The five rows below carry the operative statutory language verbatim, each quote pulled from the official code. This page is one state from the full state-by-state reference. Nothing here is legal, tax, or financial advice.
The five-part test in brief
Whether an ABA practice needs a professional entity is a stack of five questions. The licensing act is the gateway, because an unlicensed profession is generally not a professional service and an ordinary entity governs. The professional-entity statute supplies the form and the ownership rule that applies if that form is used. The scope definition decides whether ABA is actually inside that statute. The corporate-practice doctrine, a separate body of law that often lives in the medical practice act or case law rather than the entity statute, is usually what forces licensed ownership and pushes outside capital into a management company. And the fee-splitting and anti-remuneration rules constrain management-fee economics even where ownership is open. The rows below run those five against this state's actual code, quoting the operative language so the position rests on the statute.
South Dakota, provision by provision
South Dakota
Ownership openHolding: a non-licensee may own an ordinary South Dakota LLC that employs licensed behavior analysts. No professional entity is required; the professional-corporation and professional-LLC forms are available but optional; behavior analysts are licensed through the Board of Examiners of Psychologists, so the corporate-practice question routes through psychology rather than medicine, and neither reaches ABA; and management-fee economics are constrained by the Medicaid benefits-fraud statute, which reaches any provider billing the program.
This matters because the entire professional-entity analysis applies only to a licensed profession. South Dakota licenses behavior analysts under the codified laws administered by the Board of Examiners of Psychologists, the same board that licenses psychologists. The placement of the profession under the psychology board, outside the medical framework, is the fact that controls the corporate-practice analysis in axis four, because any doctrine reaching ABA would come through psychology, which carries none, rather than medicine.
South Dakota's professional entities live in the professional-corporation provisions of the codified laws and in the professional-service provisions of the limited-liability-company act. These forms are permissive rather than compulsory: they supply an optional vehicle that a licensed practitioner may elect, and they do not compel a licensed profession into a professional entity or bar an ordinary LLC from employing licensed practitioners.
The scope link decides whether the professional-entity rule actually reaches ABA. South Dakota's professional-corporation law defines the service by reference to a required license, and behavior analysts are licensed by the Board of Examiners of Psychologists, so ABA is a professional service capable of using the elective form. But because the form is optional and no corporate-practice rule compels it, the scope link does not force a professional entity on an ABA practice; it only makes the form available.
The ownership conclusion rests on the absence of any rule forcing licensed ownership, established on two independent grounds. First, the professional-corporation form is elective, an ABA practice that never elects it is never reached by its ownership rules. Second, the corporate-practice doctrine that could otherwise force licensed ownership is physician-specific, rooted in the medical-practice provisions and enforced by the Board of Medical and Osteopathic Examiners, and it reaches physicians. South Dakota licenses behavior analysts through the Board of Examiners of Psychologists, so any doctrine reaching the profession would have to come through psychology, and the psychology framework carries no corporate-practice bar. Neither the entity statute nor any professional doctrine reaches an ABA practice, so a non-licensee may own an ordinary South Dakota LLC that employs licensed behavior analysts.
Open ownership does not mean open economics. South Dakota's profession-specific fee-splitting bars sit in the physician discipline provisions and reach physicians, so the constraint on an ABA practice comes from the medical-assistance remuneration statute and the federal anti-kickback rule, neither of which is physician-specific. The state statute reaches anyone who solicits, receives, offers, or pays anything of value for referring an individual for a service reimbursable under the medical assistance program, and it reaches an ABA practice the moment it bills Medicaid; the federal statute reaches the same practice through Medicaid and Medicare. Together they mean ownership can sit with a non-licensee while the management fee cannot be structured freely. The practical consequence is the same one that governs every open-ownership state: the management fee must be fixed at fair market value for services actually rendered, not set as a share of clinical revenue or keyed to patient volume or referrals, because a percentage-of-revenue fee is precisely what these statutes police.
Reading the five together: ABA is a licensed profession in South Dakota under the Board of Examiners of Psychologists (axis one), the professional-entity forms are elective (axis two), the scope definition makes the form available but not compulsory (axis three), the corporate-practice doctrine reaches medicine only and psychology carries none reaching ABA (axis four), and the only live constraint is the medical-assistance remuneration statute and the federal anti-kickback rule, which police management-fee economics rather than ownership (axis five). Therefore a non-licensee may own an ordinary South Dakota LLC that employs licensed behavior analysts, with the professional-entity forms available but optional.
This entity question sits alongside the other state analyses in the entity decision pillar and the broader ABA compliance knowledge base: how South Dakota handles professional entity formation and management and ownership structures, its licensing regime, the facility and records rules, and its Medicaid enrollment framework each carry part of the picture.
Outlook: how this verdict could change
Likelihood of change: Low. South Dakota licenses behavior analysts through the Board of Examiners of Psychologists and has not moved to restrict ABA ownership or extend a corporate-practice doctrine to the behavioral professions.
What to watch. Any amendment to the behavior-analyst chapter or the psychology or medical practice acts that would extend corporate-practice or ownership restrictions to behavior analysts; none currently does.
Disruption if it changes: Low. A realistic change would add clinical-control or reporting terms rather than compel a new entity form.
Where professional advice is essential, not optional
Verbatim statutory text is a starting point, not a conclusion. Statutes are amended, agencies issue rules that fill them in, and courts interpret them, so the corporate-practice and fee-splitting questions in particular often turn on interpretation rather than the words on the page. Use this page to locate the operative provisions and to speak from the source, then confirm the current text against the official code and engage qualified South Dakota counsel before acting. Nothing here is legal, tax, or financial advice.
The provisions quoted here change and are interpreted by agencies and courts. The official South Dakota code and qualified South Dakota counsel are the authoritative sources. Neither this page nor any secondary source should be relied on in place of direct verification and professional advice.