South Dakota has built a reputation for being one of the easiest states in the country to incorporate in. There’s no corporate or personal income tax, and the process comes with predictable startup costs and low overhead. With that said, South Dakota still has its own set of rules, required documents, and annual obligations, and skipping a step can carry real consequences. Below, we’ll explain how to incorporate in South Dakota, from the benefits and legal requirements to the exact costs and process.

What’s in this article?

• How do you incorporate a business in South Dakota?
  
• What are the benefits of incorporating in South Dakota?
  
• What are the legal requirements to incorporate in South Dakota?
  
• How much does it cost to incorporate in South Dakota?
  
• What are the steps to register an LLC or corporation in South Dakota?
  
• How Stripe Atlas can help
  

How do you incorporate a business in South Dakota?

To start a company in South Dakota, you’ll first decide on an entity type—usually a limited liability company (LLC) or a corporation. Incorporating technically refers to creating a corporation, but people often use the same term when they form an LLC. Next, you’ll designate a registered agent with a South Dakota street address and file your formation documents with the secretary of state online or by mail.

The forms will include your business name, principal office, registered agent information, and who’s signing the paperwork. Paper filings are allowed, but they cost slightly more.

Once your filing is approved, your company officially exists under South Dakota law. From there, expect to file a report each year and apply for any necessary licenses or tax registrations (e.g., a sales tax license if you’ll be selling goods in the state).

What are the benefits of incorporating in South Dakota?

South Dakota’s pitch to businesses is simple: low taxes, low fees, and a modern filing system. Here’s a closer look at the advantages.

Favorable tax profile

South Dakota has neither corporate income tax, personal income tax, nor franchise tax (unless your business is a financial institution). That means South Dakota is one of the few states where ongoing state-level taxes are close to zero.

Low compliance costs

Once you form an LLC or corporation, the only ongoing compliance cost you pay the state is $55–$70 to file an annual report.

Strong digital infrastructure

The secretary of state’s business portal allows you to handle formation, annual reports, and certificates entirely online. It’s built for speed, and filings are processed quickly without unnecessary paperwork.

What are the legal requirements to incorporate in South Dakota?

The legal requirements to incorporate in South Dakota are simple: a compliant business name, a registered agent, filed documents with the state, and internal governance documents. Here’s what you’ll need.

Business name

Your business name must be unique in the state of South Dakota. You can use the secretary of state’s online search tool to confirm availability. LLC names must include the word “LLC” or “Limited Liability Corporation,” and corporation names must include “Corporation,” “Company,” “Incorporated,” “Inc.,” or “Corp.”

Registered agent

You must have a registered agent with a mailing address in South Dakota (street addresses only, no PO Boxes). You can act as your own registered agent, designate an employee, or use a professional registered agent service. Whoever you appoint must be available during business hours to receive notices, legal documents, and any other business mail.

Filed documents

LLCs file articles of organization. Corporations file articles of incorporation. Both can be filed online with the South Dakota secretary of state.

Internal governance documents

Corporations are required to write company bylaws that outline the procedures for corporate activities and the responsibilities of directors, officers, and shareholders. While you don’t file bylaws with the state, they’re legally binding internal documents. An LLC should write an operating agreement that outlines the business’s corporate governance. Although it’s not legally required, it’s generally recommended to clarify ownership and management.

How much does it cost to incorporate in South Dakota?

In South Dakota, it costs $150 to file articles of incorporation or articles of organization online. Paper filings add $15, and expedited processing costs $50.

Once your company is formed, you’ll pay $55 to file your annual report online or $70 if you file by mail. If you miss the deadline, you’ll owe a $50 late fee.

Additional costs might include:

• About $100–$300 annually for a registered agent service, depending on the provider

• $10 to register a “doing business as” name if you’re operating under a different public-facing name

• $25 to reserve a business name before filing

• $20 to obtain a Certificate of Good Standing online

What are the steps to register an LLC or corporation in South Dakota?

There’s a clear path to setting up your LLC or corporation in South Dakota. Follow these steps to form your business and stay compliant.

Decide on your entity type

LLCs offer a flexible ownership structure and pass-through taxation. Corporations involve shares, a board of directors, and a structure that’s suited to venture capital fundraising. The filing process is almost identical, but governance and taxation diverge once you’re operating.

Check name availability

Search the secretary of state’s database to confirm your business name isn’t already taken. If you need extra time, you can reserve a name for $25.

Appoint a registered agent

Your registered agent must have a South Dakota street address (not a PO Box). The agent can be you, a colleague, or a commercial agent.

File your formation documents

You’ll need to file articles of organization for an LLC or articles of incorporation for a corporation. You can file online or by mail and you’ll need to pay the filing fee when you do.

Draft internal governance

LLCs are governed by operating agreements, while corporations have bylaws. These aren’t filed with the state, but they’re important for banking, investors, and day-to-day clarity.

Register for licenses and accounts

You’ll need a sales and use tax license if you’re selling taxable goods or services. You’ll also need to register with the Reemployment Assistance Tax Unit if you plan to hire employees.

Handle industry-specific or local permits

Healthcare, food service, and other regulated fields will require additional approvals from state or local agencies.

File your annual reports

Annual reports are due on the first day of the anniversary month of when you registered the business. Missed filings can trigger administrative dissolution; you’ll then need to complete extra steps and pay additional fees to reinstate your business.

How Stripe Atlas can help

Stripe Atlas sets up your company’s legal foundations so you can fundraise, open a bank account, and accept payments within two business days from anywhere in the world.

Join 75K+ companies incorporated using Atlas, including startups backed by top investors like Y Combinator, a16z, and General Catalyst.

Applying to Atlas

Applying to form a company with Atlas takes less than 10 minutes. You’ll choose your company structure, instantly confirm whether your company name is available, and add up to four cofounders. You’ll also decide how to split equity, reserve a pool of equity for future investors and employees, appoint officers, and then e-sign all your documents. Any cofounders will receive emails inviting them to e-sign their documents, too.

Accepting payments and banking before your EIN arrives

After forming your company, Atlas files for your Employer Identification Number (EIN). Founders with a US Social Security number, address, and cell phone number are eligible for IRS expedited processing, while others will receive standard processing, which can take a little longer. Additionally, Atlas enables pre-EIN payments and banking, so you can start accepting payments and making transactions before your EIN arrives.

Cashless founder stock purchase

Founders can purchase initial shares using their intellectual property (e.g., copyrights or patents) instead of cash, with proof of purchase stored in your Atlas Dashboard. Your IP must be valued at $100 or less to use this feature; if you own IP above that value, consult a lawyer before proceeding.

Automatic 83(b) tax election filing

Founders can file an 83(b) tax election to reduce personal income taxes. Atlas will file it for you—whether you are a US or non-US founder—with USPS Certified Mail and tracking. You’ll receive a signed 83(b) election and proof of filing directly in your Stripe Dashboard.

World-class company legal documents

Atlas provides all the legal documents you need to start running your company. Atlas C corp documents are built in collaboration with Cooley, one of the world’s leading venture capital law firms. These documents are designed to help you fundraise immediately and ensure your company is legally protected, covering aspects like ownership structure, equity distribution, and tax compliance.

A free year of Stripe Payments, plus $50K in partner credits and discounts

Atlas collaborates with top-tier partners to give founders exclusive discounts and credits. These include discounts on essential tools for engineering, tax, finance, compliance, and operations from industry leaders like AWS, Carta, and Perplexity. We also provide you with your required Delaware registered agent for free in your first year. Plus, as an Atlas user, you’ll access additional Stripe benefits, including up to a year of free payment processing for up to $100K in payment volume.

Learn more about how Atlas can help you set up your new business quickly and easily, or get started today.