How to Dissolve an LLC in South Dakota: A Simple Guide

Dissolving an LLC in South Dakota isn’t rocket science, but it does mean filing official paperwork with the state. To properly dissolve an LLC, the owner needs to submit Articles of Termination to the South Dakota Secretary of State—this legally ends the company’s existence.

That step makes sure the business won’t owe state filings or fees anymore. Before you get there, though, you’ll want to handle any outstanding tax obligations and check the rules about who gets to sign the documents, depending on whether your LLC is member-managed or manager-managed.

Knowing these details up front can spare you a headache or two. If you’re not sure, you can always get help from a professional service or just follow each step carefully.

Key Takeways

• Filing Articles of Termination officially ends the LLC with the state.
• Tax and management requirements must be met before dissolving.
• Professional services can simplify the dissolution process.

Steps to Dissolve an LLC in South Dakota

Dissolving an LLC means paying attention to legal requirements and whatever rules your company has set up. You’ll review your LLC’s agreements and state laws, file the right documents, and deal with any debts or claims.

Save the Hassle and Get Bizzee to Do It For You

As you can see, there is considerable work in doing a dissolution and in the interests of ensuring it is done correctly, many people use a service like Bizee to do the dissolution. It is quick, easy and comparatively cheap.

Review Operating Agreement and State Requirements

Start by checking your LLC’s operating agreement. This document usually spells out how members need to agree to dissolve the company.

Look for voting rules or any special procedures for dissolution. If there’s no operating agreement, South Dakota state law steps in.

Members or managers—depending on your setup—must approve the dissolution. Document that approval, or you might run into legal issues later.

File Articles of Dissolution

Once you’ve got approval, you’ll file Articles of Termination with the South Dakota Secretary of State. This form officially ends the LLC’s existence.

If your LLC is member-managed, a member signs. If it’s manager-managed, a manager signs. You can file online or by mail, and there’s a filing fee.

After the state accepts it, your LLC doesn’t exist as a legal entity anymore. You’ll find the form and instructions on the South Dakota Secretary of State’s website here.

Notify Creditors and Settle Debts

Before you close up shop, let all creditors know about the dissolution. This gives them a chance to make claims if you owe money.

Set a deadline for claims and keep records of any notices you send. Pay or settle all outstanding debts, whether they’re bills, loans, or other liabilities.

Once you’ve handled debts, you can distribute any leftover assets to members according to your operating agreement. This helps prevent legal messes later on.

Handling Tax Obligations and Final Filings

Before the dissolution becomes official, the LLC needs to wrap up all tax responsibilities and file the necessary paperwork. That means clearing federal and state taxes and canceling business licenses or permits, so you don’t get stuck with surprise penalties down the road.

Resolve State and Federal Taxes

File your final state and federal tax returns, and mark them as “final” to show the business is closing. Pay all taxes—income, payroll, sales—because unpaid taxes can cause trouble.

Notify the South Dakota Department of Revenue and the IRS that you’re closing the business. If you had employees, file the final employment tax returns and give out W-2 or 1099 forms as needed.

Cancel Business Licenses and Permits

Cancel every business license, permit, and registration you hold with local, state, and federal agencies. This stops further fees or obligations from piling up.

That might include sales tax permits, health permits, or zoning permits. Contact each agency where you got a license and follow their process for cancellation.

Keep proof of these cancellations, just in case you need to show the LLC really is closed.

Using an LLC formation service

Honestly, using an LLC formation service can make dissolving an LLC in South Dakota a whole lot easier. These services handle the paperwork, double-check the forms, and make sure you don’t miss a step.

Bizee is one popular option. They’ll manage filings like the Articles of Termination and walk you through each requirement, so things move faster and with less confusion.

Benefits of using a formation service include:

• Expert assistance with state requirements
• Quick submission of documents
• Clear communication on what to expect

If you’re not comfortable with legal forms or state rules, a service like Bizee can save you time and stress. They handle the details, so you can focus on closing your business the right way.

Post-Dissolution Considerations

After dissolving your LLC, you’re not quite done. There are still a couple of things to wrap up to close the business properly.

Distribute Remaining Assets

Once debts and obligations are settled, distribute any remaining assets to the LLC members. Usually, this follows the ownership percentages or whatever your operating agreement says.

If your agreement doesn’t say how to split things up, South Dakota law usually requires you to distribute assets based on each member’s share. It’s best if everyone agrees on the method to avoid arguments.

Document the distribution process with written records. It might not seem urgent, but having proof can save you from future disputes or legal headaches related to the dissolved LLC’s assets.

Recordkeeping After Dissolution

The LLC still needs to keep important records after dissolving. That means hanging on to tax returns, financial statements, contracts, and anything related to asset distribution.

Most of the time, you’ll want to keep these records for at least three to seven years. Laws can vary, but that window usually covers audits, tax questions, or legal claims that might pop up later.

It’s worth organizing these documents and storing them somewhere safe—digitally or in a filing cabinet. You never know when you’ll need to dig something up, so having easy access just makes life simpler.

If you want more details about the dissolution process, check out the steps and document requirements in how to dissolve an LLC in South Dakota.