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South Dakota S Corporation Formation Services

Start setting up your South Dakota S Corporation now - without any obligation. Save all of your incorporation information until you’re ready to incorporate.


MaxFilings competitive pricing is simple and straight forward - it includes all South Dakota fees and other charges. There are absolutely no “hidden charges” to surprise you later.

South Dakota S Corporations are for those who want the limited liability and the more formal structure of a corporation but with pass-through taxation of the business profits. South Dakota S Corporation is simply a standard corporation that becomes an S Corporation when its shareholders elect special tax status with the Internal Revenue Service (IRS) by filing an IRS Form 2553 (after filing its official documents with South Dakota).

Like South Dakota C Corporation, South Dakota S Corporation is recognized by the law as an individual entity, separate from its shareholders (owners), many times treated as a human being. South Dakota S corporation shareholders enjoy limited liability for the debts, obligations and liabilities incurred by the business as well as liability stemming from possible legal action. Protection of shareholders’ personal assets is one of the major reasons South Dakota business owners choose to incorporate. Normally, shareholders cannot lose more than the amount they invested in the corporation. If the corporation goes bankrupt, the shareholders will not be liable for its debts. Should someone sue the corporation and the corporation is found liable, they can take the corporation’s property to satisfy the judgment but if that property does not satisfy the judgment, they will not be able to take a shareholder’s personal assets, i.e. home, car, or bank account. There are exceptions to shareholders’ limited liability to keep in mind. For example an exception to a shareholder's limited liability occurs when the corporation has --recklessly harmed people or has been used to perpetuate a fraud.

South Dakota S Corporation Taxation

Unlike South Dakota C Corporation, South Dakota S Corporation does not itself pay any income taxes. While an S Corporation with more than one shareholder does file tax returns, the individual shareholders (owners) must include their share of the corporation’s income or loss on their personal tax returns, just as is done in sole proprietorships, partnerships and Limited Liability Companies (LLC’s).

To qualify as an S Corporation, an IRS Form 2553 must be filed with the Internal Revenue Service. In very few states, you will also be required to file a separate state election, as specified by that state, in order to qualify as a Sub S Corporation. As of this writing only Arkansas, New Jersey, New York, Ohio and Wisconsin require state level filing in addition to IRS filing. MaxFilings can help you with filing the IRS Form 2553 by preparing the form and sending it to you with instructions for completion and filing with the IRS. Start setting up your S Corporation now

 Some Points to Consider When Forming South Dakota S Corporation

  • Official documents must be filed with South Dakota in order to form South Dakota corporation and state filing fees must be paid
  • A an IRS Form 2553 electing special tax status must be filed with the IRS
  • South Dakota S Corporation is considered by the law to be an individual entity, separate from its owners (shareholders)
  • There can be some limitations as to the kind of business South Dakota S corporation is allowed to conduct
  • You must hold and keep minutes that document meetings of the stockholders and board of directors
  • South Dakota S Corporation cannot have more than 100 shareholders and S Corporation shareholders cannot be other corporations, Limited Liability Companies (LLC’s), partnerships, certain trusts, or non-resident aliens

Limited Liability

  • South Dakota S Corporation shareholders normally enjoy limited liability and can lose no more than the amount they invested in the corporation
  • South Dakota S Corporation shareholders cannot normally be held liable for legal judgments against the corporation or for any of the corporation’s debts or obligations
  • Protection of South Dakota S Corporation shareholders’ personal assets is one of the major reasons South Dakota business owners choose to incorporate
  • There are exceptions to shareholders’ limited liability where shareholders can be held liable

Raising Capital

  • South Dakota S Corporation can get additional capital easier than some of the other types of business since you can issue and sell stock or a variety of other financial instruments as evidence of interest in the corporation
  • The sale of stock is sometimes subject to South Dakota and federal securities laws
  • Ownership can be transferred by selling stock in the corporation
  • While voting rights can differ, South Dakota S Corporation can have only one class of stock

Taxation

  • South Dakota S Corporations are normally audited less frequently than sole proprietorships and partnerships
  • South Dakota S Corporations enjoy pass-through taxation so shareholders avoid so-called double taxation
  • South Dakota S Corporation files informational tax returns but pays no income tax itself
  • South Dakota S corporation shareholders report their share of both income and losses on their personal tax returns so they are able to use losses to offset other income
  • Income and losses must be allocated based upon ownership percentages
  • Owners’ self employment taxes do not apply to salaries they are paid by the corporation

Owners & Employees

  • There can be limitations on certain fringe benefits for major shareholders
  • Owners working in the business are employees and are therefore eligible for certain fringe benefits such as group insurance plans, retirement and profit sharing plans, and tax-favored stock option and bonus plans
  • Employees frequently prefer to work for a corporation that can offer them stock options and stock bonuses
  • In a sense a corporation is immortal and perpetual since it does not end with the death of a shareholder owner as do some of the other business types

Public Perception

  • The general public normally thinks of corporations as being more substantial than sole proprietorships and partnerships

This information is not an attempt to present all you should know when forming an S corporation in South Dakota but rather to present just some of the basic information about South Dakota S corporations. While we make every effort to ensure its accuracy, MaxFilings cannot and does not guarantee that all of the information is accurate or complete and/or current and it should therefore be independently verified. And, as always, you should seek the advice of qualified professionals who are familiar with your circumstances as well as applicable federal and South Dakota laws.    

MaxFilings helps business owners just like you form S Corporations in South Dakota

  • MaxFilings helps you get organized and you set the pace – you can save all your incorporation information in one handy spot online and make changes anytime until you’re ready…or you can order online right now!
  • There’s never any obligation to order and there’s no charge for saving your information – you only pay your incorporation fees when you’re ready to order. Our competitive pricing includes all South Dakota fees and other charges so you’ll have no surprises later.
  • As you incorporate in South Dakota, you need to think about growing and promoting your new corporation – MaxFilings’ online promotions partner SEO Advantage offers you expert services in PR, web development, search engine marketing, web site optimization, and graphic design.
  • Best of all, your satisfaction is 100% guaranteed!

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I was very pleased with the entire service. You all went above and beyond. You all are AWSOME!!!!! Thanks again - Lorri Blattler, Surf Enterprises Inc., Tennessee

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