How to Get Business Licenses in South Dakota | A Comprehensive Guide

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South Dakota Business License

Starting a new business is an exciting venture, but it’s essential to understand the various licenses required to operate legally within South Dakota. Forming an LLC in South Dakota requires licenses, as different industries and locations have specific regulations. This article will provide a comprehensive guide to South Dakota Business Licenses, helping you navigate the process and ensure your new venture complies with all necessary requirements. By understanding the permitting landscape in South Dakota, you can ensure that your business is fully prepared to succeed while avoiding potential legal pitfalls.

Webinarcare Editorial Team will help you easily obtain a business license in South Dakota. You must be guided by all the factors gathered in this article.

What is a Business License in South Dakota?

A business license is a legal authorization, permit, or document that allows a business to operate within a specific jurisdiction, such as a city, county, or state. South Dakota business licenses are issued by South Dakota Secretary of State and ensure businesses comply with applicable laws, regulations, and standards in their respective industries.

A business license protects public health, safety, and welfare by ensuring businesses operate responsibly and lawfully. Acquiring a business license often involves registering the business, paying applicable fees, and meeting specific requirements or qualifications for the type of business.

Business licenses can vary greatly depending on the location and nature of the business. Some common types of business licenses include:

1. General Business License: This is a basic license required for most businesses to operate within a specific jurisdiction, such as a city or county.

2. Professional and Occupational Licenses: These licenses are specific to certain industries or professions, such as healthcare, construction, real estate, or cosmetology, and are typically issued by state licensing boards or agencies.

You must have a professional and occupational license to form South Dakota General Partnership and offer your service. 

Here are some examples of Professional and Occupational Licenses:

  • Medical License: Physicians, surgeons, and other healthcare professionals must obtain a medical license to practice medicine in a specific state. The South Dakota medical board issues this license after verifying the applicant’s education, training, and examination results.
  • Realtor License: To become a realtor in South Dakota, you must obtain a real estate license to buy, sell, or lease properties on behalf of clients. South Dakota has its own real estate commission or board responsible for issuing licenses and regulating the industry.
  • Contractor License: General contractors, electricians, plumbers, and other construction professionals must often have a contractor license to work in South Dakota. 
  • Cosmetology License: Professionals in the beauty industry, such as hairstylists, estheticians, and nail technicians, must obtain a cosmetology license to provide services. South Dakota Boards of Cosmetology oversee licensing and regulations for this industry.
  • Certified Public Accountant (CPA) License: Accountants who wish to become a CPA in South Dakota must designate and provide specific services, such as auditing financial statements and obtaining a CPA license from South Dakota’s Board of Accountancy.
  • Architect License: Architects must obtain a license to practice architecture in South Dakota. This typically involves meeting education and experience requirements and passing the Architect Registration Examination (ARE).
  • Attorney License: South Dakota Business Attorneys must obtain a license to practice law in a particular jurisdiction, typically by passing the state’s bar examination and meeting other requirements set by the South Dakota bar association.

3. Health and Safety Permits: South Dakota businesses involved in food service, hospitality, or other industries directly impacting public health and safety may require specific permits from local health departments or regulatory agencies.

4. Environmental Permits: South Dakota businesses that involve activities that may impact the environment, such as waste disposal, air or water emissions, or hazardous materials handling, may require permits from local, state, or federal environmental agencies.

5. Sales Tax License: South Dakota businesses that sell goods or services may be required to collect sales tax from customers and remit it to the appropriate tax authority. A sales tax license is typically required to collect and remit sales tax legally.

South Dakota business owners must research the specific licensing requirements for their business in their jurisdiction and obtain all necessary licenses and permits to operate legally and avoid potential fines, penalties, or legal troubles.

Requirements For Getting Business Licenses in South Dakota

If you start an LLC or any other type of business, you must wait until your South Dakota business registration is complete. Once you have completed the necessary steps to register your business in South Dakota, you must be prepared with the required documents to apply for business licenses.

  • Name of your company
  • Phone number and company address
  • Employee Identification Number (EIN)
  • Your company’s legal structure (Corporation, Partnership, or LLC)
  • Your business strategy, which includes revenues and costs

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How to Get a Business License in South Dakota

To get a business license, you must follow the guidelines below, including determining if your South Dakota business requires a license or permit, identifying the appropriate licensing agencies, researching license and permit requirements, completing and submitting license applications, and maintaining license and permit requirements.

Step 1: Determine The Required License or Permit

The first step in obtaining a business license is determining if your business needs one. Some businesses may not require a license or permit, while others may need multiple licenses depending on their industry and location. Some businesses typically require some form of licensing or permit:

  • Professional services, such as medical, legal, and accounting
  • Food establishments, including restaurants, bars, and catering businesses
  • Retail businesses, including stores, shops, and online retailers
  • Construction and contracting companies
  • Manufacturing and industrial businesses

State Licenses

The licenses that you must get first are the licenses within the state. South Dakota state licenses require individuals or businesses to engage in certain activities or professions legally. The state government issues these licenses and serves as proof that the license holder has met certain qualifications and standards set by the state. The types of licenses vary depending on the profession or activity, including but not limited to healthcare professionals, contractors, real estate agents, and drivers.

State licenses assure the public that the license holder has undergone the necessary training and education to perform their duties safely and competently.

Federal Licenses

Federal licenses in South Dakota are granted by federal agencies and are required for certain activities and industries that fall under federal jurisdiction. These licenses ensure compliance with federal laws and regulations and are necessary for individuals or businesses engaged in the following services.

  • Agriculture: License issued by The U.S. Department of Agriculture
  • Aviation: License issued by The Federal Aviation Administration
  • Alcohol & Tobacco: License issued by The Alcohol and Tobacco Tax and Trade Bureau
  • Ammunition, Explosive, & Firearms: License issued by The Bureau of Alcohol, Tobacco, Firearms, and Explosives.
  • Commercial Fisheries: License issued by The National Oceanic and Atmospheric Administration Fisheries Service
  • Mining & Drilling: License issued by The Bureau of Safety and Environmental Enforcement
  • Nuclear Energy: License issued by The U.S. Nuclear Regulatory Commission
  • Radio & Television (Broadcast): License issued by The Federal Communications Commission
  • Transportation by Sea: License issued by The Federal Maritime Commission
  • Wildlife & Fisheries: License issued by The U.S. Fish and Wildlife Service

Obtaining a federal license in South Dakota involves meeting specific criteria and adhering to federal laws and regulations, which can vary depending on the activity or industry.

City-Based License

City-based licenses in South Dakota are granted by local municipalities and are required for certain activities or businesses operating within the city limits. These licenses ensure businesses comply with local regulations and ordinances and typically cover business operations, health and safety, zoning, and permits.

City-based licenses vary depending on the location and the nature of the business, but examples may include restaurant licenses, liquor licenses, taxi licenses, and street vendor licenses. Obtaining a city-based license in South Dakota involves submitting an application, paying the necessary fees, and meeting specific requirements set by the local government.

Home-Based License

Home-based licenses in South Dakota are required for individuals or businesses that operate from their residential property. These licenses regulate and permit activities conducted within a residential setting, such as home-based businesses or rental properties. Home-based licenses ensure these activities comply with local regulations, building codes, zoning requirements, and health and safety standards.

The specific requirements for obtaining a home-based license in South Dakota can vary depending on the type of activity and the local municipality but typically involve submitting an application, paying any necessary fees, and meeting specific criteria set by the local government.

Professional License

Professional licenses in South Dakota are mandatory for individuals pursuing specific careers or professions that require specialized knowledge, skills, and expertise. The state government grants these licenses and serves to regulate and ensure the competency and ethical practice of professionals in fields such as law, medicine, engineering, teaching, and accounting.

To obtain a professional license in South Dakota, individuals must meet education, experience, and examination requirements specific to their profession. These licenses assure the public that they receive services from qualified professionals and protect consumers from potential harm or malpractice.

Step 2: Identify the South Dakota Licensing Agencies

Once you’ve determined that your business requires a license or permit, you must identify the appropriate South Dakota agencies responsible for issuing these documents. In South Dakota, numerous agencies oversee licensing and permitting, including:

  • South Dakota Secretary of State: This office is responsible for issuing licenses for many professional services, including legal, medical, and accounting.
  • South Dakota Department of Health: Food establishments, healthcare providers, and other businesses related to health and safety may require licenses from this department.
  • South Dakota Department of Revenue: If your business sells goods, you may need a sales tax license or permit from this department.
  • South Dakota Department of Labor: Businesses that involve construction or contracting may need licenses from this department.
  • Local City or County Governments: Depending on your business’s location, you may also need to obtain licenses or permits from your local government.

Step 3: Research License and Permit Requirements

After identifying the appropriate agencies, research the specific requirements for each license or permit your business needs. This may involve reviewing the South Dakota agency’s website, contacting their office directly, or consulting a legal or business professional. Some common requirements for obtaining a business license or permit include:

  • Completing an application form
  • Providing proof of insurance or bonding
  • Passing background checks or inspections
  • Paying application fees

Some licenses or permits may have ongoing requirements, such as annual renewals, inspections, or reporting.

Step 4: Complete and Submit License Applications

Once you’ve gathered all the necessary information and documents, complete the application forms for each required license or permit. Be sure to carefully follow the instructions provided by each South Dakota agency, as incomplete or incorrect applications can lead to delays or denials.

In addition to the application forms, you may also need to submit supporting documentation, such as:

Proof of Business Registration

You can find it on the South Dakota Secretary of State’s website. There should be a search feature specifically for businesses. This will often be labeled “South Carolina Secretary of State Business Filings Search“. In the search feature, enter the name of the business you are looking for, and once it appears, you will now have proof of your business registration.

Employer Identification Number (EIN)

Aside from opening a bank account, you must have an Employer Identification Number in South Dakota to file and submit for a business license. An EIN, also known as a Federal Tax Identification Number, is used by the Internal Revenue Service (IRS) to identify your business for tax purposes. You’ll need an EIN to open a business bank account, file taxes, and hire employees. 

The application of an EIN in South Dakota can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

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Proof of Insurance, Bonding, or Worker’s Compensation Coverage

To have a business license, you need proof of insurance, bonding, or worker’s compensation. You need to obtain a certificate or policy document as additional documents for your proof of insurance. Also, there is a database of businesses with worker’s compensation coverage or require businesses to register their insurance or bonding information. Visit your South Dakota Department of Labor, Department of Insurance, or another relevant agency website for information about the business’s coverage.

Professional Certifications or Licenses

As I have mentioned, if you will form a general partnership and offer your service, you must have professional certifications or licenses. 

Submit your completed applications and the South Dakota business license fee, which ranges from $50 – $300. The processing times for license and permit applications can vary, so plan accordingly and allow ample time for approval.

Step 5: Maintain License and Permit Compliance

Once you’ve obtained the necessary licenses and permits for your South Dakota business, it’s essential to maintain compliance with all requirements. This may include:

  • Keep your South Dakota licenses and permits current by renewing them on time, typically annually.
  • Reporting any changes to your business, such as a changing South Dakota LLC address. You may amend your South Dakota Articles of Organization if you change anything in your South Dakota business.
  • Maintaining proper insurance, bonding, or worker’s compensation coverage.
  • Complying with any inspection, reporting, or record-keeping requirements.

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Additional Considerations

In addition to the steps outlined above, there are a few additional considerations to keep in mind when navigating the South Dakota business licensing process:

  • Licenses and permits are often industry-specific, so research your business type’s requirements.
  • Some businesses may need licenses or permits from multiple agencies at the state and local levels. Be sure to research and comply with all necessary requirements to avoid complications.
  • If your business operates in multiple locations or across state lines, you may need to obtain licenses or permits for each jurisdiction in which you operate. You can form South Dakota Foreign LLC
  • Stay informed about licensing and permitting requirements changes, as regulations can change over time.

FAQs

What is a business license in South Dakota?
A business license is a permit issued by the state government, granting you permission to operate a business in South Dakota.
Do all businesses need a license in South Dakota?
No, not all businesses require a license in South Dakota. However, there are certain types of business that do.
What types of businesses require a license in South Dakota?
Some of the businesses that require a license in South Dakota include retailers, manufacturers, contractors, and professionals like doctors and lawyers.
How do I apply for a South Dakota business license?
You can apply for a South Dakota business license by visiting the state government’s website or by going to the appropriate state agency that governs your business.
Can I apply for a South Dakota business license online?
Yes, you can apply for a South Dakota business license online through the state’s website.
How much does a South Dakota business license cost?
The cost of a South Dakota business license varies depending on the type of business you’re operating.
Do I need any special licenses or permits for my business in addition to a South Dakota business license?
Depending on the nature of your business, yes. For example, if you’re starting a restaurant, you’ll also need a health department permit.
Can I get a temporary South Dakota business license?
Yes, South Dakota offers temporary business licenses for certain types of events, like fairs or festivals.
How long does it take to get a South Dakota business license?
The time it takes to get a South Dakota business license varies depending on the type of business you’re operating.
What happens if I operate my business without a South Dakota business license?
You may face fines or penalties, and your business could be shut down.
Can I transfer my South Dakota business license if I move my business to another state?
No, you’ll need to apply for a business license in the new state.
How often do I need to renew my South Dakota business license?
You’ll typically need to renew your South Dakota business license every year.
Do I need to register my business with the South Dakota Secretary of State’s office?
Depending on the nature of your business, yes. For example, all corporations and LLC’s must be registered with the Secretary of State’s office.
Can I operate my home-based business without a South Dakota business license?
No, you’ll still need to obtain a business license even if you’re operating a business from your home.
What do I do if I need help obtaining a South Dakota business license?
You can contact the South Dakota Small Business Development Center for assistance with obtaining a business license.
Do I need a separate license if I’m starting a daycare in South Dakota?
Yes, you’ll need a special permit from the South Dakota Department of Social Services to operate a daycare.
Do I need to obtain a South Dakota business license for an online business?
Yes, you’ll still need to obtain a South Dakota business license even if you’re operating an online business.
Can I sell food or alcohol without a South Dakota business license?
No, you’ll need a special permit from the state in order to sell food or alcohol.
Do I need to obtain a South Dakota business license for a business run by a non-profit organization?
Yes, even non-profit organizations need to obtain a business license in South Dakota.
Do I need to obtain separate licenses for each location of my business?
Yes, you’ll need to obtain a separate business license for each location of your business.
What types of businesses are exempt from obtaining a South Dakota business license?
Some types of exempt businesses include certain agricultural businesses and those that are operated by government agencies.
Can I obtain a liquor license without a South Dakota business license?
No, you’ll generally need to have a South Dakota business license in order to obtain a liquor license.
Can I operate a business with just a South Dakota sales tax license?
No, you’ll need to obtain a South Dakota business license in addition to a sales tax license.
Is it cheaper if I obtain a South Dakota business license for a home-based business?
No, the cost of a South Dakota business license is not determined by the location of your business.
Is a South Dakota business license required for a sole proprietorship?
Yes, in most cases a South Dakota business license is required for a sole proprietorship.
How long does it take to obtain a South Dakota sales tax license?
Generally, you can obtain a South Dakota sales tax license within a week.
Is a South Dakota business license required for a freelance business?
Yes, even freelance businesses still need to obtain a South Dakota business license.
What is a business license in the state of South Dakota?
A business license is a permit issued by the government allowing individuals or companies to do business in South Dakota.
How do I know if I need a business license in South Dakota?
Different businesses have different requirements, but for most types of businesses, a license is required in the state of South Dakota.
Where do I obtain a business license in South Dakota?
You can obtain a business license from the Secretary of State’s office in South Dakota.
Does South Dakota require any specific educational or professional training for certain types of licenses?
Yes, some types of businesses require specific educational or professional training. South Dakota will specify the requirements for each industry as they apply.
Is there a penalty for operating a business in South Dakota without a license?
Absolutely. Business owners operating without a legal license in South Dakota may face serious legal repercussions.
What’s the cost of getting a business license in South Dakota?
The cost of a business license varies in South Dakota depending on the type of business and other factors. You can find detailed information on the South Dakota Secretary of State website.
How long does it take to obtain a South Dakota business license?
The time it takes to obtain a business license in South Dakota varies with the number of licenses applied for and the type of business to be licensed.
Can an out-of-state company operate in South Dakota without a business license?
No. All out-of-state companies which operate, transact business, or provide their services/products in South Dakota must obtain a business license.
When do I need to renew my South Dakota business license?
The renewal of a business license depends on the type of business and the business category, and may be yearly, biennially, or every three years.
Can I operate more than one type of business under the same South Dakota business license?
Depending on the agency involved in your specific type of business, you may be granted approval for more than one business line on a single license.
Can I transfer my South Dakota business license to another person or entity?
Yes, you can transfer your South Dakota business license to another person or entity subject to agency approval.
How do I change the information on my South Dakota business license?
You can notify the Secretary of State’s office of any changes you may have by submitting amendments to your business license data.
Do I need a separate South Dakota business license for each location where I operate my business?
Yes, for each physical address, you need to have a separate legal South Dakota business address licence.
Can I use my South Dakota business license for work outside of South Dakota?
The business license is licenced for working within the state of South Dakota. If attempting to carry out activity outside of it without the correct state permits you could face penalties or serious fines.
Can a South Dakota business license be revoked?
Yes, failing to comply with the terms of the license can lead to its revocation, which would prevent any further operation of the business.
What credentials do I need for my South Dakota business license?
South Dakota differs many times from license to license to determine project or business-specific needs.
What happens if I don’t comply with South Dakota business license requirements and regulations?
Operating without the proper license in South Dakota can lead to opening your corporation to a range of legal accusations which can lead to shutting down business.
Do I Need a South Dakota Business License for an E-commerce Site?
While South Dakota law does require most businesses to register with the state, E-commerce businesses, when not operating physically within the state of South Dakota, may not need licenses depending on the product or services you sell.
Do I need a new South Dakota business license if I change the name of my business?
Yes, business license must reflect the name of the business.
How can I check if a business with a South Dakota business license is valid and legally-operating?
Check their license number with the Secretary of State website.
Does every type of business require the same license in South Dakota?
Various businesses have different license requirements depending on their licenses’ categories and classifications in South Dakota.
Can I apply for multiple South Dakota business licenses at the same time?
Multiple licensing procedures followed by identification and classification requirements and procedures clarification may happen at the same time, periodical submission is required for compliance.
Are there any exemptions for nonprofit organizations regarding South Dakota business licensing requirements?
Nonprofit organizations are required to obtain various licenses same as for-profit corps in South Dakota.
How do I get assistance with obtaining a business license in South Dakota?
You can always ask for data from the relevant event agencies, trade groups and professional associations, government resources like the South Dakota Small Business Administration, commercial firms may also help to create and understand mandatory permits and suits for business regulatory compliance in South Dakota.
Can you appeal a denial of a South Dakota business license?
You can file an appeal if they refuse to grant you the right registration request, under a few conflicting convincing factors.
What are the documentation requirements to obtain a South Dakota business license?
Benefit aganist costs, the type of corporation, and other identification requirements requires clear presentation upon licence issuing of the licensed agency-operate business in South Dakota.
Can foreign nationals or non-US residents apply for a South Dakota business license?
If you have ownership interest in the company, then you could make the effort regardless of residency, but it’d be a bit difficult with compliance requirements fulfilled from abroad.

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Conclusion

Obtaining the necessary licenses and permits is crucial in starting a new business in South Dakota. Following the steps outlined in this guide and consulting with the appropriate agencies or professionals, you can ensure that your business complies with all state and local requirements. This will protect your business from legal issues and help establish your reputation as a responsible and trustworthy business operator.

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