South Dakota Foreign Qualification
If your business plans on expanding its operations into other states, it is important that you take the time to foreign qualify in order to maintain full compliance. Foreign qualification is a key element in expanding your business and keeps you legally protected when you’re ready to move into other areas.
What is Foreign Qualification?
Foreign qualification is a process of registering a business to operate in a state other than the one it was initially formed in. For example, if your business was formed in Indiana but you wish to start operations in South Dakota, your business is considered ‘foreign’ to South Dakota and you’ll have to go through the process of foreign qualification in order to stay on the right side of all of the state’s laws and regulations.
Why Does A Company Need Foreign Qualification?
Why You Need To Do It – If an LLC or corporation plans on having any kind of physical presence in South Dakota, it must register to do business there. Foreign qualification is required whether you are opening a warehouse, shipping hub, a storefront, or even just have a couple of sales representatives working within the state.
When Should You Do It? – As soon as you decide that you’ll be expanding your operations into South Dakota. The sooner you begin, the sooner you can legally start operations. Generally, you will need to receive South Dakota foreign qualification if your company falls under any of the following criteria:
- Has a physical presence in South Dakota
- Buying a property there
- Have remote employees
- Accepts orders in South Dakota
- Owns a bank account in South Dakota
What Happens If Your Entity Does Not Foreign Qualify?
Failure to foreign qualify means that you’ll be unable to bring forth a lawsuit in the state. You’ll also potentially face various fees and fines related to your business operations, and could face tax penalties as well.
Steps To Obtain Foreign Qualification
There are a few basic steps that your business must complete in order to complete its South Dakota foreign qualification. These include the following.
1. Obtain Certificates – South Dakota requires that you file an Application for a Certificate of Authority in order to do business in the state. The name of the form is the same for both a Corporation and an LLC but the actual form is different. You can download these forms directly from the Secretary of State website. Additionally, you will also have to submit a Certificate of Existence from your company’s home state.
2. Collect And Submit Information – The forms will request a variety of basic business information.
LLC
- LLC name
- An assumed or fictitious name, if applicable
- Name of the home state
- Principal office street address
- Name and street address of your registered agent in South Dakota
- An authorized signature
Corporation
- Corporation name
- An assumed or fictitious name, if applicable
- Name of the home state
- The original date of formation of the corporation
- Period of duration of incorporation
- Principal office street address
- Name and street address of the registered agent
- Names and business addresses of officers and directors
- An authorized signature
3. Appoint Registered Agent – Your registered agent is in charge of handling the majority of tasks related to foreign qualification as well as to overall compliance. Most businesses use a third party provider like DoMyLLC to take the stress and hassle of this off their shoulders.
4. File The Application – Once you complete the forms, you’ll have to submit the original as well as one copy to the Secretary of State along with the filing fee of $750 if you file online and $765 if you file by paper. The fee is the same for both an LLC and Corporation.
5. Ongoing Maintenance – Any business must submit an annual report to the commercial division each year. The forms are due by the end of the anniversary month for the business. Corporations and LLCs both pay a $50 fee for filing their annual report.
What Is the Difference Between Foreign Qualification And Incorporating?
Incorporation creates an entirely new business entity. Foreign qualification doesn’t create a new company or modify an existing one beyond allowing it to operate legally in a foreign state – South Dakota in this case.
How DoMyLLC Can Assist With Streamlining The Process
The process of South Dakota foreign qualification can be long and confusing, with plenty of paperwork along the way. Business leaders that already have a lot on their plate don’t have time to spend focusing on the minutiae involved. We do the hard work for you so you can focus on other aspects of your business. We provide:
- A dedicated account manager
- Name availability checks
- Full filing and registration services
- Ongoing unlimited customer support
If you’re planning on branching your business out into South Dakota, contact us today to let our team help keep you fully compliant.
South Dakota Foreign Qualification FAQs
South Dakota requires an Application for a Certificate of Authority to be filed in order to foreign qualify.
There is a basic filing fee of $750 if you file online and $765 if you file by paper. The fee is the same for both an LLC and Corporation.
Any business that exists outside of South Dakota but that wishes to begin business operations within the state may foreign qualify.
No attorney is needed. You may still wish to consult with your legal team before beginning the process just to ensure full compliance, however.
The forms will request a variety of basic business information including things like:
- Business name
- Business address
- Registered agent information
- Mailing address
- Names of members or managers
- Date of organization
You’ll have to file under a fictitious name to do business in South Dakota. This won’t have any impact on your name in any other state, however.
South Dakota Business Resources:
South Dakota Office of Secretary of State
Phone Number:
(605) 773-4845
Address:
South Dakota Secretary of State
Capitol Building 500 East Capitol Avenue
Pierre, SD 57501-5070