A South Dakota limited liability company operating agreement documents a company’s policies along with its membership roster in a single contract. Issuing this contract between the members is considered advantageous since establishing the company’s procedures and hierarchy early on provides each member with a description of their expected capital contributions, effort, or equity and the schedule needed to define the company’s profit distribution.
This document also demonstrates that the South Dakota LLC’s owner(s) have formed the company with an intended tax status and business policy. Thus, a signature shall show that each South Dakota LLC member has reviewed the final policies of the company, comprehended their obligations, and will adhere to the provisions defining how the company shall operate through their signatures.
Is it Required in South Dakota?
No. There are no South Dakota laws mandating that an operating agreement be made between the members of an LLC in this state.
Single-Member LLC operating agreement – The contract used by South Dakota limited liability companies made up of no more than one (1) member.
Multi-Member LLC operating agreement – The agreement that is issued between an LLC and its members when the South Dakota limited liability company is made up of at least two (2) members.
“(14) ‘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.”