How to Start an LLC in South Dakota: Filing, EIN, and Annual Report

To start an LLC in South Dakota, file Articles of Organization with the Secretary of State and pay a $150 fee online, or $165 by paper. South Dakota has no corporate income tax and no personal income tax, which is part of why the state draws small business owners. Beyond that filing, you’ll need a compliant name, a registered agent, an EIN from the IRS, any state tax registrations that apply to what you sell, and an annual report every year to stay in good standing.

Pick a Name That Clears the State’s Rules

Your LLC name has to end with a designator that identifies the entity type. South Dakota accepts “Limited Liability Company,” “Limited Company,” and the abbreviations “L.L.C.,” “LLC,” “L.C.,” or “LC.” “Limited” can be shortened to “Ltd.” and “Company” to “Co.”¹

The name also has to be distinguishable on the Secretary of State’s records from any corporation, limited partnership, or other company already registered or authorized in South Dakota.¹ Search the Secretary of State’s online business name database before you file anything.

If the name you want is already in use, you can still take it only with written consent from the current holder (who agrees to change theirs) or a court order establishing your right to use it. Otherwise, pick something else. You can reserve an available name in advance for $25.²

Line Up a Registered Agent

Every South Dakota LLC has to designate a registered agent to receive lawsuits and official notices. Your Articles of Organization must list either a commercial registered agent by name or a noncommercial registered agent’s name and physical street address.³ A P.O. Box won’t do.

You can be your own agent if you have a South Dakota street address, or you can hire a service. The agent has to consent; you can’t just put someone’s name down. If you let the appointment lapse or your address changes and you don’t update it, the state can administratively dissolve the LLC.

File the Articles of Organization

This is the document that actually creates the LLC. State law requires it to include:⁴

The LLC’s full legal name with a required designator.
A designated office address (a physical street address where records are kept, not a mail-forwarding service).
Registered agent information.
The name and address of each organizer. Organizers don’t have to be owners.
Duration. Most people choose perpetual; you only need to state a date if you want the LLC to expire on one.
Management structure. If the LLC will be manager-managed, list each initial manager’s name and address. Say nothing and it defaults to member-managed, meaning every owner participates in running it.
Whether any members have agreed to be personally liable for the LLC’s debts.

File online through the Secretary of State’s portal or by mailing the paper form. Online is $150; paper is $165.² Online filings typically clear within a few business days. Paper takes longer depending on volume.

When the filing is approved, you receive a Certificate of Organization and a state-assigned Business ID number. Keep the certificate; you’ll need it to open a business bank account and for future filings.

Put an Operating Agreement in Writing

South Dakota doesn’t require an operating agreement, but skipping one is a mistake. State law lets all members enter into an operating agreement, written or oral, to govern how the company runs and how members, managers, and the LLC relate.⁵ Without one, the default rules in the state’s Uniform Limited Liability Company Act fill the gaps, and the defaults may not be what you want.

A useful agreement covers ownership percentages, how profits and losses are split, voting, what happens when a member leaves, and how the LLC can be dissolved. For multi-member LLCs it heads off disputes by putting expectations in writing. For a single-member LLC it reinforces the separation between you and the business, which supports the liability shield. Without that separation on paper, a court can treat the LLC as indistinguishable from a sole proprietorship and expose your personal assets to business debts.

Some things the agreement cannot do: eliminate the duty of loyalty members and managers owe one another, remove the obligation to act in good faith, or restrict third parties’ rights under the LLC act.⁵ Within those limits you have wide flexibility.

Get an EIN from the IRS

An Employer Identification Number is the nine-digit federal tax ID for your LLC. You need one to file federal taxes, hire employees, and open a business bank account. Applying is free, and the IRS online application issues the number immediately.⁶ Phone, fax, and mail applications are also available. File your Articles of Organization first; the IRS may delay the EIN if the LLC isn’t yet on record with the state.

Register for State Taxes If They Apply

Because South Dakota has no corporate or personal income tax, there’s nothing to register for on that side.⁷ Other registrations depend on what you do.

Sales Tax

If your LLC sells goods or taxable services, register for a South Dakota sales tax license. The state sales and use tax rate is 4.2%.⁸ Register online through the Department of Revenue’s Tax License Application.

Reemployment Assistance Tax

If you’ll have employees, register with the Department of Labor and Regulation’s Reemployment Assistance Tax Unit. All newly established businesses with employees must register, and successors to an existing business must register within 30 days of the ownership change.⁹ You can register online or on paper.

Workers’ Compensation

South Dakota does not require employers to carry workers’ compensation insurance.¹⁰ An uninsured employer can be sued directly in civil court by an injured worker, without the liability limits that workers’ comp coverage provides. Most employers carry it anyway.

Open a Business Bank Account

Keeping personal and business finances separate is central to preserving your LLC’s liability protection. Banks typically ask for your EIN, a copy of your Articles or Certificate of Organization, your operating agreement, and any required business licenses.¹¹ Bring everything to the appointment.

File an Annual Report Every Year

Every South Dakota LLC must file an annual report with the Secretary of State to stay in good standing.¹² It’s due by the last day of the anniversary month of formation. The fee is $55 online or $70 by paper.²

Miss it and the state can administratively dissolve the LLC. To reinstate, you pay a $150 reinstatement fee plus all delinquent annual report fees and provide a certificate showing all taxes are paid.¹³ Reinstatement relates back to the dissolution date, so the LLC is treated as if it was never dissolved. Even so, operating without good standing during the gap can create problems with banks, contracts, and your ability to enforce agreements in court.

Keep your registered agent information current between reports; file an updated statement with the Secretary of State whenever the agent or address changes. On the federal side, domestic LLCs are currently exempt from Beneficial Ownership Information reporting under a 2025 interim final rule, so there is no federal BOI filing obligation for a South Dakota LLC formed by U.S. persons at this time.¹⁴

1
South Dakota Legislature. South Dakota Codified Law 47-34A – Section 47-34A-105
2
South Dakota Secretary of State. Filing Fees
3
South Dakota Legislature. South Dakota Codified Law 59-11-6
4
South Dakota Legislature. South Dakota Codified Law 47-34A – Section 47-34A-203
5
South Dakota Legislature. South Dakota Codified Law 47-34A – Section 47-34A-103
6
Internal Revenue Service. Get an Employer Identification Number
7
South Dakota Department of Revenue. Taxes
8
South Dakota Department of Revenue. Sales and Use Tax
9
South Dakota Department of Labor and Regulation. Reemployment Assistance Tax – Employer Registration
10
South Dakota Department of Labor and Regulation. Workers’ Compensation
11
U.S. Small Business Administration. Open a Business Bank Account
12
South Dakota Legislature. South Dakota Codified Laws 59-11-24 – Annual Report
13
South Dakota Legislature. South Dakota Codified Law 47-34A-811 – Reinstatement Following Administrative Dissolution
14
FinCEN.gov. Beneficial Ownership Information Reporting