Find out how to qualify your LLC to conduct business in South Dakota.
If you own a company that was founded in a state other than South Dakota, you must qualify or register it in South Dakota in order to conduct business there. The requirements for qualifying your international (non-South Dakota) limited liability corporation (LLC) to conduct business in South Dakota are summarized below.
What exactly is a Foreign LLC?
If your LLC is founded in a different state, it is referred to as a foreign LLC in South Dakota. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. An LLC founded in Tennessee, for example, is a foreign LLC in Kentucky.
South Dakota Business Opportunities
According to South Dakota’s LLC Act, if you are “doing business” or “transacting business” in South Dakota, you must register your foreign company with the state. (The latter phrases are used in several places throughout the Act.) What exactly does this mean? South Dakota’s LLC Act, like most others, does not define either word in respect to overseas registrations.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. To be obligated to collect state sales tax on sales to citizens of a state, a firm must have a physical presence in, or nexus with, that state. In general, physical presence and nexus are synonymous and refer to:
a storage facility in the state
A shop in the state, an office in the state, or a sales representative in the state are all examples of state-based businesses.
Certain exclusions may apply, and the regulations become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
Some Activities Are Exempt
South Dakota’s LLC Act, like many others, outlines some acts that do not constitute doing business in the state. Among the objects mentioned are:
defending or settling a lawsuit dealing with internal business affairs such as holding member or manager meetings having a bank account in the state having an office, agency, or persons in the state for handling your company’s own securities selling through independent contractors soliciting or obtaining orders that require acceptance outside the state before they become contracts
If your LLC’s only operation in South Dakota is one or more of the activities mentioned above, you should not be required to register with the state. Check Section 147-34A-1003 of the South Dakota Codified Laws for the exact legal definition of each of these objects.
Authority Certificate
You must submit an Application for Certificate of Authority: Foreign Limited Liability Company to register your foreign firm in South Dakota. The form may be downloaded at the South Dakota Secretary of State’s website.
To complete the form, you must supply the same information that you would need to incorporate an LLC in your home state. However, since each state is unique, there may be materials that South Dakota requires that you did not need to submit when you initially formed your LLC. In particular, for a South Dakota Certificate of Authority, you must provide:
the name of your limited liability company
the state in which your LLC is formed the term of your LLC
the major office address of your LLC, which must be a street address
the name and street address of your registered agent in South Dakota; an indication of whether your LLC is member-managed or manager-managed; if your LLC is manager-managed, the names and street addresses of its managers; and an approved signature.
The application must be submitted in both original and duplicate form. The standard filing cost is $750.
What Happens If You Don’t Register?
If your LLC does business in South Dakota without a Certificate of Authority, it cannot file a lawsuit. However, the lack of a Certificate of Authority does not render any of your LLC’s contracts unlawful or prevent your LLC from defending a lawsuit in the state.
Forming a Foreign Corporation
The criteria and standards for international qualifying in South Dakota are identical whether your company is structured as a corporation rather than an LLC. You must, however, submit a separate application, Application for Certificate of Authority, Foreign Business Corporation. For forms, information, and filing instructions, visit the South Dakota Secretary of State’s website.