Title 47, CORPORATIONS

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…

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…

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 …

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…

Each certificate representing scrip shall be conspicuously labeled scrip and shall contain the information required by § 47-1A-625 . Source: SL 2005, ch 239 , § 61.

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…

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…

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…

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…

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…

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…

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…

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…

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…

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…

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…

Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a corporation may authorize the issue of some or all of the shares of any or all of its classes or series without certificates. The authorization does not affect shares already represented…

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…

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…

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…

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.

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 …

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, …

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 § 47-1A-640.1 . If the board of directors does not fix the record date for determining shareholders en…

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…

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…

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.…

Indebtedness of a corporation, including indebtedness issued as a distribution, is not considered a liability for purposes of determinations under § 47-1A-640.1 if its terms provide that payment of principal and interest are made only if and to the extent that payment of a distri…

The provisions of §§ 47-1A-640 to 47-1A-640.4 , inclusive, do not apply to distributions in liquidation under §§ 47-1A-1402 to 47-1A-1501 , inclusive. Source: SL 2005, ch 239 , § 85.

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…

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…

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…

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…

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 …

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…

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…

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…

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…

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…

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…

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…

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…

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…

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…

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…

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…