South Dakota § 47-34A-407 - Liability for improper distributions.
Full text of South Dakota South Dakota Codified Laws § 47-34A-407 — Liability for improper distributions., with citation guidance and answers to common questions.
§ 47-34A-407. Liability for improper distributions.
(a) Any member of a member-managed company, or a manager of a manager-managed company who votes for or assents to a distribution made in violation of § 47-34A-406, the articles of organization, or the operating agreement is personally liable to the company for the amount of the distribution which exceeds the amount that could have been distributed without violating § 47-34A-406, the articles of organization, or the operating agreement if it is established that the member or manager did not perform the member's or manager's duties in compliance with § 47-34A-409.
(b) To the extent the operating agreement of a member-managed limited liability company expressly relieves a member of the authority and responsibility to consent to distributions and imposes that authority and responsibility on one or more other members, the liability stated in subsection (a) applies to the other members and not the member that the operating agreement relieves of authority and responsibility.
(c) A member of a manager-managed company who knew a distribution was made in violation of § 47-34A-406, the articles of organization, or the operating agreement is personally liable to the company, but only to the extent that the distribution received by the member exceeded the amount that could have been properly paid under § 47-34A-406.
(d) A member or manager against whom an action is brought under this section may implead in the action all:
(1) Other members or managers who voted for or assented to the distribution in violation of subsection (a) and may compel contribution from them; and
(2) Members who received a distribution in violation of subsection (b) and may compel contribution from the member in the amount received in violation of subsection (b).
(e) A proceeding under this section is barred unless it is commenced within two years after the distribution.
Source: SL 1998, ch 272, § 407; SL 2013, ch 233, § 11.
Frequently Asked Questions About South Dakota § 47-34A-407
What does South Dakota Codified Laws § 47-34A-407 cover?
Section 47-34A-407 ("Liability for improper distributions.") 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 § 47-34A-407?
A common citation format is "South Dakota Codified Laws § 47-34A-407" (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 § 47-34A-407 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.