The Limited Liability Company, or LLC, is a legal business structure that seeks to combine benefits from across several other traditional business forms. Like a sole proprietorship or partnership, an LLC is not taxed as its own entity. However, it still has the advantage of limited liability, the same as a corporation. Like a corporation, a LLC can have unlimited shareholders, called members. But a key difference is if one of these shareholders dies or files for bankruptcy, the LLC is dissolved and will stop operations unless the remaining members form a new LLC. For hundreds of years, limited liability has been a primary goal of some business forms, but since the South Dakota legislature enacted laws authorizing its formation, the modern LLC has become more and more popular.
Can My Business Be Formed as an LLC?
In South Dakota, a business can be formed using the form that it chooses. Opening an LLC simply requires that the business founders file a form with the Secretary of State. However, some charge additional fees for the formation of LLC?s, and in South Dakota there are specific laws that govern the actions of LLC?s. When deciding whether to form a LLC, you should consider which laws would apply to your company. Although it may take some time to find, choosing the right business structure for your company will lead to increased profitability.
Can I Change the Form of My Business to an LLC?
Under certain conditions, a business in Madison may change its form. Eligibility for conversion to a LLC is determined by South Dakota law.
How Can an Attorney Help?
A lawyer versed in South Dakota business law will be able to advise you of the benefits and costs for forming and maintaining a LLC.