South Dakota LLC Operating Agreement Template [PDF]

The South Dakota limited liability company (LLC) operating agreement is a legal document that regulates the relationship between the company members and provides rules on how the company will be operated.

The LLC operating agreement, or business operating agreement, includes provisions about the contribution of each member to the LLC as well as their share in the company’s interests. The document also provides the managerial rights and duties of the members or managers.

Is an Operating Agreement Required in South Dakota?

No, an operating agreement is not required when establishing an LLC in South Dakota. However, by drafting an operating agreement, you will optimize your business activities and prevent potential misunderstandings and disputes between the company members.

4 Main Types of Operating Agreements

Here, you can find the four main types of operating agreements used in South Dakota:

Types of Operating Agreements

Single-member LLC operating agreement: If the company is established by a single member, they use this type of operating agreement to outline how the company will be operated without regulating the relationships between members.
Multi-member LLC operating agreement: Here, the members use the operating agreement to both outline how the company will be operated and to regulate the relationship between the members.
Member-managed LLC operating agreement: Used when the members decide to personally manage the company. The document defines the managerial rights and duties of each member of the company.
Manager-managed LLC operating agreement: Here, the operating agreement defines the managerial rights of a manager appointed by the members to run the company.

Laws and Legal Requirements for LLC Operating Agreements in South Dakota

Chapter 47-34A of the South Dakota Codified Laws also called the Uniform Limited Liability Company Act, regulates the status of LLCs in South Dakota.

Moreover, Section § 47-34A-103 provides rules and regulations that define the status of operating agreements in South Dakota.

Section 47-34A-101(14) provides a definition of the operating agreement as follows:

“‘Operating agreement’ means any valid agreement, either written or oral, under §47-34A-103 concerning the relations among the members, managers, and limited liability company; however, an integration clause contained in a written operating agreement may be given effect under other law. The term includes amendments to and restatements of the operating agreement. The operating agreement of a limited liability company having only one member shall not be unenforceable by reason of there being only one person who is a party to the operating agreement.”

How to Form a Limited Liability Company (LLC) in South Dakota

Below, you can find the easiest way to form a limited liability company in South Dakota.

How to Form a LLC in South Dakota

#1. Choose a Business Name For Your LLC

Before submitting your application to register an LLC in South Dakota, you should choose a business name. The business name must be distinguishable from other business names registered in South Dakota. Otherwise, your registration application might be rejected.

To make sure your business name is distinguishable, you can check the Secretary of State’s database.

#2. Choose the Type of LLC

You can choose between two main types of LLCs based on the place of their initial establishment:

Domestic LLC: a company that is established and registered in South Dakota.
Foreign LLC: a company that is registered in South Dakota but is initially registered in another state.

#3. Nominate an Agent

The last step before submitting your application is to nominate an agent who will be the official point of contact between the LLC and third parties. They will receive official notifications and documents on behalf of the LLC.

The most important criterion when choosing an agent is that it is an individual with a registered address in South Dakota or an entity

#4. File the Formation Documents

For domestic LLCs, you should file Articles of Organization. You can file this document online or by completing Form SDCL 47-34A-203, 212.

For domestic LLCs, you should file a Certificate of Authority. You can file this document online or by completing Form SDCL 47-34A-1002. Foreign LLCs should also submit the Certificate of Existence issued by the state of the company’s initial place of establishment.

#5. Pay the Required Fee

The filing fee for domestic LLCs is $150, and for foreign LLCs, it is $750. If you are submitting your application via mail, you should write a check, write the amount indicated above with the additional $15, attach it to the application documents, and send it to the following address:

Secretary of State Office, 500 E Capitol Ave, Pierre, SD 57501

#6. Create your LLC Operating Agreement

After registering your company, you should draft the operating agreement and optimize your business operations.

#7. Apply For an Employer Identification Number (EIN)

This number will enable you to open a company bank account and hire employees. You can obtain it on the IRS website or by filing Form SS-4.