South Dakota Certificate of Authority › Operating unauthorized
What happens if you operate in South Dakota without a certificate
South Dakota does not fine an LLC that operates without a certificate of authority. SDCL 47-34A-1008 instead bars the company from starting a lawsuit in the state, makes the Secretary of State its agent for service of process, and gives the attorney general power to seek a court order halting it. Getting authorized costs $750.
Effects for an LLC and for a corporation
| Effect | LLC (SDCL 47-34A) | Corporation (SDCL 47-1A) |
|---|---|---|
| Lawsuits | Cannot maintain an action or proceeding until it has a certificate | Cannot maintain a proceeding in any court until it has one; the bar passes to a successor and an assignee |
| Contracts | Remain valid; the company may defend | Not addressed in the corporation consequences section |
| Owners | Not liable for company debts on this ground alone | Not addressed in the corporation consequences section |
| Service of process | The Secretary of State is the agent for claims from South Dakota business | Service rules in the corporation chapter |
| Money penalty | None in the LLC Act | None in the consequences section |
| Injunction | The attorney general may sue under 47-34A-1009 | Not in the consequences section |
The courthouse door
The most practical effect is on the company as claimant. Until it is authorized, South Dakota courts are closed to it, whether it wants to chase an invoice or hold a counterparty to a deal. It can still defend itself if someone sues it.
Contracts hold
Under the Act the company's contracts and acts are not weakened by the missing certificate, so customers and suppliers cannot treat their agreements as void for that reason alone.
Owners keep their protection
A member or manager is not made liable for company debts only because the company transacted business without a certificate. The liability shield from the home-state LLC remains.
Process on the state
An LLC that does business here without a certificate, or that cancels one, appoints the Secretary of State as its agent for process on claims from that business. The state charges $30 each time it is served, and the winning party can recover that as costs.
The attorney general
The attorney general holds a separate power in SDCL 47-34A-1009: to bring an action asking a court to stop a foreign LLC's activity in the state that violates the article. No schedule of fines comes with it.
Back taxes and fees
Whether the company owes South Dakota tax for the earlier period is a tax and legal question for a South Dakota business lawyer or accountant, since it turns on your facts. The Secretary of State's fee is $750.
How a corporation differs
A foreign corporation reads SDCL 47-1A-1502, which has one consequence: no proceeding in any state court until the certificate is obtained, binding a successor and an assignee as well. The section sets no money penalty.
A worked situation
Say a supplier delivers goods to a customer in Sioux Falls and the customer does not pay. If the supplier is an unauthorized foreign LLC doing business in the state, it cannot start a suit there to collect until it holds a certificate. It could apply first, then sue. The unpaid invoice does not vanish, and the customer still owes it, because the Act keeps contracts valid.
Curing the gap
The cure is to apply. File the right application for your entity, attach the home paper and pay the fee. Once the certificate issues, the company can bring suit in South Dakota again. Reserving the name first costs $25 and is optional. The Secretary of State handles online filings immediately. The full guide walks through the filing.
Losing a certificate you had
A company that was authorized and lost the certificate faces revocation, not the unregistered rules. Revocation needs notice and at least 60 days, and the company may cure each ground before the date.
Consequence questions
Is there a fine?
The LLC Act sets none.
Can a customer refuse to pay?
The Act says contracts remain valid, so a missing certificate is not a defense to payment.
Can the company still be sued?
Yes, and it can defend.
Who can the attorney general stop?
An unauthorized foreign LLC doing business in the state.
What does the cure cost?
The application fee is $750 online.
Do owners become liable?
Not on that ground alone.
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.
Sources
- SDCL 47-34A-212, limited liability company fees
- South Dakota Secretary of State, filing fee schedule
- SDCL 47-1A-122, business corporation fees
- SDCL 47-34A-1001 to 47-34A-1009, foreign limited liability companies
- SDCL 47-1A-1501 to 47-1A-1532, foreign corporations
- South Dakota Secretary of State, corporations FAQ
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