Forming an South Dakota LLC

(2025 Guide)

2025 LLC Guide

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How to Start an LLC in South Dakota (Step-by-Step Guide)

Discover how to start an LLC in South Dakota, our step-by-step guide. Learn the essential requirements and process to form your business today.

To establish an LLC in South Dakota, submit the Articles of Organization to the South Dakota Secretary of State. The fee is $150, and approval is usually granted within a day.

 

There are five steps to complete: Choose a Name for your LLC, Appoint a Registered Agent, Submit the Articles of Organization, Draft an Operating Agreement, and Obtain an EIN.

 

If you prefer to form your LLC independently, refer to our complimentary guide below. Alternatively, if you wish to delegate the task, we suggest hiring Northwest Registered Agent.

Need to save time?

Form your LLC with Northwest ($39 + state fee) or LegalZoom ($149 + state fee).

(See why Northwest is #1: Northwest vs LegalZoom.)

What is the cost to establish an LLC in South Dakota?

The initial fee to start an LLC is $150, followed by an annual fee of $50.

What do these charges cover? The $150 is for filing the Articles of Organization, the document that officially forms your LLC. The $50 annual fee is for your Annual Report, a required filing to maintain your LLC’s good standing. For more information on LLC costs, visit LLC Costs in South Dakota.

How long does it take to set up an LLC in South Dakota?

Filing by mail results in approval within 1-2 business days, excluding mailing time. However, if you file online, your LLC is approved instantly. Check How long does it take to get an LLC in South Dakota for any potential delays.

Here’s how to establish an LLC in South Dakota

1. Search your LLC Name

Begin by searching your LLC Name to ensure its availability within the state.

This step is crucial since no two businesses in the state can share the same name. Start by checking your desired business name against those already registered in the state. You can verify the uniqueness of your chosen LLC Name using the South Dakota Secretary of State’s Business Information Search.

Additionally, get acquainted with the state’s naming regulations to ensure your LLC’s approval. We will delve deeper into both aspects here: South Dakota LLC Name.

Note: 

Most people choose “LLC”.

2. Select a South Dakota Registered Agent

The following step involves selecting a Registered Agent. A South Dakota Registered Agent is an individual or company responsible for receiving legal mail and state notices on behalf of your South Dakota Limited Liability Company.

Who is eligible to be an LLC Registered Agent? You have three options for appointing a Registered Agent:

You
A friend or family member
A Registered Agent Service

South Dakota mandates that LLC Registered Agents must maintain a physical street address within the state. PO Boxes are not permissible. The name and address of the Registered Agent will be included in public records.

If you lack an address in South Dakota or desire increased privacy, you can opt for a Registered Agent Service for your LLC.

We suggest Northwest Registered Agent

One of the aspects we appreciate most about Northwest is their willingness to allow you to use their office address for your LLC filing. This ensures your personal address is not listed in public records.

Additionally, they provide a service to scan any mail addressed to your LLC and upload it to your online account. Northwest offers exceptional customer service, and we trust them as our own Registered Agent.

Special offer: 

Form your LLC with Northwest for $39 + state fee and get a free year of Registered Agent service.

(Read our Northwest Registered Agent review.)

3. Submit Articles of Organization

To establish an LLC, you must submit the Articles of Organization to the South Dakota Secretary of State.

Filing your Articles of Organization online incurs a $150 fee. This is a one-time charge for setting up your LLC. If you prefer to handle this yourself, refer to our detailed guide: South Dakota Articles of Organization. Alternatively, you can hire a company to manage the filing for you.

Need to save time? 

Form your LLC with Northwest ($39 + state fee) or LegalZoom ($149 + state fee).

(See why Northwest is #1: Northwest vs LegalZoom.)

4. Draft an LLC Operating Agreement

An LLC Operating Agreement acts as a complementary document to the Certificate of Formation. While the Certificate of Formation establishes your LLC, the Operating Agreement identifies the owners of the LLC.

Moreover, many banks require an Operating Agreement when setting up an LLC bank account. It is also invaluable if legal issues arise, as it demonstrates the proper management of your LLC. For these reasons, we advise all LLCs, including Single-Member LLCs, to have an Operating Agreement.

Additionally, an Operating Agreement is considered an “internal document.” This means you don’t need to file it with the state or the IRS (Internal Revenue Service). Simply keep a copy with your business records. You can download a free template below. Then, watch our South Dakota Operating Agreement video for a step-by-step guide on how to complete it.

Download a free LLC Operating Agreement:

Member-managed: Google Doc | Word | PDF
Manager-managed: Google Doc | Word

(What’s better? See Member-managed vs Manager-managed LLC)

5. Obtain an EIN for Your LLC

The following step is to secure a South Dakota EIN from the IRS for your LLC. Note: An EIN, also known as a Federal Tax ID Number or Federal Employer Identification Number, is essential.

An EIN is needed to:
– Identify your LLC for tax purposes
– Open a business bank account
– Apply for business licenses and permits

How much does an EIN cost? The IRS provides an EIN at no charge.

How long does it take to receive an EIN? Online applications are processed in 15 minutes, while mail or fax applications may take 1-3 months.

How can I obtain an EIN?
– US Citizens/Residents: With an SSN or ITIN, apply online. Follow these instructions: Apply for an EIN online.
– Non-US Residents: You can’t apply online, but you can obtain an EIN via fax or mail. See these instructions: How to get an EIN without an SSN or ITIN.

What should I do after my LLC is approved?

Once your LLC gets the green light, there are several steps to consider.

LLC Business Bank Account


It’s advisable to set up a dedicated business bank account for your LLC. This helps streamline accounting and record-keeping, ensuring clarity in your business finances. Additionally, maintaining a separate business account safeguards your personal liability protection by clearly distinguishing between personal and business finances.

Get Business Licenses and Permits


Fortunately, South Dakota doesn’t require a state general business license. However, depending on your LLC’s location, a local business license or permit might be necessary. For instance, starting a daycare may require a city or county business license. More details can be found on our South Dakota Business License page.

File Your LLC Annual Report


All South Dakota LLCs must submit an Annual Report each year to stay in good standing with the South Dakota Secretary of State. The filing fee is $50 annually. Reports are due by the last day of your LLC’s anniversary month. For example, if your LLC was approved on April 12, 2025, the report is due by April 30, 2026, and every subsequent year on that date.

When is Your First Annual Report Due?
The first Annual Report is due the year after your LLC is approved. If your LLC was approved on May 15, 2025, the initial report must be filed by May 31, 2026, and annually on this date thereafter. You can file your LLC’s Annual Report online or by mail, though online filing is recommended for ease. Follow our step-by-step guide here: South Dakota LLC Annual Report.

File and Pay Taxes


LLCs themselves don’t pay federal income tax; rather, the LLC members do so on their personal tax returns. The IRS taxes an LLC based on the number of owners. A Single-Member LLC is taxed like a Sole Proprietorship, while a Multi-Member LLC is taxed like a Partnership. Alternatively, you can request the IRS to tax your LLC as a C-Corporation or S-Corporation. Beyond federal taxes, be mindful of state and local taxes, such as sales tax. For further details, refer to South Dakota LLC Taxes.

Helpful Resources

South Dakota Secretary of State


Website
Contact
Phone: ​​605-773-4845
Hours: 8am to 5pm, Monday – Friday, Central Time

How to Start an LLC in South Dakota FAQs

Can I start an LLC online in South Dakota?


Yes, you can establish your LLC online in South Dakota. The fee for filing the Articles of Organization is $150. When you file your LLC online, it gets approved instantly.

The primary benefit of an LLC is the protection of your personal assets. This means if your business faces a lawsuit, your personal belongings—such as your home, vehicles, and bank accounts—are safeguarded. This protection extends to all LLC owners, known as LLC Members. It doesn’t matter if you have a Single-Member or Multi-Member LLC; all owners are shielded from business debts and liabilities. This protection is not available with Sole Proprietorships or Partnerships, where owners aren’t protected against lawsuits. As a result, Limited Liability Companies (LLCs) are a more popular choice. Another advantage is LLC pass-through taxation, where the LLC itself doesn’t pay federal income taxes. The profits are instead passed through to the LLC Members, who then report them on their personal tax returns. For more details, see How are LLCs taxed.

Whether South Dakota is a suitable place to start an LLC depends on where you live and conduct business. If you reside and operate in South Dakota, you should start your LLC there. Although many websites discuss tax rates and benefits of other states, these don’t apply if you don’t live or do business there. For instance, if you form an LLC in Delaware but live and operate in South Dakota, you’ll need to register your Delaware LLC in South Dakota and incur additional fees, paying South Dakota taxes regardless. This results in higher costs and complications without benefits. In conclusion, if you live and do business in South Dakota, it is a good state to start a business. If you don’t, then it isn’t advisable.

Real estate exception: If you’re buying real estate outside South Dakota, you should form your LLC in the state where the property is located.

For more details, see Best State to Form an LLC.

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