How to Dissolve an LLC in South Dakota | LLC Closing Guide

To dissolve a limited liability company one has to take up a set of required steps. In South Dakota, if you and the members of the LLC want to discontinue business, then it is necessary to dissolve their business legally to avoid any administrative and legal consequences. To dissolve an LLC in South Dakota, you are required to submit a complete Article of Dissolution to the Secretary of State. Before submitting the Article of Dissolution, one must follow the operating agreement.

If you have a South Dakota LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of South Dakota LLC is to follow the operating agreement. There are some points to be noted before proceeding with the official paperwork. At first, make sure all the members of the LLC are agreed to dissolve the business. Once all the members are ready, their consent should be recorded via voting. After casting their vote in favor of the dissolution, the legal process must be started. Here are the steps to address for dissolving South Dakota LLC.

How to Dissolve an LLC in South Dakota

Dissolution of South Dakota LLC requires three broad procedural steps. Having a South Dakota LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the South Dakota Secretary of State.

Step 1: Follow Your South Dakota LLC Operating Agreement

When you have started an LLC as a business entity, then there is an operating agreement that is formed. There are complete details of how the company will function and grow in that operating agreement, which acts as a comprehensive guide. There is also a dissolution process, which is added to your agreement. The common dissolution steps that almost every LLC follows are:-

First of all, the dissolution vote will take place among the LLC members in the dissolution meeting. If the majority is with the YES, then the process goes into legal proceedings.

• All the dissolution votes will be noted down and recorded with the minutes of the meeting or a consent form.
• After that, a formal date for dissolving the LLC will be decided.
• The next step is counting the LLC assets and dividing them among the stakeholders and members accordingly.
• Finally, the creditors of the business are notified, and the debts of the business are settled.

This is a general process. However, it is strongly recommended to seek professional help to avoid any complications when it comes to terminating an LLC.

Get a Professional Agent Service

When it comes to a limited liability company dissolution, it is important to get professional help. The South Dakota registered agent will guide you with everything you need to close your limited liability company. While choosing a registered agent make sure they have a physical street address in the state. A professional service provider helps you to file the Article of Dissolution and close your various tax accounts without any hassle. Below are the best LLC services we strongly recommend for you.

Step 2: Close All Tax Accounts

Every action that an official business takes is legally bound to some minimum business taxes. For that, various accounts, especially business entity tax account, are maintained by the state government with the help of various departments. You should consider all the taxes that you have paid for your LLC’s duration and make a list of them.

You must contact all government entities and clear the amount of outstanding taxes due until the date you have decided for dissolution. All the taxes must be paid in advance so that you don’t face any issues in the further process of shutting down your LLC.

Some of the common taxes that limited liability companies have to pay are:

• Unemployment insurance tax
• Employee withholding tax if your LLC has employees.
• If your LLC is engaged in selling taxable goods then they are liable to pay the sales and use tax.

Most of these taxes are normally filed, but some departments require official paperwork, without which it is impossible for the business to close their accounts. Apart from business taxes, federal taxes, personal income taxes, and franchise taxes are to be considered. For the franchise taxes, a franchise tax form is required.

That is why the LLC owner should go through the sales tax guide and hire an accounting service. If you want to do the accounting yourself or make accounting easy, try FreshBooks.

Tax clearance

While dissolving the South Dakota LLC, the owner does not require to obtain a tax clearance certificate. However, if you have filed federal taxes, then you must go through the final return option on your IRS form.

The IRS form for the LLC that are classified as partnerships is form 1065, and those LLC’s who have registered themselves as corporate should check IRS form 1120.

Step 3: File Articles of Dissolution

There is a list of dissolution documents that you, as an LLC owner, have to file. Once these articles are filed, the legal existence of the LLC will be over. Like a South Dakota Articles of Organization, one has to file South Dakota LLC Articles of Dissolution. The dissolution procedure and filing the articles of dissolution form is very easy and is discussed below.

• First of all, the LLC owner(s) has to file the Article of Dissolution. There are multiple methods of filing available, such as file by mail, in-person drop, or/and online filing. To get the application form, you need to visit the Secretary of State Website of South Dakota state.
• You can follow the filing instruction on the official portal so that the steps for dissolution will be easier to complete.
• On that particular SOS website, the LLC owner has to look for the Domestic LLC Articles of Dissolution page.
• If you want to dissolve South Dakota Foreign LLC, then look for the Foreign LLC Dissolution process.
• There is a form available on this page, which is the article of dissolution you are looking for. You have to download that pdf form and start filling it out.
• You must fill in all the important and legal information in the form, so you should be extra careful.
• After filling in all the important information, you must choose the mode of payment you want to use to pay the LLC dissolution filing fees.
• After filling in every detail, one should submit the form through an official mail address and make a payment.
• It takes 3-5 business days after filing of articles of dissolution if you are filing it by mail or in person.

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The LLC you owned is dissolved, and you are free from all the liabilities linked with the LLC and its taxes. A copy of both original articles and recorded articles should be submitted in front of the probate judge. Now it’s his call that he accepts your expedited dissolutions or not.

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Points to Be Noted When Dissolving South Dakota LLC

Apart from these three steps, no major dissolution rules are there in South Dakota. However, there are some other tasks one has to keep in mind while dissolving an LLC legally.

Winding Up

There are some purposes of LLC that require some attention even after dissolution, known as winding up. The task of winding up includes.

• For a certain period, the property of a business requires preservation.
• If there is any civil case against the LLC, then the owner needs to finish them.
• Settle all the existing disputes of LLC.
• Transfer all the property of LLC to the names of partners.
• Release all the liabilities that the LLC owes to others.
• Rightful distribution of all the assets among members, according to their percentage of partnerships.

Cost of Dissolving LLC

LLC cost in South Dakota includes the formation as well as dissolution fees. To dissolve an LLC in South Dakota, LLCs have to file an Article of Dissolution. The filing fee is $10. The details are mentioned on the second page of the article dissolution filing form. Following are the ways to pay for the dissolution,

• You can select a payment pick-up option.
• There is an option of direct account transfer through your prepaid accounts.
• LLC owners can also use their Credit cards, providing their complete details and types. Along with that, an original signature is required to authorize the transaction state will make.

After Dissolving Your LLC

After you formally dissolve your LLC, your business name will not be reserved anymore. Any other business entity will be eligible to use your South Dakota LLC name immediately after 120 days of dissolving your LLC. On the other hand, if you have a foreign LLC in other states, then you must comply with the SOS of the state after the dissolution of your LLC in South Dakota. A registered agent can help you do the needful.

Reasons Behind Dissolving South Dakota LLC

There are different types of industries in a state; they all have their share in the economy. So if a company has great business relations with all, it can thrive in any economy. But it is not the same for all types of companies that we see. Some companies want to dissolve an LLC in South Dakota with their reasons too. Here, let’s see what can be the possible voluntary reasons for the dissolution,

• Increase in production cost of the business.
• The low inflow of cash in the business.
• The debt is increasing day by day.
• No way to keep up with the clientele and their new needs in the products.
• Over-reliance on the key customer of the business.

Top Businesses in South Dakota!

It is a crucial thing to become so productive in terms of the business. Without doing that and giving it all, it is impossible to make better money from it. So if you are inclined on the fact to start an LLC in South Dakota, then you better get all knowledge. Information about the best industries and how much they contribute to the economy is imperative. So here, please get to know about it from the following points!

1. Real estate, finance, and insurance industry: Several large financial companies are located in the state. Those companies make a great deal of development contribution, and it is vital too. The industry is an essential part of the services of the state and represents GDP by $10.3 billion.
2. Agriculture: The livestock products of this state are vital for this state. There are different agricultural products like wheat, hogs, soybeans, etc., that are well known. The sector seems to have great importance, which is why it also makes a great gesture for the economy. It represents the state GDP by $5.88 billion in total.
3. Government enterprises: The community needs the necessary services. There are private sectors too, but government and government enterprises are better. They even contribute $4,95 billion to the GDP too. It is more than what the private sector does, so it has more weight in it.
4. Manufacturing: No one has ever seen a state that is without the manufacturing industry. The industry is great for the economy and contributes $4.47 billion. The main product of manufacturing is the computer components and machinery.

South Dakota LLC Dissolution Review

F.A.Qs

What is the Cost to Dissolve an LLC in South Dakota

To dissolve an LLC in South Dakota you need to file the Articles of Termination with the South Dakota Secretary of State through mail by paying a filing fee of $10.

One of the key considerations in dissolving an LLC in South Dakota is the cost. While the specific costs may vary depending on the circumstances of each case, there are some common expenses associated with the dissolution process. These costs include filing fees, legal fees, and any outstanding debts or obligations that need to be settled before the dissolution is complete.

Filing fees are a necessary expense when dissolving an LLC in South Dakota. Businesses are required to file official paperwork with the South Dakota Secretary of State to formally dissolve their LLC. These filing fees can range from a few hundred dollars to several thousand, depending on the complexity of the dissolution and the size of the business.

Legal fees are another cost that business owners may incur when dissolving an LLC in South Dakota. While it is possible to dissolve an LLC without the help of an attorney, seeking legal advice can help ensure that the process is completed correctly and efficiently. Attorneys can provide valuable guidance on the legal requirements for dissolution and help navigate any potential obstacles that may arise.

In addition to filing fees and legal fees, businesses must also consider any outstanding debts or obligations that need to be settled before the dissolution is complete. This may include paying off creditors, fulfilling contractual obligations, or settling any pending lawsuits. Failing to address these debts and obligations can result in legal complications and prolong the dissolution process.

Overall, the cost of dissolving an LLC in South Dakota can vary depending on the specific circumstances of each case. While some businesses may incur significant expenses, others may find the process relatively straightforward and cost-effective. Regardless of the costs involved, it is important for business owners to carefully consider all aspects of the dissolution process and seek professional guidance when needed.

In conclusion, the cost of dissolving an LLC in South Dakota is an important factor to consider for business owners. By understanding the common expenses associated with the dissolution process and seeking professional guidance when needed, entrepreneurs can ensure that the process is completed correctly and efficiently. While the costs of dissolution may vary, careful planning and attention to detail can help minimize expenses and facilitate a smooth transition out of business operations.

In Conclusion

Limited liability companies reduce owners’ personal liability. Having an LLC is quite cost-effective. However, if it is required to close down the business, then the dissolution process should be done legally. Get a professional service to get everything done. We hope this article helps you to close your LLC in South Dakota. If you have any query do let us know in the comment box.