity responsible for receiving important tax forms, legal documents, a notice of lawsuits, and official government correspondence on behalf of your business. Think of your registered agent as your business’s 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 conduct business in the state of South Dakota. You may elect an individual within the company including yourself.

FAQ: Nominating A South Dakota Registered Agent

Can I Be My Own Registered Agent?

Yes. You or anyone else in your company can serve as the registered agent for your LLC.

Is A Registered Agent Service Worth It?

Using a professional Registered Agent service is an affordable way to manage government filings for your LLC. For most businesses, the advantages of using a professional service significantly outweigh the annual costs.

3. File The South Dakota LLC Articles Of Organization

To register your South Dakota LLC, you will need to file the Articles of Organization with the South Dakota Secretary of State. You can apply online or by mail. Some states refer to the Articles of Organization as the Certificate of Formation or Certificate of Organization.

The South Dakota Articles of Organization for an LLC (Limited Liability Company) is a legal document to officially form your business. You’ll be expected to include the name of your LLC, choose a registered agent, list the services your LLC will offer, and pay the state filing fee. We also recommend you obtain an Employer Identification Number (EIN) if you plan to hire employees and open a business bank account.

FAQ: Filing South Dakota LLC Documents

What Is The Processing Time To Form My South Dakota LLC?

Immediately after payment is received online, 1 to 2 business days by mail.

What Is The Difference Between A Domestic LLC And Foreign LLC?

An LLC is referred to as a “domestic LLC” when it conducts business in the state where it was formed. Normally when we refer to an LLC we are actually referring to a domestic LLC. A foreign LLC must be formed when an existing LLC wishes to expand its business to another state.

4. Create Your 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.

FAQ: Creating A South Dakota Operating Agreement

Do I Need To File My Operating Agreement With The State?

No. The operating agreement is an internal document that you should keep on file for future reference. However, many states do legally require LLCs to have an operating agreement in place.

5. Get An EIN For Your South Dakota LLC

What Is An EIN?

EIN stands for Employer Identification Number. EINs is a nine-digit number assigned by the Internal Revenue Service (IRS) to help identify businesses for tax purposes. It is essentially a social security number for a business.

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An EIN is sometimes referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN).

Why Do I Need An EIN?

An EIN is required to:

• Open a business bank account
• File and manage Federal and State Taxes
• Hire employees

Where Do I Get An EIN?

You can get an EIN for free from the IRS. Getting an EIN is an easy process that can be done online or by mail.

NOTE

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

FAQ: Getting A South Dakota EIN

How Do I Get An EIN If I Don’t Have A Social Security Number?

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.

What Tax Structure Should I Choose For My South Dakota LLC?

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.

6. Cost To Form An LLC In South Dakota

To start a Limited Liability Company in South Dakota you will need to file the Articles of Organization with the South Dakota Secretary of State, with a starting fee of $150 to file. You can apply online or by mail. The Articles of Organization is the legal document that officially creates your South Dakota LLC.