South Dakota LLC Operating Agreement: Free Guide (2026)
SDCL 47-34A-103 permits an agreement of all members that need not be written; incoming members are deemed to assent. Section 47-34A-101 recognizes written or oral terms and enforceable sole-member agreements. Writing helps establish the terms actually adopted. Section 47-34A-103 prevents elimination of loyalty and good faith and protects specified expulsion, winding-up and outsider rights. Its permitted information-right restrictions, care reductions and other duty alterations are subject to the manifestly-unreasonable test. The statute fills matters the agreement leaves open.
SDCL 47-34A-103 permits an agreement of all members that need not be written; incoming members are deemed to assent. Section 47-34A-101 recognizes written or oral terms and enforceable sole-member agreements. Writing helps establish the terms actually adopted. Section 47-34A-103 prevents elimination of loyalty and good faith and protects specified expulsion, winding-up and outsider rights. Its permitted information-right restrictions, care reductions and other duty alterations are subject to the manifestly-unreasonable test. The statute fills matters the agreement leaves open.
- Required by South Dakota?
- No
- Filed with the state?
- No — internal
- Banks ask for it?
- Usually yes
- Cost (template)
- $0
- Governing law
- SDCL 47-34A
- Single-member LLCs?
- Yes — still needed
Why You Need One (Even Though South Dakota Doesn't Ask)
Section 47-34A-103 prevents elimination of loyalty and good faith and protects specified expulsion, winding-up and outsider rights. Its permitted information-right restrictions, care reductions and other duty alterations are subject to the manifestly-unreasonable test. The statute fills matters the agreement leaves open.
- Written terms document ownership, governance and decisions. They do not guarantee liability protection or replace proper company records and separate finances.
- It settles the hard questions early: profit splits, buyouts, a member's death or exit — answered while everyone still agrees.
- It genuinely matters given how little else South Dakota requires: with no franchise tax, no income tax, and a light annual filing, your operating agreement is one of the few durable internal records of how the business actually works.
SDCL 47-34A-103 permits an agreement of all members that need not be written; incoming members are deemed to assent. Section 47-34A-101 recognizes written or oral terms and enforceable sole-member agreements. Writing helps establish the terms actually adopted. Section 47-34A-103 prevents elimination of loyalty and good faith and protects specified expulsion, winding-up and outsider rights. Its permitted information-right restrictions, care reductions and other duty alterations are subject to the manifestly-unreasonable test. The statute fills matters the agreement leaves open.
Section 47-34A-103 prevents elimination of loyalty and good faith and protects specified expulsion, winding-up and outsider rights. Its permitted information-right restrictions, care reductions and other duty alterations are subject to the manifestly-unreasonable test. The statute fills matters the agreement leaves open.
South Dakota Agreement Rules and Defaults
Form and evidence
SDCL 47-34A-103 permits an agreement of all members that need not be written; incoming members are deemed to assent. Section 47-34A-101 recognizes written or oral terms and enforceable sole-member agreements. Writing helps establish the terms actually adopted.
State defaults and limits
Section 47-34A-103 prevents elimination of loyalty and good faith and protects specified expulsion, winding-up and outsider rights. Its permitted information-right restrictions, care reductions and other duty alterations are subject to the manifestly-unreasonable test. The statute fills matters the agreement leaves open.
Approval and amendments
Section 47-34A-404.1 defaults to equal management rights and majority decisions in a member-managed company, with all-member consent for specified matters including agreement amendments. Review permitted variations under §47-34A-103, and document the required approval rather than equating consent with every member’s signature.
Customize the free national templates below for your company’s ownership, management, voting and exits. Bank requirements vary; an agreement does not guarantee personal-liability protection.
South Dakota agreement definitionSouth Dakota agreement limits and assentSouth Dakota management and amendment defaultsFree Operating Agreement Downloads for Your South Dakota LLC
Choose the template that matches your LLC's ownership and management. These are LLC School's national master templates, also available in the core operating agreement guide. Customize the document for your company and South Dakota law before signing.
Single-Member
For one member who owns and generally controls the LLC.
Download single-member PDFMulti-Member / Member-Managed
For multiple members who participate directly in company management.
Download member-managed PDFManager-Managed
For LLCs whose members delegate management authority to designated managers.
Download manager-managed PDFBefore signing: Fill the applicable blanks, remove clauses that do not fit, confirm ownership and management terms, and review state-specific limitations. Seek professional legal or tax advice for complex arrangements. Read the national template guidance.
Build Your Clause Checklist
South Dakota Operating Agreement Clause Builder
3 questions · custom clause checklist · educational, not legal advice
Checklist is educational. Multi-member LLCs with significant assets or unequal deals should have a South Dakota business attorney review the final agreement.
The Core Sections Every South Dakota Agreement Needs
Formation & purpose
Name, formation date (from your confirmed Articles), registered agent, and a broad purpose clause.
Members & ownership percentages
Who owns what, each member's capital contribution, and how new members are admitted.
Profit & loss allocation
How profits split — by percentage or a documented custom formula — and when distributions happen.
Management & voting
Member- vs manager-managed, decision thresholds, and any items requiring unanimity.
Transfer restrictions & buy-sell
Right of first refusal, valuation method, and triggers: exit, death, disability, divorce.
Dissolution & wind-down
What ends the company and how assets are distributed under South Dakota law.
Plus: tax classification and representative, banking authority, indemnification, amendment procedure, and severability. Start from the free template in our national operating agreement guide.
Single-Member LLCs: Yes, Still
For one owner, document ownership, authority and succession. Maintain separate company finances and records. Bank requirements vary; an agreement does not guarantee protection from personal liability.
Keeping It Current
Revisit the agreement when ownership changes, a member's role shifts, or you elect S-Corp taxation. Amendments follow whatever procedure the agreement sets — which is why the amendment clause matters on day one.
Ahmad Adil's Take: the operating agreement is the cheapest insurance in business, and South Dakota's ultra-favorable tax and compliance environment makes it especially easy to treat as an afterthought — you've paid $150, there's no income tax to worry about, and it's tempting to feel completely done. Resist that. Every partnership blowup I've watched traces back to a question the founders never answered on paper: who decides, who gets what, who buys whom out and at what price. South Dakota hands you total freedom to write those answers however you like; the mistake is not using it. Multi-member LLCs, do this before the money starts moving. Single-member owners, do it the same afternoon your Articles clear and file it with your EIN letter.
- ✓Optional formation assistance; confirm filing scope, service pricing and government fees before ordering.
- ✓Confirm filing method, document preparation and submission responsibilities before ordering.
- ✓Confirm registered-agent service availability, included periods and renewal charges.
- ✓Review address-use rules and privacy policies; a service does not remove all information from public filings.
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South Dakota LLC — FAQ
Is an operating agreement required for a South Dakota LLC?
What happens if my South Dakota LLC has no operating agreement?
Does a single-member South Dakota LLC need an operating agreement?
Do I file my operating agreement with the South Dakota Secretary of State?
How much does a South Dakota operating agreement cost?
Can I write my own operating agreement in South Dakota?
Can we change our South Dakota operating agreement later?
Ahmad Adil is the founder and CEO of LLC School. For agreement terms and member responsibilities, consult the state LLC statute and a qualified adviser. See the national operating agreement guide. This is educational information, not legal or tax advice.
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