Title 47 — CORPORATIONS
51 chapters · 1,570 sections in this title.
SDCL § 47-1A-601.1 Classes or series of shares articles of incorporation required to authorize
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The articles of incorporation shall authorize: (1) One or more classes or series of shares that together have unlimited voting rights; and (2) One or more classes or series of shares, which may be the same class or classes as those with voting rights, that together are entitled t…
SDCL § 47-1A-601.2 Classes or series of shares articles of incorporation may authorize
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The articles of incorporation may authorize one or more classes or series of shares that: (1) Have special, conditional, or limited voting rights, or no right to vote, except to the extent otherwise provided by this chapter; (2) Are redeemable or convertible as specified in the a…
SDCL § 47-1A-602 Classification or reclassification of unissued shares determined by board of directors
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If the articles of incorporation so provide, the board of directors, without shareholder approval, may: (1) Classify any unissued shares into one or more classes or into one or more series within a class; (2) Reclassify any unissued shares of any class into one or more classes or…
SDCL § 47-1A-602.1 Terms of class or series determined by board of directors
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If the board of directors acts pursuant to § 47-1A-602 , the board shall determine the terms, including the preferences, rights, and limitations, to the same extent permitted under §§ 47-1A-601 to 47-1A-601.2 , inclusive, of: (1) Any class of shares before the issuance of any sha…
SDCL § 47-1A-603 Issuance of shares--Outstanding until reacquired, redeemed, converted, or cancelled
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A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted, or cancelled. The reacquisition, redemption, or conversion of outstandin…
SDCL § 47-1A-603.1 Outstanding shares--Shares with unlimited voting rights and entitled to receipt of net assets upon dissolution required
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At all times that shares of the corporation are outstanding, one or more shares that together have unlimited voting rights and one or more shares that together are entitled to receive the net assets of the corporation upon dissolution must be outstanding. Source: SL 2005, ch 239 …
SDCL § 47-1A-604 Fractional shares--Scrip
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A corporation may: (1) Issue fractions of a share or pay in money the value of fractions of a share; (2) Arrange for disposition of fractional shares by the shareholders; (3) Issue scrip in registered or bearer form entitling the holder to receive a full share upon surrendering e…
SDCL § 47-1A-604.1 Scrip--Label on certificate--Information
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Each certificate representing scrip shall be conspicuously labeled scrip and shall contain the information required by §
SDCL § 47-1A-604.2 Rights of holder of fractional share--Scrip
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The holder of a fractional share is entitled to exercise the rights of a shareholder, including the right to vote, to receive dividends, and to participate in the assets of the corporation upon liquidation. The holder of scrip is not entitled to any of these rights unless the scr…
SDCL § 47-1A-604.3 Issuance of script--Authorization by board of directors--Conditions
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The board of directors may authorize the issuance of scrip subject to any condition considered desirable, including: (1) That the scrip will become void if not exchanged for full shares before a specified date; and (2) That the shares for which the scrip is exchangeable may be so…
SDCL § 47-1A-620 Subscription for shares before incorporation
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A subscription for shares entered into before incorporation is irrevocable for six months unless the subscription agreement provides a longer or shorter period or all the subscribers agree to revocation. The board of directors may determine the payment terms of subscription for s…
SDCL § 47-1A-621 Issuance of shares by board of directors--Powers reserved to shareholders
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The powers granted in this section to the board of directors may be reserved to the shareholders by the articles of incorporation. No corporation may issue stocks or bonds except for money, labor done, or money or property, tangible or intangible, actually received. Before the co…
SDCL § 47-1A-621.1 Issuance of shares requiring approval of shareholders
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An issuance of shares or other securities convertible into or rights exercisable for shares, in a transaction or a series of integrated transactions, requires approval of the shareholders, at a meeting at which a quorum consisting of at least a majority of the votes entitled to b…
SDCL § 47-1A-622 Liability of shareholders
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A purchaser from a corporation of its own shares is not liable to the corporation or its creditors with respect to the shares except to pay the consideration for which the shares were authorized to be issued or specified in the subscription agreement. Unless otherwise provided in…
SDCL § 47-1A-623 Share dividends
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Unless the articles of incorporation provide otherwise, shares may be issued pro rata and without consideration to the corporation's shareholders or to the shareholders of one or more classes or series. An issuance of shares under this section is a share dividend. Shares of one c…
SDCL § 47-1A-624 Share options
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A corporation may issue rights, options, or warrants for the purchase of shares or other securities of the corporation. The board of directors shall determine the terms upon which the rights, options, or warrants are issued, and the terms, including the consideration, for which t…
SDCL § 47-1A-625 Form and content of certificates generally
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Shares may but need not be represented by certificates. Unless this chapter or another statute expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates. At a minimum each share certificate s…
SDCL § 47-1A-625.1 Certificate requirements when corporation authorized to issue different classes of shares or different series within a class
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If the issuing corporation is authorized to issue different classes of shares or different series within a class, the designations, relative rights, preferences, and limitations applicable to each class and the variations in rights, preferences, and limitations determined for eac…
SDCL § 47-1A-625.2 Signatures on certificate--Seal
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Each share certificate shall be signed, either manually or in facsimile, by two officers designated in the bylaws or by the board of directors and may bear the corporate seal or its facsimile. If the person who signed a share certificate no longer holds office when the certificat…
SDCL § 47-1A-626 If, at the time of the agreement, the corporation has shares outstanding represented by certificates, the corporation shall recall the outstanding certificates and issue substitute certificates that comply with this section
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The failure to note the existence of the agreement on the certificate or information statement does not affect the validity of the agreement or any action taken pursuant to it. Any purchaser of shares who, at the time of purchase, did not have knowledge of the existence of the ag…
SDCL § 47-1A-627 Restriction on transfer of shares or registration of transfer of shares in articles, bylaws, or agreements--Effect on shares
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The articles of incorporation, bylaws, an agreement among shareholders, or an agreement between shareholders and the corporation may impose restrictions on the transfer or registration of transfer of shares of the corporation. A restriction does not affect shares issued before th…
SDCL § 47-1A-627.1 Purposes for which restriction on transfer of shares and registration of transfer of shares authorized--Validity and enforceability of restriction
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A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transferee of the holder if the restriction is authorized by this section and its existence is noted conspicuously on the front or back of the certificate or is co…
SDCL § 47-1A-627.2 Terms of restriction on transfer or registration of transfer of shares
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A restriction on the transfer or registration of transfer of shares may: (1) Obligate the shareholder first to offer the corporation or other persons, separately, consecutively, or simultaneously, an opportunity to acquire the restricted shares; (2) Obligate the corporation or ot…
SDCL § 47-1A-628 Expense of issue
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A corporation may pay the expenses of selling or underwriting its shares, and of organizing or reorganizing the corporation, from the consideration received for shares. Source: SL 2005, ch 239 , § 77.
SDCL § 47-1A-630 Shareholders' preemptive rights
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The shareholders of a corporation have the preemptive right to acquire unissued or treasury shares of a corporation, except, to the extent, if any, that such right is limited or denied in the articles of incorporation. Having preemptive rights means that the following provisions …
SDCL § 47-1A-631 Corporation's acquisition of its own shares
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A corporation may acquire its own shares, and shares so acquired constitute authorized but unissued shares. If the articles of incorporation prohibit the reissue of the acquired shares, the number of authorized shares is reduced by the number of shares acquired. Source: SL 2005, …
SDCL § 47-1A-640 Distributions to shareholders authorized--Distribution entitlement date
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A board of directors may authorize, and the corporation may make, distributions to its shareholders subject to restriction by the articles of incorporation and the limitation in §
SDCL § 47-1A-640.1 Distribution to shareholders prohibited if certain financial conditions result
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No distribution may be made if, after giving it effect: (1) The corporation would not be able to pay its debts as they become due in the usual course of business; or (2) The corporation's total assets would be less than the sum of its total liabilities plus, unless the articles o…
SDCL § 47-1A-640.2 Factors used to measure effect of distribution
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Except as provided in § 47-1A-640.4 , the effect of a distribution under § 47-1A-640.1 is measured: (1) In the case of distribution by purchase, redemption, or other acquisition of the corporation's shares, as of the earlier of the date money or other property is transferred or d…
SDCL § 47-1A-640.3 Indebtedness to shareholder by reason of distribution at parity with indebtedness to general unsecured creditor
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A corporation's indebtedness to a shareholder incurred by reason of a distribution made in accordance with §§ 47-1A-640 to 47-1A-640.5 , inclusive, is at parity with the corporation's indebtedness to its general, unsecured creditors except to the extent subordinated by agreement.…
SDCL § 47-1A-640.4 47-1A-701 Annual meeting
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47-1A-702 Special meeting. 47-1A-703 Court-ordered meeting. 47-1A-704 Action without meeting. 47-1A-704.1 Notice to nonvoting shareholders of action to be taken by unanimous consent of voting shareholders. 47-1A-705 Notice of meeting. 47-1A-706 Waiver of notice. 47-1A-707 Record …
SDCL § 47-1A-640.5 SDCL 47-1A-640.5
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Application of provisions in §§ 47-1A-640 to
SDCL § 47-1A-701 Annual meeting
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A corporation shall hold a meeting of shareholders annually at a time stated in or fixed in accordance with the bylaws. Annual shareholders' meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated in or fix…
SDCL § 47-1A-702 Special meeting
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A corporation shall hold a special meeting of shareholders: (1) On call of its board of directors or any persons authorized to do so by the articles of incorporation or bylaws; or (2) If the holders of at least ten percent of all the votes entitled to be cast on an issue proposed…
SDCL § 47-1A-703 Court-ordered meeting
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The circuit court of the county where a corporation's principal office is located in this state, or, if none in this state, the circuit court of Hughes County, may summarily order a meeting to be held: (1) On application of any shareholder of the corporation entitled to participa…
SDCL § 47-1A-704 Action without meeting
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Action required or permitted by this chapter to be taken at a shareholders' meeting may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action. The action shall be evidenced by one or more written consents describing the action ta…
SDCL § 47-1A-704.1 Notice to nonvoting shareholders of action to be taken by unanimous consent of voting shareholders
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If this chapter requires that notice of proposed action be given to nonvoting shareholders and the action is to be taken by unanimous consent of the voting shareholders, the corporation shall give its nonvoting shareholders written notice of the proposed action at least ten days …
SDCL § 47-1A-705 Notice of meeting
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Except for the increase of stock and indebtedness when sixty days' notice is required by S.D. Const., Art. XVII, § 8, a corporation shall notify shareholders of the date, time, and place of each annual and special shareholders' meeting no fewer than ten nor more than sixty days b…
SDCL § 47-1A-706 Waiver of notice
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A shareholder may waive any notice required by this chapter, the articles of incorporation, or bylaws before or after the date and time stated in the notice. The waiver shall be in writing, shall be signed by the shareholder entitled to the notice, and shall be delivered to the c…
SDCL § 47-1A-707 Record date
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The bylaws may fix or provide the manner of fixing the record date for one or more voting groups in order to determine the shareholders entitled to notice of a shareholders' meeting, to demand a special meeting, to vote, or to take any other action. If the bylaws do not fix or pr…
SDCL § 47-1A-708 Conduct of the meeting
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At each meeting of shareholders, a chair shall preside. The chair shall be appointed as provided in the bylaws or, in the absence of such provision, by the board. The chair, unless the articles of incorporation or bylaws provide otherwise, shall determine the order of business an…
SDCL § 47-1A-709 Shareholders' meeting--Remote communication--Requirements
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If authorized by the board of directors in its sole discretion and subject to any guidelines and procedures adopted by the board of directors, shareholders and proxies of shareholders not physically present at a meeting of shareholders may participate in the meeting by means of r…
SDCL § 47-1A-720 Shareholders' list for meeting
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After fixing a record date for a meeting, a corporation shall prepare an alphabetical list of the names of all its shareholders who are entitled to notice of a shareholders' meeting. The list shall be arranged by voting group, and within each voting group by class or series of sh…
SDCL § 47-1A-721 Voting entitlement of shares
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Except as provided in §§ 47-1A-721.1 and 47-1A-721.2 or unless the articles of incorporation provide otherwise, each outstanding share, regardless of class, is entitled to one vote on each matter voted on at a shareholders' meeting. Only shares are entitled to vote. Source: SL 20…
SDCL § 47-1A-721.1 Limitation on voting entitlement of shares when owned by a second corporation--Shares held in fiduciary capacity
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Absent special circumstances, the shares of a corporation are not entitled to vote if they are owned, directly or indirectly, by a second corporation, domestic or foreign, and the first corporation owns, directly or indirectly, a majority of the shares entitled to vote for direct…
SDCL § 47-1A-721.2 Voting entitlement of redeemable shares
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Redeemable shares are not entitled to vote after notice of redemption is mailed to the holders and a sum sufficient to redeem the shares has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption…
SDCL § 47-1A-722 Voting shares in person or by proxy--Appointment of proxy
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A shareholder may vote the shareholder's shares in person or by proxy. Any shareholder or the shareholder's agent or attorney-in-fact may appoint a proxy to vote or otherwise act for the shareholder by signing an appointment form, or by an electronic transmission. An electronic t…
SDCL § 47-1A-722.1 Effective date and duration of appointment of proxy
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An appointment of a proxy is effective when a signed appointment form or an electronic transmission of the appointment is received by the inspector of election or the officer or agent of the corporation authorized to tabulate votes. An appointment is valid for eleven months unles…
SDCL § 47-1A-722.2 Appointment of proxy revocable--Exception
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An appointment of a proxy is revocable unless the appointment form or electronic transmission states that it is irrevocable and the appointment is coupled with an interest. Appointments coupled with an interest include the appointment of: (1) A pledgee; (2) A person who purchased…
SDCL § 47-1A-722.3 Death or incapacity of shareholder appointing proxy
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The death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy…