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.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in South Dakota
- After Dissolving Your LLC
- Reasons Behind Dissolving South Dakota LLC
- South Dakota LLC Dissolution Review
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.
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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.
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.
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.
- In 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.
- 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.
Secretary of State
Secretary of State Office
500 E Capitol Ave
Pierre, SD 57501
Filing Fee: $10
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.
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.
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!
- 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.
- 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.
- 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.
- 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
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your South Dakota LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your South Dakota LLC Operating Agreement
Remember that when you started, you created an operating agreement. Use this agreement as a guide in proceeding with the dissolution of your LLC.
- Close All Tax Accounts
Make sure you close all your tax accounts to avoid incurring further costs.
- File Articles of Dissolution
File the article of dissolution to make it known to the state where your LLC operates is that you are indeed no longer in business.
What is the Cost to Dissolve an LLC in South Dakota
In South Dakota, you can dissolve an LLC for as little as $149. In general, dissolving your LLC will take a week or so, depending on the complexity of your paperwork and how quickly you file your documents. If you need to complete the dissolution process in a hurry, you can pay a professional service provider to expedite the process for you for an additional fee of $50.
To start, the process involves conducting a name search. This is a free service provided by the Secretary of State. Once you have determined the name of the business, you can file the required documents. You can either file your documents online or at a state office. In South Dakota, you can also prepare an operating agreement, which outlines the processes that your LLC will follow. This document serves as your company’s bylaws.
If you’ve established an LLC in South Dakota, you will need to file tax returns to prove that the company was in existence for five years. You’ll need to submit these forms every year, and the deadline is the last day of the anniversary month. Delinquent corporations will be served by U.S. mail and will have 60 days to rectify the delinquency. After that, you’ll have to face administrative dissolution. The secretary of state office usually sends out dissolution notices once a year, depending on the workload.
Yes, in South Dakota, there is a fee of $10 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the South Dakota SOS.
No, there is no requirement of revenue department clearance till the time the SOS of South Dakota accepts the dissolution form.
The name will also get deregistered with the dissolution of the LLC. But the name will not be allotted for the next 120 days. After that, if some business wants to name their LLC after the name chosen by you, then it is their choice.
If you have not dissolved your LLC, you are liable for business privilege tax, and if it is not paid on time, you are leveraged with 10% of the amount of tax or $50. After that, the additional penalties will increase by $1 per month. If it goes unpaid for a longer duration, then the chances of seizing your property can also recover the tax.
Yes, if you are dissolving your LLC, then you have to pay some amount to the probate judge also who was also present during the time of your LLC formation in the probate office. The minimum fee of the judge is $50, which can vary.