Many LLC owners who plan to move their business to South Dakota (SD) ask, “Does South Dakota allow LLC domestication?”, “Is South Dakota LLC domestication a good choice?” or “How to domesticate an LLC in South Dakota?
If you are in a similar situation, keep on reading. This South Dakota LLC domestication guide has all the information that you seek.
What is South Dakota LLC Domestication?
LLC domestication in South Dakota means changing the location or domicile of your LLC from any state into South Dakota. In other words, if you want to move your Georgia LLC to South Dakota, for instance, LLC domestication is the best way to do so.
By LLC domestication, you change the governing laws of your LLC. Domesticating your LLC into South Dakota will have the following benefits over other methods of moving your LLC to South Dakota:
- LLC domestication allows you to maintain previous business relationships.
- No need to renew contracts made in the previous state.
- No need to change bank accounts and credit rating.
- You can retain your EIN (Tax ID Number).
- No need to rehire employees.
- No need to transfer assets.
How to Domesticate your LLC in South Dakota
There’s always something new to learn in the ever-changing landscape of business, and this same goes for LLC domestication in South Dakota. Below, we explained the process of transferring an LLC from any state to South Dakota via SD LLC domestication in 3 simple steps.
Acquire a Certificate of Good Standing
A certificate of good standing is also called a certificate of existence or certificate of status in some states. It is a legal document issued by the state authorities, usually the secretary of state.
This certificate verifies that your LLC or corporation was legally formed and operated in a state compliance manner.
In other words, this official document states that you timely pay your LLC taxes, submit LLC annual reports and fees, follow the state laws in all business operations: hence, your business is in good standing with the state.
South Dakota LLC domestication requires that your LLC does not have any outstanding debts or taxes in the home state. So you have to pay state taxes, LLC annual fees, and other fees in the state where you initially registered your LLC.
To prove that your LLC is up to date on all important business marks, you need to submit a certificate of status while filing Articles of Domestication in South Dakota.
Approval of LLC Domestication
Before you file articles of domestication with the South Dakota Department of State, you need to acquire approval from the state where you originally formed your LLC.
Contact the state department where you initially filed your articles of organization and acquire permission to move your business out of that state.
For instance, if you want to move your Texas LLC to South Dakota, you need to get permission to transfer your LLC out of Texas from the Texas Secretary of State.
File an Articles of Domestication South Dakota
To formally move your LLC from the LLC’s home state to South Dakota, you need to file articles of domestication downloaded with the South Dakota department of state.
With South Dakota Articles of Domestication, you will see South Dakota articles of organization form as well. So you need to file the South Dakota certificate of domestication along with the South Dakota articles of domestication.
To download both forms, click on the link below:
Moreover, you also need to submit the certificate of good standing to show that your LLC does not have any outstanding state taxes or debts in the previous state.
Finally, depending on the LLC management structure mentioned in your LLC operating agreement, you need the signature of the authorized person to sign the South Dakota LLC domestication form. After completing all the information, send the complete forms to:
Mailing Address:
New Filing Section
Division of Corporations
P.O. Box 6327
Tallahassee, SD 32314
In Person Filing Address:
New Filing Section
Division of Corporations
The Centre of Tallahassee
2415 N. Monroe Street, Suite 810
Tallahassee, SD 32303
Requirements to Complete South Dakota Articles of Domestication Form
As mentioned earlier that South Dakota articles of domestication are filed with the South Dakota articles or organization; the following information/documents will be needed to complete the LLC domestication process:
- Certificate of good standing from the previous state
- LLC domestication approval from the previous state
- Name of the domesticating entity (The name of your LLC with which you used to operate your business in the previous state)
- The name of the previous state where your LLC was registered
- The date when your LLC was formed initially
- South Dakota articles of organization form with South Dakota registered agent information
- Signature of the authorized person to initiate LLC domestication
- The effective date of the LLC domestication, if it is not the same as the date of filing of the South Dakota articles of domestication
South Dakota LLC Domestication Fee (Cost)
To convert an out-of-state LLC into a South Dakota LLC, you need to pay the following fee to the South Dakota Department of State along with the South Dakota articles of domestication:
- Articles of Domestication: $25
- Articles of Organization: $125
- Total to Domesticate and file: $150
Alternatives to LLC Domestication South Dakota
If you do not plan to move your LLC to South Dakota permanently, or for any other reason South Dakota LLC domestication does not seem suitable, the followings are the alternative to South Dakota LLC domestication:
What Next After South Dakota LLC Domestication?
Once the state of South Dakota domesticates your LLC, the laws of the previous state will no longer apply to your LLC.
Now your LLC will be governed under the LLC statute of South Dakota. Now, to remain compliant with the laws of South Dakota, you need to:
- Make sure you pay outstanding LLC federal taxes or debts in the previous state.
- Keep your registered agent information up to date. If you don’t have one, you can review top registered agent services here.
- Follow your LLC operating agreement.
- Acquire licenses and permits specifically required by the new state.
- Regularly submit annual reports and fees.
- Pay South Dakota sales tax (6% on the total sales).
Moving an LLC out of South Dakota
The South Dakota Department of state allows an LLC to move out of South Dakota via LLC domestication. However, the law of the other state must permit LLC domestication in its statute.
If the law of the other state does not permit LLC domestication, you should look for alternatives of LLC domestication to transfer your LLC out of South Dakota.
For the states that allow LLC domestication, you need to submit a South Dakota certificate of status to domesticate your LLC there. Click on the following link to get a South Dakota certificate of status.
FAQs on How to Domesticate an LLC in South Dakota
Alfie Wilson, Esq., is a legal content writer with expertise in business formation, criminal law, veterans disability, family law, DUI law, personal injury, animal welfare, and legal writing. He holds a J.D. from Emory University School of Law and has experience in appellate advocacy and regulatory matters. Alfie’s passion lies in breaking down complex legal topics for a non-lawyer audience. He currently writes for law firms and non-profits on various issues and resides in Arlington, Virginia.