How to Form an LLC in South Dakota (2026)
Reviewed by DocDraft Legal Team · South Dakota · Last updated 2026-08-06
A limited liability company (LLC) is a business structure that legally separates the company from the people who own it, so the owners are generally not personally responsible for the company's debts. Forming one in South Dakota means filing a formation document with a state agency and paying its fee to bring the company into legal existence. In South Dakota you create an LLC by filing the Articles of Organization with the South Dakota Secretary of State and paying a $150 filing fee. What sets South Dakota apart is what it does not charge. The state imposes no franchise tax or separate annual LLC tax on your company, so the recurring cost of staying in good standing is small. South Dakota does require an annual report filed with the Secretary of State each year for a $55 fee. The state does not require you to publish notice of your LLC in a newspaper. South Dakota LLCs are governed by the South Dakota Uniform Limited Liability Company Act in SDCL Chapter 47-34A. This guide explains what an LLC is, the exact South Dakota steps and fees, and the deadlines that keep the company in good standing.
Find out where you stand in South Dakota
Where are you in forming your LLC?
DocDraft provides document preparation, not legal advice.
How do you form an LLC in South Dakota?
File the Articles of Organization with the South Dakota Secretary of State and pay the $150 filing fee. You must name a registered agent with a physical South Dakota street address. Filing online through the Secretary of State portal is processed immediately, while paper filings take one to three business days.
Does a South Dakota LLC pay a franchise or annual tax?
No. South Dakota imposes no franchise tax and no separate annual tax on an LLC's existence. The main recurring obligation is the annual report filed with the Secretary of State for a $55 fee. This keeps the ongoing cost of a South Dakota LLC low compared with states that charge a minimum yearly tax.
Does a South Dakota LLC have to file an annual report?
Yes. Every South Dakota LLC must file an annual report with the Secretary of State each year for a $55 fee. The report confirms the LLC's address, its registered agent, and its management information, and keeps the company in good standing. Missing it can lead the Secretary of State to administratively dissolve the LLC.
Does South Dakota require newspaper publication to form an LLC?
No. South Dakota does not require an LLC to publish notice of its formation in a newspaper. This is unlike New York, Arizona, and Nebraska, where publication is a condition of forming or operating. In South Dakota the Articles of Organization filing and the annual report are handled entirely through the Secretary of State.
South Dakota LLC formation at a glance
You form a South Dakota LLC by filing the Articles of Organization with the South Dakota Secretary of State for a $150 filing fee. What sets South Dakota apart is the absence of ongoing tax cost. The state charges no franchise tax and no separate annual LLC tax, so once your LLC exists the only routine state expense is the annual report, filed with the Secretary of State each year for a $55 fee. Every LLC must name and continuously maintain a registered agent with a physical South Dakota street address to receive lawsuits and official notices. South Dakota does not require newspaper publication, so the LLC is complete once the Secretary of State files the Articles of Organization. If you want to hold a name before filing, you can reserve it with the Secretary of State for a $25 fee. Online filings are processed immediately, and paper filings are processed in one to three business days. The governing statute is the South Dakota Uniform Limited Liability Company Act, SDCL Chapter 47-34A, and the $150 filing fee is set by SDCL 47-34A-212.
Forming a two-owner South Dakota LLC, step by step
Suppose two friends in Sioux Falls want to open a small design studio as an LLC. First they search the South Dakota Secretary of State's business search to confirm their name is available and includes a designator such as LLC, and they can reserve the name for a $25 fee while they prepare paperwork. Next they appoint a registered agent: one owner lives in South Dakota and agrees to serve, using a physical South Dakota street address, not a P.O. box, where legal papers can be delivered during business hours. They then file the Articles of Organization with the Secretary of State and pay the $150 filing fee. The LLC legally exists once the Secretary of State files it, which for an online filing happens immediately. Because they have two members, they also write an operating agreement setting each owner's percentage and how profits split, even though South Dakota does not require them to file it. They apply to the IRS for a free EIN so the partnership can file taxes and open a bank account. Finally they calendar the $55 annual report, due to the Secretary of State each year, to keep the LLC in good standing. Because South Dakota has no franchise tax and no separate annual LLC tax, there is no minimum yearly tax to budget for beyond that report.
Relevant Laws
South Dakota Uniform Limited Liability Company Act (SDCL Ch. 47-34A)
SDCL Chapter 47-34A governs the formation, management, and dissolution of every South Dakota LLC. It sets who may form an LLC, the required contents of the Articles of Organization, the registered agent requirement, and the default rules for member-managed and manager-managed companies. It is South Dakota's version of the Uniform Limited Liability Company Act.
SDCL 47-34A-201 and 47-34A-203 (Articles of Organization)
Require an LLC to be formed by delivering Articles of Organization to the South Dakota Secretary of State for filing. The articles state the LLC's name, its registered agent and registered office in South Dakota, and whether it is member-managed or manager-managed. The LLC comes into existence when the Secretary of State files the articles.
SDCL 47-34A-212 ($150 filing fee)
Sets the fees the Secretary of State charges. The statute provides that the fee for filing the Articles of Organization for a domestic limited liability company is one hundred fifty dollars. This is the core one-time cost to bring a South Dakota LLC into legal existence.
SDCL Ch. 59-11 and 47-34A (Registered agent)
Require every South Dakota LLC to designate and continuously maintain a registered agent with a physical South Dakota street address, called the registered office. The agent, an individual residing in South Dakota or a registered business entity, receives lawsuits and official notices for the company. The agent is named on the Articles of Organization and the annual report.
South Dakota annual report ($55 fee)
South Dakota requires each LLC to file an annual report with the Secretary of State every year for a $55 fee. The report confirms the LLC's principal address, registered agent, and management, and keeps the company in good standing. Failing to file can lead the Secretary of State to administratively dissolve the LLC.
No state franchise or income tax on LLCs
South Dakota does not impose a personal income tax or a general corporate income tax, and it does not charge LLCs a franchise tax or a separate annual tax on their existence. This is a defining feature of forming in South Dakota. The only routine state cost after formation is the $55 annual report fee.
IRS federal tax classification (default pass-through)
The IRS does not tax the LLC as a separate category. By default a single-member South Dakota LLC is disregarded and taxed like a sole proprietorship, and a multi-member LLC is taxed as a partnership, with income passing through to the owners. An LLC may instead elect S corporation or C corporation treatment. This federal classification applies regardless of South Dakota's state rules.
Regional Variances
How forming an LLC in South Dakota differs from other states
No franchise tax or annual LLC tax
This is the headline difference. South Dakota charges no franchise tax and no separate annual tax on an LLC's existence, and the state has no personal or general corporate income tax. States like California charge a minimum $800 yearly tax regardless of income. In South Dakota the only routine state cost after formation is the $55 annual report fee.
Annual report, filed every year
South Dakota requires an annual report with the Secretary of State each year for a $55 fee. Some states use a biennial report instead. Because the South Dakota report is annual, the easiest way to fall out of good standing is simply forgetting a yearly filing, which can lead to administrative dissolution.
No newspaper publication requirement
South Dakota does not require you to publish notice of formation in a newspaper. New York, Arizona, and Nebraska do, which adds cost and a deadline. A South Dakota LLC is complete once the Secretary of State files the Articles of Organization, with no publication step.
Formation document and filing office
South Dakota uses the Articles of Organization, filed with the Secretary of State, with a $150 filing fee. Some states call the document a Certificate of Formation or Certificate of Organization, and some route filings through a Division of Corporations rather than the Secretary of State.
Higher upfront fee, lower ongoing cost
South Dakota's $150 filing fee is higher than the one-time fee in many states, but there is no minimum annual tax to offset it. Over the life of the company the total state cost stays low because the recurring obligation is just the $55 annual report, not a yearly tax that can dwarf the filing fee elsewhere.
Suggested Compliance Checklist
Confirm your LLC name is available and compliant
Before filing days after startingSearch the South Dakota Secretary of State's business search to confirm your desired name is not already in use and that it includes a required designator such as LLC or Limited Liability Company. Avoid restricted words that need special approval. You can reserve an available name with the Secretary of State for a $25 fee while you prepare your Articles of Organization.
Appoint a registered agent
Before filing days after startingSouth Dakota requires a registered agent with a physical South Dakota street address who is available during business hours to accept legal documents. Decide whether you, a co-owner who lives in South Dakota, or a commercial registered agent service will serve. You will name the agent on the Articles of Organization, so settle this first.
File the Articles of Organization with the Secretary of State
To create the LLC days after startingFile the Articles of Organization with the South Dakota Secretary of State and pay the $150 filing fee. The LLC legally exists only once the Secretary of State files it, which for an online filing happens immediately. Keep the filed confirmation as proof of formation.
Adopt an operating agreement
At or soon after formation days after startingPut the ownership percentages, profit split, management structure, and exit rules in writing. South Dakota's LLC act expects members to have an operating agreement, but you do not file it with the state. It governs how the LLC runs and overrides the act's default rules. Attorney review of the agreement is available as an option through DocDraft.
Get a federal EIN from the IRS
Before opening a bank account or hiring days after startingApply for an Employer Identification Number free on the IRS website. Multi-member LLCs, LLCs with employees, and LLCs electing corporate tax treatment need one. Single-member LLCs with no employees usually get one anyway to open a business bank account and keep business and personal finances separate.
File the annual report with the Secretary of State
Each year, by the first day of the anniversary month days after startingFile the annual report with the South Dakota Secretary of State each year for a $55 fee. It confirms the LLC's address, registered agent, and management. Missing it can lead the Secretary of State to administratively dissolve the LLC, so calendar the deadline when you form.
Register for any applicable South Dakota state taxes
Before making taxable sales days after startingSouth Dakota has no franchise tax and no income tax on the LLC itself, but a business making taxable sales generally needs a South Dakota sales tax license from the Department of Revenue. Check whether your activity requires a license or other permit before you begin operating, since these vary by industry.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Confirm your LLC name is available and compliant | Search the South Dakota Secretary of State's business search to confirm your desired name is not already in use and that it includes a required designator such as LLC or Limited Liability Company. Avoid restricted words that need special approval. You can reserve an available name with the Secretary of State for a $25 fee while you prepare your Articles of Organization. | - | Before filing |
| Appoint a registered agent | South Dakota requires a registered agent with a physical South Dakota street address who is available during business hours to accept legal documents. Decide whether you, a co-owner who lives in South Dakota, or a commercial registered agent service will serve. You will name the agent on the Articles of Organization, so settle this first. | - | Before filing |
| File the Articles of Organization with the Secretary of State | File the Articles of Organization with the South Dakota Secretary of State and pay the $150 filing fee. The LLC legally exists only once the Secretary of State files it, which for an online filing happens immediately. Keep the filed confirmation as proof of formation. | - | To create the LLC |
| Adopt an operating agreement | Put the ownership percentages, profit split, management structure, and exit rules in writing. South Dakota's LLC act expects members to have an operating agreement, but you do not file it with the state. It governs how the LLC runs and overrides the act's default rules. Attorney review of the agreement is available as an option through DocDraft. | llc-operating-agreement | At or soon after formation |
| Get a federal EIN from the IRS | Apply for an Employer Identification Number free on the IRS website. Multi-member LLCs, LLCs with employees, and LLCs electing corporate tax treatment need one. Single-member LLCs with no employees usually get one anyway to open a business bank account and keep business and personal finances separate. | - | Before opening a bank account or hiring |
| File the annual report with the Secretary of State | File the annual report with the South Dakota Secretary of State each year for a $55 fee. It confirms the LLC's address, registered agent, and management. Missing it can lead the Secretary of State to administratively dissolve the LLC, so calendar the deadline when you form. | - | Each year, by the first day of the anniversary month |
| Register for any applicable South Dakota state taxes | South Dakota has no franchise tax and no income tax on the LLC itself, but a business making taxable sales generally needs a South Dakota sales tax license from the Department of Revenue. Check whether your activity requires a license or other permit before you begin operating, since these vary by industry. | - | Before making taxable sales |
Frequently Asked Questions
An LLC, or limited liability company, is a business structure that separates the company from its owners as a matter of law. The owners, called members, are generally not personally liable for the company's debts or lawsuits, so a creditor usually cannot reach a member's home or savings for a business obligation. In South Dakota, LLCs are created under the South Dakota Uniform Limited Liability Company Act in SDCL Chapter 47-34A. An LLC pairs that liability protection with pass-through taxation and lighter paperwork than a corporation, which is why it is the most common structure for small South Dakota businesses.
You file the Articles of Organization with the South Dakota Secretary of State and pay a $150 filing fee, set by SDCL 47-34A-212. The articles name your LLC, its registered agent and South Dakota registered office, and whether it is member-managed or manager-managed. The LLC legally exists only when the Secretary of State files the articles. That $150 is the core one-time cost to bring the company into existence.
Yes. South Dakota has no personal income tax and no general corporate income tax, and it charges LLCs no franchise tax or separate annual tax on their existence. Your LLC's profits pass through to the members for federal tax purposes and are reported on federal returns. You may still owe federal tax and South Dakota sales or use tax on taxable business activity, so confirm current rules with the Department of Revenue before you begin operating.
Very little. Because South Dakota levies no franchise tax and no annual LLC tax, the only routine state cost after formation is the $55 annual report filed with the Secretary of State. Compare that with California, where LLCs owe a minimum $800 tax every year regardless of income. In South Dakota the upfront $150 filing fee is higher than some states, but the low $55 recurring cost keeps the lifetime state expense small.
South Dakota LLCs file an annual report with the Secretary of State every year, generally due by the first day of the anniversary month of formation, for a $55 fee. The report confirms the LLC's address, registered agent, and management. If you miss it, the Secretary of State can administratively dissolve the LLC, which strips its good standing, so calendar the deadline at formation and confirm the exact date on your filing confirmation.
Yes. If you are not ready to file, you can reserve an available name with the South Dakota Secretary of State for a $25 fee, which holds it while you prepare your paperwork. First, search the Secretary of State's business database to confirm the name is not already in use and that it includes a required designator such as LLC or Limited Liability Company. Reservation is optional; you can also just file the Articles of Organization directly.
Every South Dakota LLC must name and continuously maintain a registered agent with a physical South Dakota street address, called the registered office, not a P.O. box. The agent accepts lawsuits and official state mail during business hours. You can serve as your own agent, name a co-owner who lives in South Dakota, or hire a commercial registered agent service. You list the agent on both the Articles of Organization and the annual report. Attorney review of your formation documents is available as an option through DocDraft.
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