Getting Started

Naming the LLC

Naming Guidelines in South Dakota

In South Dakota, an LLC must publicly showcase its status by including one of the following phrases as part of the official company name: “LLC,” “L.L.C.,” or “Limited Liability Corporation.” If there are any restricted words in the name of the company, additional paperwork will be required. If a word is already being used by a federal or a state agency, that word is fully prohibited, not just restricted, in South Dakota.

Is the Name for the LLC Available in South Dakota? (How Does a Company Search for Name Availability?)

Companies can find the availability of a certain name using the name search feature at the following web address: https://sosenterprise.sd.gov/BusinessServices/Business/NameAvailability.aspx

Is the Domain Name Available?

Companies should check with a domain name registrar to see if a domain name is available. It is not a formal requirement to format a domain name in a certain way; no iteration of “LLC” in the URL is necessary in order to remain in compliance.

Select a Registered/Statutory Agent

 

South Dakota wants to be able to get in touch with businesses in its jurisdiction. Having a P. O. Box as a business address is not good enough for the state. The state also wants to keep up with incorporated business entities for tax purposes and separate them from independent contractors and self employed individuals. The registered agent helps the state accomplish these goals.

The registered agent is a person or a company that will receive any service of process correspondence [read: official mail] if a business is involved in any legal action. Registered agents also serve as a permanent address for the state of South Dakota to send paperwork to a company.

A registered agent may also be known as a ‘resident agent’ or a ‘statutory agent.’

Who Can be a Registered Agent in South Dakota?

In South Dakota, companies may have a company employee or an outside individual or company serve as the registered agent. However, if the agent is a corporation, it must be duly authorized to operate in the state. If the registered agent is an individual, that person must be a resident of South Dakota.

Filing Articles of Organization

Link to Download

Companies may download the required Articles of Organization at https://sdsos.gov/docs/business-forms/domesticllcarticlesoforganization20170307.pdf

Is There a Fee?

South Dakota requires a nonrefundable fee of $150 to file the Articles of Organization.

The Operating Agreement

Does South Dakota Require an Operating Agreement to Form an LLC?

South Dakota does not require an Operating Agreement to form an LLC.

Running Your Business

Getting Your EIN

What’s an EIN?

An EIN is an employee identification number, issued by the Internal Revenue service. Sometimes it is also called a Federal Tax Identification Number. It’s a unique number issued to each business.

You’ll need an EIN to

  1. Open a business bank account.
  2. File Federal and State Taxes
  3. Hire employees.

Before you get your EIN:

  1. Make sure your new business has been properly formed before applying.
  2. Be wary of paid sites. EINs are free direct from the IRS.

How do I get an EIN?

  1. Apply online: The easiest way is to apply online for an EIN. Note, the IRS website has office hours, and is only available Monday through Friday, 7am to 10pm. Yes, we also agree this is one of the most ridiculous things we’ve ever seen.
  2. Call: You can call 1-800-829-4933, between 7am to 7pm of your time zone, Monday to Friday.
  3. Snail Mail – You can download the form and mail it in.

Keep Business and Personal Accounts Separate

  1. Get a business bank account for your business. This will help you protect your personal assets from potential creditors and lawsuits, and will also make life A LOT easier come tax time.
  2. Get a business credit or debit card. This will help you keep your expenses separate and easier to track.

Accounting

No matter what business you run, accounting software and processes is a must for any small business. If you have an accountant, ask them which software they work with and recommend.

A good accounting system is necessary to:

  1. Track income and expenses, so you can easily see if you’re making money
  2. Makes filing income taxes so much easier.

Always try and find something that will:

  1. Sync with all of your bank and credit card accounts automatically – not just downloads, but auto sync.
  2. Automatch vendors, customers and other accounts.
  3. Let you accept credit cards and ach drafts with ease.

If a business has employees, South Dakota requires registration for Unemployment Insurance Tax here (http://dlr.sd.gov/ui/businesses/default.aspx).

How to Register for Sales and Use Tax in South Dakota

If a business is selling taxable goods or services, it must register for the Sales Tax here: https://apps.sd.gov/rv23cedar/main/main.aspx

Licenses and Permits

Depending on the industry, a business may need to register for other federal, state and local permits.

Insurance and Workmen’s Comp in South Dakota

All companies must register for Workers Compensation and General Liability insurance.

Keeping the LLC Compliant

Hiring Employees

To stay in compliance with South Dakota, companies must do the following for its employees:

– Verify the status of the employee to work in the United States
– Report the employee as a “new hire” to the state
– Provide Workers Compensation insurance to the employee
– Withhold income taxes
– Give increments to the employee

Annual Report

Companies in South Dakota are required to file an Annual Report with the Secretary of State. The first report must be filed in the year following the formation of the LLC.

Cost

It costs $50 to file an Annual Report in South Dakota.

Links

The link to file the Annual Report is here: https://sosenterprise.sd.gov/BusinessServices/Business/AnnualReportInstr.aspx

Deadlines

All Annual Reports are due on November 15.

Late Filings

If a filing is late, then a business will need to request a Certificate of Good Standing. The Certificate can be requested online, by email, by fax or in person. There is a $20 fee associated with the request. The website link is here: https://sosenterprise.sd.gov/BusinessServices/Business/CertOfExistenceInstr.aspx

How to File a Foreign LLC in South Dakota

South Dakota accepts LLCs from outside of the state boundaries. There is a $750 fee associated with filing a foreign LLC with the state. The link to file is here: http://sdsos.gov/business-services/assets/foreignllccertificateofauthority20110101.pdf