General Guide to Company Incorporation in South Dakota

Updated on Thursday 10th May 2018

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South Dakota is known as the “Mount Rushmore State” and it is located in the Midwest part of USA. This is the 17th largest American state with a flourishing economy mostly based on agriculture and tourism, considering the major point of attraction, Mount Rushmore. We have prepared a general guide to company incorporation in South Dakota to help foreign investors understand better how business is done in this state. We mention that our company formation agents in USA can offer information and assistance at the time of company registration in any chosen state for future activities.
 

How to form an LLC in South Dakota


The USA company formation is less bureaucratic and allows foreigners to enter the market in a fast and reliable manner. Limited liability companies in South Dakota are the most preferred business forms which can be easily registered with the Business Division and the Secretary of the State of South Dakota. The abbreviations LLC, L.C., LC or L.L.C. are necessary when choosing the company’s name, but before that, a verification in this sense is mandatory. At the base of any LLC in South Dakota stand the Articles of Association that offer necessary information like:
  • the name of the owners, their nationality and the country of residence;
  • the activities and the purposes of the LLC formed in South Dakota;
  • details about the business address of the company in South Dakota;
  • information about the board of managers (the owners can also be directors);
  • the name of the registered agent who will represent the business.
Foreign entrepreneurs in South Dakota can ask for the services of our USA company formation specialists who can act as representative agents for companies in this state.
 

Can I open a branch in South Dakota?


Yes, foreign investors can establish branches in South Dakota as corporations for which all the activities and the financial matters must be reported to the parent company. Comprehensive information about the business from abroad needs to be provided to the Business Division in charge of incorporation.
 

Can I open a subsidiary in South Dakota?


Yes, foreigners can set up subsidiaries in South Dakota in compliance with the Companies Act of this state and the applicable legislation. This is a separate legal entity which can be easily incorporated, as soon as the Articles of Association are provided. If you want to start a business in USA, we invite you to get in touch with our team of advisors.
 

Do I need an operating agreement for my company?


Although many US states do not impose such requirements, it is suggested to create an operating agreement for your company in South Dakota with information about the liabilities of the owners, the capital distribution, the voting rights and details about the dissolution methods in case the company closes.
 

Apply for EIN in South Dakota


The Employer Identification Number is the company’s federal tax ID which proves that the business is registered for tax matters. The application in this sense is made with the IRS (Internal Revenue Service) by providing the documents of the firm. As soon as these are accepted, your business in South Dakota is a taxpayer.
 

What is the rate of the sales tax in South Dakota?


The sales tax in South Dakota is set at 4% rate. Cities of this state are allowed to collect their own sales tax which cannot exceed 2%. It is good to know that there is no country sale tax in South Dakota, but for more information about the tax structure in this state, please address your inquiries to our advisors.
 

Should I hire an accountant for my company in South Dakota?


Yes, all companies in South Dakota should benefit from complete accounting services offered by a specialized team of accountants who can help with payroll, annual financial statements, tax advice, tax planning and tax minimization methods among many others.
 

Economy facts about South Dakota


South Dakota is seen as the 7th best state in the USA from an economic point of view, with well-developed industries that generate important revenues. The agriculture, the tourism, the finance and the retail sectors are the key engines of South Dakota’s diversified economy. The state is known for the largest production of ethanol that serves countries worldwide. Foreign investors can establish their business presence in Pierre, the capital of the state, and also in cities like Sioux Falls, Brookings, Mitchell, Yankton or Rapid City.

For a better understanding of how companies can be set up in South Dakota, please feel free to contact our team of company incorporation consultants in USA.

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