How to Dissolve an LLC in South Dakota

Dissolving a business often involves complex procedures. However, for a limited liability company in South Dakota, dissolving it takes a handful of paperwork. When an LLC is formed in South Dakota, the owner(s) draft the operating agreement. If the owner(s) decide to dissolve the business, the dissolution takes place following the articles mentioned in the operating agreement.

In this article, LLCBuddy editors shared the ins and outs of dissolving an LLC in South Dakota. LLCs must file the Articles of Dissolution with the South Dakota Secretary of State like the formation certificate was filed at the time of forming an LLC in South Dakota. It takes a few days to process and a handful of fees to be paid to the SOS. Many people hire a professional service to do the paperwork to process it hassle-free.

How to Dissolve an LLC in South Dakota

At the time of forming an LLC, an operating agreement draft must be written. Generally, the process of dissolution takes place following the operating agreement (read: South Dakota LLC operating agreement). Before the dissolution process, there are a few things to consider in the LLC.

First, make sure all the members of the LLC agree 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.

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

Step 1: Follow the LLC Operating Agreement in South Dakota

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 in South Dakota.

Get a Professional Agent Service

When it comes to a limited liability company dissolution, it is important to get professional help. 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 in South Dakota that we strongly recommend for you.

LLC Service	Our Rating & Pricing	Top Features	Learn More
#1 TOP PICK	4.5/5 $0 + State Fees	100% accuracy guarantee Worry-free service Great customer support	Learn More
	4/5 $0 + State Fees	Free LLC Formation Affordable Add-on services Other business solutions	Learn More

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 accounts, 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 by the date you have decided to dissolve. All the taxes must be paid in advance so that you don’t face any issues in the 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.

Tax clearance

While dissolving the South Dakota LLC, the owner is not required 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 LLCs that are classified as partnerships is Form 1065, and those LLCs who have registered themselves as corporate should check IRS Form 1120.

BOI Reporting

If you’re going to dissolve your LLC this year, make sure to update your BOI reporting. From January 1, 2024, the Financial Crimes Enforcement Network (FinCEN) implied a rule to all businesses, including LLCs in South Dakota to file the BOI Report. The Beneficial Ownership Information (BOI) in South Dakota is a report that states about in and out of the company. This report must be up-to-date and submitted to the FinCEN before you proceed to the dissolution.

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 Organization. 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 filing by mail, in-person drop, or/and online filing.
You can follow the filing instructions on the official portal so that the steps for dissolution will be easier to complete.
For offline filing, LLCs must download the form and submit it to the South Dakota Secretary of State physical office along with the state filing fee.
If you want to dissolve South Dakota Foreign LLC then look for the Foreign LLC Dissolution process.
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.

Filing	Forms and Details
Online Applications	Sign in to SOS
Offline Applications	LLC Articles of Termination
SOS Contact (if offline application is available)	Secretary of State Office, 500 E Capitol Ave, Pierre, SD 57501
Filing Time	Up to 15 working days
Filing Fee	$10

The LLC you own 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 whether he accepts your expedited dissolutions or not.

Points to Be Noted When Dissolving an LLC in South Dakota

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

Some purposes of LLC 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 the 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 costs in South Dakota include 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 in the articles of dissolution filing form. Following are the ways to pay for the dissolution,

You can select a payment pick-up option.
There is an option for 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 the state will make.

After Dissolving Your LLC

After you dissolve an LLC in South Dakota, you can reinstate or revive the same within a given time. In South Dakota, the LLC name will be available up to the time till SOS dissolves the LLC completely. After this, the name will be available to other LLCs. Besides, you might revive or reinstate the LLC in South Dakota if that is available. According to the South Dakota SOS, you can revive your LLC anytime.

Reasons Behind Dissolving an LLC in South Dakota

People always think they can leave the company without any notice and there will be no issue. But if you have an LLC that you created with a legal obligation, it needs to be ended that way. Yes, if someone will dissolve an LLC in South Dakota, they will have to do it while taking care of the government. For dissolving the company, there is always a reason. The reason can be voluntary or involuntary too. Let’s get to know about the involuntary reasons,

If the company was caught doing illegal business.
If the company’s member died due to some reason or went bankrupt.
The dissolution will be mandatory if the assets of the business are used unwisely.
If the time being of the company was already determined in the will, then the company will go into dissolution at that time.

Top Businesses in South Dakota

With the population of 908,414, South Dakota is one of the favorable places to start an LLC. According to several reports, starting an LLC for Tour Guide can be profitable as various places in the state showed steady growth in this business over the past few years. On the other side, based on the city or region you’re going to start your LLC, you can decide the type of business to start. Following are the top 5 businesses you can start in South Dakota.

Tour Guide
Canoe and Kayak Rental Business
Catering Business
Campground business
Woodworking business

South Dakota LLC Dissolution Review – A Quick Recap

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 details.

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 Organization: File the article of dissolution to make it known to the state where your LLC operates that you are indeed no longer in business.

FAQs

How do I dissolve my LLC in South Dakota?

To dissolve your LLC in South Dakota, you will need to file articles of dissolution with the Secretary of State.

What is the filing fee for dissolving an LLC in South Dakota?

The filing fee for dissolving an LLC in South Dakota is $20.

Is there a specific form I need to use to dissolve my LLC in South Dakota?

Yes, you will need to use the Articles of Dissolution form provided by the South Dakota Secretary of State.

What information do I need to include in the Articles of Dissolution form in South Dakota?

You will need to include the name of your LLC, the effective date of the dissolution, and a statement regarding the distribution of assets.

Are there any tax implications for dissolving an LLC in South Dakota?

Yes, you will need to file a final tax return for your LLC and pay any outstanding taxes before officially dissolving the company.

How long does it take to dissolve an LLC in South Dakota?

The processing time for LLC dissolution in South Dakota can vary, but it typically takes a few weeks to a month.

Can I dissolve my LLC in South Dakota if there are outstanding debts or liabilities?

Yes, but you will need to settle any outstanding debts or liabilities before the dissolution is completed.

Do I need to notify any creditors or business partners when dissolving my LLC in South Dakota?

It is recommended to notify creditors and business partners of the dissolution, but it is not required by law in South Dakota.

Can I reinstate my LLC in South Dakota after it has been dissolved?

Yes, you can reinstate your LLC in South Dakota within one year of the dissolution by filing the necessary forms and paying the required fees.

What happens to any remaining assets of the LLC after it has been dissolved in South Dakota?

Any remaining assets of the LLC will be distributed among the members according to the operating agreement or state law in South Dakota.

Do I need to notify the IRS when dissolving my LLC in South Dakota?

Yes, you will need to notify the IRS by filing a final tax return for your LLC and checking the box indicating that it is a final return.

Can I dissolve my LLC in South Dakota if it is involved in a lawsuit?

Yes, you can still dissolve your LLC in South Dakota if it is involved in a lawsuit, but you may need to settle the lawsuit before the dissolution is finalized.

Will dissolving my LLC in South Dakota affect any ongoing contracts or leases?

Yes, dissolving your LLC in South Dakota may affect any ongoing contracts or leases, so it is important to review them before proceeding with the dissolution.

Is there a specific deadline for filing for dissolution of an LLC in South Dakota?

No, there is no specific deadline for filing for dissolution of an LLC in South Dakota, but it is recommended to do so as soon as possible after the decision is made.

What should I do with my LLC’s business licenses and permits when dissolving in South Dakota?

You will need to cancel or transfer any business licenses and permits held by your LLC in South Dakota before the dissolution is finalized.

Can I dissolve my LLC in South Dakota if I am the only member?

Yes, you can dissolve your LLC in South Dakota even if you are the only member, as long as you follow the proper procedures for dissolution.

What is the first step to take when dissolving an LLC in South Dakota?

The first step to dissolve an LLC in South Dakota is to hold a meeting of the members and vote to approve the dissolution.

Do I need to publish a notice of dissolution in a newspaper in South Dakota?

No, you are not required to publish a notice of dissolution in a newspaper in South Dakota.

Can I dissolve my LLC in South Dakota online?

Yes, you can file for dissolution of your LLC in South Dakota online through the Secretary of State’s website.

What happens if I do not properly dissolve my LLC in South Dakota?

If you do not properly dissolve your LLC in South Dakota, you may still be responsible for annual reports, taxes, and other obligations of the LLC.

Do I need to notify the South Dakota Department of Revenue when dissolving my LLC?

Yes, you will need to notify the South Dakota Department of Revenue of the dissolution so they can update their records accordingly.

Can I transfer any remaining assets of my LLC to another business entity when dissolving in South Dakota?

Yes, you can transfer any remaining assets of your LLC to another business entity if the members agree to do so during the dissolution process in South Dakota.

Will dissolving my LLC affect my personal liability in South Dakota?

Dissolving your LLC in South Dakota does not eliminate your personal liability for any debts or obligations the company may have incurred.

Can I dissolve my LLC in South Dakota if it is in good standing with the state?

Yes, you can dissolve your LLC in South Dakota even if it is in good standing with the state, as long as you follow the proper procedures for dissolution.

Do I need to obtain a tax clearance certificate before dissolving my LLC in South Dakota?

No, you are not required to obtain a tax clearance certificate before dissolving your LLC in South Dakota.

Can I dissolve my LLC in South Dakota if it is a foreign LLC registered in the state?

Yes, you can dissolve your foreign LLC registered in South Dakota by following the same procedures as a domestic LLC.

Will dissolving my LLC in South Dakota affect my personal credit score?

Dissolving your LLC in South Dakota may not directly affect your personal credit score, but any outstanding debts or liabilities of the company could impact your credit.

Can I dissolve my LLC in South Dakota if it is currently involved in bankruptcy proceedings?

Yes, you can still dissolve your LLC in South Dakota if it is involved in bankruptcy proceedings, but you may need to consult with a bankruptcy attorney to ensure compliance with the law.

What should I do with my LLC’s employer identification number (EIN) when dissolving in South Dakota?

If you no longer need your LLC’s EIN after dissolving in South Dakota, you should contact the IRS to close the account associated with the EIN.

How do I dissolve an LLC in South Dakota?

To dissolve an LLC in South Dakota, you need to file Articles of Dissolution with the Secretary of State.

In Conclusion

Dissolving a business is not an easy task as a lot of homework is involved with the process. The official process might have only a few steps, however, before and after dissolving the LLC, there might be a lot of other tasks. In this case, it is highly recommended to get a professional service. If you are looking to file an LLC at $0, then ZenBusiness is your answer.

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. This article shared the general steps. Let us know if you have any queries.

How to Dissolve an LLC in South Dakota