This article provides three key state business startup requirements for self-employed sole proprietors and general partners who run residential house cleaning businesses. Information from the Secretary of State, the South Dakota Department of Revenue and selected city and county government sources were used to research this article.
Be aware that sole proprietor and general partner startup requirements in this state are always changing. Some requirements even vary from county to county. It is important that you call or visit your local county or city government to find out local requirements for residential house cleaning businesses and home-based businesses. This article is not intended to be exhaustive or a substitute for qualified legal or tax advice.
Business Name Registration
Sole proprietors and general partners who want a business name that does not include the owner(s) full names (for example, Janice Smith’s Cleaning Service or Martha Harris and Tom Graham’s Maid Service) need to find out whether the name they want to use is available in the state. Start with a statewide corporate business name search to avoid legal problems and customer confusion.
It is advisable to do an online search for names similar to the one you plan to use. For example, if you want to use the name, Crystal Clean Maid Service, do simple Google searches for “Crystal Clean Maid Service+South Dakota” plus Crystal Clean Maid Service+your county” and “Crystal Clean Maid Service+your town or city”. Search beyond the first page of results. Go at least five pages deep into the search results to see if the name you want or similar names are being used in your state, county or city.
Sole proprietors and general partners in South Dakota can register for a Fictitious Name or DBA (“doing business as” name) for their business with: the county Register of Deeds Office where the business will be based. Find a county Register of Deeds.
Fictitious Names or DBAs can also be registered online at the Secretary of State’s website https://sosenterprise.sd.gov/BusinessServices/Fictitious/FictitiousHome.aspx
In the state of South Dakota, registering a DBA does not guarantee a business sole rights to the use of that name. Other businesses in the county and state may also register the same DBA. Registered businesses are expected to legally defend their trade names.
Business License Registration
Sole proprietors and general partners do not have to apply for a state business license in South Dakota. Residential house cleaning businesses should check with the local city or county clerk’s office for licensing requirements.
In South Dakota, a general partnership is created when two or more owners form an oral or written agreement to start a business together. General partners are not required to file any documents with the Secretary of State. It is advisable for general partners to file a Fictitious Name or DBA in the county where the business is based. Also, one or more partners may register a Partnership Statement of Authority with the Secretary of State. A written partnership agreement drawn up by a lawyer is important for both or all partners. Partnership agreements do not have to be filed with the state.
Sole proprietors and general partners may apply for an Employer Identification Number (EIN) from the IRS even if they do not plan to hire employees. Getting an EIN may make it easier to open a bank account and reduce your risk of identity theft. You can apply for an EIN online. In addition, some business registration forms will require a NAICS business classification number for the house cleaning industry.
Business Tax Registration
Residential house cleaning services are taxable in South Dakota. House cleaning businesses must collect and send sales taxes to the Department of Revenue. Under South Dakota law, cleaning companies can add sales tax to the price of the service. However, the cleaning company is responsible for collecting and sending the sales tax due to the state, whether or not it is collected from customers.
Register for a South Dakota Sales Tax License.
South Dakota has no personal state income tax. Sole proprietors and general partners do not have to file estimated self-employment income taxes in South Dakota similar to the way self-employment taxes are paid to the federal government.
South Dakota general partnerships that file a Federal partnership information Form 1065, may need to file a state partnership return. Get more information from a CPA or qualified tax preparer to find out if your partnership must file a similar state tax return.
Selected South Dakota City Licenses
Aberdeen Business License: The city of Aberdeen does not require a business license for housecleaning services.
Brookings Business License: The city of Brookings does not require a business license for housecleaning services.
Rapid City Business License: Rapid City does not require a business license for housecleaning services.
Sioux Falls Business License: The city of Sioux Falls does not require a business license for housecleaning services.
Watertown Business License: The city of Watertown does not require a business license for housecleaning services.