When you form a South Dakota limited liability company (“LLC”), you will need to decide how your LLC will be managed. The most common form of LLC management is the member-managed LLC where all the members (or owners) participate in running the business.
In South Dakota, A Member-Managed LLC Is The Most Common Choice
Most people who set up an LLC in South Dakota choose member-management, meaning that all the members share responsibility for the day-to-day running of the business. This approach is more common in part because most LLCs are small businesses with limited resources and they don’t require a separate management level to operate. Unlike corporations, LLCs have a streamlined organizational structure, without officers or boards of directors. As such, the LLC form is often chosen by people who want to be directly involved in managing and operating their business.
If you and the other members of your LLC want to run your own business - actually make and sell products, take orders, provide services - then you will probably want a member-management structure for your LLC. For example, if your LLC is a bakery and all your LLC members want to play an active role in the business -- crafting recipes, baking goods, hiring employees, opening and closing the shop -- then you will want to operate the LLC as member-managers.