What is the advantage of electing S-Corporation status for your South Dakota LLC?

The primary advantage for a South Dakota limited liability company (LLC) to elect S-Corporation status involves the self-employment tax.  An S-Corporation's officers/shareholders who provide more than minimal services to the LLC and receive (or are entitled to receive) compensation are subject to the self-employment tax.  These payments are considered wages.  On the other hand, non-wage compensation (deriving from dividends or distributions) is not subject to the self-employment tax.