Limited Liability Companies (LLC) are great for small businesses because they offer limited liability protection. If someone gets hurt while working on your property, it won’t affect your personal assets. This is especially important if you’re starting a business where you’ll be handling dangerous equipment. An LLC protects your personal assets, too. For example, if you buy a house, the IRS doesn’t consider the money you paid toward the down payment as income. But if you use the same amount of money to start an LLC, the IRS considers the money as income.
There are three main ways to set up an LLC in South Dakota:
1. Sole proprietorship
2. General partnership
3. Professional corporation
The process for forming an LLC is relatively straightforward in South Dakota. You just file Articles of Organization with the Secretary of State. Once you’ve filed the articles, you must pay $20 within 30 days. If you don’t, the Secretary of State will send you a bill. Then, you wait 90 days before you can do anything else.
If you want to start an LLC in South Dakota, here’s what you need to know:
Table of Contents
1. Define the Name of Your LLC
An LLC name must comply with federal law. You are required to file an application with the Secretary of State within 30 days of forming the LLC. This process costs $100 plus filing fees. If you do not complete it, you risk losing control over the LLC.
The name must be unique and easily pronounced. A good rule of thumb is to avoid naming your organization something similar to another existing entity. For example, don’t use “ABC Inc.” because someone else already owns the ABC brand. Also, make sure that the name doesn’t contain any trademarks or other intellectual property owned by others.
If you plan to incorporate your LLC into a larger corporation, consider incorporating under a different state. Doing so allows you to keep your personal assets separate from those of the parent company.
2. Appoint a Registered Agent
An LLC must designate one person as its registered agent. This person is responsible for receiving legal notices, contracts, and process regarding the organization. If you are forming an LLC, it is important to select a name that reflects your business purpose. You do not want to use your personal name because you could later find yourself personally liable for debts incurred by the LLC.
The LLC South can appoint a registered Sales representative through a written agreement Employer signed by both parties. When appointing a registered agent, make Federal sure that you state the term of appointment. For example, File Avoid “for a period Hiring of three months.”
If you fail to appoint a registered agent within 30 days of formation, the Secretary of State will automatically appoint a registered agent for you.
3. File Articles of Organization
A South Dakota LLC is formed when you file Articles of Organization with the Secretary of State’s Office. You must pay $25 to do this. This process takes about 5 days.
An LLC is an entity separate form its owners, unlike a Corporation which is owned by shareholders who are called members.
An LLC is taxed differently than corporations. Corporations are taxed based on profits while LLCs are taxed based on income.
4. Prepare an Operating Agreement
An Operating Agreement is a document that sets out how a group of people will work together. This includes outlining what each person’s responsibilities are, how decisions will be made, and how the organization will operate. If you want to make sure everyone knows exactly what it is they’re getting into, prepare an operating agreement.
The most common form of operating agreement is called a Management Contract. However, there are many others including a Shareholders Agreement, Employment Agreement, and Partnership Agreement. Each type of agreement serves a different purpose. For example, a shareholders agreement might include provisions regarding dividends, voting shares, and liquidation preferences.
There are many different forms of Operating Agreements available online. Some examples include templates for a partnership agreement, employment contract, and shareholder agreement. You can find these online for free.
5. Obtain an EIN
Obtaining an Employer Identification Number (EIN) is easy. You just go online and fill out some forms. But what happens next? What are the implications of having an EIN?
An EIN makes it easier for customers to find your business on the internet because every business needs an EIN to file federal tax returns. If you don’t have one, you might not even know it. There are no fees associated with obtaining an EIN. However there are costs involved in maintaining an EIN.
If you’re a sole proprietorship, you do not need an EIN. All you need is a Social Security number.
A single member limited liability company (LLC), however, does require an EIN. This is because it files its own separate return. In addition, an LLC cannot deduct expenses related to operating its business.
A partnership, another form of business organization, requires an EIN. Partnerships file individual income tax returns. They pay self employment taxes such as Medicare, FUTA, and SSI. And they must keep records for each partner.
6. File Annual Reports
South Dakota requires every limited liability company (LLC), foreign LLC, and corporation to file an annual report. These reports include information about the entity’s name, address, date formed, registered agent, principal office, and authorized representative. In addition, each report includes financial statements, including balance sheet, statement of income, and statement of cash flows.
In addition, South Dakota requires certain entities to file additional forms. For example, corporations must file a form authorizing the state to collect sales tax, and limited partnerships must file a form allowing the state to assess taxes against the partnership.
South Dakota LLC Tax Filing Requirements
There are many different kinds of reporting requirements for LLCs in South Dakota. This includes an annual report, corporate resolutions, and federal income taxes. Some states require additional forms and filing requirements.
Sales taxes vary by state. In some states, you don’t even have to register to sell products. If you do want to collect sales tax, there are several different methods. For example, you could charge customers separately for each item sold; you could calculate the total amount due based on the price of each product; or you could use a combination of both methods.
Registering for a seller‘s permit isn’t always required. You must obtain a seller’s registration number from the appropriate government agency in your area. This number allows you to file returns and pay taxes. However, it does not allow you to collect sales tax unless you have registered.
There are other ways to avoid collecting sales tax. For example, you might choose to accept cash payments rather than credit cards. Or, you might decide to limit your inventory to items that aren’t subject to sales tax.
State employer taxes are generally based upon the amount of wages earned while working in the state. Federal employer taxes are usually based upon a percentage of total wages earned. If you work for multiple employers, you could end up owing both federal and state employer tax.
Federal LLC Tax Filing Requirements
Most Limited Liability Companies (LLCs) are required to file a federal income tax return each year. This includes filing a Form 1065 or 1066 Schedule C. If you are self-employed, you may use one of those forms to report your earnings. However, there are some exceptions to the filing requirement.
The IRS requires most LLCs to pay taxes on their profits. You cannot avoid paying taxes just because you operate under an LLC name. But there are ways around it. For example, you could pay yourself through dividends, salaries, bonuses, or other compensation. These payments do not count toward your total taxable income. Instead, the money goes directly into your pocket.
You can also take advantage of certain deductions. For instance, you might claim depreciation on equipment used in your business. And you can write off advertising costs. All of these items help lower your overall tax bill.
In addition to the federal requirements, state governments require LLCs to file state returns. Some states even require annual reports. So make sure you know what you need to file.
submit your South Dakota LLC yearly report
South Dakota law requires every limited liability company to file an annual report with the Secretary of State. If you are required to file an annual report, you must do so no later than midnight on April 30th.
The form itself is pretty simple. There are just four sections to complete: name, address, principal office location, and registered agent information. After filling out the form, you can either upload it to the Secretary of State’s website or download a PDF version and print it out.
If you choose to submit the report via email, you must include the following documents:
1. A completed LLC Agreement;
2. A completed Operating Agreement;
3. Copies of any articles of organization filed with the secretary of state;
4. Proof of payment of filing fees;
Avoid Automatic Dissolution
If you are looking to protect your company from being dissolved, it is important to avoid filing late. In fact, there are certain steps you must take within 30 days of registering your corporation. If you fail to do so, the state will automatically dissolve your organization.
For example, if you register your LLC in New York on January 1st, you have until February 28th to file articles of incorporation, pay fees, and complete other tasks. You don’t want to miss out on those deadlines because you didn’t realize how important it was to act quickly.
Registered agents will notify you about impending deadlines and submit required documents on your behalf. They will also help you navigate the process of creating a corporate resolution plan. This way, you won’t forget anything along the way.
The IRS requires employers to verify that new employees are eligible to work in the United States before hiring them. This includes verifying whether they have valid Social Security numbers, checking their immigration status, and ensuring they don’t owe taxes.
Employers must report employees as “new hires” to the state where they live. They must withhold federal income tax from wages paid to those individuals. Employers must provide workers’ compensation insurance for their employees. And employers must post workplace compliance posters.
Frequently Asked Questions
How to Obtain a Certificate of Good Standing
A Certificate of Good Standing verifications that your South Dakota limited liability company (LLC) was legally formed and has remained properly maintained since it was established. This document must be obtained before forming your LLC. If you are seeking financing or applying for certain types of licenses or permits, you will likely need a certificate of good standing.
You can obtain a certificate of good standing online via the Secretary of State’s office. Simply fill out the form, pay $15, and wait several weeks for your certificate to arrive in the mail. Your LLC will remain active while your application is pending. Once approved, you will receive a copy of the certificate within 10 days.
How to Dissolve an LLC in South Dakota
If at any point in the near future you no longer wish continue conducting business with your limited liability company (LLC), it is important to formally dissolve it. Failure to do so in an appropriate manner could result in serious tax consequences, including fines and possible jail time.
To dissolve your South Dakota LLC you must close your business tax accounts and file an Articles of Dissolution. In addition, you must pay the filing fee and provide proof of dissolution. This guide provides step-by-step instructions on how to properly dissolve your LLC.
The following information is intended to help you understand what happens when you dissolve your LLC. However, we recommend consulting with a qualified attorney if you have questions regarding the process.
James Rourke is a business and legal writer. He has written extensively on subjects such as contract law, company law, and intellectual property. His work has been featured in publications such as The Times, The Guardian, and Forbes. When he’s not writing, James enjoys spending time with his family and playing golf.