South Dakota Dissolution
South Dakota is home to many business entities. Many entrepreneurs consider it the place to make their ideas come to life. However, not all companies last. Some have to close due to various reasons. It may be because of financial problems, management issues, or maybe the company has already served its purpose.
What Is South Dakota Dissolution?
If you realize that it is time for your company to stop doing business, you have to find out the steps that you need to take to close the company. In South Dakota, business entities that plan to end their operations must go through the dissolution process. Through this, the company will be able to end its existence formally and with the acknowledgment of the state.
Why Does A Company Dissolve?
Why do companies need to dissolve? – To start a business in South Dakota, formal paperwork is required, but the state does not only have regulations for the formation of a business entity. A company that wants to close must file paperwork too. Dissolution will also inform the state that your company does not plan to stay in business and will no longer be liable to pay fees and taxes.
Who makes the decision to dissolve? – The first thing a company has to do is to hold a meeting. An LLC should have its members vote. A corporation may have to schedule 2 meetings. The first one is for the board of directors to adopt a resolution. The second meeting is for shareholders to vote on the resolution the board of directors approved. All minutes of the meetings have to be in the record books of the company to serve as reference and proof.
How long does it take to dissolve a business? – It may take a company weeks to complete the whole process. There is no definite time frame because it will depend on how the company deals with the tasks. The state does not take too much time to process the documents. You can expect it to be finished in 2 days or you can expedite the process to get it done quicker.
What Happens If Your Company Does Not Formally Dissolve?
Failure to dissolve your business means it will still be state-registered. Your company will still have the responsibility to file annual reports and pay annual fees.
Steps To Dissolve Your Business
The state has a multi-step process to dissolve your business in South Dakota.
1. File Articles of Dissolution with the state – To dissolve your LLC in South Dakota, your company has to submit completed Articles of Termination. A corporation has to use the Articles of Dissolution form. Submit the appropriate form in duplicate and the filing fee to the Secretary of State by mail or in person.
2. Remove all liabilities and obligations – Your company has to proceed with the winding up. It is a crucial process that includes the handling of your company’s assets and liabilities. The distribution of company assets will depend on the ownership interest of members or shareholders.
3. Give notice to any claimants – South Dakota does not require the publication of the notice. However, it may be good for you. It can help you notify claimants and creditors. The proof of publication may also help in case of claims after the company dissolves. Alternatively, you can also send a written notice to known claimants.
4. Tax clearance – South Dakota does not require business entities to obtain tax clearance. However, you should make sure that your company has current filings and has no unpaid taxes.
5. Close all bank accounts, credit lines, permits, and licenses – You can use company funds to settle the liabilities of your business. However, it is best to close the accounts and credit lines under the name of your company after dealing with its obligations. Even if you leave the accounts open, you will not be able to use them for other purposes. Additionally, your company may also have other business permits and licenses. Not doing so may result in reporting or fiscal obligations.
How DoMyLLC can assist with streamlining the process
It may take time for someone without experience to memorize and understand each step. The information in this article only talks about the basics. You may have to do further research to learn more. However, it may take more time and delay your company’s dissolution.
With the help of a professional, you will not have to worry about these things. You can leave the filing to us. We will handle the paperwork and ensure that your company complies with state laws. With our team of experts, we can provide your company with a personalized solution. Contact us now and let us take care of your company’s dissolution in South Dakota.
South Dakota Dissolution FAQs
The filing fee to dissolve a business entity in South Dakota is $10. Expedited processing requires your company to pay for an additional $50 fee.
No, it is not a requirement in South Dakota.
Normal processing takes 2 days. You can have the same day expedited processing service by paying an additional fee.
The name of your company will immediately be available for other business entities the day after its dissolution.
South Dakota Business Resources:
South Dakota Office of Secretary of State
South Dakota Secretary of State
Capitol Building 500 East Capitol Avenue
Pierre, SD 57501-5070