How to Register a Business in South Dakota

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TLDR

When you register a business in South Dakota, you’ll need to satisfy several requirements, allowing you to start your company legally and compliantly. Before registering, though, it’s a good idea to map out your business, including your location, your ideal customer, and your marketing and sales approach, to name a few topics. You can do this by drafting a business plan.
In South Dakota, you can choose from several different business structures. One of the more prevalent business types is the sole proprietorship. If you operate as a sole proprietorship, you do not have to file your startup in South Dakota formally. Instead, any profits or losses are reported on your personal tax return.
You’ll also have to choose a name in choosing your startup’s structure. When picking a name for an LLC, corporation, or limited partnership, you’ll need to distinguish it from other business names already registered with the state. Further, your startup’s name must comply with South Dakota’s naming conventions.
Next, after choosing your startup’s name, you need to identify a statutory agent (often referred to as a registered agent in other states). A statutory agent is an individual or a business that can receive legal and financial documents on behalf of the startup. A statutory agent must have “an actual street address or rural route box number in th[e] state.”
Finally, after completing the above steps, it’s time to submit your formation forms to South Dakota’s Secretary of State. The State of South Dakota provides sample forms for your use or review for new entities. For example, if you choose to register as a for-profit corporation, you will file an Articles of Incorporation application along with a non-refundable $165 filing fee.
Depending upon your chosen entity for your startup, you will have your initial filing fee payment, any additional annual filings, and any taxes. For example, as stated above, you must pay a non-refundable $165 filing fee for registering a for-profit corporation or an LLC. You’ll need to file annual reports for your entity, requiring a filing fee.
If you founded a startup in a state other than South Dakota but want to conduct business in South Dakota, you’ll have to register your business as a foreign entity. Whether a business is a domestic or foreign entity depends upon where the startup was formed and which state governs its management and operation.

When you decide where to locate your startup, South Dakota may not immediately come to mind. However, the state known for the Badlands and Mount Rushmore may surprise you.

In South Dakota, 30 percent of its economy comes from the agriculture industry, with other industries including bioscience, oil and gas production, business and professional services, and outdoor recreation. And speaking of outdoor recreation, South Dakota has a growing tourism industry, with 14 million visitors traveling to the state.

Groups like the Enterprise Institute, the Small Business Innovation Research, and the Procurement Technical Assistance Center all support the growth and success of South Dakota’s startups.

Small business numbers are equally impressive. In 2021, South Dakota was home to almost 90,000 small businesses, employing just over 210,000 people and making up 99% of all businesses in the state. Top small business industries include retail trade; professional, scientific, technical services; construction; transportation and warehousing; and finance and insurance.

With a total state population of 886,667, the importance of these small business numbers comes to light.

As you’re launching your startup and exploring where to locate your new business, this article will explore registering your business in South Dakota.

When Do You Need to Register a Business in South Dakota?

When you register a business in South Dakota, you’ll need to satisfy several requirements, allowing you to start your company legally and compliantly. Before registering, though, it’s a good idea to map out your business, including your location, your ideal customer, and your marketing and sales approach, to name a few topics. You can do this by drafting a business plan.

To help guide you in drafting your business plan, you can check in with the U.S. Small Business Administration or SCORE, which focuses specifically on small businesses and startups. South Dakota’s Department of Development also offers numerous resources for South Dakota founders when starting a new business, in addition to resources specifically for entrepreneurs. Once you’ve identified some of the basics about your startup’s operation, it is time to register your business.

Below, we’ve broken the South Dakota requirements into an easy step-by-step process.

Determine Your Business’s Entity Structure

Before registering your startup in South Dakota, you must first determine your organization’s legal entity structure. When deciding upon your startup’s structure, it’s a good idea to discuss your options with your accountant or attorney, as they can advise you in detail about the ownership, management, tax benefits, and drawbacks of each structure.

In South Dakota, you can choose from several different business structures. One of the more prevalent business types is the sole proprietorship. If you operate as a sole proprietorship, you do not have to file your startup in South Dakota formally. Instead, any profits or losses are reported on your personal tax return.

In addition to sole proprietorships, five other popular South Dakota business entities include:

Limited partnership
Limited liability partnership
Limited liability company
Corporation

For example, a limited liability company is an entity where the owners are called members or managers. Members or managers of the LLC enjoy a certain level of protection, and the LLC’s taxes are reported on each member’s tax returns.

In a c-corporation, the owners are taxed twice on their personal tax returns and again on the corporation’s tax return.

Founders must register their startups (typically online) for these types of entities with South Dakota’s Secretary of State.

Choose Your Business’s Name

You’ll also have to choose a name in choosing your startup’s structure. When picking a name for an LLC, corporation, or limited partnership, you’ll need to distinguish it from other business names already registered with the state. Further, your startup’s name must comply with South Dakota’s naming conventions.

You can check for available names by visiting South Dakota’s business name availability database. If you want to register a business with a “conflicting name,” you can apply for authorization to use the non-distinguishable name from the Secretary of State.

Reserved Names

Suppose you’re not ready to register your business in South Dakota, but you want to preserve your startup’s name. In this case, you can reserve a business name, preventing another new business from taking the name. You can book your startup’s name for 120 days. After that, you’ll need to pay a $25 fee for new filings.

DBA or Assumed Names

Note that reserving a startup name is not the same as registering a “doing business as” or DBA name. DBA names are also called fictitious or assumed names. You can file for a DBA online with South Dakota’s Secretary of State for corporations, limited partnerships, and limited liability companies.

Suppose the founder chooses an assumed name rather than their personal name for sole proprietorships. In that case, the founder will need to file that assumed name with South Dakota’s Secretary of State, even though the entity itself does not need to be registered. Further, founders with sole proprietorships must check with local and municipal business license offices before conducting business.

Identify Your Registered Agent

Next, after choosing your startup’s name, you need to identify a statutory agent (often referred to as a registered agent in other states). A statutory agent is an individual or a business that can receive legal and financial documents on behalf of the startup. A statutory agent must have “an actual street address or rural route box number in th[e] state.”

You can also search for a statutory agent online on the Secretary of State’s website.

Submit Your Formation Forms

Finally, after completing the above steps, it’s time to submit your formation forms to South Dakota’s Secretary of State. The State of South Dakota provides sample forms for your use or review for new entities.

For example, if you choose to register as a for-profit corporation, you will file an Articles of Incorporation application along with a non-refundable $165 filing fee.

For South Dakota startups registering as an LLC, you will file Articles of Organization application, also along with a non-refundable $165 filing fee.

How Much Does It Cost to Register a Business in South Dakota?

Depending upon your chosen entity for your startup, you will have your initial filing fee payment, any additional annual filings, and any taxes. For example, as stated above, you must pay a non-refundable $165 filing fee for registering a for-profit corporation or an LLC.

You’ll need to file annual reports for your entity, requiring a filing fee.

Additionally, most South Dakota startups must apply for specific business licenses or permits through South Dakota’s Department of Revenue and local municipalities, which all may have separate filing fees.

How to Register a Business in South Dakota that Started in Another State

If you founded a startup in a state other than South Dakota but want to conduct business in South Dakota, you’ll have to register your business as a foreign entity. Whether a business is a domestic or foreign entity depends upon where the startup was formed and which state governs its management and operation.

For example, a registered startup in South Dakota is a “domestic” startup. However, if you have a Delaware registered startup but want to conduct business in South Dakota, your business would be considered a “foreign” startup.

Let’s look at an example. Suppose you have a Delaware LLC, but you’d like to conduct business in South Dakota. Then, you can complete an Application for Certificate of Authority for a Foreign LLC, along with the applicable filing fee of $765.

The Benefits of Registering a Business in South Dakota

There are many benefits associated with registering your startup in South Dakota. Let’s look at some top ones:

Affordable living
Plenty of job opportunities
Minimal effects of urbanization
Small town feel, across the whole state
Limited diversity
No taxes levied on personal or corporate income
Low sales tax
Low local taxes

The Limitations Associated with Registering a Business in South Dakota

There aren’t many limitations associated with registering your startup in South Dakota. However, here are a couple of points to keep in mind:

Extreme weather, with very cold winters and lots of wind
Low wages
Limited access to urban areas and their amenities
A small-town mindset
Higher property taxes

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At AbstractOps, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most—your business.

If you’re looking for help registering your Utah startup, we can get your documentation ready, overall shepherding this process to ensure it’s done right. Get in touch with us.

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Note: Our content is for general information purposes only. AbstractOps does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.

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