How to Start a South Dakota LLC
(Step-by-Step) 2025 Guide
CONTENTS
Starting a business in South Dakota involves careful planning and adherence to state-specific regulations. Many entrepreneurs opt for a limited liability company (LLC) due to its flexibility and liability protection.
To establish an LLC in South Dakota, follow these seven essential steps. If you don’t have the time or energy, then use our free business registration service. It’s very affordable and will be a load off of your shoulders.
1. Conduct an LLC Name Search
Begin by ensuring your desired LLC name is unique and complies with South Dakota’s naming requirements. The name must include “Limited Liability Company,” “Limited Company,” or abbreviations like “L.L.C.” or “LLC.”
To verify name availability, use the South Dakota Secretary of State’s business iInformation search tool. If you’re not ready to file immediately, you can reserve your chosen name for up to 120 days by submitting a reservation application and paying a $25 fee.
There are several other ways to do LLC name searches. Find out how to do other South Dakota business entity searches in our guide.
2. Appoint a Registered Agent
South Dakota law requires your LLC to have a registered agent with a physical address in the state. This agent is responsible for receiving legal documents on behalf of your LLC. You have three options:
- Yourself: Acting as your own registered agent is permissible if you have a physical address in South Dakota and are available during regular business hours. However, this option may raise privacy concerns and require consistent availability.
- A family member or friend: You can designate someone you trust who meets the state's requirements.
- A professional registered agent service: Hiring a professional service ensures reliability and privacy. For example, we offer registered agent services for as low as $147 per year.
3. File Articles of Organization
To officially form your LLC, submit the articles of organization to the South Dakota Secretary of State. This document includes essential information about your LLC, such as its name, principal place of business, registered agent details, and management structure.
The filing fee is $150 for online submissions and $165 for paper filings. Online filings are processed more quickly, typically within 3-5 business days.
See our guide for more about filing South Dakota articles of organization.
4. Create an Operating Agreement
While not legally required in South Dakota, drafting an operating agreement is highly recommended. This internal document outlines the management and ownership structure of your LLC, helping prevent disputes among members and providing clear operational guidelines.
Our guide will show you how to draft a South Dakota operating agreement.
5. Get an Employer Identification Number (EIN)
6. Comply With State and Local Licensing Requirements
Depending on your business type and location, you may need specific licenses or permits to operate legally in South Dakota. Research state and local regulations to identify any necessary licenses.
Additionally, South Dakota requires LLCs to file an annual report with the Secretary of State, due on the first day of the anniversary month of your LLC’s formation. The filing fee is $50, and failure to file can result in penalties or administrative dissolution of your LLC.
For more details, see our guide on South Dakota business licenses.
7. Obtain a Certificate of Good Standing
While not required to form your LLC, obtaining a certificate of good standing in South Dakota can be beneficial for business operations. This document, issued by the South Dakota Secretary of State, verifies that your LLC is compliant with all state regulations, including filing annual reports and paying necessary fees.
- Opening a business bank account
- Securing financing or loans
- Registering your LLC in another state (foreign qualification)
- Maintaining compliance with certain business contracts
To request a Certificate of Good Standing, visit the South Dakota Secretary of State’s website and submit an online application. The fee is typically $20 for a standard request.
By obtaining this certificate, you ensure that your LLC remains in good legal standing, which can facilitate smoother business transactions and expansion opportunities.
To learn more, read our guide on getting South Dakota certificate of good standing.
South Dakota LLC FAQs
We’ve given you the basics of forming a South Dakota LLC. Now, read our FAQs for more information.
Does South Dakota have state income tax for LLCs?
No, South Dakota does not have state income tax for individuals or businesses, making it an attractive state for entrepreneurs. However, your LLC may still be subject to federal taxes and other state business taxes, depending on your industry.
Can I change my LLC’s name after formation?
Yes, you can change your LLC’s name by filing an amendment to the articles of organization with the South Dakota Secretary of State. The filing fee is $60. Before changing your name, conduct a new name availability search to ensure the new name is unique.
What happens if I don’t file my annual report?
Failure to file your South Dakota LLC annual report on time can result in late fees or penalties. It may also result in the administrative dissolution of your LLC if it's not corrected within a certain timeframe. If your LLC is dissolved, you may need to file for reinstatement and pay additional fees to bring your business back into good standing.
Does South Dakota allow anonymous LLCs?
No, South Dakota does not allow completely anonymous LLCs. However, you can maintain some level of privacy by using a registered agent service and not listing your personal address on public records.
Step-by-Step Guide to
Forming a South Dakota LLC
1. South Dakota Name Search
Learn how to check the availability of your desired LLC name and ensure compliance with South Dakota naming rules.
2. South Dakota Registered Agent
Understand the role of a registered agent and how to choose one for your South Dakota.
4. South Dakota Operating Agreement
Discover why an Operating Agreement is crucial for defining the structure and management of your LLC.
5. South Dakota EIN Number
Learn how to obtain an Employer Identification Number (EIN) from the IRS for tax and banking purposes.
6. South Dakota Business License
Get information on the required business licenses and permits for operating legally in South Dakota.
