Understanding South Dakota LLC Laws
The rules for starting and running a South Dakota limited liability company (LLC) are laid out by South Dakota's LLC laws.
In this guide, we offer simple explanations to South Dakota LLC laws about:
- LLC Formation Requirements
- Registered Agent Duties and Appointment
- Operating Agreements
- Annual Report Requirements
To learn more about starting an LLC, visit our form an LLC guide.
LLC Formation Requirements
South Dakota LLC laws set out the requirements for forming an LLC. The State of South Dakota has created the SOS Business Services Online portal and PDF Articles of Organization form to simplify the process.
South Dakota LLC Formation Statute
The following LLC formation statutes are from the South Dakota Uniform Limited Liability Company Act:
Section 47-34A-203. Articles of organization.
(a) Articles of organization of a limited liability company must set forth:
(1) The name of the company;
(2) The address of the initial designated office;
(3) The information required by § 59-11-6;
(4) The name and address of each organizer;
(5) The duration of the company if other than perpetual;
(6) Whether the company is to be manager-managed, and, if so, the name and address for each initial manager;
(7) Whether one or more of the members of the company are to be liable for its debts and obligations under § 47-34A-303(c);and
(8) Whether the limited liability company is authorized to establish one or more series and the matters required under § 47-34A-702.
(b) Articles of organization of a limited liability company may set forth:
(1) Provisions permitted to be set forth in an operating agreement; or
(2) Other matters not inconsistent with law.
(c) Articles of organization of a limited liability company may not vary the nonwaivable provisions of § 47-34A-103(b). As to all other matters, if any provision of an operating agreement is inconsistent with the articles of organization:
(1) The operating agreement controls as to managers, members, and members' transferees; and
(2) The articles of organization control as to persons, other than managers, members and their transferees, who reasonably rely on the articles to their detriment.
Source: SL 1998, ch 272, § 203; SL 2006, ch 228, § 8; SL 2008, ch 275, § 75; SL 2020, ch 200, § 8, eff. Nov. 15, 2020.
Start forming your LLC by reading our top LLC services review.
What This Means: Key Takeaways*
The South Dakota LLC statute provides the requirements for setting up (or forming) an LLC. The State of South Dakota offers online and mail-in LLC filing to meet these requirements.
Required Information for South Dakota LLC Formation:
- LLC’s name (Must meet South Dakota LLC naming requirements)
- LLC principal office’s street and mailing address
- Registered agent’s name and South Dakota designated office address
- The purpose of the LLC
- The name and address of each LLC organizer
- How long the company will be doing business if not perpetual (no end)
- Whether the company will be manager-managed, and, if so, the name and address for each initial manager
- Whether one or more of the members of the company are to be liable for its debts and obligations under 47-34A-303
- Whether the LLC is authorized to establish one or more series under 47-34A-702
Optional Information for South Dakota LLC Formation:
- LLC organizers can add their own provisions as long as the provisions don’t conflict with LLC statute.
Recommended: For help with completing the LLC formation forms, visit our South Dakota LLC Articles of Organization guide
Registered Agent Duties and Appointment
South Dakota LLC laws define the duties and appointment of the LLC registered agent.
South Dakota LLC Registered Agent Statute
The following registered agent statutes are from the South Dakota Model Registered Agents Act:
59-11-6. Appointment of registered agent.
A registered agent filing must state:
(1) The name of the represented entity's commercial registered agent; or
(2) If the entity does not have a commercial registered agent:
(a) The name and address of the entity's noncommercial registered agent; or
(b) The title of an office or other position with the entity if service of process is to be sent to the person holding that office or position, and the address of the business office of that person.
The appointment of a registered agent pursuant to subdivision (1) or subsection (2)(a) is an affirmation by the represented entity that the agent has consented to serve as such.
Source: SL 2008, ch 275, § 6.
What This Means: Key Takeaways*
A registered agent’s job is to accept service of process (legal summons to a lawsuit).
A South Dakota registered agent must:
- Maintain a registered office in South Dakota (i.e., no P.O. boxes)
- Be an individual, a South Dakota corporation or LLC, or foreign corporation or LLC with a business address that is the same as the registered office address
Registered agent information is kept on file by the State of South Dakota. If you change your registered agent or if your registered agent resigns, you must file a change of registered agent form.
Operating Agreements
South Dakota LLC laws provide guidelines for creating and maintaining an LLC operating agreement.
The following operating agreement statutes are from the South Dakota Uniform Limited Liability Company Act:
Section 47-34A-103. Operating agreement--Scope--Limitations.
(a) Except as otherwise provided in subsection (b), all members of a limited liability company may enter into an operating agreement, which need not be in writing, to regulate the affairs of the company and the conduct of its business, and to govern relations among the members, managers, and company. A person that becomes a member of a limited liability company is deemed to assent to the operating agreement. To the extent the operating agreement does not otherwise provide, this chapter governs relations among the members, managers, and company.
(b) The operating agreement may not:
(1) Eliminate the duty of loyalty under § 47-34A-409(b) or § 47-34A-603(b)(3), but the agreement may, if not manifestly unreasonable:
(i) Identify specific types or categories of activities that do not violate the duty of loyalty; and
(ii) Specify the number or percentage of members or disinterested managers that may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty;
(2) Eliminate the obligation of good faith and fair dealing under § 47-34A-409(d), but the operating agreement may determine the standards by which the performance of the obligation is to be measured, if the standards are not manifestly unreasonable;
(3) Vary the right to expel a member in an event specified in § 47-34A-601(6);
(4) Vary the requirement to wind up the limited liability company's business in a case specified in § 47-34A-801(a)(3) or (4); or
(5) Restrict rights of a person, other than a manager, member, and transferee of a member's distributional interest, under this chapter.
(c) If not manifestly unreasonable, the operating agreement may:
(1) Restrict a right to information or access to records under § 47-34A-408;
(2) Reduce the duty of care under § 47-34A-409(c) or § 47-34A-603(b)(3);
(3) Alter any other fiduciary duty, including eliminating particular aspects of that duty.
(d) The court shall decide any claim under this section that a term of an operating agreement is manifestly unreasonable. The court:
(1) Shall make its determination as of the time the challenged term became part of the operating agreement and by considering only circumstances existing at that time; and
(2) May invalidate the term only if, in light of the purposes and activities of the limited liability company, it is readily apparent that:
(i) The objective of the term is unreasonable; or
(ii) The term is an unreasonable means to achieve the provision's objective.
Source: SL 1998, ch 272, § 103; SL 2013, ch 233, § 2.
Section 47-34A-103.1. Effect of records that conflict with § 47-34A-103 or operating agreement.
(a) If a record that has been delivered by a limited liability company to the Office of the Secretary of State for filing and has become effective under this chapter, contains a provision that would be ineffective under § 47-34A-103 if contained in the operating agreement, the provision is likewise ineffective in the record.
(b) Subject to subsection (a) of this section, if a record that has been delivered by a limited liability company to the Office of the Secretary of State for filing, and which has become effective under this chapter, conflicts with a provision of the operating agreement:
(1) The operating agreement prevails as to members, dissociated members, transferees, and managers; and
(2) The record prevails as to other persons to the extent they reasonably rely on the record.
What This Means: Key Takeaways*
An LLC operating agreement allows LLC members to create rules for how their unique LLC operates. These rules are often called “terms” or “provisions.”
Operating agreements are limited by state statute. For example, if the statute says LLC members can’t dissolve an LLC without all members agreeing, LLC members can’t change or override the statute with an operating agreement.
When an operating agreement is in place, it’s easier to navigate situations involving the operation of the LLC. And, if a lawsuit or dispute arises, LLC members (or the courts) have something to reference.
If a dispute arises that can’t be resolved by LLC members and there isn’t an operating agreement, the courts will use LLC statute to resolve disputes.
Creating an Operating Agreement
Some LLCs, such as professional LLCs or real estate LLCs, might need unique terms, while others might only need to cover standard provisions:
- Each member’s responsibilities
- How new members will be admitted
- How existing members may transfer or terminate their membership
- How profits and dividends will be distributed
- The process for amending the operating agreement
Use our free operating agreement template or learn more with our What Is an Operating Agreement guide.
Annual Report Requirements
South Dakota LLC laws set out the requirements for annual LLC reporting. The State of South Dakota has created the SOS annual report online portal and PDF annual report form to simplify the process.
South Dakota LLC Annual Report Statute
The following annual report statutes are from the South Dakota Uniform Limited Liability Company Act and the South Dakota Model Registered Agents Act:
Section 47-34A-211. Annual report for secretary of state.
A limited liability company, and a foreign limited liability company authorized to transact business in this state, except a bank organized pursuant to § 51A-3-1.1, shall deliver to the secretary of state for filing an annual report pursuant to §§ 59-11-24 to 59-11-26, inclusive.
Source: SL 1998, ch 272, § 211; SL 2004, ch 289, § 5; SL 2005, ch 241, § 2; SL 2008, ch 275, § 76.
Section 59-11-24. Annual report.
Each filing entity or qualified foreign entity, except a bank organized under § 51A-3-1.1, a limited partnership organized pursuant to chapter 48-7, or a series of a limited liability company established under §§ 47-34A-701 through 47-34A-707 shall deliver to the Office of the Secretary of State for filing an annual report that sets forth:
(1) The name of the filing entity or qualified foreign entity;
(2) The jurisdiction under whose law it is formed;
(3) The address of its principal office, wherever located;
(4) The information required by § 59-11-6; and
(5) The names and business addresses of its governors except in the following two cases:
(a) If a business corporation has eliminated its board of directors pursuant to § 47-1A-732, the annual report shall set forth the names of the shareholders instead; and
(b) If a limited liability company is member-managed, the names and business addresses of its governors need not be set forth.
Information in the annual report must be current as of the date the annual report is executed on behalf of the filing entity or qualified foreign entity. Any other provisions of law notwithstanding the annual report may be executed by any authorized person. Any amendment filed is a supplement to, and not in place of, the annual filing required by this section.
What This Means: Key Takeaways*
You can file your South Dakota annual report online or by mail.
Your South Dakota LLC annual report must state the following information (and must be current as of the date of filing):
- The name of the LLC
- The state where the LLC was formed, South Dakota or elsewhere
- The principal office address
- Registered agent name and street address
- The name and address of any LLC managers
*This information is provided for educational and entertainment purposes only. Please consult a lawyer for legal advice.