South Dakota Codified Laws 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.
Terms Used In South Dakota Codified Laws 47-34A-503
- Business: includes every trade, occupation, profession, and other lawful purpose, whether or not carried on for profit. See South Dakota Codified Laws 47-34A-101
- Distributional interest: means all of a member's interest in distributions by the limited liability company. See South Dakota Codified Laws 47-34A-101
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Member: means a person that:
(A) Prior to formation of the limited liability company, becomes a member as agreed by that person and the organizer of the limited liability company. See South Dakota Codified Laws 47-34A-101
(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.
Source: SL 1998, ch 272, § 503; SL 2009, ch 234, § 1.