South Dakota Limited Liability Company Articles of Organization

Last Revised: April 13, 2024.

About this Form

The articles of organization form is the document required to establish the creation of an LLC within the State of South Dakota. It outlines essential information such as the proposed company name, the registered agent for service of process, and the business address, among other details. The purchased version of this form is guaranteed compliant with the laws of the State of South Dakota. It comes complete with instructions and filing information for creating an LLC within the state.

Why Form an LLC in South Dakota?

✔ Business-Friendly Environment: South Dakota is known for its supportive business climate, which includes no corporate income tax and a lack of personal income tax. This tax-friendly stance can result in substantial savings for LLCs operating within the state.

✔ Strong Privacy Protections: South Dakota provides significant privacy protections for LLC members, as the state does not require the disclosure of members' names in public filings. This can be beneficial for owners who prefer to maintain anonymity regarding their business dealings.

✔ Inside-Out Creditor Protection: Like many jurisdictions, South Dakota ensures that the personal assets of LLC members are shielded from business creditors. These creditors might include employees, contractors, or individuals who have filed liability claims against the business. By establishing an LLC, your private assets are protected, confining creditor claims to only the assets held within the business. This fundamental level of protection, often referred to as "inside-out" protection, is reliably effective across states, ensuring that personal financial exposure is limited to the extent of your investment in the company.

✔ Enhanced Creditor Protection: Beyond merely safeguarding your personal assets from business liabilities, South Dakota offers strong protections against personal creditors affecting your business. Unlike in many states, where personal creditors might access business ownership or assets, South Dakota restricts creditor claims to what is known as a "charging order." This order only allows creditors to claim distributions made to the business owner, without forcing distributions or meddling in business operations. This "outside-in" protection is effective for both single-member and multi-member LLCs and often deters creditors from pursuing these limited claims due to the inefficacy of the remedy.

✔ Enhanced Asset Protection: South Dakota offers an excellent opportunity for LLC owners to enhance their asset protection by aligning their business structure with specialized trusts such as Dynasty Trusts and Domestic Asset Protection Trusts. While similar trusts are available in a few other states, South Dakota's specific legal provisions, such as allowing trusts to continue in perpetuity and shielding assets from federal transfer taxes across generations, make it an attractive option for long-term asset protection and wealth management. This strategic integration provides a comprehensive shield for personal and business assets, extending protective benefits that are highly competitive among state offerings.

✔ Flexibility in Ownership and Taxation: The state allows LLCs to decide their management structure and choose from multiple taxation options. Whether taxed as a pass-through entity or as a corporation, LLCs can align their financial strategies with their business goals for optimal tax benefits and operational efficiency.

✔ Low Cost of Entry: The overall costs to form an LLC in South Dakota are competitively low, making it an economical choice for startups and small businesses. The state strives to simplify the setup process, reducing barriers to entry for new entrepreneurs.

✔ No Residency Requirements: Unlike some states, South Dakota does not impose residency restrictions on LLC owners. This inclusivity allows individuals from any location to establish and operate an LLC in South Dakota, expanding the potential for business growth and investment opportunities statewide.

Accepted Filing Methods

South Dakota allows for the filing of LLC formation documents online through its efficient digital platform, available 24/7. Paper submissions are also accepted via mail, ensuring accessibility for all filers regardless of their preference or technological capabilities.

Name Availability & Requirements

The requirements for naming an LLC in South Dakota are clearly defined by state law. The name must contain "Limited Liability Company," "Limited Company" or the abbreviation "L.L.C.," "LLC," "L.C.," or "LC." "Limited" may be abbreviated as "Ltd.," and "company" may be abbreviated as "Co." The name must be unique and not closely resemble the names of existing entities registered in the state.

One may determine the availability of a proposed business name for use within South Dakota by querying the state's official Business Name Availability search tool.

Required Fees

In South Dakota, the fee for filing the Articles of Organization online is $150, while the fee for submitting by mail is $165. These rates are cost-effective compared to those in many other states. Expedited services are offered for quicker processing, although the standard processing time is already efficient.

Statutory Authority & Requirements

The statutory authority for an LLC within the state is outlined in the Uniform Limited Liability Company Act, codified at S.D. Codified Laws § 47-34A et seq.

47-34A-203. Articles of organization.

(a) Articles of organization of a limited liability company must set forth:
(1) The name of the company;
(2) The address of the initial designated office;
(3) The information required by § 59-11-6;
(4) The name and address of each organizer;
(5) The duration of the company if other than perpetual;
(6) Whether the company is to be manager-managed, and, if so, the name and address for each initial manager;
(7) Whether one or more of the members of the company are to be liable for its debts and obligations under § 47-34A-303(c);and
(8) Whether the limited liability company is authorized to establish one or more series and the matters required under § 47-34A-702.
(b) Articles of organization of a limited liability company may set forth:
(1) Provisions permitted to be set forth in an operating agreement; or
(2) Other matters not inconsistent with law.
(c) Articles of organization of a limited liability company may not vary the nonwaivable provisions of § 47-34A-103(b). As to all other matters, if any provision of an operating agreement is inconsistent with the articles of organization:
(1) The operating agreement controls as to managers, members, and members' transferees; and
(2) The articles of organization control as to persons, other than managers, members and their transferees, who reasonably rely on the articles to their detriment.

Source:  SL 1998, ch 272, § 203; SL 2006, ch 228, § 8; SL 2008, ch 275, § 75; SL 2020, ch 200, § 8, eff. Nov. 15, 2020.

47-34A-105. Name.

(a) The name of a limited liability company must contain, limited liability company, or limited company, or the abbreviation, L.L.C., LLC, L.C., or LC. Limited may be abbreviated as Ltd. and company may be abbreviated as Co.
(b) Except as authorized by subsections (c) and (d), the name of a limited liability company must be distinguishable upon the records of the secretary of state from:
(1) The name of any corporation, limited partnership, or company incorporated, organized or authorized to transact business, in this state;
(2) A name reserved or registered under § 47-34A-106 or 47-34A-107;
(3) A fictitious name approved under § 47-34A-1005 for a foreign company authorized to transact business in this state because its real name is unavailable.
(c) A limited liability company may apply to the secretary of state for authorization to use a name that is not distinguishable upon the records of the secretary of state from one or more of the names described in subsection (b). The secretary of state shall authorize use of the name applied for if:
(1) The present user, registrant, or owner of a reserved name consents to the use in a record and submits an undertaking in form satisfactory to the secretary of state to change the name to a name that is distinguishable upon the records of the secretary of state from the name applied for; or
(2) The applicant delivers to the secretary of state a certified copy of the final judgment of a court of competent jurisdiction establishing the applicant's right to use the name applied for in this state.
(d) A limited liability company may use the name, including a fictitious name, of another domestic or foreign company which is used in this state if the other company is organized or authorized to transact business in this state and the company proposing to use the name has:
(1) Merged with the other company;
(2) Been formed by reorganization with the other company; or
(3) Acquired substantially all of the assets, including the name, of the other company.

Source:  SL 1998, ch 272, § 105.