Title 47 — CORPORATIONS

The consideration paid for stock recalled by the cooperative shall be its par value and accrued unpaid dividends, provided that if the book value of such stock is less than the par value, the consideration shall be such book value. The cooperative may set off obligations of the s…

When stock is acquired, recalled, exchanged, or redeemed by the cooperative, such stock is restored to the status of authorized but unissued stock. Source: SDC 1939, § 11.1118 (4) as enacted by SL 1965, ch 23 , § 1.

Stockholders of a cooperative as such have no preemptive right to purchase additional stock. Source: SDC 1939, § 11.1118 (5) as enacted by SL 1965, ch 23 , § 1.

No stock certificate may be issued by a cooperative except upon payment of the par value of the stock it represents. No cooperative shall issue stock or bonds except for money, labor done, or money or property actually received; and all fictitious increase of stock or indebtednes…

Each certificate for stock of a cooperative shall bear the manual or facsimile signature of a principal officer and shall state: (1) The name of the cooperative, the number, par value, and class of the shares represented by the certificate, and whether or not it is membership sto…

A subscription for stock of a cooperative is irrevocable for six months unless otherwise provided by the subscription agreement or unless all subscribers consent to the revocation. Source: SDC 1939, § 11.1120 as enacted by SL 1965, ch 23 , § 1.

Special member meetings of a cooperative may be called by the president, board of directors, or members having one - fifth of the votes entitled to be cast at such meeting. Source: SDC 1939, § 11.1115 (3) as enacted by SL 1965, ch 23 , § 1.

Except for debts lawfully contracted between the member and the cooperative, no member or patron is liable for the debts of the cooperative to an amount exceeding the sum remaining unpaid on his subscription for shares of the cooperative, and the sum unpaid on such members member…

When a security issued by a cooperative is missing, the cooperative shall issue a duplicate security if the owner so requests and furnishes an indemnity acceptable to the cooperative. Source: SDC 1939, § 11.1121 (1) as enacted by SL 1965, ch 23 , § 1.

If records of a cooperative showing ownership of securities or apportionment of equity interest in the assets are missing and the information contained in such records is necessary to a proposed redemption of the interest, the cooperative may give notice and redeem as follows: (1…

A cooperative is not liable for acting upon wrongful transfers of its securities unless it has notice that the certificate was not transferred by a proper person or has notice that the transfer was wrongful. Source: SDC 1939, § 11.1122 (1) as enacted by SL 1965, ch 23 , § 1.

As used in § 47-16-33 : (1) "Proper person" means the registered owner or last prior transferee, whether or not described as fiduciary for another, or his authorized agent, legal representative, or successor to his interest by operation of law; (2) "Transfer" includes a redemptio…

No action may be instituted or maintained in the right of any association by a member or stockholder unless he alleges in his complaint that he was a member or registered stockholder when any part of the transaction of which he complains took place, or that his stock thereafter d…

No action may be instituted or maintained in the right of any association by any member or stockholder unless he alleges in his complaint with particularity his efforts to secure from the board of directors such action as he desires. He shall allege further that he has either inf…

An action instituted or maintained in the right of any association by any member or stockholder shall not be dismissed or compromised without the approval of the court. Source: SDC 1939, § 11.1153 (2) as enacted by SL 1965, ch 23 , § 1.

If anything is recovered or obtained as the result of an action instituted or maintained in the right of any association by any member or stockholder, whether by means of compromise and settlement or by a judgment, the court may, out of the proceeds of the action, award the plain…

In any action brought in the right of a cooperative by less than three percent of the members or by holders of less than three percent of any class of stock outstanding, the defendants may require the plaintiff to give security for the reasonable expenses of defending such action…

Unless the articles of incorporation or bylaws provide otherwise, the board of directors shall provide that member meetings of a cooperative are held at the principal office or such other place or by means of communication as the board of directors may determine. Unless the artic…

At least once annually the directors of a cooperative shall determine and distribute net proceeds as provided by §§ 47-16-41 to 47-16-53 , inclusive. Source: SDC 1939, § 11.1131 as enacted by SL 1965, ch 23 , § 1.

In determining net proceeds of a cooperative, there shall be deducted from total proceeds: (1) All operating expenses and costs; (2) The cost of supplies, commodities, equipment, and other property or services procured or sold for patrons; (3) The cost of services performed for p…

After the deductions required by § 47-16-41 , the remainder of the total proceeds of a cooperative are net proceeds and shall be distributed and paid as provided by §§ 47-16-44 and

47-16-44 Payments to employees. 47-16-45 Dividends on capital stock--Conditions to payment. 47-16-46 Distributions to patrons. 47-16-47 Creation of reserves--Credit to patrons. 47-16-48 Ratio of patronage as determining payment to patron. 47-16-49 Classification of patrons. 47-16…

A share of the net proceeds of a cooperative may be set aside for or paid to employees. Such amount shall for all purposes except the computation of net proceeds be deemed an expense of operation of the cooperative. Source: SDC 1939, § 11.1131 (2) (b) as enacted by SL 1965, ch 23…

In a cooperative organized with capital stock such dividend from net proceeds may be paid upon capital stock as is authorized by the articles. No dividend may be paid if the capital is impaired or if payment of such dividend would result in an impairment of capital. Source: SDC 1…

Unless the articles or bylaws of a cooperative otherwise expressly provide, none of the remainder of the net proceeds after distributions and payments pursuant to §§ 47-16-44 and 47-16-45 shall constitute income of the cooperative but all thereof shall be distributed and paid to …

Reasonable reserves for necessary purposes may be created by a cooperative, which shall be credited to patrons in accordance with the ratio which their patronage bears to total patronage. Source: SDC 1939, § 11.1131 (3) (a) as enacted by SL 1965, ch 23 , § 1.

All the remainder of the net proceeds of a cooperative after reserves created pursuant to § 47-16-47 shall be distributed and paid to patrons in accordance with the ratio which their patronage bears to total patronage. Source: SDC 1939, § 11.1131 (3) (b) as enacted by SL 1965, ch…

There shall be no distinction between the persons entitled to reserves and distributions under §§ 47-16-47 and 47-16-48 , but such reserves and distribution may be based upon business done with particular departments or in particular commodities, supplies, or services, or upon cl…

Written notice of a membership meeting of a cooperative, stating the place, day, and hour, and, in case of a special member meeting the purposes for which the meeting is called, shall be given no fewer than ten nor more than sixty days before the meeting, at the direction of the …

If the articles or bylaws of a cooperative so provide, any of the net proceeds may be credited to allocated or unallocated surplus or reserves of the cooperative. Source: SDC 1939, § 11.1131 (4) (a) as enacted by SL 1965, ch 23 , § 1.

If the articles or bylaws of a cooperative so provide, none of the remainder of the net proceeds after credits pursuant to § 47-16-50 shall constitute income to the cooperative, but all thereof shall be distributed and paid in accordance with the ratio which individual patronage …

The distribution and payment of net proceeds of a cooperative under §§ 47-16-46 to 47-16-51 , inclusive, may be in cash, credits, stock, certificates or interest, revolving fund certificates, letters of advice, or other certificates or securities of the cooperative or of other as…

All or any part of the net proceeds of a cooperative may be applied to losses incurred in prior years, and the bylaws may also include any reasonable provisions for the apportionment of losses. Source: SDC 1939, § 11.1131 (6) as enacted by SL 1965, ch 23 , § 1.

Any share of corporate stock membership, credit, dividend, profit, patronage refund, distribution, interest, payment, or other money or property right held by a cooperative for, or owing by it to, a member, stockholder, or participating patron, or other person or persons entitled…

A motion or resolution may be passed or adopted by the board of directors of a cooperative declaring the forfeiture of any money or property described in § 47-16-54 unless the same is claimed by the person or persons entitled thereto within six months after notice of such forfeit…

If the name and address of any person entitled to receive the money or property mentioned in § 47-16-54 is shown on the records of the cooperative, and the money or property is of the value of fifty dollars or more, a notice shall be mailed or electronically transmitted to each p…

If the name or address of any person entitled to receive the money or property described in § 47-16-54 is not shown upon the records of the cooperative, or if the name or address is known by the cooperative's secretary to be incorrect, then the cooperative shall publish a notice …

Sections 47-16-54 to 47-16-57 , inclusive, apply to all money or property described in § 47-16-54 , payment or delivery of which was authorized either before or after July 1, 1965. Source: SDC 1939, § 11.1132 (4) as enacted by SL 1965, ch 23 , § 1.

Notwithstanding the forfeiture of any money or property as provided in §§ 47-16-54 to 47-16-58 , inclusive, the board of directors, in its discretion, at any time after such forfeiture, may authorize the payment of any such money, or delivery of any such property, to the person o…

At any meeting of a cooperative at which members are to be represented by delegates, notice to such members may be given by notifying such delegates and their alternates. Notice may consist of a notice to all members or may be in the form of an announcement at the meeting at whic…

A person who files, or causes to be filed, a document required to be filed by this chapter, which he knows to be materially false in any respect, is guilty of a Class 6 felony. Source: SL 1983, ch 15 , § 38.

Cooperatives organized pursuant to chapters 47-15 and 47-21 shall report to the administrator all sums forfeited pursuant to procedures as provided in §§ 47-16-54 to 47-16-59 , inclusive. A municipally owned utility which provides for forfeiture of unclaimed property by ordinance…

A quorum at a member meeting of a cooperative shall be ten percent of the first one hundred members plus five percent of additional members, present or represented by delegate. Unless the bylaws fix a larger number of members to constitute a quorum, a quorum may never be more tha…

Action without a membership meeting may be taken by a cooperative pursuant to §

Any action which may be taken at a member meeting of a cooperative, may be taken without a meeting if a writing setting forth and approving the action taken shall be signed by a majority of the members entitled to vote on such action. In such cases, such consent shall have the sa…

The business and affairs of a cooperative shall be managed by a board of directors. Each director shall be a member or a representative of a member who is an entity member. The bylaws shall prescribe any other qualifications for directors and may provide that directors be from sp…

A signed waiver of notice of a meeting of the board of directors of a cooperative is equivalent to personal notice to the individual signing the waiver. Attendance at a meeting is a waiver of notice of the meeting, except when a director attends the meeting and objects to the tra…

Unless the bylaws of a cooperative provide otherwise, the purposes of any meeting of the board of directors need not be specified in the notice or waiver of notice of such meeting. Source: SDC 1939, § 11.1124 (4) as enacted by SL 1965, ch 23 , § 1.

If the bylaws of a cooperative so provide, the board of directors may elect an executive committee to consist of three or more directors. When the board is not in session, such committee shall have all powers of the board except in respect to: (1) Powers reserved by the board to …

Any action which may be taken at a meeting of the directors or executive committee of a cooperative may be taken without a meeting if a writing setting forth and approving the action taken shall be signed by all of the directors or executive committee members entitled to vote on …