A Limited Liability Company (LLC) is a separate legal entity that can conduct business just like a corporation with many of the advantages of a partnership. It is taxed as a partnership. Its owners are called members and receive income from the LLC just as a partner would. There is no tax on the LLC entity itself. The members are not personally liable for the debts and obligations of the entity like partners would be. Basically, an LLC combines the tax advantages of a partnership with the limited liability feature of a corporation.
An LLC is formed by filing articles of organization with the secretary of state in the same type manner that articles of incorporation are filed. The articles must contain the name, purpose, duration, registered agent, and principle office of the LLC. The name of the LLC must contain the words Limited Liability Company or LLC. An LLC is a separate legal entity like a corporation.
Management of an LLC is vested in its members. An operating agreement is executed by the members and operates much the same way a partnership agreement operates. Profits and losses are shared according to the terms of the operating agreement.
The South Dakota Operating Agreement is a legal document that outlines the operational and financial structure of a Limited Liability Company (LLC) operating in the state of South Dakota, which has adopted the Uniform Limited Liability Company Act (UCLA) and the Revised Uniform Limited Liability Company Act (SULLA). This agreement is specifically designed for LCS and serves as a binding contract between the LLC's members, laying out their rights, responsibilities, and ownership interests. The South Dakota Operating Agreement provides a comprehensive framework for managing the LLC's operations, including provisions related to decision-making, profit distribution, management structure, and member contributions. By detailing these key elements, the agreement helps establish a clear and agreed-upon structure, promoting smooth business operations, and preventing conflicts among the LLC's members. There are different types of South Dakota Operating Agreements within the framework of the UCLA and SULLA, catering to various LLC structures and preferences. Some of these variations include: 1. Single-Member Operating Agreement: This type of agreement is suitable for LCS with only one member or owner. It outlines how the sole member will manage the LLC and make decisions on behalf of the company. 2. Multi-Member Operating Agreement: This agreement is designed for LCS with multiple members. It outlines the rights and responsibilities of each member, their respective capital contributions, and how profits and losses will be shared among them. 3. Manager-Managed Operating Agreement: LCS that prefer to appoint managers to handle the day-to-day operations can use this type of operating agreement. It defines the roles and responsibilities of both the managers and non-manager members, ensuring a clear chain of command within the company. 4. Member-Managed Operating Agreement: This agreement is suitable for LCS where all members are actively involved in the management and decision-making processes. It clarifies the authority and responsibilities of each member, promoting effective collaboration and communication among them. 5. Customized Operating Agreement: LCS may also choose to create a customized operating agreement tailored to their specific needs. This type of agreement may include additional provisions not covered in the standard operating agreements, reflecting the unique circumstances or requirements of the LLC. In summary, the South Dakota Operating Agreement is an essential legal document for LCS operating in South Dakota under the UCLA and SULLA. It provides a comprehensive framework for managing the LLC's operations, ensuring clarity and consensus among members. Different variations of the operating agreement cater to various LLC structures and preferences, such as single-member, multi-member, manager-managed, member-managed, and customized agreements.
