Form a South Dakota LLC
LegalZoom is your best resource to start your limited liability company online today. We provide a user-friendly service with hefty customer support to help you create an LLC in three easy steps. Protect your business and personal assets and organize your business with the help of experienced business formation experts.
When you form your South Dakota LLC, with LegalZoom, we prepare and file your articles of organization with the Corporations Division of the South Dakota Secretary of State. We also conduct a name search for your South Dakota LLC to assist you in the preparation of your operating agreement and other customized services corresponding to your needs. Once your articles of organization have been successfully filed, your South Dakota LLC begins its existence as a legal business entity.
LegalZoom LLC Overview
Registering a Limited Liability Company Name: Choosing a business name is one of the first steps in the process of forming your South Dakota Limited Liability Company. The name that you choose:
Must contain, as the last words of the name, limited liability company, or limited company, or the abbreviation, L.L.C., LLC, L.C., or LC. Limited may be abbreviated as Ltd. and company may be abbreviated as Co.
Must be distinguishable from (cannot be the same as or deceptively similar to)
o The name of any corporation, limited partnership, or company incorporated, organized or authorized to transact business, in this state
o A name reserved or registered
o A fictitious name for a foreign company authorized to transact business in this state
A South Dakota Limited Liability Company may apply to the secretary of state for authorization to use a name that is not distinguishable if either:
o The present user, registrant, or owner of a reserved name consents to the use in a record and submits an undertaking in form satisfactory to the secretary of state to change the name to a name that is distinguishable upon the records of the secretary of state from the name applied for
o The applicant delivers to the secretary of state a certified copy of the final judgment of a court of competent jurisdiction establishing the applicant's right to use the name applied for in this state
A South Dakota Limited Liability Company may use the name, including a fictitious name, of another domestic or foreign company which is used in this state if the other company is organized or authorized to transact business in this state and the company proposing to use the name has:
o Merged with the other company
o Been formed by reorganization with the other company
o Acquired substantially all of the assets, including the name, of the other company
LegalZoom allows you to choose up to 3 names, in order of preference. We will conduct a name check before filing to see which names are available.
Reserving a Limited Liability Company Name: Once you have chosen an available name, LegalZoom can help you register your name with the state.
Articles of Organization: In any South Dakota LLC formation process, articles of organization must be signed by at least two persons organizing the LLC and delivered, along with a copy, to the South Dakota Secretary of State, Corporations Division for filing. State law requires that certain information be included in your articles of organization for South Dakota LLC formation procedurally. This information must include:
The LLC name
The address of the initial designated office
The name and street address of the initial agent for service of process
The name and address of each organizer
The duration of the company if other than perpetual
A statement as to whether the company is to be manager-managed, and, if so, the name and address for each initial manager
A statement as to whether one or more of the members of the company are to be liable for its debts and obligations
Articles of organization of a limited liability company may not vary the nonwaivable provisions.
Filing: Your LLC is considered organized once the original articles of organization and one (1) exact or conformed copy is delivered to the Corporations Division of the Secretary of State by one or more persons. The record must be signed in the name of the LLC by: (1) Manager of a manager-managed company; (2) Member of a member-managed company; (3) Person organizing the company, if the company has not been formed; (4) Fiduciary, if the company is in the hands of a receiver, trustee, or other court-appointed fiduciary; or (5) by an attorney-in-fact. The record must also state the name and title (capacity) of the signer.
A certificate of organization will be issued and delivered along with the conformed copy to the representative of the LLC. The original articles of organization will in turn be filed with the Secretary of State along with the month, day and year of filing.
Additionally, South Dakota LLC formation generally requires inclusion and/or considering of the following:
Operating Agreement: Although not required, LLC members may adopt an operating agreement to regulate the internal affairs of the company, including the management of the LLC, which may also be amended and repealed as allowed by the agreement or applicable law.
If any provision of an operating agreement is inconsistent with the articles of organization:
The operating agreement controls as to managers, members, and members' transferees
The articles of organization control as to persons, other than managers, members and their transferees, who reasonably rely on the articles to their detriment.
Membership: A LLC must have one or more members. Requirements:
Minimum Number of Members: One or more
Eligibility Requirements: Natural Person or Entity
Procedure for Membership: The member may acquire an interest in the LLC either (1) in proportion to their contribution or (2) otherwise in accordance with the operating agreement of the company.
Resignation of Membership: A member has the power to dissociate from a LLC. However, certain prohibitions exist surrounding the ability of a member to resign from the company.
If the operating agreement does not eliminate the power to dissociate, dissociation is wrongful only if:
It is in breach of an express provision of the agreement
Before the expiration of the term specified in the articles of organization, if any, the member:
o withdraws by express will
o is expelled by judicial determination
o is dissociated by becoming a debtor in bankruptcy
o In the case of a member that is an entity and not a natural person, trust other than a business trust, or estate, the member is expelled or otherwise dissociated because it willfully dissolved or terminated its existence.
A member who wrongfully dissociates from a limited liability company is liable to the company and to the other members for damages caused by the dissociation. The liability is in addition to any other obligation of the member to the company or to the other members.
Contribution: The contributions of a member to the LLC may consist of tangible or intangible property or other benefit to the company, including money, promissory notes, services performed, or other agreements to contribute cash or property, or contracts for services to be performed.
Registered Agent In South Dakota
LegalZoom can also provide your business with a registered agent in South Dakota. Every South Dakota LLC must have a registered office and agent in South Dakota, who is the person or office designated to receive official state correspondence and notice if the company is "served" with a lawsuit.
Eligibility Requirements: The registered agent in South Dakota may be either (1) an individual resident in this state whose business office is identical with such registered office, (2) a domestic corporation, or (3) a foreign corporation authorized to transact business in this state, having a business office identical with such registered office.
Registered Office: The registered office may be but does not need to be the LLC's place of business.
South Dakota Secretary of State
Once a South Dakota LLC has been created, the South Dakota Secretary of State will require certain recurring responsibilities and duties. The most important of these are explained below. For further information, refer to the South Dakota Secretary of State office.
Records: Each limited liability company shall keep records open to inspection at its office.
Acts Triggering Dissolution: A LLC is dissolved upon the happening of any one of the following events:
An event specified in the operating agreement
Consent by the specific number or percentage of members specified in the operating agreement
Event that makes it unlawful for all or substantially all of the business of the LLC to continue, unless after notice, any cure of illegality is made within ninety (90) days
On application by a member or a dissociated member and entry of a judicial order
On application by a transferee (of a member's interest), a judicial determination that it is equitable to wind up the LLC after expiration of the LLC (if the company was for a specified duration at the time the applicant became a transferee by member dissociation, transfer, or entry of a charging order that gave rise to the transfer)
A LLC can offer certain tax advantages over a corporation, including the availability of more deductions. Additionally, a LLC is not required to be a separate tax entity like a corporation; instead it can be a "pass-through entity" so that the LLC owners report business losses or profits on their personal tax returns, like a partnership.
Federal Income Tax: Unless you elect to tax the LLC as a corporation, the IRS treats single-member LLCs as sole proprietorships for tax purposes. This means the LLC itself does not pay taxes and does not have to file a tax return. Unless you elect to tax the limited liability company as a corporation, the IRS treats multi-owned LLCs as partnerships for tax purposes. This means that LLC owners each pay taxes on their lawful share of the profits on their personal income tax returns, not the LLC itself. If you desire, by filing IRS Form 8832, you may elect corporate taxation if you regularly need to keep a substantial amount of profits in your LLC.
State Income Tax: The LLC tax rate for South Dakota is variable, based on South Dakota taxable net income.
Federal Tax Identification Number: Your LLC may need to obtain a federal tax identification number (also known as an employment identification number/ EIN), which is similar to an individual's social security number. Generally, you will not need a separate EIN number for your LLC as long as you are the sole owner and the LLC has no employees. However, if you are not the sole owner of the LLC or if the LLC has employees, your LLC will need a separate EIN number to open a bank account and for certain tax filing requirements LegalZoom can prepare your Federal Tax ID Application if you have not already done so
Filings must be made with the South Dakota Secretary of State along with the appropriate filing fee. When appropriate a check must accompany the document payable to the State of South Dakota, covering all charges for the Secretary of State.