South Dakota Codified Laws 47-1A-833. Directors’ liability for unlawful distributions
A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to § 47-1A-640 or 47-1A-1409 is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating § 47-1A-640 or 47-1A-1409 if the party asserting liability establishes that when taking the action the director did not comply with §§ 47-1A-830 and 47-1A-830.1. A proceeding to enforce the liability of a director under this section is barred unless it is commenced within two years after the date:
(1) On which the effect of the distribution was measured under § 47-1A-640.2 or 47-1A-640.4;
Terms Used In South Dakota Codified Laws 47-1A-833
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- 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.
- Proceeding: includes civil suit and criminal, administrative, and investigatory action. See South Dakota Codified Laws 47-1A-140
(2) As of which the violation of § 47-1A-640 occurred as the consequence of disregard of a restriction in the articles of incorporation; or
(3) On which the distribution of assets to shareholders under § 47-1A-1409 was made.
Source: SL 2005, ch 239, § 162.