Form a Partnership in South Dakota
Everything you need to know about forming a Partnership in South Dakota. Filing fees, requirements, timeline, and step-by-step guidance.
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How to File
Choose a Partnership Type
Decide whether to form a General Partnership (GP), Limited Partnership (LP), or Limited Liability Partnership (LLP). GPs require no state filing, while LPs and LLPs must register with the South Dakota Secretary of State.
1-2 hours
Select and Reserve a Business Name
Choose a unique business name and verify its availability using the South Dakota Secretary of State's online business name search. For LPs and LLPs, the name must include the required designator such as 'Limited Partnership' or 'LLP'.
30 minutes
Draft a Partnership Agreement
Create a written partnership agreement outlining each partner's roles, contributions, profit/loss sharing, and decision-making procedures. Although not legally required by South Dakota, a written agreement is strongly recommended to prevent disputes.
2-5 hours
Designate a Registered Agent
Appoint a registered agent with a physical South Dakota street address to receive legal and official documents on behalf of the partnership. The agent must be available during normal business hours.
30 minutes
What's Next After Filing
Once your Partnership is officially formed, you'll want to complete these important steps:
- •File Formation Documents (LP/LLP Only) — For Limited Partnerships, file a Certificate of Limited Partnership with the South Dakota Secretary of State online or by mail with a $125 filing fee. LLPs must file a Statement of Qualification for a $100 fee.
- •Obtain an EIN and Register for Taxes — Apply for a federal Employer Identification Number (EIN) from the IRS at no cost. Register with the South Dakota Department of Revenue if the partnership will collect sales tax or hire employees.
- •Obtain Required Licenses and Permits — Apply for any necessary state, county, or local business licenses or permits applicable to your industry or location. South Dakota does not have a general statewide business license, but specific professions and activities may require permits.
Advantages
- ✓South Dakota has no state income tax, meaning partners only pay federal income taxes on their share of partnership income
- ✓General partnerships require no state registration or filing fees, making formation fast and low-cost
- ✓Simple pass-through taxation avoids double taxation that affects corporations
- ✓South Dakota has a favorable and stable legal and regulatory environment with minimal bureaucratic requirements for small partnerships
Considerations
- •General partners face unlimited personal liability for all business debts and legal obligations of the partnership
- •Partnerships dissolve or require restructuring upon the death, withdrawal, or bankruptcy of a general partner unless the agreement provides otherwise
- •Raising outside investment capital is more difficult compared to corporations since partnerships cannot issue stock
Annual Obligations
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