Starting your own business in the Mount Rushmore State? Setting up a South Dakota LLC can be one of the smartest moves you make. Forming a limited liability company gives you flexibility, protection, and credibility, all while keeping setup costs and ongoing requirements refreshingly simple.
In this guide, you’ll learn how to start an LLC in South Dakota step by step, from filing your paperwork to creating an operating agreement that keeps your business running smoothly.
Related: LLC or LLP
How to start an LLC in South Dakota in 5 steps
To open an LLC in South Dakota, you need to choose a business name, secure your domain name, get a DBA (if applicable), appoint a registered agent, file Articles of Organization, create an operating agreement, and get an EIN. This may sound like a lot, but don’t let that scare you off! Starting a South Dakota LLC is a straightforward process that can typically be completed in just a few days when filed online.
If you’re new to starting a business, read this guide to learn what is an LLC organizer. When you’re ready to take the next step, you can access LLC setup for free with GoDaddy.
Choose a name for your LLC
The first step in forming a business is to choose an available name for your LLC. The South Dakota Secretary of State requires that your LLC name:
- Includes “Limited Liability Company” or an abbreviation like “LLC” or “L.L.C.”
- Is distinguishable from existing business names on record in South Dakota
- Does not include misleading terms such as “bank” or “insurance” without approval from the appropriate regulatory authority
Once you’ve picked a name, use the South Dakota Business Information Search to make sure it’s available.
Get your business domain name
Once you’ve landed on the perfect business name, it’s smart to register a domain name for your LLC before someone else does. A matching domain helps your business look professional and makes it easier for customers to find you online.
Get a DBA
A DBA, or “doing business as,” allows your LLC to operate under a different name than the one officially registered with the state. This is useful if you want to create a separate brand identity for your products or services. You can register a DBA through the South Dakota Secretary of State for a small filing fee of $10. Note that DBAs must be renewed every five years.
Appoint a registered agent
Every LLC in South Dakota must have a registered agent, which is a person or business responsible for receiving official documents and legal notices on behalf of your company. There are a few things to know about registered agents in South Dakota. They must:
- Have a physical street address in South Dakota (no P.O. boxes)
- Be available during regular business hours
- Be either a South Dakota resident or a business authorized to operate in the state
You can act as your own agent or hire a professional service. Many businesses opt for professional services to ensure their LLC stays compliant and doesn’t miss important state communications.
File Articles of Organization
To officially form your South Dakota limited liability company, you must file Articles of Organization with the South Dakota Secretary of State. This can be done online through the Secretary of State’s Business Filing Portal or by mail. You’ll need to provide:
- Your LLC’s name and address
- Registered agent’s name and address
- Management structure—learn about the different types of LLCs here
- Duration of your LLC (perpetual or specified term)
The filing fee is $150 online or $165 by mail. Once filed and approved, you’ll receive a Certificate of Organization confirming your business’s legal formation.
Create an operating agreement
While not legally required in South Dakota, having an operating agreement is strongly recommended because it outlines how your LLC will be managed and helps prevent disputes among members.
It’s also important to note that some financial institutions may ask for a copy of your operating agreement before you can open a business bank account or receive financing.
Your operating agreement should include:
- Member names and ownership percentages
- Roles and responsibilities
- Profit and loss allocation
- Voting rights and procedures
- Management structure
- Rules for adding or removing members
- Dissolution process
Even if you’re the sole member, having an operating agreement can strengthen your liability protection and add credibility.
Get an EIN
An Employer Identification Number (EIN) is a nine-digit number issued by the Internal Revenue Service (IRS). It identifies your business for tax purposes and is required to:
- File federal and state taxes
- Hire employees
- Open a business bank account
- Apply for certain licenses or permits
You can apply for an EIN directly on the IRS website. For more details, read this guide on TIN vs. EIN.
How long does it take to get an EIN?
If you apply online, you’ll receive your EIN immediately after your application is processed. This usually only takes a few minutes.
How much does an EIN cost?
It’s completely free to apply for and maintain an EIN. There are no renewal, registration, or processing fees.
How much does it cost to start and run an LLC in South Dakota
Starting a South Dakota LLC is relatively affordable compared to many other states. Below are the main costs you’ll likely encounter when forming and maintaining your company.
- Articles of Organization filing fee: $150 (online) or $165 (by mail), paid to the South Dakota Secretary of State when you register your LLC.
- Name reservation (optional): $25 to reserve your business name for up to 120 days before filing.
- DBA registration (if applicable): $10, required if you plan to operate under a trade name different from your LLC’s legal name.
- Registered agent service (optional): $100–$300 per year.
- Annual report fee: $50 (online) or $65 (paper filing), required each year by the South Dakota Secretary of State to keep your LLC in good standing.
- Sales tax: 4.2% state rate, plus applicable local rates. This applies if your LLC sells goods or taxable services.
- Employer taxes: If you have employees, you must register for unemployment insurance tax through the South Dakota Department of Labor and Regulation.
- Federal income tax: Most LLCs are pass-through entities, meaning profits are reported on the members’ individual tax returns.
Overall, expect to spend roughly $200–$250 to start and about $50–$100 per year to maintain your South Dakota limited liability company, depending on any optional services you choose.
What happens after your LLC is up and running
Once your South Dakota LLC is officially formed, there are a few important tasks to complete to keep your business compliant.
Open a business bank account
Opening a dedicated bank account for your LLC is one of the best ways to separate your personal and business finances. This helps protect your limited liability status and simplifies bookkeeping and tax filing. It also helps build your business’s credit and credibility.
To open a business bank account, you’ll typically need:
- A copy of your Articles of Organization
- Your EIN (Employer Identification Number)
- Your LLC Operating Agreement (if applicable)
- A valid photo ID for all members or authorized signers
File for permits and required business licenses
Depending on the nature of your business, you may need certain licenses or permits to legally operate in South Dakota. Not every business is required to have one, but it’s important to verify your obligations before you begin operations.
You can do this by visiting the South Dakota Governor’s Office of Economic Development website for all state-level licenses, and contacting your city or county government offices for zoning, health, or safety regulations specific to your location.
If your LLC sells goods or taxable services, you must apply for a sales tax license. This can be done through the South Dakota Department of Revenue website.
File annual reports
Every LLC in South Dakota must file an annual report to remain in good standing with the South Dakota Secretary of State. This report keeps your company information up to date, including your registered agent, business address, and member details. Here’s what you need to know:
- Due date: The annual report is due by the first day of the anniversary month of your LLC’s formation each year.
- Filing fee: $50 if filed online, or $65 if filed by mail.
- Where to file: Submit through the South Dakota Secretary of State Annual Report Portal.
Need more information? Learn more about the LLC annual report in this guide.
Things to know about South Dakota LLCs
To keep your LLC in South Dakota running smoothly, it helps to understand how taxes work, what paperwork you may need to stay compliant, and the unique advantages the state offers to business owners.
Filing taxes for a South Dakota LLC
South Dakota is one of the few states with no state income tax, which means LLC members do not pay state tax on business profits. However, you’ll still have federal and other tax responsibilities:
- Federal taxes: Most LLCs are pass-through entities, meaning profits are reported on each member’s personal tax return.
- Sales tax: If your LLC sells taxable goods or services, register with the South Dakota Department of Revenue to collect and remit sales tax (4.2% state rate plus local taxes).
- Employer taxes: If you have employees, register with the South Dakota Department of Labor and Regulation for unemployment insurance and payroll taxes.
You can learn to file business taxes for your LLC with this step-by-step guide.
Obtaining a Certificate of Good Standing
A Certificate of Good Standing is an official document that confirms your LLC is legally registered and compliant in South Dakota. It’s often required when applying for loans, opening business bank accounts, or registering your LLC in another state. You do not get this document automatically; you have to request it online by:
- Visiting the South Dakota Secretary of State’s Business Services Portal.
- Enter your Business ID or use the embedded search tool to find it.
- Select “Certificate of Good Standing” and pay the $20 fee.
- Download the certificate immediately once payment is complete.
Privacy protections
South Dakota provides strong privacy advantages for LLC owners. The state does not require the names of members or managers to be listed publicly in the Articles of Organization, allowing owners to remain private. Only the registered agent’s name and address are shown in public records.
South Dakota Series LLC
A Series LLC allows one parent company to create multiple “series” within it, each with its own assets and liabilities. South Dakota law permits Series LLC formation, which can simplify management for businesses with several ventures or properties.
You can register a Series LLC by filing Articles of Organization with the South Dakota Secretary of State and paying the standard filing fee.
Start your South Dakota LLC today
With no state income tax, low filing fees, and an efficient online registration process, South Dakota makes it easy to launch and maintain a limited liability company. Once your LLC is set up, remember to keep your filings current, maintain accurate records, and stay organized as your business grows.
Ready to make it official? Use GoDaddy Airo to set up your LLC for free in minutes. Airo also helps you find the perfect domain, design your logo, and build your website so you can start your business off on the right foot.
FAQ
What is the advantage of a South Dakota LLC?
A South Dakota LLC offers several key advantages for business owners. The state has no personal or corporate income tax, which helps you keep more of your earnings. It also has low filing fees and minimal annual reporting requirements. Additionally, South Dakota provides strong privacy protections since member names are not required on public records.
Do you need a registered agent for an LLC in South Dakota?
Yes, every LLC in South Dakota is required to appoint a registered agent. Your registered agent must have a physical address in South Dakota and be available during normal business hours. You can act as your own registered agent or hire a professional service.
How much tax do I have to pay for an LLC in South Dakota?
South Dakota does not charge a state income tax on individuals or businesses, which is one of its biggest benefits. However, your LLC will still be subject to local taxes, along with:
- Federal income tax: Based on how your LLC is structured and your profits.
- Sales tax: 4.2% state rate plus any applicable local taxes, if your business sells taxable goods or services.
- Employment taxes: If you have employees, you must pay federal payroll taxes and state unemployment insurance
