How to Form an LLC in South Dakota

What South Dakota law does with a member's interest

SDCL 47-34A-504(e) makes a charging order the exclusive remedy a judgment creditor of a member's distributional interest may use to satisfy a judgment out of that interest, and rules out every other remedy, including foreclosure on it. Subsection (f) bars a member's creditor from obtaining possession of, or exercising legal or equitable remedies against, company property, and subsection (g) applies the section to single member limited liability companies as well as companies with more than one member.

SDCL 47-34A-303(b) treats internal formalities the same way: a failure to observe formalities relating to the exercise of the company's powers or the management of its activities and affairs is not a ground for imposing liability on a member or manager, and subsection (a) adds that the shield applies regardless of the dissolution of the company. Purpose is limited, though: SDCL 47-9A-1 bars any foreign or domestic limited liability company, except as chapter 47-9A provides, from being formed or licensed to own, lease, hold or otherwise control agricultural land to be used in the business of agriculture.

Filing the articles of organization

A South Dakota LLC is organized by delivering articles of organization to the Office of the Secretary of State. Under SDCL 47-34A-203(a) the articles state the company name, the address of the initial designated office, the information required by SDCL 59-11-6, each organizer's name and address, the duration if other than perpetual, whether the company is manager-managed and if so each initial manager, whether any member is to be liable for company debts, and whether the company may establish one or more series.

Member names are not on that list, and the Secretary of State states that owners of LLCs are not filed with its office, that ownership is not defined in the articles, and that only organizers are filed, with members reaching the record only where the company has qualified as a family farm.

Domestic articles cost $150 filed electronically online and $165 filed on paper, SDCL 47-34A-212(a) setting the $150 fee and the paper figure adding the $15 the fee schedule lists as the "Paper Filing Fee for documents able to be filed online." Articles carrying notice of one or more series cost $200. Online filing runs through Business Services Online at sosenterprise.sd.gov under "Start a New Business". Paper filings go to the Secretary of State at 500 East Capitol Avenue, Suite 112, Pierre, SD 57501-5070.

On turnaround, the office publishes that new paper filings are processed on average within 1-3 business days and that online filings are processed immediately. An online filer downloads a color PDF certificate of organization as soon as payment is processed and receives no mailed certificate. The fee schedule lists expedited service at $50, defines it as "completion sooner than the normal course of business upon request," and states no turnaround for it.

Until that certificate of organization issues, SDCL 47-34A-202.2 bars the company from transacting business or incurring indebtedness beyond what is incidental to its organization. Existence otherwise begins on filing, unless the articles specify a delayed effective date under SDCL 47-34A-206(d).

Naming the company

SDCL 47-34A-105(a) requires the name to contain "limited liability company" or "limited company," or the abbreviation "L.L.C.," "LLC," "L.C." or "LC," and allows "Limited" to be abbreviated as "Ltd." and "company" as "Co." Subsection (b) requires the name to be distinguishable upon the records of the Secretary of State from any corporation, limited partnership or company already organized or authorized to transact business here, from a name reserved or registered under SDCL 47-34A-106 or 47-34A-107, and from a fictitious name approved under SDCL 47-34A-1005. The office applies that as a sound test, asking whether two names sound the same.

The Secretary of State states that "TRUST" is a regulated word, that an entity name containing it needs approval from the Department of Labor and Regulation, Division of Banking, and that because of that approval the documents cannot be filed online and must be filed via paper. The office's Business Name Availability Search is published as a preliminary name check only. Reserving a name under SDCL 47-34A-106 costs $25 and holds it for one hundred twenty days.

Registered agent

The requirement reaches an LLC through SDCL 47-34A-203(a)(3), which calls for the information required by SDCL 59-11-6: the name of the entity's commercial registered agent or, if it has none, the name and address of its noncommercial registered agent. SDCL 59-11-5 requires an actual street address or rural route box number in this state, and a mailing address in this state if different. The Secretary of State states that a registered agent must be a resident of South Dakota with both a physical and mailing address in South Dakota, and that the office-holder option does not apply to LLCs.

Changing the agent or office uses the Statement of Change of Registered Office or Registered Agent or Both, at $10 online and $25 on paper. Failure to keep a valid South Dakota registered agent on file is one of the grounds the office names for administrative dissolution or revocation. More sits on the South Dakota registered agent page.

The annual report

SDCL 47-34A-211 requires every LLC, and every foreign LLC authorized to transact business here, to deliver an annual report to the Secretary of State. The office states the deadline as the first day of the anniversary month of the month the business was initially filed, every year: an entity filed June 11, 2026 owes its first report June 1, 2027 and every June 1 after. Filing may begin two months before the due date.

That rule changes on January 1, 2027. The Legislature publishes a second version of SDCL 59-11-25 effective that date under which an entity files either in the month representing the first-year anniversary of its formation and each same month annually, or, beginning in the calendar year after formation, on or before January thirty-first each year. The entity indicates its selected filing date on the formation document and may switch by filing a change-of-filing-date form while in good standing.

The fee is $55 filed electronically online and $70 on paper, with SDCL 47-34A-212(b) setting the $55 reporting fee. SDCL 59-11-24 requires the report to give the entity name, the jurisdiction of formation, the principal office address, the governors' names and business addresses, and whether the entity owns agricultural land and, if so, whether it has foreign beneficial owners; a member-managed company is excused from listing its governors. The agricultural land question is marked required on the paper form, and the same section directs the Secretary of State, on or before December first of each year, to publish an aggregated report of all foreign entities and entities with foreign beneficial ownership that indicated they owned agricultural land during the reporting period.

Missing the deadline

The Secretary of State states that an entity becomes delinquent and late fees are assessed if the report has not been filed two months following the due date, so a report due June 1 and unfiled leaves the entity delinquent and incurring late fees on August 1. The late fee is $55 under SDCL 47-34A-212(b). SDCL 47-34A-809 lets the office commence administrative dissolution where the company does not deliver its annual report, or pay fees, taxes or penalties, within sixty days after they are due.

Reinstatement runs through the Department of Revenue first. The Application for Reinstatement costs $150 plus the filing fees for any delinquent annual report and requires a certificate from the Department of Revenue reciting that all taxes owed have been paid, which the Department forwards to the Secretary of State once approved. A foreign entity cannot be reinstated and must file for a new certificate of authority; see the South Dakota foreign LLC page.

Farming and agricultural land

Chapter 47-9A defines its "corporation" to include limited liability companies, substituting members for shareholders. The Secretary of State publishes a Qualification for Farming form for a domestic LLC with no filing fee. No corporation may commence farming in this state until the Secretary of State has inspected the report required by SDCL 47-9A-16 and certified that the proposed operations comply, and SDCL 47-9A-20 sets a civil fine of not more than one thousand dollars for failing to file or intentionally filing false information.

State taxes and licenses

The Department of Revenue's July 2026 Sales and Use Tax Guide opens its Tax Basics section with the statement that South Dakota does not have a corporate, unitary, or personal income tax, and the Department states separately that there is no inheritance tax, repealed effective July 1, 2001, and no estate tax.

The state sales and use tax rate is 4.2%. Municipal sales and use tax runs generally between 1% and 2%, and municipalities may impose or amend a municipal tax only on January 1 or July 1. Construction work requires a South Dakota contractor's tax license and carries a 2% excise tax on gross receipts for construction projects.

A sales tax license is required of any business with a physical presence in South Dakota, and of a business without one whose gross revenue from sales into South Dakota exceeded $100,000 in the previous or current calendar year. Licenses come from the Department's online Tax License Application or Streamlined registration, and returns and payments go through EPath. More sits on the South Dakota LLC taxes page.

Assumed names

An LLC trading under another name files a fictitious name statement under SDCL ch. 37-11. SDCL 37-11-1 requires it of any person regularly conducting a business in this state unless the name plainly shows the true surname of each person interested in the business, or the name is on file with the Secretary of State in a required business filing. The statement is filed electronically with the Secretary of State or in paper form with any register of deeds in the state, ten dollars is paid with each new filing and renewal, and the filing is renewed every fifth year. Until the statement is filed, SDCL 37-11-5 bars any legal action in the name under which the business is conducted.

Operating agreement

SDCL 47-34A-103(a) provides that all members may enter into an operating agreement, which need not be in writing; to the extent the agreement does not otherwise provide, chapter 47-34A governs. Subsection (b) bars the agreement from eliminating the duty of loyalty or the obligation of good faith and fair dealing, or restricting the rights of a person other than a manager, member or transferee. SDCL 47-34A-114 states that it is the policy of the chapter and this state to give maximum effect to the principles of freedom of contract and to the enforceability of operating agreements. Operating agreements are not filed with the Secretary of State. See the operating agreement guide.

EIN and closing the company

A federal employer identification number comes from the IRS, and the Secretary of State states that its office does not issue the number. The EIN guide covers the application. Ending the company uses Articles of Termination under SDCL 47-34A-805, which cost $10 and may be filed at any time after dissolution and winding up; the South Dakota dissolution page covers the wind-up steps that come first.

Frequently asked questions

How much does it cost to form an LLC in South Dakota?

Articles of organization for a domestic LLC cost $150 filed electronically online and $165 filed on paper, the paper figure including the $15 paper filing fee that attaches to documents able to be filed online. Articles carrying notice that the company may establish one or more series cost $200.

When is the South Dakota LLC annual report due?

The Secretary of State states that annual reports are due every year on the first day of the anniversary month of the month the business was initially filed, and that filing may begin two months before that date. Effective January 1, 2027, SDCL 59-11-25 lets an entity file either in its first-year anniversary month each year or on or before January 31 each year.

What happens if a South Dakota LLC files its annual report late?

The Secretary of State states that an entity becomes delinquent and begins incurring late fees two months after the due date. The late fee is $55 under SDCL 47-34A-212(b), and the Secretary of State may commence administrative dissolution if the report is not delivered within sixty days after it is due.

Who can serve as registered agent for a South Dakota LLC?

The Secretary of State states that a registered agent must be a resident of South Dakota with both a physical and a mailing address in South Dakota. The permitted types are a noncommercial registered agent, meaning an individual residing in South Dakota or a business entity registered in South Dakota, and a commercial registered agent registered with the Secretary of State.

Does South Dakota tax LLC income?

The Department of Revenue's Sales and Use Tax Guide states that South Dakota does not have a corporate, unitary, or personal income tax. An LLC selling taxable products or services collects the 4.2% state sales and use tax plus municipal tax.

Can a South Dakota LLC own farmland?

SDCL 47-9A-1 provides that no foreign or domestic LLC, except as chapter 47-9A provides, may be formed or licensed for the purpose of owning, leasing, holding or otherwise controlling agricultural land used in the business of agriculture. Named exemptions cover breeding stock, greenhouse produce, poultry meat and egg facilities, dairies and pork.