Creating a South Dakota LLC comes with more costs than you might think, but don't be alarmed.
We have spent months researching on how much does an LLC cost and requirements to form a South Dakota LLC to save you the time and effort you can put into your business.
In this article, we will review all the costs associated with creating your South Dakota LLC, so you know what to expect.
Quick Summary
- The South Dakota LLC state filing fee is $150 if filed online and $165 if filed via paper.
- There is a $50 annual report fee for an LLC in South Dakota online and a $65 fee if filed via paper. If the annual fee is paid late, there is an additional $50 fee.
- There are various business and tax licenses you may need to apply for based on the industry you're in and where you do business.
How Much Does An LLC Cost In South Dakota?
An LLC in South Dakota costs $150 if filed online and $165 if filed on paper for your LLC in South Dakota. This fee is to register your South Dakota LLC and file your South Dakota Articles Of Organization through the South Dakota Secretary Of State [1].
The South Dakota Secretary of State also offers expedited processing for $50.
South Dakota LLC Filing Fee
South Dakota LLC filing fee is $150 if you file online or $165 if you file via paper. You will pay this fee only once when establishing your businesses in South Dakota.
There may be additional costs besides the filing fee when filing your LLC in South Dakota.
South Dakota Annual Filing Fee
A $50 annual report fee must be filed to the South Dakota Secretary of State if filed online or $65 if filed via paper.
You can file online on the South Dakota business forms page. Any annual reports not filed on time will have a $50 late fee per annual report [2].
South Dakota Registered Agent Service Fee
South Dakota law requires you to choose a South Dakota registered agent when filing for your LLC in South Dakota. A registered agent accepts legal documents and notices for your South Dakota LLC.
The registered agent must have an address in the state and be available during normal business hours.
You can choose to be your own LLC's registered agent or hire a registered agent service.
If you decide to be designated as your own registered agent, your information must be public, and you must be available every day of the week all year round.
Hiring a professional registered agent service in South Dakota will typically cost between $100 to $300 a year. Hiring one can be beneficial if you don't want your address to be public or don't have an address within the state.
South Dakota Business/ License Tax
Depending on where your South Dakota LLC does business or your industry, you may need additional business licenses.
The cost of these licenses varies depending on the location and industry.
There are several business tax licenses you may need to apply for, including [3]:
- Contractors Excise Tax: Any business that engages in construction, building, installation, and more must have a contractor's tax license. The excise tax is a 2% rate and depends on the type of construction project.
- Sales Tax: Sales tax is needed for a business that does the selling, leasing, or renting of products, including tangible property and any product transferred electronically or the sale of a service.
- Use Tax: Use tax is needed for a business that sells goods and services in which South Dakota sales tax isn't paid. This includes any goods and services that are used, stored, or consumed in South Dakota.
- Municipal Sales Tax: Most municipal cities and towns in South Dakota have local sales tax in addition to state tax. This varies by city.
You can apply for any tax permits online through the South Dakota Department Of Revenue.
Other South Dakota LLC Cost Factors
There are other various factors included in the entire South Dakota LLC cost, including:
1. Name Reservation
To reserve a business name in South Dakota, you must submit an application and a $25 fee. Look up for an LLC in South Dakota, to make sure your name is available.
Name reservation prevents any other South Dakota LLCs from using your business name before you are ready to register.
Your reservation lasts for 120 days, and you can't reserve the same name until 60 days after the expiration [4].
2. DBA Name
If you are considering doing business under any name than your legal business name, you must register a Doing Business As name, which costs $10. In South Dakota, DBAs are referred to as fictitious names.
All DBA names must have at least one owner and require the owner's name and address or the State Business ID of the South Dakota LLC.
3. Certified Copies
You can order any certified copies of your South Dakota LLC documents from the Secretary Of State, including your LLC operating agreement, LLC's Articles Of Organization, legal documents, registered agent information, and more for $15 plus $2 per additional page.
Certified copies can be ordered online, by phone, or in person.
4. LLC Certificate Of Good Standing
You can order an LLC certificate of good standing for $20 online or $35 via paper. A certificate of good standing shows your LLC is in compliance with the South Dakota Secretary Of State fees and filings.
An LLC in South Dakota is often required to provide a certificate of good standing if creating a business bank account, being a part of legal proceedings, or registering as an LLC in another state as a foreign LLC.
5. Business Insurance Premiums
If you have employees in your South Dakota LLC, you will need to purchase workers' compensation insurance for your LLC. Workers' compensation insurance covers medical and other costs for employees who have gotten injuries in the workplace.
If you have a multi-member South Dakota LLC, members are considered employees that will need this coverage. The price of your coverage will vary based on how many employees you have and the hazards they are exposed to in the working environment.
You may also need unemployment insurance and tax and business liability insurance for your business if you have employees.
6. Employer Identification Number
An EIN costs nothing to file and can be done online, via mail, or phone through the Internal Revenue Service.
You will need LLC members' full legal names and addresses, social security numbers, your formal business name, and more.
South Dakota Foreign LLC
A foreign South Dakota LLC must pay the $150 state filing fee if filed online and $165 if filed via paper.
Paying the fee and filing an application to create a foreign limited liability company will expand your LLC into South Dakota. Filing is available online, by mail, or in person.
You will also need to register your foreign LLC and pay for all tax and business licenses for your specific business before you can start performing business in South Dakota.
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FAQs
How Much Does A LLC Bank Account Cost In South Dakota?
An LLC bank account cost in South Dakota varies. Some banks charge $10 to $20 monthly fees, while some don't charge any monthly fees or have methods to avoid monthly fees.
Is South Dakota A Good State To Start An LLC In?
Yes, South Dakota is an excellent state to start an LLC in. They don't charge a business license fee, their approval times are very fast, and everyone in the state department is knowledgeable about common issues and questions involved in the process.
What Is The Sales Tax Percentage For A South Dakota LLC?
The sales tax percentage for a South Dakota LLC is 4.5 percent. Every business that sells a product or service needs to apply with the Department of Revenue to get a sales tax license to collect sales tax from customers.
Do You Need Professional Help With Your South Dakota LLC?
South Dakota is an excellent state for forming an LLC because you don't need a specific license, the processing is fast, and their fees are affordable.
Being your own registered agent can be overwhelming. If you don't want to hassle in addition to everything else going on with your LLC, consider using an LLC formation service.
These South Dakota LLC formation services will be essential in helping you throughout the process.
The formation services team can manage your operating agreement, South Dakota LLC fees, South Dakota Articles Of Organization, and more so you can spend valuable time on your new business.
References:
- https://sdsos.gov/general-information/filing-fees.aspx
- https://sosenterprise.sd.gov/BusinessServices/Business/AnnualReportInstr.aspx
- https://apps.sd.gov/rv23cedar/main/main.aspx
- https://sdsos.gov/docs/business/reservationofllcname20180215.pdf
