A South Dakota LLC operating agreement is a document that sets the rules for a limited liability company. It covers how the company is run and how its members, managers and the company deal with each other. State law lets all members enter into one, and it need not be in writing.[1.2] Our LLC operating agreement template is a single-member agreement you can build online.
Last Updated: October 2026. This guide is reviewed and updated regularly to reflect current South Dakota law. If you notice an error or outdated information, please contact us.
South Dakota LLC Laws and Definition
Under S.D. Codified Laws § 47-34A-103, all members of a limited liability company may enter into an operating agreement. The agreement regulates the affairs of the company and the conduct of its business. It also governs relations among the members, managers, and company.[1.2]
The statute sets these basic rules for the agreement.
- An operating agreement need not be in writing, so an oral operating agreement can be valid. In practice, a written agreement is easier to prove and to follow.
- A person that becomes a member of a limited liability company is deemed to assent to the operating agreement. Deemed means the law treats the person as having agreed.
- To the extent the operating agreement does not otherwise provide, the LLC chapter governs relations among the members, managers, and company. In other words, the statute fills in whatever the agreement leaves out.
These rules are in § 47-34A-103.[1.2]
A company with only one member can have an operating agreement too. Section 47-34A-101 of the S.D. Codified Laws covers this case. The operating agreement of a limited liability company having only one member is not unenforceable by reason of there being only one person who is a party to it.[1.1]
What Can an Operating Agreement Not Change?
South Dakota lets members write most of their own rules, but S.D. Codified Laws § 47-34A-103 sets limits. An operating agreement may not eliminate the duty of loyalty or the obligation of good faith and fair dealing. It also may not vary certain rules on expelling a member, winding up the company, or the rights of outsiders.[1.2]
In detail, the operating agreement may not do the following.
- Eliminate the duty of loyalty under § 47-34A-409(b) or § 47-34A-603(b)(3). The agreement may, if not manifestly unreasonable, identify specific types or categories of activities that do not violate the duty of loyalty. It may also 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.
- Eliminate the obligation of good faith and fair dealing under § 47-34A-409(d). The agreement may determine the standards by which the performance of the obligation is to be measured, if the standards are not manifestly unreasonable.
- Vary the right to expel a member in an event specified in § 47-34A-601(6).
- Vary the requirement to wind up the limited liability company's business in a case specified in § 47-34A-801(a)(3) or (4).
- Restrict rights of a person, other than a manager, member, and transferee of a member's distributional interest, under this chapter.
All five limits come from § 47-34A-103.[1.2]
Who decides. The court decides any claim that a term of an operating agreement is manifestly unreasonable.[1.2]
The FormsPal South Dakota LLC operating agreement is a single-member agreement. One member signs it as the sole equity member. Work through the parts below in the order they appear on the form. Page numbers refer to the form.
- Preamble (page 1). Enter the company name, the state of formation, the date and the member who signs. Add the date the initial Articles of Organization were filed and the LLC statute the form refers to. The form prints 2021 as the year, so check that it matches your signing date.
- Sections 1 to 3: name, office and registered agent (page 1). Repeat the company name, then enter the principal business office and the name and address of the registered agent.
- Section 6: Purposes (page 2). Tick one box. Either describe the business in your own words or choose "All matters permitted by applicable law."
- Section 8: Managers (pages 2 to 4). Enter the initial number of Managers. Their names go on Schedule B. On pages 3 and 4, tick one box for Manager compensation.
- Section 9: Officers (page 4). Tick whether the company will have no Officers or will have Officers. If it will, state the role of each.
- Section 15: Fiscal Year (page 6). Enter the date the fiscal year starts and the date it ends.
- Section 30: Effectiveness (page 10). Enter the date the entity was legally formed, which is the date the initial Articles of Organization were filed.
- Signature block (page 11). The member signs on the "By" line and prints a name and title.
- Schedule A: Definitions (page 12). Enter the date of the Articles of Organization in the definition. The rest of the schedule is fixed text.
- Schedule B: Member, Managers and Officers (page 14). List the member's name and address, the initial Managers and, if you chose to have them, the initial Officers.
- Schedule C: Initial capital contribution (page 15). Describe what the member contributed to the company.
Read the finished agreement all the way through before you sign. Keep a signed copy with your company records.
Frequently Asked Questions
The answers below stick to what S.D. Codified Laws §§ 47-34A-101 and 47-34A-103 say about the operating agreement. They do not cover filing the LLC with the state or the other parts of forming a South Dakota LLC.
Can I write my own operating agreement for my LLC?
South Dakota law lets all members of a limited liability company enter into an operating agreement. The agreement can do three things.[1.2]
- Regulate the affairs of the company
- Regulate the conduct of the company's business
- Govern relations among the members, managers, and company
The limits listed above still apply.
Can an LLC operate without an operating agreement?
Whatever an operating agreement does not address, the LLC chapter covers. To the extent the operating agreement does not otherwise provide, the chapter governs relations among the members, managers, and company.[1.2]
Can an LLC with one member have an operating agreement?
Yes. The operating agreement of a limited liability company having only one member is not unenforceable by reason of there being only one person who is a party to the operating agreement.[1.1]
Does an operating agreement have to be in writing?
No. South Dakota law says an operating agreement need not be in writing, so an oral operating agreement can be valid.[1.2] Putting it in writing is still the safer practice, because the members can then point to the same terms.
General information, not legal or tax advice.
Sources
- South Dakota Legislature. South Dakota Codified Laws §§ 47-34A-101 to 47-34A-103.
- 1.1 § 47-34A-101
- 1.2 § 47-34A-103
Published: Apr 13, 2022
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