South Dakota’s low cost of living, lack of a personal state income tax, and business-friendly environment make it one of the most favorable states in the United States in which to own and operate a business. New corporations or limited liability companies may be formed in South Dakota, or existing businesses can be moved to South Dakota from another state through the process of domestication.

The first step should be to determine whether the name of your potential business is available. If another business is operating under the same or a similar name in South Dakota, you may need to change the name of your new business. Fortunately, it is very easy to perform a business search on the South Dakota Secretary of State website.

In many circumstances, a number of legal documents are required in order to start a new business in South Dakota. For example, a new corporation will need articles of incorporation and by-laws, whereas a new limited liability company requires articles of organization and an operating agreement. These documents should be carefully crafted to allow business owners to operate with flexibility while also protecting them against liability and potential internal disputes.

A business which is already in existence and organized under the laws of another state can often be moved to South Dakota through a process known as domestication. It is important to note that during the domestication process, a business owner must comply with the laws of the state under which the business is currently organized as well as the laws of South Dakota. Additionally, some states, such as New York, do not support domestication. To ensure full compliance with the law, it is important to consult with an experienced attorney.

In order to domesticate your business in South Dakota, the law requires that you file various legal documents. For example, a plan of domestication and articles of domestication must be approved by the members or shareholders of the business and filed with the South Dakota Secretary of State. It is also a good time for a business going through the domestication process to update its other governing documents, such as its operating agreement or bylaws. As the business environment continues to evolve, it is always a good idea to ensure that the documents governing your business are kept up to date and in compliance with applicable law.

Like other states, South Dakota regulates business. Some businesses may require special licenses or registration at the city, county, or state level. Businesses must also comply with state laws pertaining to employer responsibilities and environmental standards. If you need any guidance in starting a new business in South Dakota or domesticating your current business, please reach out to Brendan Reilly, Kalen Biord, or Mike Srstka at Davenport, Evans, Hurwitz & Smith. We can assist you in drafting legal documents as well as guide your business through the process of becoming established under South Dakota law.

Davenport, Evans, Hurwitz & Smith, LLP, located in Sioux Falls, South Dakota, is one of the State’s largest law firms. The firm’s attorneys provide business and litigation counsel to individuals and corporate clients in a variety of practice areas. For more information about Davenport Evans, visit