South Dakota § 47-1A-831 - Standards of liability for directors.
Full text of South Dakota South Dakota Codified Laws § 47-1A-831 — Standards of liability for directors., with citation guidance and answers to common questions.
§ 47-1A-831. Standards of liability for directors.
A director is not liable to the corporation or its shareholders for any decision to take or not to take action, or any failure to take any action, as a director, unless the party asserting liability in a proceeding establishes that:
(1) Any provision in the articles of incorporation authorized by subdivision 47-1A-202.1(4) or the protection afforded by §§ 47-1A-861 and 47-1A-861.1 for action taken in compliance with §§ 47-1A-862 to 47-1A-862.3, inclusive, or §§ 47-1A-863 to 47-1A-863.3, inclusive, if interposed as a bar to the proceeding by the director, does not preclude liability; and
(2) The challenged conduct consisted or was the result of:
(a) Action not in good faith; or
(b) A decision:
(i) Which the director did not reasonably believe to be in the best interests of the corporation; or
(ii) As to which the director was not informed to an extent the director reasonably believed appropriate in the circumstances; or
(c) A lack of objectivity due to the director's familial, financial, or business relationship with, or a lack of independence due to the director's domination or control by, another person having a material interest in the challenged conduct:
(i) Which relationship or which domination or control could reasonably be expected to have affected the director's judgment respecting the challenged conduct in a manner adverse to the corporation; and
(ii) After a reasonable expectation to such effect has been established, the director has not established that the challenged conduct was reasonably believed by the director to be in the best interests of the corporation; or
(d) A sustained failure of the director to devote attention to ongoing oversight of the business and affairs of the corporation, or a failure to devote timely attention, by making, or causing to be made, appropriate inquiry, when particular facts and circumstances of significant concern materialize that would alert a reasonably attentive director to the need therefor; or
(e) Receipt of a financial benefit to which the director was not entitled or any other breach of the director's duties to deal fairly with the corporation and its shareholders that is actionable under applicable law.
Source: SL 2005, ch 239, § 159.
Source: official South Dakota text · Last verified 2026-08-27
Frequently Asked Questions About South Dakota § 47-1A-831
What does South Dakota Codified Laws § 47-1A-831 cover?
Section 47-1A-831 ("Standards of liability for directors.") is part of the South Dakota Codified Laws, the codified statutory law of South Dakota. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite South Dakota § 47-1A-831?
A common citation format is "South Dakota Codified Laws § 47-1A-831" (South Dakota). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of South Dakota law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the South Dakota official source linked on this page or consult a licensed South Dakota attorney.
How does South Dakota § 47-1A-831 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in South Dakota can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in South Dakota.