NONPROFIT CORPORATIONS--MEMBERS, DIRECTORS, OFFICERS AND AGENTS

SDCL tit. 47, ch. 47-23

in effect

SDCL § 47-23-1 Classes of members--Corporations without members--Articles of incorporation as governing--Certificates of membership.

47-23-1. Classes of members--Corporations without members--Articles of incorporation as governing--Certificates of membership. A corporation may have one or more classes of members or may have no members. If the corporation has one or more classes of members, the designation of such class or classes and the qualifications and rights of the members of each class shall be set forth in the articles of incorporation or by the bylaws. A corporation may issue certificates evidencing membership therein. SL 1965, ch 24, § 12.

SDCL § 47-23-2 Exoneration from personal liability.

47-23-2. Exoneration from personal liability. The directors, officers, employees, and members of the corporation shall not, as such, be liable on its obligations. SDC 1939, § 11.1406; SL 1965, ch 24, § 12.

SDCL § 47-23-2.1 Liability of director, trustee, committee member, or officer serving without compensation.

47-23-2.1. Liability of director, trustee, committee member, or officer serving without compensation. No director, trustee, committee member, or officer serving without compensation, other than reimbursement for actual expenses, of any corporation organized under this chapter or under similar laws of another state, or any hospital organized pursuant to chapter 34-8, 34-9, or 34-10 is liable, and no cause of action may be brought, for damages resulting from the exercise of judgment or discretion in connection with the duties or responsibilities of such director, trustee, committee member, or officer while acting in an official capacity as such director, trustee, committee member, or officer, unless the act or omission involved willful or wanton misconduct. The immunity provided by this section applies to any member of an advisory board, serving without compensation, other than reimbursement for actual expenses, of any corporation described by this section. SL 1987, ch 343, § 1; SL 2006, ch 230, § 1; SL 2016, ch 221, § 5.

SDCL § 47-23-3 Members' meetings--Time and place.

47-23-3. Members' meetings--Time and place. Meetings of members of a corporation may be held via electronic communication or at such place, either within or without this state, as may be provided in the articles or bylaws. In the absence of any such provision, all meetings shall be held at the registered office of the corporation in this state, unless a special meeting is called and held electronically pursuant to § 47-23-5. SDC 1939, §§ 11.1301, 11.1408; SL 1965, ch 24, § 15; SL 2021, ch 195, § 2, eff. Mar. 3, 2021.

SDCL § 47-23-4 Annual members' meeting--Time and place--Failure to hold meeting.

47-23-4. Annual members' meeting--Time and place--Failure to hold meeting. An annual meeting of the members of a corporation shall be held at such time as may be provided in the bylaws. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the corporation. The articles of incorporation or bylaws may provide that an annual or regular meeting of members does not need to be held at a geographic location and may instead be held by any means of electronic communication which allows the members to read or hear the proceedings substantially concurrently with their occurrence, vote on matters submitted to the members, pose questions, and make comments. SL 1965, ch 24, § 15; SL 2016, ch 221, § 6.

SDCL § 47-23-5 Special meetings--Electronic communication.

47-23-5. Special meetings--Electronic communication. Special meetings of the members of a corporation may be called by the president or by the board of directors. Special meetings of the members may also be called by such other officers or persons or number or proportion of members as may be provided in the articles of incorporation or the bylaws. In the absence of a provision fixing the number or proportion of members entitled to call a meeting, a special meeting of members may be called by members having one-twentieth of the votes entitled to be cast at such meeting. The call of a special meeting may provide that the meeting be held by any means of electronic communication that allows the members to: (1) Substantially see or hear the proceedings concurrently with their occurrence; (2) Vote on matters submitted to the members; and (3) Pose questions and make comments. SL 1965, ch 24, § 15; SL 2021, ch 195, § 3, eff. Mar. 3, 2021.

SDCL § 47-23-6 Taking action without meeting--Written consent--Effect of written consent.

47-23-6. Taking action without meeting--Written consent--Effect of written consent. Any action required by chapters 47-22 to 47-28, inclusive, to be taken at a meeting of the members or directors of a corporation, or any action which may be taken at a meeting of the members or directors or of a committee of directors, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all the members entitled to vote with respect to the subject matter thereof, or all of the directors, or all of the members of the committee of directors, as the case may be. If permitted in the articles of incorporation or the bylaws, such consent and signature may be transmitted by any reasonable means including, but not limited to, traditional mail, hand delivery, email, or electronic facsimile. Such consent shall have the same force and effect as a unanimous vote, and may be stated as such in any articles or document filed with the secretary of state under chapters 47-22 to 47-28, inclusive. SL 1965, ch 24, § 97; SL 2016, ch 221, § 7.

SDCL § 47-23-7 Notice to members of meeting--Manner of giving notice.

47-23-7. Notice to members of meeting--Manner of giving notice. Unless otherwise provided in the articles of incorporation or the bylaws, written notice stating the place, day, and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten nor more than fifty days before the date of the meeting, either personally or by mail, by or at the direction of the president, or the secretary, or the officers or persons calling the meeting, to each member entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the member at his address as it appears on the records of the corporation, with postage thereon prepaid. If permitted in the articles of incorporation or the bylaws, notice of meetings may be given by any reasonable means including, but not limited to, traditional mail, hand delivery, email, or electronic facsimile. SL 1965, ch 24, § 16; SL 2016, ch 221, § 8.

SDCL § 47-23-8 Articles or bylaws as limiting right to vote--Vote in absence of limitation provision.

47-23-8. Articles or bylaws as limiting right to vote--Vote in absence of limitation provision. The right of the members, or any class or classes of members, to vote may be limited, enlarged, or denied to the extent specified in the articles of incorporation or the bylaws. Unless so limited, enlarged, or denied, each member, regardless of class, shall be entitled to one vote on each matter submitted to a vote of members. SL 1965, ch 24, § 17.

SDCL § 47-23-9 Voting procedure--Proxy votes--Ballots.

47-23-9. Voting procedure--Proxy votes--Ballots. A member entitled to vote may vote in person or, unless the articles of incorporation or the bylaws otherwise provide, may vote by proxy executed in writing by the member or by his duly authorized attorney in fact. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy. Except as otherwise provided in the articles of incorporation or bylaws, any action that may be taken at any annual, regular, or special meeting of members may be taken without a meeting if the corporation delivers a ballot to every member entitled to vote on the matter. Each ballot must: (1) Set forth each proposed action; (2) Provide an opportunity to vote for or against, or withhold a vote for, each proposed action; (3) Be delivered to each member by any means of transmission set forth in the bylaws or articles of incorporation. If no method is set forth in the bylaws or articles of incorporation, ballots may be delivered by any reasonable means, including, but not limited to, traditional mail, hand delivery, email, or electronic facsimile; (4) Indicate the number of responses needed to meet the quorum requirements; (5) State the percentage of approvals necessary to approve each matter other than election of directors; and (6) Specify the time by which a ballot must be received in order to be counted. Unless otherwise provided in the articles of incorporation or bylaws, approval by ballot, pursuant to this section, of action other than election of directors is valid only when the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot. Except as otherwise provided in the articles of incorporation or bylaws, a ballot may not be revoked. SL 1965, ch 24, § 17; SL 2016, ch 221, § 9.

SDCL § 47-23-10 Cumulative voting for directors.

47-23-10. Cumulative voting for directors. The articles of incorporation or the bylaws may provide that in all elections for directors every member entitled to vote shall have the right to cast the whole number of his votes for one candidate or distribute them upon two or more candidates, as he may prefer. SL 1965, ch 24, § 17.

SDCL § 47-23-11 Corporations without members entitled to vote--Powers of directors.

47-23-11. Corporations without members entitled to vote--Powers of directors. If a corporation has no members or its members have no right to vote, the directors shall have the sole voting power. SL 1965, ch 24, § 17.

SDCL § 47-23-12 Bylaw provisions governing vote or quorum--Quorum in absence of bylaw provision--Majority vote required.

47-23-12. Bylaw provisions governing vote or quorum--Quorum in absence of bylaw provision--Majority vote required. The bylaws may provide the number or percentage of members entitled to vote represented in person or by proxy, or the number or percentage of votes represented in person or by proxy, which shall constitute a quorum at a meeting of members. In the absence of any such provision, members holding one-tenth of the votes entitled to be cast on the matter to be voted upon represented in person or by proxy shall constitute a quorum. A majority of the votes entitled to be cast on a matter to be voted upon by the members present or represented by proxy at a meeting at which a quorum is present shall be necessary for the adoption thereof unless a greater proportion is required by chapters 47-22 to 47-28, inclusive, the articles of incorporation or the bylaws. SL 1965, ch 24, § 18.

SDCL § 47-23-13 Board of directors--Qualifications of directors.

47-23-13. Board of directors--Qualifications of directors. Except as authorized by § 47-23-22, the affairs of a corporation shall be managed by a board of directors. Directors need not be members of the corporation unless the articles of incorporation or the bylaws so require. The articles of incorporation or the bylaws may prescribe other qualifications for directors. SL 1965, ch 24, § 19; SL 1989, ch 394, § 1; SL 2016, ch 221, § 10.

SDCL § 47-23-14 Number of directors--Bylaws as governing--Increasing or decreasing number of directors--Decrease as not affecting term.

47-23-14. Number of directors--Bylaws as governing--Increasing or decreasing number of directors--Decrease as not affecting term. The number of directors of a corporation shall not be less than three. Subject to such limitation, the number of directors shall be fixed by the bylaws, except as to the number of the first board of directors which number shall be fixed by the articles of incorporation. The number of directors may be increased or decreased from time to time by amendment to the bylaws, unless the articles of incorporation provide that a change in the number of directors shall be made only by amendment of the articles of incorporation. No decrease in number shall have the effect of shortening the term of any incumbent director. In the absence of a bylaw fixing the number of directors, the number shall be the same as that stated in the articles of incorporation. SL 1965, ch 24, § 20.

SDCL § 47-23-15 First board of directors--Term of office.

47-23-15. First board of directors--Term of office. The directors constituting the first board of directors shall be named in the articles of incorporation and shall hold office until the first annual election of directors or for such other period as may be specified in the articles of incorporation or the bylaws. SL 1965, ch 24, § 20.

SDCL § 47-23-16 Election or appointment of directors--Term of office.

47-23-16. Election or appointment of directors--Term of office. Directors after the first board shall be elected or appointed in the manner and for the terms provided in the articles of incorporation or the bylaws. In the absence of a provision fixing the term of office, the term of office of a director shall be one year. SL 1965, ch 24, § 20.

SDCL § 47-23-17 Classes of directors--Term of office.

47-23-17. Classes of directors--Term of office. Directors may be divided into classes and the terms of office of the several classes need not be uniform. Each director shall hold office for the term for which he is elected or appointed and until his successor shall have been elected or appointed and qualified. SL 1965, ch 24, § 20.

SDCL § 47-23-18 Removal of directors.

47-23-18. Removal of directors. A director may be removed from office pursuant to any procedure therefor provided in the articles of incorporation. SL 1965, ch 24, § 20.

SDCL § 47-23-19 Vacancy on board of directors--Filling by majority vote of remaining directors--Term of office.

47-23-19. Vacancy on board of directors--Filling by majority vote of remaining directors--Term of office. Any vacancy occurring in the board of directors and any directorship to be filled by reason of an increase in the number of directors may be filled by the affirmative vote of a majority of the remaining directors, though less than a quorum of the board of directors, unless the articles of incorporation or the bylaws provide that a vacancy or directorship so created shall be filled in some other manner, in which case such provision shall control. A director elected or appointed, as the case may be, to fill a vacancy shall be elected or appointed for the unexpired term of his predecessor in office. Any directorship to be filled by reason of an increase in the number of directors may be filled by the board of directors for a term of office continuing only until the next election of directors. SL 1965, ch 24, § 21.

SDCL § 47-23-20 Quorum of directors--Provisions of articles or bylaws as governing.

47-23-20. Quorum of directors--Provisions of articles or bylaws as governing. A majority of the number of directors fixed by the bylaws, or in the absence of a bylaw fixing the number of directors, then of the number stated in the articles of incorporation, shall constitute a quorum for the transaction of business, unless otherwise provided in the articles of incorporation or the bylaws; but in no event shall a quorum consist of less than one-third of the number of directors so fixed or stated. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors, unless the act of a greater number is required by chapters 47-22 to 47-28, inclusive, the articles of incorporation or the bylaws. SL 1965, ch 24, § 22.

SDCL § 47-23-21 Meetings by teleconference.

47-23-21. Meetings by teleconference. Meetings of the board of directors, regular or special, may be held either within or without this state, and upon such notice as the bylaws may prescribe. Attendance of a director at any meeting shall constitute a waiver of notice of such meeting except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting. Unless restricted by the articles of incorporation or bylaws, members of the board of directors or any committee designated by the board of directors may participate in a meeting of such board or committee by means of teleconference or similar communications equipment which allows all persons participating in the meeting to hear each other at the same time. Participation by a board or committee member in a teleconference constitutes presence in person at a meeting. SL 1965, ch 24, § 24; SL 1997, ch 257, § 3.

SDCL § 47-23-22 Committees--Authority and function--Responsibility of board of directors.

47-23-22. Committees--Authority and function--Responsibility of board of directors. If the articles of incorporation or the bylaws so provide, the board of directors may designate one or more committees each of which shall consist of one or more directors and such additional members as specified in the resolution which such additional members need not be a director or member of the nonprofit corporation, or resident of the state. Such committees, to the extent provided in the articles of incorporation or in the bylaws of the corporation, shall have and exercise the authority or function of the board of directors in the management of the corporation. The designation of such committees and the delegation thereto of authority shall not operate to relieve the board of directors, or any individual director of any responsibility imposed upon it or any individual director by law except those responsibilities related to the authority or function the committee is authorized to exercise. Other committees not having and exercising the authority of the board of directors in the management of the corporation may be designated by a resolution adopted by a majority of the directors present at a meeting at which a quorum is present. Members of committees created under this section have the same rights of indemnification and immunity as are provided to the board of directors in chapters 47-22 to 47-28, inclusive, unless otherwise provided in the articles of incorporation or bylaws. SL 1965, ch 24, § 23; SL 2016, ch 221, § 11.

SDCL § 47-23-23 Articles or bylaws as governing vote of directors.

47-23-23. Articles or bylaws as governing vote of directors. Whenever, with respect to any action to be taken by the members or directors of a corporation, the articles of incorporation or bylaws require the vote or concurrence of a greater proportion of the directors or members or any class of members than required by chapters 47-22 to 47-28, inclusive, the provisions of the articles of incorporation or bylaws shall control. SL 1965, ch 24, § 95.

SDCL § 47-23-24 Corporate officers--Appointment and term of office--Ex officio members of board of directors.

47-23-24. Corporate officers--Appointment and term of office--Ex officio members of board of directors. The officers of a corporation shall consist of a president, one or more vice-presidents, a secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary, each of whom shall be elected or appointed at such time and in such manner and for such terms not exceeding three years as may be prescribed in the articles of incorporation or the bylaws. In the absence of any such provision, all officers shall be elected or appointed annually by the board of directors. If the bylaws so provide, any two or more offices may be held by the same person, except the offices of president and secretary. The articles of incorporation or the bylaws may provide that any one or more officers of the corporation shall be ex officio members of the board of directors. The officers of a corporation may be designated by such additional titles as may be provided in the articles of incorporation or the bylaws. Unless the articles of incorporation or the bylaws so prescribe, officers need not be directors. SL 1965, ch 24, § 25.

SDCL § 47-23-25 Removal of officers--Contract rights unaffected.

47-23-25. Removal of officers--Contract rights unaffected. Any officer or agent elected or appointed may be removed by the persons authorized to elect or appoint such officer whenever in their judgment the best interests of the corporation will be served thereby. The removal of an officer or agent shall be without prejudice to the contract rights, if any, of the officer so removed. Election or appointment of an officer or agent shall not of itself create contract rights. SL 1965, ch 24, § 26.

SDCL § 47-23-26 Notice to members or directors--Written waiver.

47-23-26. Notice to members or directors--Written waiver. Whenever any notice is required to be given to any member or director of a corporation under the provisions of chapters 47-22 to 47-28, inclusive, or under the provisions of the articles of incorporation or bylaws of the corporation, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be equivalent to the giving of such notice. SL 1965, ch 24, § 96.

SDCL § 47-23-27 Indemnification of corporate agents for liability from good faith acts on behalf of corporation.

47-23-27. Indemnification of corporate agents for liability from good faith acts on behalf of corporation. A nonprofit corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened pending or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative other than an action by or in the right of the corporation by reason of the fact that that person is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent or another corporation, limited liability company, partnership, joint venture, trust, or other enterprise, against expenses including attorneys' fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by that person in connection with the action, suit, or proceeding if that person acted in good faith and in a manner that person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such conduct was unlawful. SL 1978, ch 338, § 6; SL 1994, ch 351, § 127.

SDCL § 47-23-28 Definition of terms.

47-23-28. Definition of terms. Terms used in §§ 47-23-28 to 47-23-32, inclusive, mean: (1) "Free clinic," a clinic in which health care services are offered voluntarily through a nonprofit corporation by health care professionals licensed or certified under the laws of this state to patients without charge or at a charge based on a sliding fee scale or the ability to pay; (2) "Governmental entity," any county, municipality, township, school district, chartered governmental units, other special districts, or any association, authority, board, commission, division, office, officer, task force, or other agency of the State of South Dakota; (3) "Nonprofit corporation," any corporation organized under chapters 47-22 to 47-28, inclusive, and which is exempt from taxation pursuant to Section 501(a) of the Internal Revenue Code, 26 U.S.C. Section 501(a); (4) "Nonprofit organization," any organization which is exempt from taxation pursuant to Section 501(c) of the Internal Revenue Code, 26 U.S.C. Section 501(c) as amended; (5) "Volunteer," an individual performing services for a nonprofit organization, a nonprofit corporation, a hospital organized pursuant to chapter 34-8, 34-9, or 34-10, or a governmental entity without compensation, other than reimbursement for actual expenses incurred. The term includes a volunteer serving as a director, officer, trustee, or direct service volunteer. SL 1987, ch 344, § 1; SL 1993, ch 340, § 1.

SDCL § 47-23-29 Immunity of volunteers of nonprofit organizations, free clinics, certain hospitals, and governmental entities.

47-23-29. Immunity of volunteers of nonprofit organizations, free clinics, certain hospitals, and governmental entities. Any volunteer, including any volunteer who is a licensed health care professional under Title 36, providing services on behalf of a nonprofit organization, a nonprofit corporation, a free clinic, any hospital organized pursuant to chapter 34-8, 34-9, or 34-10, or a governmental entity are immune from civil liability in any action brought in any court in this state on the basis of any act or omission resulting in damage or injury if: (1) The individual was acting in good faith and within the scope of such individual's official functions and duties for the nonprofit organization, the nonprofit corporation, the free clinic, a hospital organized pursuant to chapter 34-8, 34-9, or 34-10, or a governmental entity; and (2) The damage or injury was not caused by gross negligence or willful and wanton misconduct by such individual. SL 1987, ch 344, § 2; SL 1993, ch 340, § 2; SL 2013, ch 231, § 1.

SDCL § 47-23-30 Person not immune where negligent operation of vehicle caused injury.

47-23-30. Person not immune where negligent operation of vehicle caused injury. No immunity provided in §§ 47-23-28 to 47-23-32, inclusive, extends to any person causing personal injury or wrongful death resulting from the negligent operation of a motor vehicle. SL 1987, ch 344, § 3.

SDCL § 47-23-31 Effect on other statutes concerning immunity.

47-23-31. Effect on other statutes concerning immunity. Sections 47-23-28 to 47-23-32, inclusive, shall not be construed to constitute a modification or repeal of §§ 20-9-3, 20-9-4, 20-9-4.1, 34-48A-23, and 34-48A-24. SL 1987, ch 344, § 4.

SDCL § 47-23-32 Waiver of immunity to extent of risk sharing pool or liability insurance coverage--Volunteer serving as director, officer, or trustee exempt.

47-23-32. Waiver of immunity to extent of risk sharing pool or liability insurance coverage--Volunteer serving as director, officer, or trustee exempt. To the extent that any volunteer, nonprofit corporation, nonprofit organization, governmental entity, or hospital organized pursuant to chapter 34-8, 34-9, or 34-10 participates in a risk sharing pool or purchases liability insurance and to the extent that coverage is afforded thereunder, the immunity provided by § 47-23-29 is deemed to have been waived and may not be raised by way of affirmative defense. This section does not apply to a volunteer serving as a director, officer, or trustee. SL 1987, ch 344, § 5.

Source: South Dakota Legislature (sdlegislature.gov)URL: https://sdlegislature.gov/Statutes/47-23Fetched: 10/20/2026