How to Start a DBA in South Dakota
South Dakota can be an attractive place to start a small business due to its low cost of living, low taxes, and supportive business environment. Along with the beautiful scenery, it’s no wonder that small business owners have gravitated toward The Mount Rushmore State for their endeavors. One of the first steps to starting a small business in South Dakota is to choose the name of the business, which can mean both the business’s legal name and the name it will operate as to the public. If these are different, you will need to complete the process of DBA filing with the state. Starting a business can be challenging, but registering your DBA in South Dakota is a relatively straightforward process. By following these steps and ensuring that your business is in compliance with all state and federal regulations, you can set your business up for success in South Dakota.
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What is a DBA?
The acronym “DBA” stands for “doing business as” and is used to refer to a business operating under a different name from its legally registered name. Different states use a variety of terms to refer to this concept, like “fictitious name,” “assumed name,” or “trade name,” but they all amount to the same concept.
A DBA is the name that will be used for operations of your business. It’s what you may see on signage and business cards, what customers will know you by, and what you will use on most documents. But with a DBA in place, your business’s true legal name remains something else, usually the legal name of the owner.
How to search DBA names in South Dakota
The process of registering a DBA in South Dakota is mostly to let others know that your name is in use. It does not grant any exclusive rights to the name, and others can use it as well. Similarly, you can use a DBA that is already in use. However, it is still recommended that you use a unique name to help you stand out from other businesses.
To search for DBA (Doing Business As) names in South Dakota, follow these steps:
- Visit the South Dakota Secretary of State’s Business Services webpage.
- Click on the “Search Business Filings” button.
- Select “Search by Business Name” from the drop-down menu and enter the DBA name you wish to search for.
- Click “Search” to see if the DBA name is already registered in South Dakota.
You will also need to be sure that the name follows South Dakota’s general naming regulations. This includes prohibitions on names that are misleading or vulgar, as well as names that suggest a government affiliation.
Keep in mind that while you can share a name with other DBAs and businesses in other states, your DBA is a branding tool. It can be helpful to perform a general internet search to see what customers might when they look for your business, including potential website URLs.
Have a name in mind? Check on name availability first here.
How to register a DBA in South Dakota
After you have chosen a name to use as your DBA, you can move forward with the DBA filing process in South Dakota.
Complete the new DBA application
You can register for your DBA through a simple online form on the Secretary of State’s website. You will need to provide the name and address of the owner of your business. If your business is a corporation, LLC, general partnership, association, or cooperative, you will also need to provide your Secretary of State Business ID as a part of the application.
The filing fee of $10 can be paid online with major credit cards.
Save your Certificate of Registration
Within the weeks following your application, you will receive a Certificate of Registration from the South Dakota Secretary of State. This name certificate confirms you have registered a DBA, allowing you to conduct business under that name moving forward.
Ready to register your DBA? Fill out these forms.
What comes next
Being a business owner comes with a large number of responsibilities that you must carry out to ensure your business runs smoothly. This includes daily operations as well as laws and regulations that allow your business to operate according to South Dakota laws. The below are some of the most common things you will need to complete, though your business may have unique needs not captured.
Consider getting an EIN
An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify a business entity. Like you need a Social Security Number for your personal taxes, businesses may need an EIN.
There are several reasons why you might need an EIN. If you are starting a new business, you will need an EIN to open a business bank account, apply for business licenses, and file tax returns. If you are changing the structure of your business, such as incorporating or forming a partnership, you will need to apply for a new EIN. Additionally, if you hire employees, you are required to have an EIN for payroll tax purposes. If you are involved in certain types of business activities, such as selling alcohol or firearms, you may also be required to have an EIN.
An EIN is a necessary component of running a business and complying with tax and legal requirements. It is free to be issued an EIN online and takes only a few minutes.
If you plan to get an EIN, you can do so on the IRS website.
Obtain licenses and permits
The specific business licenses and permits required in South Dakota will depend on the nature of your business and its location. However, here are some of the common business licenses and permits that may be required in South Dakota:
- Business registration: All businesses operating in South Dakota must register with the Secretary of State.
- Sales tax license: If your business sells goods or services subject to sales tax, you will need to obtain a sales tax license at the state level from the South Dakota Department of Revenue.
- Professional and occupational licenses: Some professions in South Dakota, such as architects, accountants, and contractors, require a professional or occupational license.
- Building permit: If your business involves construction or renovation of a building, you will need to obtain a building permit from the local government.
- Health permits: If your business involves the handling of food, beverages, or other health-related products, you may need to obtain health permits from the South Dakota Department of Health.
It’s essential to check with the South Dakota Secretary of State, Department of Revenue, and local county clerk’s offices to determine the exact licenses and permits required for your business.
Open a business bank account
Having a business bank account can provide several benefits to your business.
Firstly, it can help establish your business as a legal entity separate from your personal finances. This can be important when dealing with suppliers, vendors, and customers. It can also record-keeping easier by providing a clear separation between personal and business finances, which provides legal protection for your personal assets. Additionally, this separation can simplify tax reporting and make it easier to calculate business expenses and income.
Having a business bank account can give your business a more professional image and show that you are committed to its success. As you grow and want to add investors and expand your footprint, a bank account is a good way to establish yourself financially.
Keep your DBA current
South Dakota requires that DBAs are renewed every five years. The process can be done online through the Secretary of State for a $10 fee.
Who is a DBA best for?
Not all businesses will have a need to use a DBA. Along with state-specific requirements, the legal structure of your business and the owners’ personal preference will be major factors in whether this is necessary.
When it comes to business structures, the legal process for registering your business may indicate whether a DBA is useful. The most common uses of a DBA are:
- Sole proprietorships and partnerships will be registered by default under the name of their owner. Since there is no formal paperwork to name the business, there is no other name that it could be listed as. In this case, a DBA would allow the business to have a publicly-facing name other than your own.
- Franchises often use a DBA to establish their business as a local one. For example, you may own a local McDonald’s and will need to register it as something like an LLC or corporation. The business may then be called ABC Burgers, but a DBA would allow you to operate as “McDonald’s” to tie you to the parent company.
Other business structures, like a limited liability company or corporation, do not usually need to use a DBA. This is because part of registering these businesses includes choosing a name, which can be anything. Some localities may require this, but it is rare. These businesses can always choose to register a DBA if they choose.
Why would entrepreneurs choose to set up a DBA in South Dakota?
There are a number of reasons that a South Dakota small business owner may choose to startup a DBA.
Firstly, a DBA registration can help businesses establish a separate identity from their owners, which can be useful for branding and marketing purposes. It can also provide a level of privacy for the owners, as they can conduct business under something other than their own name.
Secondly, registering a DBA can help businesses comply with legal requirements in South Dakota. The state requires businesses to register their DBA if they want to use a name other than their personal name. Failure to register a DBA can result in legal penalties, such as fines or even being barred from doing business.
Thirdly, a DBA registration can also help businesses open a business bank account and obtain credit or lenders in South Dakota. Many financial institutions require businesses to have a DBA registration before opening a business account, as it provides proof that the business is legitimate and registered with the state.
Cost to get a DBA set up
In South Dakota, there are some DBA costs and requirements that you should be aware of:
- Formation fees: Before you can file a DBA, you have to form your business entity under its legal name. This can cost up to $15, along with other fees such as name reservations and registered agents.
- Filing of the DBA: Once you have reserved the name of your business, you can file for your DBA. This can be done online through the South Dakota Secretary of State website, and the filing fee is $10.
- Business licenses: Depending on the type of business you are running, you may also need to obtain a business license from the South Dakota Department of Revenue. The cost for this varies depending on the type of business.
The total cost to set up a DBA in South Dakota can range from $20 to several hundred dollars. It is important to check with the appropriate agencies to determine the exact requirements and costs for your specific new business.
What is the processing time for a South Dakota DBA?
The process for filing a DBA is typically completed online, with a turnaround time no more than a few days. If you need to complete this in person or through the mail, it can take longer.
Do DBAs in South Dakota give exclusive naming rights?
No, in South Dakota a fictitious business name does not grant you exclusive rights to use the name. It is meant to announce your intention to use the name to others, and it is registered on an online database. But two businesses can share the same DBA in South Dakota.
Can I have multiple DBAs in South Dakota?
Yes, a business can register multiple DBAs for the same business. This can be useful for franchises or a business with multiple branches and products.
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