South Dakota Foreign Registration / Do you need it?
Doing business in South Dakota: when an LLC has to register
South Dakota law keeps a foreign LLC out of the market until the Secretary of State issues its certificate of authority, and applying costs $750. The statute does not define doing business in one sentence. It lists 10 activities that do not count and says that owning income-producing property does.
How the Act frames the test
SDCL 47-34A-1002 keeps an unauthorized LLC from doing business in the state. Section 47-34A-1003 then says what falls outside that phrase. It works as a safe list: if everything the company does in South Dakota sits on the list, no certificate is needed. If something sits off the list, the question is open and turns on your facts.
What the Act sets aside
The Act lists these as not counting: defending, settling or maintaining a proceeding; internal affairs such as members' or managers' meetings; accounts at financial institutions; offices or agencies that handle the company's own securities; sales through independent contractors; soliciting or taking orders, by mail, electronically or through employees or agents, that need acceptance outside South Dakota to become contracts; creating or acquiring debt, mortgages or security interests; securing or collecting debts and enforcing security interests, including holding property acquired that way; a single transaction completed within thirty days and not part of a series of similar ones; and business in interstate commerce.
The same list, grouped
| Group | What does not count |
|---|---|
| Legal and internal matters | Defending or settling a proceeding; meetings of the members or managers and similar internal affairs |
| Money and securities | Bank and similar accounts; offices that deal in the company's own securities; taking on debt and granting mortgages or security interests; chasing debts and enforcing the security behind them |
| Selling | Sales made by independent contractors; requests for orders that bind only once accepted outside South Dakota |
| One-off and interstate | A transaction that closes inside thirty days with nothing similar around it; interstate commerce |
The property rule
One sentence cuts the other way. Real estate or goods that the company owns in South Dakota and that bring in income are doing business in themselves, except for property the list already excludes. A rental house, a leased building or a fleet earning money in the state falls under that sentence, even if the company never opens an office.
Other laws are separate
The list answers one question only: whether the company needs a certificate under the LLC Act. A different South Dakota statute can still apply to an LLC the list clears, because the list was written for the certificate rule alone, not for service, tax or regulation. A company can be outside the certificate rule and still have obligations under another statute.
Scenarios, tested against the list
The questions below pair common situations with the statute's list. Whether a situation matches the list depends on the facts, and a South Dakota business lawyer is the person to confirm it.
Common situations
We only keep a bank account in South Dakota.
Accounts at financial institutions are one of the listed exceptions.
Our South Dakota sales run through independent reps.
Sales made through independent contractors are listed as not counting.
Customers in South Dakota send orders that we accept at our home office.
The list covers orders that bind only once the home office accepts them outside South Dakota.
We did one deal in South Dakota and finished it within a month.
A stand-alone transaction completed within 30 days, with no similar ones in the course of business, is among the listed exceptions.
We own a rental property in South Dakota.
Real property that earns income in the state is itself doing business, so the company applies.
We lend money secured by South Dakota property.
Taking a mortgage or security interest, and enforcing it, appear among the exceptions.
An employee works from home in South Dakota.
Employees are not named on the list, so the list does not settle it. What the employee does is what matters.
We store inventory in a South Dakota warehouse.
The property rule reaches goods and equipment earning income in the state. Whether stored goods qualify depends on the facts.
Property that earns income, in plain terms
The property rule is written for income-producing real property and tangible personal property. Rent from a building is the plain example. A parcel held with no income and no activity is not described by the sentence, and neither is a bank balance, which sits on the list of accounts at financial institutions. Where a given asset falls turns on its facts.
If the company is over the line
Apply. With a certificate in hand the company can bring a suit in South Dakota again; the consequences page sets out each effect. The application is described on the LLC application page, and the step-by-step is in the registration guide.
Corporations use a different list
A foreign corporation reads SDCL 47-1A-1501. Its list has 11 items and opens with the words "among others", which makes it non-exhaustive. It also says that owning real or personal property without more does not count, the reverse of the LLC property rule. The corporation application page covers that filing.
Two conditions in the one-off exception
The one-off exception in the text has two conditions. First, the deal is finished inside 30 days. Second, it does not belong to a pattern of look-alike deals. Both have to hold. A company that closes each deal quickly but keeps doing the same kind of deal is not describing a single transaction.
What you pay
Apply in South Dakota
South Dakota$199
+ $750 South Dakota fee
- The application, drafted from your answers
- Your home certificate of existence, ordered to match the filing
- A South Dakota registered agent, either ours or your own pick
- The filed certificate of authority, sent to you
- Renewal: after the first year, the agent service renews at $149 a year
For an LLC, $750 is paid to the Secretary of State and appears as its own line; other kinds of entity are priced on their own pages. $199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.
Doing business in South Dakota?
Order now and we prepare and file the application for you.