South Dakota Certificate of Authority › Required or not?
Is a South Dakota certificate of authority required of your company?
A South Dakota certificate of authority becomes necessary once an out-of-state company does business here, and it costs $750. The statutes do not define doing business directly; they list 10 activities that an LLC can carry on without a certificate, plus a property rule that points the other way.
Two statutes, two tests
An LLC reads SDCL 47-34A-1003. A corporation reads SDCL 47-1A-1501. The lists are not identical, and the differences matter if you own property in the state.
LLC exceptions
Under the LLC Act the following do not count: 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.
Corporation exceptions
The corporation list reads: defending, settling or maintaining a proceeding; board and shareholder meetings and other internal affairs; bank accounts; offices or agencies that handle the corporation's own securities; sales through independent contractors; soliciting or taking orders 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; owning real or personal property without more; a single transaction completed within thirty days and not one of a repeating pattern; and business in interstate commerce. The introduction to that list says "among others", so it is not the whole universe.
Where the two entities differ
| Point | LLC | Corporation |
|---|---|---|
| Owning property in the state | Income-earning real or movable property counts as doing business | Property owned without more is not doing business |
| The list | 10 listed activities | 11 listed activities, introduced by "among others" |
| One-off deals | Completed within thirty days and not part of a series | Completed within thirty days and not one of repeated deals |
| Other laws | The list does not decide service, tax or regulation elsewhere | Same practical effect |
Ten questions to ask yourself
Run through these in order and note which answers match a line on the statute. Where an answer is unclear, a lawyer licensed in South Dakota can apply the statute to your facts.
The questions
| Question | If the answer is yes |
|---|---|
| Does the company own a building or land in South Dakota that earns rent? | Property rule for LLCs: this is doing business |
| Does it own equipment or goods in the state that earn income? | Property rule for LLCs again: income-earning goods count |
| Does it have a bank account only? | An exception for accounts |
| Do independent contractors make its sales? | An exception for independent contractors |
| Must its orders be accepted outside the state? | An exception for orders that bind elsewhere |
| Was there one deal, closed within thirty days? | An exception for isolated transactions |
| Is it only suing, defending or settling a case? | An exception for proceedings |
| Is it only holding members' or managers' meetings? | An exception for internal affairs |
| Is it only making loans secured by property? | An exception for security interests |
| Is all its activity interstate commerce? | An exception for interstate commerce |
What the one-off exception needs
The text of the exception has two parts: the transaction is finished inside 30 days, and it does not sit in a run of similar ones. A deal that fails either part is outside the exception.
How the corporation list differs on property
A corporation may own real or personal property, without more, and remain outside the certificate rule. An LLC cannot say the same when the property earns income.
Employees and offices
Neither the LLC list nor the corporation list mentions an office, a worker or a sales team in the state, so the statutes give no answer for them. What matters is what the people do. That is a facts question.
Registration and other laws
The list answers the certificate question only. By its own terms it does not settle which contacts bring a company within South Dakota's other laws on process, tax or regulation, so a company inside the exceptions can still meet those.
When the company is a holding vehicle
A company formed only to hold property is still covered. For a foreign LLC, the Act counts ownership of property that earns income in South Dakota as doing business, whether or not the company has staff here.
If you cross the line
Apply for the certificate: $750 for an LLC or a corporation. The full guide shows the path, and the consequences page lists what the absence of a certificate does in the meantime.
Doing-business questions
Does a bank account alone call for a certificate?
Keeping accounts at financial institutions is one of the listed exceptions for an LLC.
What about sales made by independent reps?
Selling through independent contractors is also a listed exception.
Is a rented warehouse covered?
It depends on the facts. The property rule speaks of income-earning property that the company owns.
Is a visit to the state enough to trigger the rule?
Neither statute mentions visits, so the question turns on what the company does while it is here.
Does a corporation read a different list?
Yes. SDCL 47-1A-1501 has its own list, and owning property without more is on it.
Pricing
Get your South Dakota certificate
+ $750 state filing fee
- An application for your type of entity, drafted from your replies
- The home-state certificate, requested to arrive with the filing
- A South Dakota agent supplied by us, or one you pick
- A copy of the certificate of authority once the state issues it
- Renewal: after the first year, the agent service renews at $149 a year
$199
Request my certificateThe $750 shown is the LLC fee, paid to the Secretary of State and itemised on its own line. Other entities pay their own state fee, listed on the fees page. $199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.
Ready for your South Dakota certificate?
Name your entity type and we draft the matching application.