How Much Does an LLC Cost in South Dakota? (2024)

Starting a Limited Liability Company (LLC) in South Dakota? First, you’ll need to pay the $150 filing fee for your Articles of Organization.

Once you’ve done that, remember the $50 annual report fee, which keeps your LLC in good standing year after year.

But here’s where things get a little more tricky.

Other LLC costs include hiring a registered agent, filing a DBA, and getting licenses or permits.

Let’s dive into the full picture of South Dakota LLC fees.

How Much Does an LLC Cost in South Dakota?

When starting an LLC in South Dakota, costs can vary. Here are the main expenses you should consider:

• Articles of Organization Filing Fee: The fee to file the Articles of Organization with the Secretary of State is $150.
• Registered Agent Fee: You may need a registered agent. Depending on your chosen service provider, this can cost between $100 and $300.
• Annual Report Fee: Your LLC must file an annual report. The fee is $50.
• LLC Name Registration: To secure a unique name for your business, ensure it’s available. You can reserve a business name in South Dakota for $25.
• Certificate of Good Standing: This can cost around $20 if you need one for business transactions.
• Doing Business As (DBA) Name Registration: If you want to operate under a different name, you can register with the South Dakota Secretary of State for $10.
• Licenses and Permits: All businesses in South Dakota require at least one state-issued business license. A Sales/Use Tax License is free, and there is no need to renew it at any point.
• Taxes: South Dakota does not have a corporate income tax, but you should consider any local taxes that may apply to your LLC.

LLC Costs in South Dakota (Formation Fees)

Below is a table outlining the main requirements and associated fees for forming an LLC in South Dakota.

South Dakota LLC Requirements	Cost
LLC Business Name Search	$0
Articles of Organization	$150
Operating Agreement (optional)	$0 (with Northwest)
EIN Number	$0 (free from IRS)
Annual Certificate	$50/annually
LLC Name Reservation Fee (optional)	$25
South Dakota Certificate of Good Standing (optional)	$10
Foreign LLC Registration (optional)	$750
Fictitious Name (DBA) (optional)	$20
Taxes	Varies
State Business License Fees	$0
Registered Agent Services (optional)	$0-$125 (Northwest)
LLC Formation Services (optional)	$39
Total LLC Costs in South Dakota	$200 – $1169

Total LLC costs in South Dakota range from $200 to $1,169. If you do everything yourself and skip the optional extras, you might only spend around $200. However, if you decide to pay for additional services and requirements, your costs could go up to between $900 and $1,169.

The first mandatory expense is the $150 fee for filing the Articles of Organization, which is essential for officially establishing your LLC.

Additionally, you will need to budget for the annual certificate, which costs $50 each year.

Now, let’s discuss the optional costs.

Conducting an LLC business name search is free, and obtaining an Employer Identification Number (EIN) from the IRS is also free. An Operating Agreement is recommended but can be obtained at no cost using services like Northwest.

You may also want a South Dakota Certificate of Good Standing, which costs $10. If you plan to register a foreign LLC in South Dakota, that incurs a fee of $750.

Regarding registered agent services, you can either act as your agent at no cost or hire a professional service, which typically ranges from $100 to $300.

South Dakota LLC Business Name Search Cost ($0)

Before starting an LLC in South Dakota, you must check if your desired business name is available. Luckily, this search is free.

You can search the South Dakota Secretary of State’s website for a business name. There, you can access the free business name search tool.

Make sure your chosen name is not very similar to existing names. This step helps avoid any potential legal issues. A unique name can also make your business stand out.

South Dakota Articles of Organization ($150)

One of the first steps to starting an LLC in South Dakota is filing the Articles of Organization. This document is crucial as it formally establishes your LLC with the state.

The filing fee for the Articles of Organization is $150 if you submit it online. If you prefer mailing your application, the fee goes up to $165. This fee is a one-time charge that covers the processing of your LLC.

Once you submit your Articles, the South Dakota LLC processing time can vary depending on the filing method and how quickly the state processes your application. Online filings are approved immediately, while mail filings take a week.

Having your Articles of Organization approved officially creates your LLC. It allows you to conduct business within South Dakota while enjoying limited liability protection.

LLC Operating Agreement Cost in South Dakota ($0 with Northwest)

When you set up an LLC in South Dakota, having an operating agreement is a smart choice. This document outlines how your LLC operates and the roles of its members.

The good news is that if you choose Northwest, you can get your operating agreement for free. This service can save you some initial costs when starting your business.

Creating an operating agreement is essential. Although it’s not required by law in South Dakota, it helps clarify business roles and responsibilities and protects your business from personal liability.

Registered Agent Fee ($0-$300/year)

You can choose to act as your registered agent at no cost. To do this, provide your name and address. This free option allows you full control over your LLC’s communications.

If you prefer a professional South Dakota registered agent service, fees typically range from $100 to $300 annually. Using a registered agent service can help protect your privacy and ensure you don’t miss important legal documents.

For example, LegalZoom charges about $249 per year, while ZenBusiness offers services for around $199 a year.

A great option is Northwest Registered Agent, which provides free registered agent services for the first year if you use them to form your LLC. After the first year, their fee is only $125 annually, making it a competitive choice.

Choosing the right registered agent service is important, as they can provide valuable support to your business while ensuring compliance with state requirements.

EIN Cost in South Dakota ($0 from the IRS website)

Applying for an Employer Identification Number (EIN) in South Dakota does not cost you anything. The IRS offers this service for free.

You can complete the application on the IRS website to obtain your EIN. This is the quickest method; you will receive your EIN immediately upon completion.

If you prefer to apply in other ways, you can mail or fax Form SS-4 to the IRS. This method may take longer, but it is an option if you do not have a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).

Obtaining an EIN is essential for your LLC if you plan to hire employees or if your business will be taxed as a corporation. It serves as a unique identifier for your business with the IRS.

South Dakota Annual Report ($50/annually)

In South Dakota, every LLC must file an annual report. This report ensures that your business information is current and accurate. The filing is due on the first day of the second month after your LLC’s formation.

The annual report filing fee is $50 if you file online. If you submit a paper report by mail, the fee increases to $65.

When filling out the report, you’ll need to provide basic information. This includes details about your LLC’s managers or members and whether your LLC owns agricultural land.

LLC Name Reservation Fee in South Dakota ($25)

If you want to reserve a name for your LLC in South Dakota, you’ll need to pay a fee of $25. This step is important to ensure your business name is available before officially forming your LLC.

You can reserve your name for up to 120 days. During this time, no one else can register the same name. This can give you peace of mind as you start your business.

You must apply to the South Dakota Secretary of State to reserve a name. You can do this online or by mail.

Fictitious Name/DBA Cost in South Dakota ($10)

In South Dakota, filing for a DBA, also known as a fictitious name, costs $10. This fee is straightforward and affordable for anyone wanting to operate their business under a name different from their legal name.

A DBA is useful if you want to create a brand identity. For example, if you run a sole proprietorship, the legal name defaults to yours. However, you can register a DBA to use a different business name.

The process to file a DBA is simple. You’ll need to choose a unique name that isn’t used by other businesses. Once you have your name, you can submit your application to the Secretary of State.

South Dakota Certificate of Good Standing ($20)

You may need a Certificate of Good Standing to keep your LLC in good standing in South Dakota. This certificate shows that your business complies with state laws and confirms that you have filed all required documents and paid the necessary fees.

If you file online, a Certificate of Good Standing costs $20. If you file a paper form, the cost increases to $35. Filing online is often faster and more convenient.

South Dakota Foreign LLC Registration Fee ($750)

When you want to register a foreign LLC in South Dakota, the fee is $750. This fee applies if your LLC is formed in another state and you want to operate in South Dakota.

You can register your foreign LLC online for the same $750 fee. However, the cost is slightly higher at $765 if you submit your application by mail. This extra amount covers the handling and processing of your mailed application.

It’s important to pay this fee when you submit your Application for a Certificate of Authority to the South Dakota Secretary of State. You can pay the registration fee online using a credit card. If you send your application by mail, you’ll need to include a check or money order.

South Dakota State Business License Fee (varies)

In South Dakota, every business needs at least one state-issued business license. This is important for compliance with state regulations.

If you have a physical presence in South Dakota, you must obtain a Sales/Use Tax License. This applies to all businesses, regardless of how much money you make.

The great news is that this license is free and does not need to be renewed, making it easy to manage your licensing needs.

South Dakota LLC Taxes (varies)

When you operate an LLC in South Dakota, taxes can vary based on several factors. Here are the main taxes you may encounter:

• Federal Taxes: Your LLC is taxed as a pass-through entity. This means the LLC itself does not pay federal income tax. Instead, you pay personal income tax on your share of the profits.
• Self-Employment Taxes: As an LLC member, your profits are subject to a self-employment tax rate of 15.3%, which includes 12.4% for Social Security and 2.9% for Medicare.
• State Taxes: South Dakota does not charge state personal or corporate income taxes. However, you will likely need to pay:
  • Sales and Use Tax
  • Local Taxes
  • Industry-Specific Taxes
• Other Considerations: If your LLC has employees, you will also need to account for:
  • Payroll Taxes
  • Unemployment Insurance Taxes
• Property Taxes: Property taxes will apply if the LLC owns real estate.

Since tax liabilities depend on your industry and the scale of your business activities, costs can vary widely.

South Dakota LLC reinstatement fee ($150)

If your LLC in South Dakota needs to be reinstated, you’ll have to pay a $150 reinstatement fee, which the South Dakota Secretary of State sets.

Be prepared to cover any unpaid annual report fees and the reinstatement fee. Each delinquent annual report costs $50. Tracking these fees is essential to avoid delays in the reinstatement process.

To get started, ensure that all taxes owed by the LLC are paid. This is a requirement for reinstatement. You must also submit a completed Application for Reinstatement along with the fees.

South Dakota LLC dissolution fee ($10)

You must file certain documents when closing your LLC in South Dakota. One of these is the Articles of Dissolution.

The South Dakota Secretary of State requires a $10 dissolution fee to file these articles. This simple cost is essential for the official termination of your LLC.

The form for the Articles of Dissolution is on the Secretary of State’s website. Please complete it accurately.

South Dakota LLC Change of Registered Agent Fee ($10)

If you need to change your registered agent in South Dakota, there is a fee of $10. This fee applies when you file the necessary form with the Secretary of State.

Your LLC requires a registered agent who receives legal documents for your business. You can change your registered agent anytime, but it must be done through official channels.

What is the Cheapest Way to Start South Dakota LLC?

To start an LLC in South Dakota, you have a few options. The most common method is to file the necessary paperwork yourself. This involves completing and submitting the Articles of Organization and the $150 state filing fee. Using this method can save you money because you won’t have to pay service fees from a formation company.

Another option is to use a South Dakota LLC online service.

Many companies offer packages that include filing the Articles of Organization, ranging from $50 to $200. While this option is convenient, it typically costs more than doing it yourself.

To save even more, seek help from local business groups or non-profits. These companies sometimes offer free or low-cost services to help new businesses.

The cheapest way to start your LLC is by filing the Articles of Organization yourself. This method costs only the state filing fee of $150. While it requires time and effort, you avoid additional service fees.

If you choose a formation service, be aware that the added costs can add up quickly. Also, some services offer features you may not need right now, leading to unnecessary expenses.

Should You Use an LLC Formation Service in South Dakota? (here’s why)

When forming an LLC in South Dakota, you might wonder if using a formation service is a good idea. These services can simplify the process by handling the paperwork for you.

• Peace of mind: Northwest Registered Agent handles all the details, so you won’t miss important forms or deadlines. This helps you stay compliant with state regulations and avoid fines.
• Privacy protection: They act as your Registered Agent, keeping your address off public records, which protects your home or office information.
• Expert support: Many services offer free access to LLC formation experts and attorneys, giving quick answers to your questions without extra costs and ensuring you understand the process.

Frequently Asked Questions

What are the benefits of an LLC in South Dakota?

An LLC offers benefits like limited liability protection, which protects your personal assets from business debts. Additionally, an LLC allows for flexible management structures and can help reduce self-employment taxes.

Is South Dakota a good state to form an LLC?

Yes, South Dakota is considered a good state for forming an LLC. It has business-friendly regulations, no state income tax, and a straightforward filing process, which make it attractive for many entrepreneurs.

Do I need a business license for an LLC in South Dakota?

It depends on your business type and location. While South Dakota doesn’t require a general state business license, you may need specific licenses or permits based on your industry or city.

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

You can reinstate your LLC by filing the appropriate application if it is administratively dissolved. The reinstatement fee is typically around $150. You may also need to pay any outstanding fees or taxes.

Do I need to hire an attorney to form an LLC in South Dakota?

Hiring an attorney is not required to form an LLC in South Dakota. Many people successfully create LLCs on their own using online resources. However, consulting an attorney can help ensure you meet all legal requirements.

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

Dissolving an LLC in South Dakota generally involves filing a form with a small fee, usually around $10. Before you submit the dissolution paperwork, ensure that you settle any debts and obligations.

Should I hire an LLC formation service in South Dakota?

Using an LLC formation service can simplify the process. These services often handle paperwork, compliance, and filings. This may be a wise choice if you are unfamiliar with the filing process.

Are there penalties for paying my fees late in South Dakota?

Yes, there can be penalties for late fee payments. If you fail to pay your fees on time, your LLC may face fines or administrative dissolution. It is important to stay on top of your filing deadlines to avoid these issues.

What happens if I do not file my South Dakota LLC annual report?

If you do not file your required annual report in South Dakota, your LLC may be subject to penalties. Continued failure to file can lead to administrative dissolution, which means your LLC could lose its legal standing.