TRANSFEREES AND CREDITORS OF MEMBER.

SDCL tit. 47, ch. 47-34A, art. 47-34A-Article5

in effect

SDCL § 47-34A-501 Member's distributional interest.

47-34A-501. Member's distributional interest. (a) A member is not a co-owner of, and has no transferable interest in, property of a limited liability company. (b) A distributional interest in a limited liability company is personal property and, subject to § 47-34A-502 and § 47-34A-503, may be transferred in whole or in part. (c) An operating agreement may provide that a distributional interest may be evidenced by a certificate of the interest issued by the limited liability company and, subject to § 47-34A-503, may also provide for the transfer of any interest represented by the certificate. SL 1998, ch 272, § 501.

SDCL § 47-34A-502 Transfer of distributional interest.

47-34A-502. Transfer of distributional interest. A transfer of a distributional interest does not entitle the transferee to become or to exercise any rights of a member. A transfer entitles the transferee to receive, to the extent transferred, only the distributions to which the transferor would be entitled. SL 1998, ch 272, § 502.

SDCL § 47-34A-503 Rights of a transferee.

47-34A-503. Rights of a transferee. (a) A transferee of a distributional interest may become a member of a limited liability company if and to the extent that the transferor gives the transferee the right in accordance with authority described in the operating agreement or all other members consent. (b) A transferee who has become a member, to the extent transferred, has the rights and powers, and is subject to the restrictions and liabilities, of a member under the operating agreement of a limited liability company and this chapter. A transferee who becomes a member also is liable for the transferor member's obligations to make contributions under § 47-34A-402 and for obligations under § 47-34A-407 to return unlawful distributions, but the transferee is not obligated for the transferor member's liabilities unknown to the transferee at the time the transferee becomes a member. (c) Whether or not a transferee of a distributional interest becomes a member under subsection (a), the transferor is not released from liability to the limited liability company under the operating agreement or this chapter. (d) A transferee who does not become a member is not entitled to participate in the management or conduct of the limited liability company's business, require access to information concerning the company's transactions, or inspect or copy any of the company's records. (e) A transferee who does not become a member is entitled to: (1) Receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled; (2) Receive, upon dissolution and winding up of the limited liability company's business: (i) In accordance with the transfer, the net amount otherwise distributable to the transferor; (ii) A statement of account only from the date of the latest statement of account agreed to by all the members. (f) A limited liability company need not give effect to a transfer until it has notice of the transfer. SL 1998, ch 272, § 503; SL 2009, ch 234, § 1.

SDCL § 47-34A-504 Rights of creditor.

47-34A-504. Rights of creditor. (a) On application by a judgment creditor of a member of a limited liability company or of a member's transferee, and following notice to the limited liability company of such application, a court having jurisdiction may charge the distributional interest of the judgment debtor to satisfy the judgment. (b) A charging order constitutes a lien on the judgment debtor's distributional interest. (c) A distributional interest in a limited liability company which is charged may be redeemed: (1) By the judgment debtor; (2) With property other than the company's property, by one or more of the other members; or (3) With the company's property, but only if permitted by the operating agreement. (d) This chapter does not affect a member's right under exemption laws with respect to the member's distributional interest in a limited liability company. (e) This section provides the exclusive remedy that a judgment creditor of a member's distributional interest or a member's assignee may use to satisfy a judgment out of the judgment debtor's interest in a limited liability company. No other remedy, including foreclosure on the member's distributional interest or a court order for directions, accounts, and inquiries that the debtor, member might have made, is available to the judgment creditor attempting to satisfy the judgment out of the judgment debtor's interest in the limited liability company. (f) No creditor of a member or a member's assignee has any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the company. (g) This section applies to single member limited liability companies in addition to limited liability companies with more than one member. SL 1998, ch 272, § 504; SL 2007, ch 262, § 1; SL 2009, ch 234, § 2; SL 2012, ch 226, § 1; SL 2013, ch 233, § 13.

Source: South Dakota Legislature (sdlegislature.gov)URL: https://sdlegislature.gov/Statutes/47-34A-Article5Fetched: 10/20/2026