South Dakota Codified Laws 47-1A-955.3. Owner liability of an interest holder in an unincorporated entity converted to domestic business corporation
The owner liability of an interest holder in an unincorporated entity that converts to a domestic business corporation is as follows:
(1) The conversion does not discharge any owner liability under the organic law of the unincorporated entity to the extent any such owner liability arose before the effective time of the articles of entity conversion;
Terms Used In South Dakota Codified Laws 47-1A-955.3
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Entity: includes domestic and foreign business corporation. See South Dakota Codified Laws 47-1A-140
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
(2) The interest holder does not have owner liability under the organic law of the unincorporated entity for any debt, obligation, or liability of the corporation that arises after the effective time of the articles of entity conversion;
(3) The provisions of the organic law of the unincorporated entity continue to apply to the collection or discharge of any owner liability preserved by subdivision (1), as if the conversion had not occurred;
(4) The interest holder has whatever rights of contribution from other interest holders are provided by the organic law of the unincorporated entity with respect to any owner liability preserved by subdivision (1), as if the conversion had not occurred.
Source: SL 2005, ch 239, § 233.