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Starting an LLC in South Dakota comes with more costs than just filing the initial paperwork. But it doesn’t have to be as expensive as you think.
We explain all of the initial and ongoing South Dakota LLC cost details below, as well as give you tips on how to save money.
How much does an LLC cost in South Dakota?
It costs $150 to form an LLC in South Dakota. This is a fee paid for the Articles of Organization.
You’ll file this form with the South Dakota Secretary of State. And once approved, your LLC will go into existence.
Need to save time? Hire a company to form your LLC:
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)
(check out Northwest vs LegalZoom)
In addition to this LLC filing fee, there are other costs to be aware of when forming a South Dakota LLC (Limited Liability Company).
Costs to forming a South Dakota LLC
There is a $150 one-time state filing fee to form a South Dakota LLC.
There are also ongoing fees (like a $50 Annual Report fee), which we discuss below.
LLC Costs in South Dakota
|Registered Agent||$0 or $125 per year|
|Articles of Organization||$150|
|Operating Agreement||$0 (free on our site)|
|EIN Number||$0 (free through IRS)|
|Annual Report||$50 (every year)|
|Taxes||varies (filed and/or paid every year)|
South Dakota LLC Articles of Organization Filing Fee ($150)
Starting an LLC costs $150 in South Dakota. This is the state filing fee for a document called the South Dakota Articles of Organization.
The Articles of Organization are filed with the South Dakota Secretary of State. And once approved, this is what creates your LLC.
The $150 fee is a one-time fee. You don’t have to pay any monthly (or annual) fees to start your South Dakota LLC.
Note: LLCs are the most common business structure used in South Dakota. They are the most popular business entity because they offer liability protection for the LLC owners.
Depending on the state, the Articles of Organization form is sometimes called a Certificate of Organization or Certificate of Formation. Articles of Organization is the most common name – but they all mean the same thing: the form used to create your LLC.
South Dakota business name cost ($0)
Naming your Limited Liability Company doesn’t cost anything. Your South Dakota LLC Name is approved (at no extra cost) when your Articles of Organization filing is approved by the state.
You may have read online that LLC Name Reservations are required. However, this is not true in most states. Most states don’t require a Name Reservation to form an LLC.
How much does a DBA cost? ($10)
A DBA is filed with the state or the county. In South Dakota, a DBA costs $10 (but this is an optional LLC filing fee).
Note: A DBA is sometimes called a Trade Name, Fictitious Name, Assumed Name or Fictitious Business Name. They all mean the same thing.
Tip: You aren’t required to get a DBA for your LLC. It’s optional. For more information, read our article: Do I need a DBA?
South Dakota Registered Agent Fee ($0 or $125/year)
South Dakota law requires that you designate a Registered Agent when forming your LLC.
A South Dakota Registered Agent is a person or company who receives legal documents and state notices for your LLC. A Registered Agent needs a street address in the state and should generally be available during normal business hours.
There is no additional cost if you will be your own Registered Agent, or have someone you know be your LLC’s Registered Agent.
However, you have the option of hiring a Registered Agent service. This will cost you between $100 to $300 per year. But Registered Agent service companies offer other helpful business services and can protect your privacy.
Hiring a Registered Agent service is a good idea if:
- You don’t have an address in the state (South Dakota law requires Registered Agents to have a physical address in the state
- You want to keep your address off public record (depending on which company you hire, you may be able to use their address to keep your address private)
Special offer: If you hire Northwest to form your LLC ($39 + state fee), they’ll include their Registered Agent service free for the 1st year.
(Check out our Northwest Registered Agent review to learn more)
LLC Operating Agreement Fee ($0)
A South Dakota LLC Operating Agreement is a written contract between the LLC Members. Operating Agreements include detailed information about LLC ownership, how the LLC is managed, and how profits are distributed.
Single-Member LLCs and Multi-Member LLCs should draft an Operating Agreement, keep it with their business records, and give a copy to each Member.
Most websites charge $50 to $200 for LLC Operating Agreements.
Here at LLC University®, we offer free LLC Operating Agreement templates for all types of LLCs.
LLC EIN Number Fee ($0)
An EIN Number is also known as an Employer Identification Number (EIN) or a Federal Employer Identification Number (FEIN).
This number is used to file income taxes, to open an LLC bank account, and to hire employees (if applicable).
Although many websites charge a service fee to get an EIN for your LLC, it can actually be done for free.
You can obtain an EIN for your LLC from the Internal Revenue Service (IRS) at no cost. The online filing can be completed in a few minutes.
South Dakota LLC Annual Report Fee ($50/year)
South Dakota requires you to keep your LLC’s information up to date by filing an Annual Report.
This keeps your South Dakota LLC in good standing and in compliance with state law so it can continue operating. You simply confirm the information on the Annual Report, file it with the South Dakota Secretary of State, and pay the Annual Report fee.
The South Dakota LLC Annual Report costs $50 per year if you file online. This fee is paid every year for the life of your LLC, because you will file Annual Reports every year.
If you file by mail, there’s an additional processing fee and the total cost is $65.
South Dakota Business License and Permit Fees (varies)
Depending on where your LLC does business in South Dakota and the industry you’re in, you may need to obtain additional Business Licenses or Permits. For example, you may need to get a City Business Permit.
The costs for these other business licenses or permits will vary depending on location and industry, but usually the fees are not very high. Some licenses and permits are issued at the state level, and others are issued by a municipality (the town, city, or county).
LLC Taxes (varies)
There are many different types of South Dakota LLC taxes that owners must pay, so this annual cost varies widely.
Some of the taxes LLC owners pay include:
- Federal taxes
- State income tax
- Local income tax
- Business taxes
- Self-employment taxes
- Sales and use tax
- Payroll tax (if you have employees)
- Unemployment insurance tax (if you have employees)
- Property tax (if the LLC owns property)
Your South Dakota LLC taxes depend on your industry and amount of business activity, so we’re not able to provide an estimate. Every business is different, and your specific circumstances determine what taxes apply to your LLC.
Check with the South Dakota Department of Revenue for more information about what taxes LLCs have to pay in the state.
Note: By default, a Single-Member LLC is taxed like a Sole Proprietorship. And a Multi-Member LLC is taxed like a Partnership.
Hiring an Accountant
How much your small business pays in taxes is best determined by working with a qualified accountant in South Dakota.
The amount you’ll pay your accountant will vary. However, most accountants will charge $300 per year for a simple tax return, or up to $900 for more detailed filings.
Note: We recommend speaking with a few accountants in South Dakota to make sure they can help you meet all of your federal, state, and local tax obligations. We offer detailed tips on How to Find an Accountant.
South Dakota Secretary of State
If you have any questions about the cost of opening a South Dakota LLC, you can contact the South Dakota Secretary of State.
South Dakota LLC Cost FAQs
How much does it cost to open an LLC in South Dakota?
It costs $150 to start a South Dakota LLC. This is a one-time filing fee for the LLC Articles of Organization.
Some LLCs may need a business license in South Dakota. This depends on your industry and where your LLC is located. The cost of local business permits varies. And depending on what your LLC does, you may need to obtain business insurance (such as business liability insurance).
How much does an LLC in South Dakota cost per year?
All South Dakota LLCs need to pay $50 per year for the Annual Report. These state fees are paid to the Secretary of State. And these are the only required annual South Dakota LLC fees. You have to pay this to keep your LLC in good standing.
If you hired a Registered Agent service, you’ll have an annual subscription fee to pay each year. This is usually about $125 per year.
Some LLCs may need a business license in South Dakota. This depends on your industry and where your LLC is located. You’ll need to check with your municipality to see if there are any annual renewal fees for the business permit.
Should I hire an LLC formation service?
You aren’t required to hire a professional service company (aka LLC formation services) to form your South Dakota LLC. You’re allowed to complete the South Dakota LLC formation process yourself if you’d like. You’ll just pay the state filing fees, and won’t pay any other service fees to a company.
However, if you want to save time and make sure your LLC is filed correctly, we recommend hiring Northwest Registered Agent.
Northwest Registered Agent has excellent customer service and they include Registered Agent services free for the 1st year. They also offer other services, like an Operating Agreement and filing your Annual Report.
Check out Best LLC Services for more suggestions.
Do I need to hire an attorney to form an LLC?
No, you aren’t required to hire an attorney to form your LLC in South Dakota. You’re allowed to form your LLC yourself if you’d like.
However, some people may want to hire an attorney if their LLC has a complex ownership or management structure, has investors, or requires industry-specific documentation.
A business attorney usually charges between $800 and $2,500 to form an LLC.
How do I start an LLC in South Dakota?
Here are the steps to starting an LLC in South Dakota:
- Choose an LLC business name and make sure it’s available
- Choose who will be your South Dakota Registered Agent
- File the South Dakota Articles of Organization
- Complete and sign your LLC’s Operating Agreement
- Get a Tax ID Number (EIN) from the IRS
- Open an LLC bank account
- Check whether you need a business or sales tax license in South Dakota
What’s the cheapest way to start an LLC?
You can get an LLC cheaply by filing your formation documents yourself. You’ll also save money by being your own Registered Agent, and using our free LLC Operating Agreement template.
By forming your LLC yourself, being your own Registered Agent, and using our Operating Agreement template you can save over $400.
How long does it take to get an LLC in South Dakota?
How long it takes to get an LLC in South Dakota depends on how you file your Articles of Organization.
You can get an LLC in South Dakota approved immediately if you file online. On the other hand, filing by mail takes about 1-2 business days (plus mail time).
How much does a South Dakota business bank account cost?
It varies. Some banks charge monthly fees ($10 to $20 per month), but these can sometimes be avoided by meeting certain requirements. For example, if you make a certain number of direct deposits or maintain a specified minimum balance, then they’ll waive the monthly fees.
And you might be able to find a bank that doesn’t charge any monthly fees.
Before you open your LLC business bank account, we recommend calling and asking if there are ways to avoid the monthly maintenance fees.
How much is a Foreign LLC in South Dakota?
A Foreign LLC is an LLC formed in another state that must register (aka Foreign Qualify) in South Dakota. This is because the LLC is doing business in both states.
The South Dakota Foreign LLC cost is $750 if you file online. Registering a Foreign LLC by mail costs $765.
If you form an LLC in South Dakota, it is called a “Domestic LLC”. If you formed your LLC in another state, it would be a Foreign LLC once you register it in South Dakota.
Is South Dakota a good state for an LLC?
Yes, South Dakota is a great state to start a business. South Dakota doesn’t charge a state business license fee, has quick approval times and helpful representatives at the Secretary of State if you have questions.
However, the most important factors in deciding where to start a business are where you live and where you’re doing business.
Meaning, if you live in or do business in South Dakota, then you should start your business in South Dakota. While many websites talk about tax rates and advantages of certain states, none of that applies if it’s not the state where you live and do business. And just because a certain state has cheaper LLC fees doesn’t mean it’s a good idea to form your LLC there.
For example, if you form an LLC in Wyoming, but live in and conduct business in South Dakota, you’ll also need to register your Wyoming LLC in South Dakota (and pay fees). And you’ll end up paying South Dakota taxes anyway. This ends up leading to more costs and more headaches with no advantages.
In summary, if you are a South Dakota resident, then yes, South Dakota is the best state to form an LLC. If you don’t live in and do business in South Dakota, then no, South Dakota probably isn’t a good state to start an LLC.
South Dakota Secretary of State: Filing Fees
South Dakota Secretary of State: LLC Forms
South Dakota Secretary of State: Business Filings FAQs
SOUTH DAKOTA LLC GUIDE
Follow the lessons below to form your South Dakota LLC.