A South Dakota multi-member LLC operating agreement is an administrative document that regulates the internal affairs of a limited liability company consisting of two (2) or more members. The owners/members of the LLC will decide on the amounts and schedule of capital contributions/distributions, the organization of meetings and voting, and the type of management of the entity.

An operating agreement isn’t a legal requirement and it doesn’t need to be filed with the Secretary of State, but it will help confirm the limited liability status of the company. Drafting an operating agreement will ensure that, for tax purposes and in event of a legal dispute, the owners’ assets are protected.