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South Dakota LLC Formation Requirements

Articles of Organization

In any South Dakota LLC formation process, articles of organization must be signed by at least two persons organizing the LLC and delivered, along with a copy, to the South Dakota Secretary of State, Corporations Division for filing. State law requires that certain information be included in your articles of organization for South Dakota LLC formation procedurally. This information must include:

  • The LLC name
  • The address of the initial designated office
  • The name and street address of the initial agent for service of process
  • The name and address of each organizer
  • The duration of the company if other than perpetual
  • A statement as to whether the company is to be manager-managed, and, if so, the name and address for each initial manager
  • A statement as to whether one or more of the members of the company are to be liable for its debts and obligations

Articles of organization of a limited liability company may not vary the non waivable provisions.

Filing

Your LLC is considered organized once the original articles of organization and one (1) exact or conformed copy is delivered to the Corporations Division of the Secretary of State by one or more persons. The record must be signed in the name of the LLC by:

  • Manager of a manager-managed company;
  • Member of a member-managed company;
  • Person organizing the company, if the company has not been formed;
  • Fiduciary, if the company is in the hands of a receiver, trustee, or other court-appointed fiduciary; or
  • by an attorney-in-fact

The record must also state the name and title (capacity) of the signer.

A certificate of organization will be issued and delivered along with the conformed copy to the representative of the LLC. The original articles of organization will in turn be filed with the Secretary of State along with the month, day and year of filing.

Additionally, South Dakota LLC formation generally requires inclusion and/or considering of the following:

Operating Agreement

Although not required, LLC members may adopt an operating agreement to regulate the internal affairs of the company, including the management of the LLC, which may also be amended and repealed as allowed by the agreement or applicable law.

If any provision of an operating agreement is inconsistent with the articles of organization:

  • The operating agreement controls as to managers, members, and members’ transferees
  • The articles of organization control as to persons, other than managers, members and their transferees, who reasonably rely on the articles to their detriment

Membership

A LLC must have one or more members. Requirements:

  • Minimum Number of Members: One or more
  • Eligibility Requirements: Natural Person or Entity
  • Procedure for Membership: The member may acquire an interest in the LLC either:
    • In proportion to their contribution or
    • Otherwise in accordance with the operating agreement of the company

Resignation of Membership

A member has the power to dissociate from a LLC. However, certain prohibitions exist surrounding the ability of a member to resign from the company.

If the operating agreement does not eliminate the power to dissociate, dissociation is wrongful only if:

  • It is in breach of an express provision of the agreement
  • Before the expiration of the term specified in the articles of organization, if any, the member:
    • Withdraws by express will
    • Is expelled by judicial determination
    • Is dissociated by becoming a debtor in bankruptcy
    • In the case of a member that is an entity and not a natural person, trust other than a business trust, or estate, the member is expelled or otherwise dissociated because it willfully dissolved or terminated its existence

A member who wrongfully dissociates from a limited liability company is liable to the company and to the other members for damages caused by the dissociation. The liability is in addition to any other obligation of the member to the company or to the other members.

Contribution

The contributions of a member to the LLC may consist of tangible or intangible property or other benefit to the company, including money, promissory notes, services performed, or other agreements to contribute cash or property, or contracts for services to be performed.

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