An obligation of a corporation formed pursuant to this chapter, whether arising in contract, tort, or otherwise, is the obligation of the corporation and the individual whose act or omission gives rise to the obligation. No shareholder, director, officer, member, or manager is personally liable, directly or indirectly, by way of contribution or otherwise, for the obligation based solely on the person‘s capacity as a shareholder, director, officer, member, or manager.

The limitation of liability does not extend to amounts owed to this state or its political subdivisions for any taxes, or any penalty or interest on such taxes.

Terms Used In South Dakota Codified Laws 47-11G-7

  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: includes both corporations under the South Dakota Business Corporations Act and limited liability companies under the South Dakota Limited Liability Company Act. See South Dakota Codified Laws 47-11G-1
  • 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.
  • 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.
  • officer: includes any manager of a limited liability company or the members of a limited liability company that does not have managers. See South Dakota Codified Laws 47-11G-1
  • Person: includes natural persons, partnerships, associations, cooperative corporations, limited liability companies, and corporations. See South Dakota Codified Laws 2-14-2
  • Tort: A civil wrong or breach of a duty to another person, as outlined by law. A very common tort is negligent operation of a motor vehicle that results in property damage and personal injury in an automobile accident.

Source: SL 2022, ch 167, § 7.

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