How to Form an LLC in South Dakota: Steps & Cost (2026)

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 6, 2026 · Last updated Aug 6, 2026

You form a South Dakota LLC by filing Articles of Organization with the South Dakota Secretary of State and paying the $150 online filing fee ($165 by paper). You must appoint a South Dakota registered agent, and each year you file a $50 annual report by the first day of your LLC's anniversary month. South Dakota has no state income tax.

South Dakota Agency and Form: Secretary of State, Articles of Organization

A South Dakota LLC is created by filing Articles of Organization with the South Dakota Secretary of State. The Articles of Organization are the legal document that brings a domestic limited liability company into existence under the South Dakota Limited Liability Company Act. The Secretary of State strongly encourages online filing through its business portal, which costs less and is processed faster than a paper submission.

The Articles of Organization ask for the LLC's name, its designated office address, the registered agent and registered office, whether the LLC is member-managed or manager-managed, the duration, and the organizer. The name must contain an LLC designator (such as "LLC," "L.L.C.," or "Limited Liability Company") and be distinguishable in the Secretary of State's records from existing entity names. This guide covers the South Dakota process; for the national overview see how to form an LLC and what an LLC is.

How to Form a South Dakota LLC, Step by Step

Forming a South Dakota LLC is a five-step process centered on the Articles of Organization. Each step below corresponds to a requirement of the South Dakota Limited Liability Company Act or a federal tax rule.

1. Choose and check your LLC name. Select a name that includes an LLC designator and is distinguishable from names already on file. Verify availability in the Secretary of State business search. If you are not ready to file, you may reserve the name for a fee. Confirm the name does not infringe a federal trademark.
2. Appoint a South Dakota registered agent. Every South Dakota LLC must designate a registered agent with a physical South Dakota street address (the registered office). The agent must consent to the appointment. See whether you need a registered agent.
3. File the Articles of Organization. Submit the Articles to the Secretary of State and pay $150 if you file online (or $165 by paper). Once the Secretary of State accepts the filing, your LLC legally exists. Compare the total in our South Dakota LLC cost breakdown.
4. Adopt an operating agreement. South Dakota does not file or require you to submit an operating agreement, but one is strongly recommended to set ownership percentages, management structure, voting, and profit distribution. See operating agreements for what to include, especially for a single-member LLC.
5. Get an EIN and register for taxes. Apply for a free federal EIN from the IRS - see how to get an EIN for an LLC - then register with the SD Department of Revenue for a sales tax license if you make taxable sales.

After these steps, open a business bank account (banks generally ask for the filed Articles of Organization and the EIN) and keep your registered agent and annual report current every year.

South Dakota LLC Filing Fees (2026)

The core cost of a South Dakota LLC is the $150 online Articles of Organization fee. The table below lists the state fees most new LLCs encounter, each verified against the South Dakota Secretary of State fee schedule or the Department of Revenue. Amounts are effective for 2026 and are set by the state, not by any filing service.

Because expedite, name reservation, and change-of-agent fees change, confirm the current amount on the Secretary of State fee schedule before you file. South Dakota's lack of a state income tax makes its ongoing cost relatively low. See our full how much an LLC costs comparison for context.

South Dakota Registered Agent Requirement

A South Dakota registered agent is the person or entity your LLC designates to receive service of process, tax notices, and official state correspondence. The South Dakota Limited Liability Company Act requires every domestic LLC to designate and continuously maintain a registered agent and a registered office in the state. You name the initial agent directly on the Articles of Organization.

The agent must be an individual South Dakota resident or an entity authorized to do business in the state, with a physical South Dakota street address - a post office box alone does not satisfy the registered office requirement - and must consent to serve. You may act as your own registered agent, name a member or manager, or hire a commercial registered agent service. To change agents later, file a statement of change of registered office or agent with the Secretary of State; confirm the current fee on the fee schedule. Failing to maintain a registered agent, or missing annual reports, can lead the Secretary of State to administratively dissolve the LLC. See South Dakota registered agent requirements and the national registered agent overview.

South Dakota Annual Report and Ongoing Compliance

South Dakota LLCs file an annual report with the Secretary of State to keep the entity in good standing. The report is due by the first day of the anniversary month of the LLC's formation each year - for example, if you formed on June 20, the report is due by June 1 in following years. The fee is $50 if filed online (or $65 by paper), and the report updates the LLC's address, registered agent, and management.

If you miss the deadline, a $50 penalty applies to a delinquent report, and an LLC that remains delinquent can be administratively dissolved. The state allows you to file up to two months before the due date. Track the exact steps and deadline in our South Dakota annual report guide.

EIN, Sales Tax, and No State Income Tax

A federal Employer Identification Number (EIN) is issued free by the IRS and is used to open a bank account, hire employees, and file taxes. By default, the IRS treats a single-member LLC as a disregarded entity (taxed on the owner's return) and a multi-member LLC as a partnership; either can elect corporate or S-corporation treatment by filing IRS Form 2553. Most South Dakota LLCs need an EIN, and one is required if the LLC has more than one member or any employees.

South Dakota is one of a handful of states with no personal income tax and no corporate income tax, so LLCs face no state income or franchise tax. If your LLC sells taxable goods or services, however, you must obtain a sales tax license from the Department of Revenue and collect the 4.2% state sales tax plus any applicable municipal tax. South Dakota has no single general statewide business license, but many cities and regulated professions require their own permits, so check business license requirements for your activity. Learn the basics of how to file business taxes.

Penalties for Missing South Dakota Requirements

Missing South Dakota requirements carries real consequences. If an LLC fails to file its annual report by the first day of the anniversary month, a $50 penalty applies, and continued failure to file leads the Secretary of State to administratively dissolve the entity. An administratively dissolved LLC loses the right to conduct business in its name and must file for reinstatement - correcting the delinquency and paying the required fees - to restore good standing.

Separately, if an LLC does not maintain a registered agent and registered office, the Secretary of State may begin the dissolution process after notice. Keeping your registered agent current and filing the annual report on time is the simplest way to avoid these outcomes and preserve the liability protection the LLC provides.

Closing a South Dakota LLC

To close a South Dakota LLC properly, you wind up the business, settle debts and taxes, and file Articles of Termination (Dissolution) with the Secretary of State. Simply abandoning the LLC leaves the annual report obligation running and risks administrative dissolution. See how to dissolve an LLC in South Dakota and the national dissolution overview for the full wind-up steps.

Frequently Asked Questions

How much does it cost to start an LLC in South Dakota?

The state filing fee for the Articles of Organization is $150 online, or $165 by paper, paid to the South Dakota Secretary of State. The ongoing annual report is $50 online, and an EIN from the IRS is free. See South Dakota LLC cost.

What form do I file to create a South Dakota LLC?

You file the Articles of Organization for a domestic limited liability company with the South Dakota Secretary of State. Online filing costs $150 and paper filing costs $165.

Does a South Dakota LLC need a registered agent?

Yes. Every South Dakota LLC must continuously maintain a registered agent with a physical South Dakota address. The agent must consent and receives service of process and official notices.

When is the South Dakota annual report due?

By the first day of the anniversary month of your LLC's formation each year, filed with the Secretary of State. The fee is $50 online (or $65 paper), and a $50 penalty applies to delinquent reports.

Does a South Dakota LLC pay state income tax?

No. South Dakota has no personal income tax and no corporate income tax, so LLCs face no state income or franchise tax, though they may owe state and municipal sales tax and federal taxes.

Does a South Dakota LLC need a sales tax license?

If your LLC sells taxable goods or services, you must obtain a sales tax license from the Department of Revenue and collect the 4.2% state sales tax plus any municipal tax before making sales.

Related

• How to form an LLC (cluster hub)
• South Dakota registered agent requirements
• How much does a South Dakota LLC cost?
• South Dakota annual report
• How to get an EIN
• How to dissolve an LLC in South Dakota
• How to form an LLC in North Dakota (sibling)
• How to form an LLC in Montana (sibling)
• What are Articles of Organization?

Sources

1. South Dakota Secretary of State - Limited Liability Companies (Articles of Organization; fees).
2. South Dakota Secretary of State - Business Services (online filing portal; annual report).
3. South Dakota Secretary of State - Corporate Forms & Fees (registered agent; name reservation).
4. South Dakota Department of Revenue - Department of Revenue (no state income tax).
5. South Dakota Department of Revenue - Sales & Use Tax (4.2% state rate; sales tax license).
6. South Dakota Codified Laws - Title 47, Chapter 47-34A, Uniform Limited Liability Company Act.
7. South Dakota Legislature - SDCL Chapter 47-34A (official).
8. IRS - Limited Liability Company (LLC) (federal default classification).
9. IRS - Get an Employer Identification Number (free EIN).
10. IRS - Single Member Limited Liability Companies (disregarded entity default).
11. IRS - About Form 2553, Election by a Small Business Corporation (S-corp election).
12. IRS - Partnerships (multi-member LLC default).

LegalGlass provides general information for educational purposes and is not a law firm or a substitute for advice from a licensed attorney or tax professional. Laws, fees, and deadlines change; verify current requirements with the South Dakota Secretary of State and SD Department of Revenue before acting.