South Dakota Codified Law Chapter 47-23 governs the dissolution of nonprofit corporations. When a nonprofit corporation dissolves, its assets must be distributed in accordance with its articles of incorporation, bylaws, and applicable law. Specifically, South Dakota law mandates that after paying or making provision for all liabilities and obligations, any remaining assets must be distributed to one or more domestic or foreign corporations or entities qualifying as a public benefit corporation, a private foundation, or a charitable trust, or for any other purpose specified in the articles of incorporation that is permitted under South Dakota law. This ensures that the assets of a dissolved nonprofit continue to serve a public or charitable purpose, preventing private inurement. The specific recipient must be designated in the articles of incorporation or bylaws, or if not specified, the directors or members can designate a recipient that aligns with the original charitable intent of the organization. If no such designation can be made, the assets may escheat to the state. The scenario describes a nonprofit in South Dakota that has completed its dissolution process and has remaining assets after settling all debts. The question hinges on the proper distribution of these residual assets under South Dakota law. The articles of incorporation do not specify a recipient. The board of directors, acting in good faith and consistent with the nonprofit’s original mission of supporting local arts and cultural initiatives, proposes to transfer the remaining funds to the “Dakota Arts Foundation,” a recognized 501(c)(3) organization with a similar mission. This action aligns with the legal requirement to distribute assets for charitable purposes.

South Dakota Codified Law § 38-16-13 outlines the requirements for dissolution of a nonprofit corporation. When a nonprofit corporation in South Dakota decides to dissolve, the process involves several steps to ensure that its assets are distributed appropriately and its legal obligations are met. The initial step typically involves the adoption of a resolution to dissolve by the board of directors, followed by approval from the members, if applicable. Once the dissolution is authorized, the corporation must cease conducting its usual business activities, except as necessary for winding up its affairs. A crucial aspect of this winding-up process is the payment or provision for payment of all known debts and liabilities. This includes outstanding accounts payable, salaries owed to employees, and any other financial obligations. Following the settlement of debts, the remaining assets must be distributed in accordance with the corporation’s articles of incorporation or bylaws, and applicable South Dakota law. For public benefit or religious corporations, any remaining assets must be distributed to another organization that is exempt under Section 501(c)(3) of the Internal Revenue Code, or to the federal government, a state, or a local government for a public purpose. For mutual benefit corporations, distribution can be made to members, or to another organization that is not organized for profit. The law does not permit the distribution of assets to the directors, officers, or members in their individual capacities, except as a return of their capital contributions, if such contributions were made and the articles permit it. The filing of a final certificate of dissolution with the South Dakota Secretary of State is the final step to formally terminate the corporation’s existence.

The South Dakota Codified Law (SDCL) Chapter 35-12, concerning the regulation of alcoholic beverages, outlines specific requirements for nonprofit organizations seeking to obtain temporary special event liquor licenses. For a nonprofit organization to be eligible for such a license, it must demonstrate a bona fide charitable, religious, or educational purpose, as defined by state law. Furthermore, the organization must be registered and in good standing with the South Dakota Secretary of State. The application process typically involves submitting detailed information about the event, including the date, time, location, and purpose, along with a clear description of how the proceeds will be used for the organization’s stated mission. A key requirement is that the event must be organized and operated by the nonprofit itself, with no more than two such licenses permitted for the same organization within a calendar year. The application must be filed with the relevant local licensing authority, often the municipality or county where the event is to be held, at least 30 days prior to the event. The licensing authority then reviews the application for compliance with all state and local regulations, including zoning and public safety considerations. Approval is contingent upon the organization meeting all statutory criteria and demonstrating that the event will not negatively impact public order or safety.

South Dakota Codified Law § 38-17-10 outlines the requirements for the annual report of a nonprofit corporation. This report must be filed with the Secretary of State and include information such as the corporation’s name, registered agent and office, names and addresses of its directors and officers, and a statement of the activities undertaken by the corporation during the preceding fiscal year. The law also specifies that the report must be accompanied by a filing fee. Failure to file the annual report can lead to administrative dissolution of the corporation by the Secretary of State, as per South Dakota Codified Law § 38-17-13. The purpose of the annual report is to ensure that the state has current information about the nonprofit’s operations and leadership, maintaining transparency and accountability for organizations operating under the state’s nonprofit statutes. The filing fee is a nominal amount, currently set at \$50, to cover the administrative costs associated with processing these reports. The report is due on the first day of the anniversary month of the corporation’s incorporation.

South Dakota Codified Law § 38-17-1.1 defines a “nonprofit corporation” as a corporation no part of the income, profit, or benefit of which is distributable to the members, directors, or officers, except as to reasonable compensation for services rendered or as to distribution of assets upon dissolution. This definition is crucial for determining eligibility for various state-level benefits and exemptions available to nonprofit entities in South Dakota. The core principle is the absence of private inurement, meaning that the organization’s financial gains must be reinvested into its stated charitable or public benefit purposes, rather than flowing to individuals associated with the organization. This distinguishes nonprofit corporations from for-profit entities where profit distribution to owners or shareholders is a primary objective. The specific phrasing regarding “reasonable compensation for services rendered” acknowledges that individuals can be paid for their work for the nonprofit, but this compensation must be commensurate with the services provided and not a disguised distribution of profits. Similarly, the provision for asset distribution upon dissolution ensures that any remaining assets are transferred to another qualifying nonprofit or for a public purpose, further reinforcing the public benefit nature of these organizations. Understanding this foundational definition is essential for navigating the legal landscape of nonprofit operations in South Dakota.

The South Dakota Codified Law (SDCL) Chapter 37-23 governs nonprofit corporations. Specifically, SDCL 37-23-34 outlines the requirements for dissolving a nonprofit corporation. Voluntary dissolution requires a resolution adopted by the board of directors and then submitted to the members for approval. The law mandates that a dissolution resolution must be approved by a majority of the votes cast by the members entitled to vote thereon at a members’ meeting, provided that a quorum is present. If the corporation has no members or no provision for members to vote on dissolution, the resolution must be adopted by the board of directors. Following the approval, the corporation must file articles of dissolution with the South Dakota Secretary of State. The process also involves winding up the affairs of the corporation, which includes paying or providing for all known debts and liabilities, and distributing any remaining assets to designated recipients, typically other nonprofit organizations with similar purposes, as specified in the articles of incorporation or bylaws, or as determined by the members or board in accordance with the law. The question tests the understanding of the specific approval threshold required for voluntary dissolution under South Dakota law when members are involved in the decision-making process. The law specifies a majority of the votes cast by members entitled to vote, not a majority of all members or a two-thirds majority.

The South Dakota Codified Law (SDCL) Chapter 37-23 governs the formation and operation of nonprofit corporations. Specifically, SDCL 37-23-15 outlines the requirements for the annual report, which is crucial for maintaining a nonprofit’s good standing with the state. This report must be filed with the Secretary of State and includes information such as the names and addresses of directors and officers, and a statement of the activities undertaken by the corporation during the preceding year. Failure to file the annual report by the specified deadline can lead to administrative dissolution. The question assesses understanding of the statutory obligation for ongoing reporting to the state, which is a fundamental aspect of maintaining corporate existence and compliance for South Dakota nonprofits. The annual report serves as a mechanism for the state to track the activities and leadership of its registered nonprofit entities, ensuring transparency and accountability.

South Dakota Codified Law § 38-17-1 defines a charitable trust as a trust that benefits a charitable purpose. The South Dakota Nonprofit Corporation Act, specifically South Dakota Codified Law § 47-22-6, outlines the requirements for forming a nonprofit corporation. For a nonprofit corporation to be recognized as exempt from state income tax in South Dakota, it must meet the requirements of South Dakota Codified Law § 10-43-1, which generally aligns with federal IRS requirements for 501(c)(3) status. This includes operating exclusively for charitable, educational, religious, scientific, literary, testing for public safety, fostering national or international amateur sports competition, or preventing cruelty to children or animals purposes. The question concerns a scenario where a trust’s purpose is not exclusively charitable. Specifically, the trust’s stated purpose includes providing financial assistance to members of a particular labor union, which is a private benefit and not a public charitable purpose. While a trust can exist and operate, its inability to meet the statutory definition of a charitable trust under South Dakota law means it cannot qualify for tax exemption as a charitable organization under South Dakota tax provisions. The dissolution and distribution of assets upon termination of such an entity would follow the provisions of South Dakota Codified Law § 47-22-64, which mandates distribution to another organization with similar purposes or to a public charity if the articles of incorporation or bylaws do not specify otherwise. Since the organization’s purpose was not exclusively charitable, it cannot be distributed to another charitable organization. The most appropriate action is for the assets to be distributed to the state treasurer for the benefit of the general fund of South Dakota, as per the statute for dissolution of nonprofit corporations when no recipient is designated or the designated recipient is not qualified.

The South Dakota Codified Law (SDCL) 37-22-11 outlines the procedures for a nonprofit corporation to dissolve voluntarily. A key aspect of this process involves the disposition of assets upon dissolution. SDCL 37-22-11(3) specifically mandates that after satisfying or making provisions for all liabilities and obligations, any remaining assets must be distributed for one or more exempt purposes or to one or more governmental entities. An exempt purpose, as defined within the context of nonprofit law, generally refers to purposes that would qualify the organization for tax-exempt status under federal or state law, such as charitable, educational, religious, scientific, or literary endeavors. Distributing assets to members, directors, or officers, or to any private individual or entity not serving an exempt purpose, would violate this statutory requirement and could lead to the revocation of tax-exempt status and potential penalties. Therefore, when a South Dakota nonprofit corporation dissolves, its remaining assets must be directed towards furthering similar exempt purposes or to a governmental body, ensuring that the organization’s assets continue to serve the public good as intended by its nonprofit status.

South Dakota Codified Law § 38-17-1 defines a “charitable trust” as a fiduciary relationship concerning property that arises as a result of a manifestation of intent to create it for the purpose of carrying out a charitable purpose. The South Dakota Nonprofit Corporation Act, primarily found in Title 38, Chapter 17 of the South Dakota Codified Laws, governs the formation and operation of nonprofit corporations. While the Act outlines procedures for incorporation, dissolution, and governance, it does not explicitly mandate a separate, state-level registration or licensing process specifically for all charitable trusts operating within South Dakota, beyond the general requirements for corporate formation and tax-exempt status. However, entities that solicit contributions in South Dakota are subject to registration requirements under the Charitable Solicitations Act (SDCL Chapter 28-7). This act requires any person or organization, with certain exceptions, that intends to solicit contributions in South Dakota to register with the Secretary of State. This registration is distinct from the initial formation of a nonprofit corporation or the establishment of a charitable trust. The question probes the understanding of whether a separate state-specific filing is required for the mere existence of a charitable trust in South Dakota, as opposed to the act of soliciting funds. The South Dakota Nonprofit Corporation Act itself does not impose such a unique registration requirement for all charitable trusts.

The South Dakota Codified Law (SDCL) 37-17-11 outlines the requirements for a nonprofit corporation to dissolve voluntarily. A voluntary dissolution requires the adoption of a resolution by the board of directors, followed by a vote of the members or, if there are no members, by the directors themselves. For corporations with members, the resolution must be adopted by a majority of the votes cast by the members entitled to vote thereon at a meeting of members, or by the written consent of all members entitled to vote thereon. For corporations without members, the resolution must be adopted by a majority of the directors. The law also specifies that the dissolution must be authorized by the articles of incorporation or bylaws, or by a vote of two-thirds of the votes cast by the members entitled to vote thereon at a meeting of members. However, SDCL 37-17-11(2) provides a specific threshold for member approval in the absence of explicit provisions in the articles or bylaws: “by the affirmative vote of a majority of the votes cast by the members entitled to vote thereon at a meeting of members for which a notice of the proposed dissolution was given.” This means that if the articles or bylaws do not specify a higher voting threshold, a simple majority of votes cast by members present and voting at a properly noticed meeting is sufficient. Therefore, if the articles of incorporation of the “Prairie Bloom Foundation” are silent on the specific voting threshold for dissolution, and the board has adopted a resolution, the members can approve the dissolution with a majority of the votes cast at a meeting where dissolution was properly noticed.

The South Dakota Codified Law (SDCL) Chapter 35-10 outlines the requirements for charitable solicitations. Specifically, SDCL 35-10-2.1 mandates that any person or organization soliciting contributions for a charitable purpose in South Dakota must register with the Secretary of State unless an exemption applies. This registration requires providing detailed information about the organization, its officers, and its fundraising activities. SDCL 35-10-2.2 specifies the information to be included in the registration statement, such as the organization’s name, address, purpose, and the names and addresses of its principal officers and directors. Furthermore, SDCL 35-10-3 details the annual reporting requirements for registered organizations, which include filing a financial report detailing income and expenditures from charitable solicitations. The purpose of these provisions is to ensure transparency and accountability in charitable fundraising, thereby protecting the public from fraudulent solicitations. Failure to comply can result in penalties, including fines and injunctions. Therefore, an organization conducting a statewide fundraising campaign for a South Dakota-based domestic animal welfare shelter, even if it is a newly formed entity, must comply with these registration and reporting mandates unless a specific exemption, such as soliciting only from within the organization’s membership or receiving no public contributions, is met. In this scenario, a statewide public campaign implies a broad solicitation, making registration necessary.

South Dakota Codified Law § 38-17-1 defines a nonprofit corporation as one organized for purposes other than generating profit for its members. This includes entities engaged in charitable, educational, religious, scientific, literary, or prevention of cruelty to children or animals activities. The key distinction lies in the purpose of the organization and the disposition of its assets. Upon dissolution, a nonprofit corporation’s remaining assets, after satisfying all debts and liabilities, must be distributed to another organization that qualifies as a nonprofit corporation under South Dakota law or for a public purpose. This ensures that the assets continue to serve the public interest for which the nonprofit was originally established, preventing private inurement of assets. The specific requirements for dissolution and asset distribution are further detailed in South Dakota Codified Law Chapter 38-17.

The South Dakota Codified Law (SDCL) Chapter 35-11 governs the formation and operation of nonprofit corporations. Specifically, SDCL 35-11-5 addresses the initial filing requirements for Articles of Incorporation. For a nonprofit corporation to be properly established and recognized under South Dakota law, the Articles of Incorporation must contain certain mandatory provisions. These include the name of the corporation, the purpose for which it is organized, the name and address of the initial registered agent, and provisions for the distribution of assets upon dissolution. The specific requirement regarding the duration of the corporation is also critical. While many corporations may have perpetual existence, the law requires the Articles to state whether the corporation is to have perpetual existence or a specified duration. This is a fundamental element for legal recognition and governance. Therefore, an omission of the statement regarding the duration of the corporation would render the Articles incomplete according to SDCL 35-11-5, potentially invalidating the formation or requiring amendment before official recognition.

The South Dakota Codified Law (SDCL) Chapter 37-22 governs nonprofit corporations. Specifically, SDCL 37-22-36 outlines the requirements for a nonprofit corporation to dissolve voluntarily. A voluntary dissolution requires a resolution adopted by the board of directors, followed by approval by the members. The law mandates that this resolution must be adopted by a majority of the directors present at a meeting where a quorum is present, unless the articles of incorporation or bylaws require a greater proportion. Subsequently, the members must approve the dissolution. The statute specifies that for corporations with voting members, the board of directors shall submit the question of dissolution to the members. Approval typically requires a majority vote of the members present at a meeting where a quorum is present, again, unless the articles or bylaws specify a higher threshold. The process also involves filing a statement of dissolution with the South Dakota Secretary of State. The question asks about the minimum requirement for member approval for voluntary dissolution in South Dakota, assuming no specific provisions in the articles or bylaws alter this default. Therefore, a simple majority of members present and voting, provided a quorum is met, is the baseline legal requirement.

South Dakota Codified Law § 38-17-5 outlines the requirements for a nonprofit corporation to be eligible for exemption from property taxes. This statute specifies that the property must be used exclusively for religious, educational, charitable, or cemetery purposes. The key to understanding this exemption is the “exclusively” standard, which implies that any significant use of the property for non-exempt purposes would disqualify the organization from receiving the property tax exemption. For instance, if a charitable organization’s facility also housed a for-profit retail store that generated substantial revenue unrelated to its charitable mission, it could jeopardize the exemption. The law also requires that the property be owned and occupied by the organization claiming the exemption. The South Dakota Department of Revenue is responsible for administering property tax exemptions. The determination of whether property meets the exclusive use test is often fact-specific and can involve an assessment of the primary purpose and the extent of any ancillary uses. The exemption is not automatic; it must be applied for and granted by the relevant tax authorities.

In South Dakota, the process of dissolving a nonprofit corporation involves several statutory steps to ensure orderly winding up of affairs and proper distribution of assets. According to South Dakota Codified Law (SDCL) Chapter 34-22, a nonprofit corporation may be dissolved voluntarily. The initial step typically involves the board of directors adopting a resolution recommending dissolution, which must then be submitted to the members for approval. For corporations that have members, a majority vote of members present and voting at a meeting where a quorum is present is generally required, unless the articles of incorporation or bylaws specify a higher threshold. If the corporation has no members, or if the members have no voting rights, the dissolution resolution is typically approved by the board of directors. Following member or board approval, the corporation must file Articles of Dissolution with the South Dakota Secretary of State. The winding up process itself, as outlined in SDCL 34-22-27, requires the corporation to cease carrying on its activities except as necessary for winding up, collect its assets, pay or make provision for its liabilities, and distribute any remaining assets in accordance with its articles of incorporation or bylaws. Importantly, any assets remaining after satisfaction of liabilities must be distributed for a public purpose, typically to another organization that qualifies as a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code, or for any other purpose specified in the articles of incorporation that is permitted by South Dakota law. Failure to adhere to these provisions, particularly regarding the distribution of assets, can lead to legal challenges and potential penalties.

South Dakota Codified Law § 38-17-1 defines a charitable trust as a trust for the benefit of a charitable purpose. South Dakota Codified Law § 38-17-2 outlines the requirements for the formation of a charitable trust, including the need for a trustee, a trust corpus, and a charitable purpose. The law also specifies that a charitable trust must be for the benefit of an indefinite number of persons or for the relief of poverty, the advancement of education, the advancement of religion, the promotion of health, or any other purpose beneficial to the community. A key aspect of South Dakota law concerning charitable trusts is the requirement for registration and reporting with the South Dakota Secretary of State, as mandated by South Dakota Codified Law § 38-17-3. This registration is crucial for ensuring transparency and accountability in the management of charitable assets. Failure to register can result in penalties and the inability to legally solicit contributions within the state. The question assesses the understanding of this specific registration requirement and its implications for a nonprofit organization operating as a charitable trust in South Dakota. The correct answer hinges on the statutory obligation to register with the Secretary of State to maintain its legal standing and ability to operate as a charitable entity.

South Dakota Codified Law § 38-17-2 outlines the requirements for the dissolution of a nonprofit corporation. Upon adoption of a resolution to dissolve, the corporation must file a certificate of dissolution with the Secretary of State. This certificate must include specific information, such as the name of the corporation, the date the resolution was adopted, and a statement that the resolution was adopted by the required vote. Furthermore, the law mandates that before filing the certificate, the corporation must provide notice of its intent to dissolve to all creditors and claimants, allowing them a reasonable period to present their claims. This notice process is crucial for ensuring that all outstanding liabilities are addressed. Following the satisfaction of all debts and obligations, or the provision for them, the remaining assets are to be distributed in accordance with the corporation’s articles of incorporation or bylaws, or if not specified, to other organizations that are exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. The filing of the certificate of dissolution with the Secretary of State is the final legal step that officially terminates the corporation’s existence.

The South Dakota Codified Law (SDCL) § 35-2-2.1 outlines the requirements for obtaining a retail liquor license for a nonprofit organization. Specifically, it states that a nonprofit organization must have been in continuous existence and operation in South Dakota for at least two years prior to the date of application to be eligible for such a license. This two-year residency requirement is a critical eligibility criterion. Other factors, such as the nature of the fundraising event or the specific purpose of the liquor sales, are secondary to meeting this fundamental operational duration. Therefore, an organization that has only been operational for 18 months would not meet the statutory prerequisite, regardless of its charitable mission or the intended use of the funds. The law is designed to ensure that organizations seeking to sell alcohol have a demonstrated history of community involvement and stable operation within the state.

South Dakota Codified Law § 38-17-2 outlines the requirements for a nonprofit corporation to be exempt from property taxes. Specifically, it states that property owned by a nonprofit corporation and used exclusively for charitable, religious, educational, or scientific purposes, or for the promotion of social welfare, may be exempt from taxation. The key is the exclusive use of the property for these designated purposes. If a portion of the property is used for commercial purposes that do not directly support the charitable mission, or if it is leased to a for-profit entity for unrelated business activities, that portion may not qualify for the exemption. The determination of “exclusive use” is a factual one, often requiring an examination of how the property is utilized by the organization and whether that use aligns with the statutory exemptions. The presence of a small, incidental commercial activity that directly funds the exempt purpose might be permissible, but a significant or primary commercial use would likely disqualify the property. Therefore, a nonprofit organization must demonstrate that its property’s use is predominantly and intrinsically tied to its tax-exempt mission.

The South Dakota Codified Law (SDCL) Chapter 37-23 governs nonprofit corporations. A critical aspect of this chapter is the process for amending articles of incorporation. For a nonprofit corporation to amend its articles, the board of directors must adopt a resolution setting forth the amendment. Subsequently, this resolution must be submitted to the members for their approval, unless the articles of incorporation specify that amendments can be made solely by the board. The required vote for member approval is typically a majority of the votes cast by members entitled to vote on the amendment, or a higher percentage if stipulated in the articles or bylaws. Following member approval, the corporation must file an amendment to the articles of incorporation with the South Dakota Secretary of State. This filing typically includes a statement of adoption, the text of the amendment, and a certification by an authorized officer. This process ensures that significant changes to the foundational governing document of a nonprofit are properly authorized by both the board and, usually, the membership, and are then officially recorded with the state.

The South Dakota Codified Law (SDCL) 37-22-11 addresses the dissolution of a nonprofit corporation. Specifically, it outlines the procedure for winding up the affairs of the corporation. Upon dissolution, the corporation must cease to carry on its activities except as necessary for the winding up process. The board of directors is responsible for overseeing this process, which includes collecting assets, paying liabilities, and distributing any remaining assets. SDCL 37-22-11(2) states that after paying or making provision for all liabilities, the remaining assets shall be distributed in accordance with the articles of incorporation or bylaws. If neither document specifies a distribution plan, the assets must be distributed to a person or persons who have been granted a similar status by the Internal Revenue Code, or to any other person or persons not organized or operated for profit, as the circuit court may direct. This ensures that the assets of a dissolved nonprofit are used for charitable or public purposes, aligning with the original intent of its tax-exempt status. The question tests the understanding of the statutory requirements for asset distribution upon dissolution, emphasizing the hierarchy of directives: articles/bylaws first, then IRS-recognized entities, and finally court discretion.

The South Dakota Codified Law (SDCL) Chapter 37-22 governs the formation and operation of nonprofit corporations. Specifically, SDCL 37-22-13 outlines the requirements for annual reports. A nonprofit corporation is obligated to file an annual report with the South Dakota Secretary of State. This report serves to update information about the corporation’s officers, directors, and registered agent, ensuring the state has current contact and governance details. Failure to file the annual report can lead to administrative dissolution of the corporation by the Secretary of State. The question asks about the consequence of failing to file this report, and the law clearly states that the Secretary of State may dissolve the corporation. Therefore, the correct response is administrative dissolution. Other options, such as personal liability for directors or the automatic revocation of tax-exempt status, are not the direct and immediate consequence of failing to file the annual report under SDCL 37-22-13. While persistent non-compliance could indirectly lead to other issues, the primary and statutory consequence of missing the annual filing is administrative dissolution by the state.

South Dakota Codified Law § 38-17-12 governs the dissolution of nonprofit corporations. Upon dissolution, a nonprofit corporation must follow a specific process to wind up its affairs. This involves ceasing to conduct its business except as may be necessary for the winding up of its business, notifying creditors, collecting its assets, and paying or making provision for the payment of all its liabilities. Any remaining assets, after the satisfaction of liabilities, must be distributed for one or more exempt purposes specified in the articles of incorporation or bylaws, or if the articles and bylaws do not specify, to any person or persons for a charitable purpose as determined by the court. The South Dakota Secretary of State’s office oversees the filing of dissolution documents. The process requires a resolution by the board of directors and, in most cases, approval by the members. A statement of dissolution must be filed with the Secretary of State, followed by a final certificate of dissolution after all winding up activities are completed. The law emphasizes that assets not disposed of in accordance with the articles, bylaws, or court order escheat to the state of South Dakota. Therefore, proper distribution of remaining assets is crucial to avoid state escheatment.

South Dakota Codified Law § 38-17-4 addresses the dissolution of nonprofit corporations. When a nonprofit corporation dissolves, its assets, after paying off all debts and liabilities, must be distributed for one or more exempt purposes. This means that any remaining property cannot be distributed to the members, directors, or officers of the corporation. Instead, the assets must be given to another organization that qualifies as tax-exempt under Section 501(c)(3) of the Internal Revenue Code, or to a governmental entity for a public purpose. The process involves identifying a suitable recipient organization that aligns with the dissolved corporation’s original mission or charitable intent. This ensures that the charitable assets continue to serve public benefit rather than private gain, a fundamental principle of nonprofit law. Failure to adhere to these distribution requirements can result in penalties and legal challenges.

The South Dakota Codified Law § 38-12-11.1 outlines the requirements for charitable solicitations. Specifically, it mandates that any organization soliciting charitable contributions in South Dakota must register with the Secretary of State unless an exemption applies. The question presents a scenario where a South Dakota-based organization, “Prairie Hope Foundation,” which operates exclusively within the state and does not engage in any fundraising activities outside of South Dakota, solicits donations from South Dakota residents. The key factor here is the geographical scope of the solicitation. South Dakota law generally applies to solicitations occurring within the state. Since Prairie Hope Foundation is based in South Dakota and solicits only South Dakota residents, it falls under the purview of South Dakota’s charitable solicitation laws. There are specific exemptions, such as for religious organizations, educational institutions, and certain small solicitations, but the scenario does not provide information to suggest any of these exemptions apply. The question asks about the requirement to register with the Secretary of State. Based on the general provisions of South Dakota Codified Law § 38-12-11.1, an organization soliciting charitable contributions within the state must register. The fact that the organization operates exclusively within the state and solicits only within the state means it is subject to these registration requirements. Therefore, Prairie Hope Foundation must register with the South Dakota Secretary of State.

South Dakota Codified Law § 38-17-12 governs the dissolution of agricultural associations. This statute outlines the process for winding up the affairs of such an organization. Specifically, it mandates that upon dissolution, the association shall cease to carry on its activities except as may be necessary for the winding up of its business. The assets remaining after paying or making provision for the payment of all liabilities shall be distributed to its members in proportion to their respective contributions or interests in the association. If the articles of incorporation or bylaws provide for a different distribution, that provision shall control. If no provision is made, and no agreement exists, the distribution is to be made to those persons who are members at the time of dissolution, in equal shares, unless the articles or bylaws specify otherwise. The statute does not permit distribution to members of profit-making entities or to any other entity unless the articles of incorporation or bylaws provide for such a distribution and the association is not a public benefit corporation. In this scenario, the articles of incorporation of the “Prairie Harvest Cooperative” clearly state that any remaining assets upon dissolution shall be distributed to the members in proportion to their patronage during the preceding fiscal year. This specific provision in the articles supersedes any general default distribution rules. Therefore, the distribution must follow the patronage-based allocation outlined in the articles.

The South Dakota Codified Law (SDCL) Chapter 37-23 governs nonprofit corporations. A key aspect of this chapter, particularly concerning dissolution, is the distribution of assets. When a nonprofit corporation dissolves, its assets must be distributed for charitable purposes. Specifically, SDCL § 37-23-35 outlines the procedure for distribution. It mandates that after paying debts and liabilities, any remaining assets must be distributed to one or more domestic or foreign corporations or other organizations engaged in activities substantially similar to those of the dissolving corporation, or for other charitable purposes, as determined by the court. This ensures that the charitable mission continues or that the assets are used for related public benefit. The question revolves around the proper disposition of assets upon dissolution, which is a critical procedural step to maintain the integrity of nonprofit status and public trust. The core principle is that assets accumulated for charitable purposes should not inure to the benefit of private individuals but should continue to serve the public good. This aligns with the fundamental nature of nonprofit entities as instruments for public benefit.

The South Dakota Codified Law (SDCL) Chapter 37-22 governs the dissolution of nonprofit corporations. Specifically, SDCL 37-22-11 outlines the procedure for administrative dissolution by the Secretary of State. This occurs when a nonprofit corporation fails to file its annual report or pay required fees within a specified timeframe after notice. The law mandates that the Secretary of State must provide written notice of delinquency to the corporation at its registered office. If the corporation does not cure the delinquency within 60 days of the notice, the Secretary of State may then administratively dissolve the corporation. This process is distinct from voluntary dissolution initiated by the corporation itself, which involves a resolution by the board of directors and, in many cases, a vote of the members, followed by filing specific dissolution documents with the Secretary of State. The question probes the conditions under which the state can unilaterally terminate a nonprofit’s existence due to non-compliance with reporting and fee obligations.