If you're considering starting a business in South Dakota, forming a limited liability company (LLC) could be the right choice for you. LLCs offer several advantages, including protection of an owner’s personal assets and flexibility in management and taxation. While creating and running an LLC does not require the same formalities as a corporation, there are still several steps you need to take in order to establish a legal entity recognized under South Dakota law.

Once you decide to form an LLC, you should start thinking about these required and recommended actions: 

• Choose a unique name — The first step in creating an LLC is choosing a name for your business. Your chosen name must comply with South Dakota's naming requirements. One of the following phrases or abbreviations has to be used: Limited Liability Company; Limited Company; LLC; L.L.C.; LC or L.C.  Additionally, your chosen name must be distinguishable from the names of existing businesses registered in South Dakota.

• Appoint a registered agent — Every LLC in South Dakota is required to have a registered agent designated to accept service of legal documents and official correspondence on behalf of the company. Your registered agent must have a physical street address in South Dakota and be available during regular business hours.

• Submit articles of organization — To create your LLC, you'll need to file articles of organization with the South Dakota Secretary of State. This document typically includes basic information about your LLC, such as its name, principal place of business, registered agent's name and address, and the names and addresses of the LLC's members or managers.

• Establish an operating agreement — While not required by law, it's a good idea to create an operating agreement for your LLC. Developing a clear document addressing ownership structure, management responsibilities and operating procedures can clarify everyone’s role and avert problems down the road.

• File annual reports — South Dakota requires LLCs and several other types of business entities to file an annual report with the Secretary of State, typically including similar information as what must be provided upon formation. Failure to do so can result in penalties and administrative dissolution of your LLC.

Working with a knowledgeable South Dakota business formation lawyer will help you determine whether an LLC or a different entity best suits your situation and needs. Anker Law Group in Rapid City provides comprehensive legal support to startups in all industries, including assistance with licensing and permitting issues. To schedule a free initial consultation, please call 605-519-5967 or contact us online.