South Dakota Codified Law (SDCL) Chapter 37-23 governs the formation and operation of nonprofit corporations. Specifically, SDCL 37-23-16 outlines the requirements for the annual report. This report serves as a crucial mechanism for the state to maintain up-to-date information on its registered nonprofit entities. The statute mandates that the annual report must be filed with the Secretary of State on or before the first day of the anniversary month of the corporation’s formation. Failure to file the annual report can lead to administrative dissolution of the nonprofit corporation, as provided for in SDCL 37-23-71. The contents of the annual report are generally limited to updating information such as the registered agent, principal office address, and names of officers and directors, rather than requiring a full financial audit or detailed program evaluation. The purpose is to ensure the state has current contact and leadership information for each nonprofit.

The South Dakota Codified Law § 29A-7-201 outlines the requirements for the annual report of a nonprofit corporation. This report must be filed with the Secretary of State and includes information such as the name of the corporation, its principal office address, the names and addresses of its directors and officers, and a brief description of the nature of its activities. The filing fee for this annual report is \$50. The question posits a scenario where a South Dakota nonprofit has failed to file its annual report for two consecutive years. Under South Dakota law, specifically SDCL § 29A-14-201, a corporation that fails to file its annual report or pay required fees may have its corporate existence administratively dissolved by the Secretary of State. The penalty for failure to file is not a fixed monetary fine that accrues daily, but rather the potential loss of corporate status. The question asks about the consequence of this non-compliance. The correct understanding is that the Secretary of State has the authority to initiate administrative dissolution proceedings after a period of non-compliance. Therefore, the most accurate consequence among the options is the potential for administrative dissolution by the Secretary of State.

The South Dakota Codified Law (SDCL) Chapter 38-17 addresses the regulation of charitable solicitations. Specifically, SDCL 38-17-2.1 mandates that any charitable organization, professional fund-raiser, or solicitor that solicits contributions in South Dakota must register with the South Dakota Secretary of State unless an exemption applies. This registration is an annual requirement and involves submitting a registration statement and a filing fee. The purpose of this registration is to provide transparency and accountability to the public regarding charitable fundraising activities. Exemptions are typically granted for certain types of organizations, such as religious institutions, educational institutions, and those soliciting solely from their own members, provided they meet specific criteria outlined in the law. Failure to register when required can result in penalties, including fines and injunctions. Therefore, understanding the scope of the registration requirement and the available exemptions is crucial for compliance with South Dakota’s charitable solicitation laws.

In South Dakota, when a nonprofit corporation proposes to merge with another entity, the process requires careful adherence to statutory provisions to ensure validity and protect the interests of stakeholders. The South Dakota Codified Law (SDCL) Chapter 29A-11 outlines the procedures for mergers and consolidations involving nonprofit corporations. Specifically, SDCL 29A-11-02 details the requirements for a plan of merger, which must be adopted by the board of directors and then submitted to the members for approval, unless the plan is one that can be effected without member approval under SDCL 29A-11-03. For a merger requiring member approval, the plan must be approved by a majority of the votes cast by the members entitled to vote thereon at a meeting of members, provided that the notice of the meeting included a description of the merger. Alternatively, if the corporation has no members or no provision for member voting, the plan must be approved by a majority of the directors. Following approval, articles of merger must be prepared and filed with the South Dakota Secretary of State. The question tests the understanding of when a nonprofit corporation’s board of directors can unilaterally approve a merger without member involvement, as stipulated by South Dakota law. This exception typically applies when the merger does not materially affect the rights or interests of the members, or if the corporation’s articles or bylaws grant the board such authority under specific circumstances, or if the corporation has no members.

The South Dakota Codified Law § 38-17-3 addresses the dissolution of a nonprofit corporation. Specifically, it outlines the procedure for distributing assets upon dissolution. According to this statute, after all debts and liabilities have been paid or adequately provided for, the remaining assets of the nonprofit corporation must be distributed for one or more exempt purposes. This typically means distributing assets to other organizations that are also exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, or to the federal government, a state, a county, or a municipality for a public purpose. The law aims to ensure that assets dedicated to charitable or public benefit are not diverted for private gain. The process involves a formal dissolution plan approved by the board and potentially members, followed by the liquidation of assets and distribution according to the plan and legal requirements. The key is that the distribution must align with the corporation’s original charitable or public purpose, or a similar purpose, to prevent private enrichment.

South Dakota Codified Law (SDCL) Chapter 29A-5 governs the administration of estates, including the rights and responsibilities of fiduciaries. When a nonprofit corporation is dissolved, its assets are to be distributed to other organizations that are also exempt under Section 501(c)(3) of the Internal Revenue Code, or for a public purpose, as specified in its articles of incorporation or bylaws. If the articles or bylaws do not specify a recipient, the court may direct the distribution to a nonprofit organization engaged in activities substantially similar to those of the dissolved corporation. The law emphasizes the importance of adhering to the organization’s stated purpose and the intent of its founders. It is not permissible for assets to be distributed to the directors, officers, or members of the nonprofit corporation unless they are also members of a qualifying charitable organization to which the assets are being distributed. The primary principle is to ensure that the residual assets continue to serve a charitable or public purpose consistent with the original mission of the dissolved entity. This ensures that funds dedicated to public benefit are not diverted for private gain.

South Dakota Codified Law § 38-17-17 governs the dissolution of nonprofit corporations. When a nonprofit corporation in South Dakota is dissolved, its assets must be distributed for charitable purposes. Specifically, after paying or making provision for the payment of all liabilities of the corporation, any remaining assets must be distributed to one or more organizations that are qualified under Section 501(c)(3) of the Internal Revenue Code, or to a governmental entity for a public purpose, or to any other person or organization as a court shall direct, which organization or purpose is intended to be devoted to the charitable purposes of the dissolved corporation. This ensures that the assets are not distributed to members or private individuals, upholding the charitable mission. The question scenario involves the distribution of remaining assets after dissolution. The nonprofit has liabilities and then remaining assets. The correct distribution of these remaining assets is to an organization qualified under IRC 501(c)(3) or for a public purpose as determined by a court. The calculation is conceptual: Total Assets – Liabilities = Remaining Assets. Remaining Assets must be distributed to a 501(c)(3) organization or for a public purpose.

In South Dakota, when a nonprofit corporation’s articles of incorporation are filed, they establish the fundamental structure and purpose of the organization. The South Dakota Codified Law (SDCL) Chapter 10-36, concerning the regulation of charitable solicitations, and SDCL Title 35, regarding nonprofit corporations, provide the framework for their operation. Specifically, SDCL 35-11-11 addresses the requirements for amending articles of incorporation. An amendment generally requires a resolution approved by the board of directors, followed by a vote of the members, if the articles or bylaws grant members the right to vote on such matters. The question pertains to a scenario where the board of directors wishes to change the organization’s primary purpose, which is a fundamental aspect of its corporate identity. Such a significant alteration necessitates adherence to the statutory procedures for amending the articles of incorporation. The process typically involves board approval and then member approval, as outlined in the corporation’s governing documents and state law. The question tests the understanding of which body has the ultimate authority to approve such a substantial change, which in South Dakota nonprofit law, after board action, rests with the membership if voting rights are established.

The scenario describes a situation where a South Dakota nonprofit corporation, “Prairie Roots Foundation,” is considering amending its articles of incorporation to change its stated purpose. South Dakota Codified Law (SDCL) Chapter 29A-10 addresses the amendment of articles of incorporation for nonprofit corporations. Specifically, SDCL 29A-10-11 outlines the procedure for amending articles of incorporation. This section generally requires that amendments be adopted by the board of directors and then approved by the members. For a change in the fundamental purpose of the corporation, which is a significant alteration, a supermajority vote of the members is typically required, as stipulated in the corporation’s bylaws or by the governing statutes if the bylaws are silent or less restrictive. Assuming Prairie Roots Foundation’s bylaws require a two-thirds (2/3) majority vote of the members present and voting at a duly called meeting for amendments that alter the corporation’s fundamental purpose, and that a quorum of 50% of the voting power was present, the calculation for the required number of affirmative votes would be based on the total number of members entitled to vote. If there are 100 members entitled to vote, a quorum of 50 members is present. A two-thirds majority of those present and voting would require \( \frac{2}{3} \times 50 = 33.33 \). Since you cannot have a fraction of a vote, this would round up to 34 affirmative votes. However, the law often refers to a supermajority of the *members entitled to vote*, not just those present. If the bylaws mandate a two-thirds vote of *all* members entitled to vote, then the requirement would be \( \frac{2}{3} \times 100 = 66.67 \), rounding up to 67 affirmative votes. The question asks about the *minimum* number of affirmative votes from members entitled to vote, and the most stringent and common requirement for such a fundamental change is a supermajority of all members. Therefore, if 100 members are entitled to vote, and the requirement is a two-thirds vote of all members, the correct answer is 67. This reflects the governance principle that significant changes require broad consensus among the entire membership. The board’s approval is a prerequisite, but the member vote is decisive for this type of amendment. The filing of the amended articles with the South Dakota Secretary of State is the final administrative step. The core legal concept tested is the member approval process for amending articles of incorporation, particularly regarding significant changes to the corporate purpose under South Dakota law.

South Dakota Codified Law (SDCL) Chapter 37-22 governs the dissolution of nonprofit corporations. When a nonprofit corporation in South Dakota decides to dissolve, it must follow a specific statutory process. This process typically involves adopting a resolution of dissolution by the board of directors and, depending on the corporation’s bylaws and whether members exist, approval by the members. Following this, the corporation must cease its activities except those necessary to wind up its affairs. This winding up includes collecting assets, paying liabilities, and distributing remaining assets. SDCL 37-22-11 outlines the distribution of assets upon dissolution. It mandates that assets not disposed of by trust or otherwise in compliance with provisions for the distribution of assets shall be distributed in accordance with the corporation’s articles of incorporation or bylaws. If neither the articles nor the bylaws specify a distribution plan, the assets must be distributed to a person or persons who have been granted a tax exemption under Section 501(c) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or to a government unit for a public purpose. This ensures that the assets of a dissolved nonprofit continue to serve charitable or public purposes, preventing private inurement. The question tests the understanding of this statutory hierarchy for asset distribution in South Dakota when a nonprofit dissolves and its governing documents are silent on the matter. The calculation is conceptual, following the priority of distribution as outlined in the law: first, articles of incorporation or bylaws; second, a qualified 501(c) organization or government unit.

South Dakota Codified Law § 38-17-15 outlines the requirements for a nonprofit corporation to amend its articles of incorporation. Specifically, it states that amendments must be adopted by the board of directors and, if the corporation has members, by the members. For member approval, a majority vote of the members present and voting at a meeting where a quorum is present is generally sufficient, unless the articles or bylaws specify a higher voting threshold. If the corporation has no members, then only the board of directors needs to approve the amendment. The question describes a scenario where a nonprofit corporation has no members, and the board of directors has unanimously approved an amendment to its articles of incorporation. Therefore, no further action is required from any other body or individual, and the amendment is considered adopted according to South Dakota law for a non-member corporation.

South Dakota Codified Law § 38-17-4.1 addresses the reporting requirements for charitable organizations. Specifically, it mandates that any organization soliciting contributions in South Dakota must file an annual financial report with the Secretary of State. This report must detail the organization’s income, expenses, and assets for the preceding fiscal year. The law further stipulates that this report must be filed within five months after the close of the organization’s fiscal year. For an organization whose fiscal year ends on December 31st, the deadline for filing this annual financial report would be May 31st of the following year. Failure to comply with this reporting requirement can result in penalties, including fines and the revocation of the organization’s authority to solicit contributions in the state. This reporting mechanism is crucial for transparency and accountability in the charitable sector, allowing the public and regulatory bodies to assess the financial health and operational efficiency of these organizations.

The South Dakota Codified Law § 38-17-10 outlines the requirements for a nonprofit corporation to maintain its status and operate lawfully. Specifically, it addresses the annual filing of reports with the Secretary of State. Failure to submit these reports can lead to administrative dissolution. The law mandates that a corporation must file an annual report within a specified period following its anniversary date. For a corporation whose anniversary date is October 15th, the annual report would be due by November 1st of the following year. This deadline is not tied to a calendar year but rather to the corporation’s specific formation or last anniversary date. Therefore, if the anniversary date is October 15, 2023, the report is due by November 1, 2024. The question tests the understanding of this specific reporting requirement and the consequences of non-compliance, which is a fundamental aspect of maintaining corporate existence and good standing in South Dakota. The concept of administrative dissolution is a critical governance matter for all nonprofit entities operating within the state.

South Dakota Codified Law § 38-17-16 outlines the requirements for a nonprofit corporation to merge with another entity. For a merger to be effective, the board of directors of each merging entity must adopt a plan of merger, which then requires approval by the members of each corporation. Specifically, unless the articles of incorporation or bylaws provide for a higher threshold, a merger requires the affirmative vote of at least two-thirds of the votes cast by the members present at a meeting of the members, provided a quorum is present. This requirement ensures that significant corporate actions like mergers receive substantial member support. The question posits a scenario where a South Dakota nonprofit, “Prairie Roots Foundation,” intends to merge with “Dakota Conservation Alliance.” The board of Prairie Roots Foundation unanimously approved a merger plan. However, at the subsequent members’ meeting, only 60% of the members present voted in favor of the merger, with a quorum being met. Under South Dakota law, this level of member approval is insufficient for a merger to proceed. The statutory minimum for member approval in South Dakota for a merger, absent any other provisions in the articles or bylaws, is two-thirds of the votes cast by members present at a meeting where a quorum exists. Therefore, the merger plan, as presented and voted upon, would not be legally ratified by the members of Prairie Roots Foundation.

South Dakota Codified Law (SDCL) Chapter 37-23 governs the formation and governance of nonprofit corporations. A key aspect of this chapter relates to the annual reporting requirements for such entities. SDCL 37-23-16 mandates that each nonprofit corporation shall file an annual report with the Secretary of State. This report serves to keep the state’s records current regarding the corporation’s existence and its principal office. Failure to file this report can lead to administrative dissolution of the corporation by the Secretary of State, as outlined in SDCL 37-23-66. The annual report is due by the first day of the anniversary month of the corporation’s incorporation. The information required typically includes the corporation’s name, the address of its registered office and agent, and the names and business or residential addresses of its directors and principal officers. This reporting mechanism ensures accountability and transparency in the operations of nonprofit organizations within South Dakota.

South Dakota Codified Law § 38-17-10 outlines the requirements for a nonprofit corporation to obtain a certificate of authority to transact business in the state. This statute mandates that an application must be filed with the Secretary of State, which includes specific information about the foreign nonprofit corporation. Key details required are the name of the corporation and the fictitious name it will use in South Dakota if different, the jurisdiction under whose law it is incorporated, the address of its principal office, and the name and South Dakota address of its registered agent for service of process. Additionally, the application must state the purpose for which the corporation is organized. The filing fee for this application is also a statutory requirement. The process ensures that the foreign entity is properly registered and subject to South Dakota’s laws governing nonprofit corporations, facilitating oversight and accountability. Failure to obtain this certificate means the foreign nonprofit corporation cannot legally conduct business within the state.

The South Dakota Codified Law (SDCL) Chapter 38-17 governs agricultural fairs and expositions. Specifically, SDCL 38-17-2 outlines the requirements for state aid to district agricultural societies. To qualify for state aid, a district agricultural society must hold an annual fair and exposition, with at least five days of exhibits and activities, and must have been in continuous operation for at least three years prior to the application for aid. Furthermore, the society must have a minimum of 100 exhibiting members or participants in its annual fair. The total amount of state aid is capped at \( \$20,000 \) per district agricultural society per year. The application for aid must be filed with the Department of Tourism by November 1st of the year preceding the fair. The law also specifies that the aid is intended to promote agricultural development and education within the state. The calculation for determining eligibility for state aid does not involve a direct numerical calculation of aid based on specific metrics beyond meeting the minimum thresholds and the overall cap. The focus is on adherence to the statutory requirements. Therefore, the critical factor for a district agricultural society in South Dakota seeking state aid under SDCL 38-17-2 is meeting the established statutory criteria, including the duration of operation, the number of participants, and the timely submission of the application, within the allocated state funding framework.

South Dakota Codified Law (SDCL) Chapter 37-23 governs the formation and operation of nonprofit corporations. Specifically, SDCL 37-23-12 outlines the requirements for the annual report. A nonprofit corporation is required to file an annual report with the South Dakota Secretary of State. This report serves to update the state on the corporation’s current status, including its registered agent, officers, and directors. Failure to file the annual report can lead to administrative dissolution of the corporation. The filing fee is a nominal amount, and the report is due on the anniversary date of the corporation’s formation or by a specified date each year, depending on the specific provisions. The content of the report is generally standardized, focusing on essential governance information.

The scenario describes a situation where a South Dakota nonprofit corporation, “Prairie Bloom Foundation,” is considering a significant amendment to its articles of incorporation to change its primary charitable purpose. South Dakota Codified Law § 38-17-10 outlines the procedure for amending articles of incorporation for nonprofit corporations. Generally, such amendments require approval by a majority of the board of directors and then a vote by the members. The specific voting threshold for member approval is typically defined in the nonprofit’s bylaws. However, if the bylaws are silent or do not specify a different threshold, South Dakota law often defaults to a majority of the members present at a duly called meeting where a quorum is established. The question focuses on the minimum board approval required. Section 38-17-10 states that amendments to articles of incorporation must be adopted by the board of directors. While member approval is often necessary for substantive changes, the initial step of board approval is critical. The law does not mandate a supermajority for board approval of amendments unless the articles of incorporation or bylaws specify otherwise. Therefore, a simple majority of the directors present and voting at a meeting where a quorum exists is generally sufficient for the board’s initial approval to propose the amendment. This aligns with standard corporate governance principles where ordinary business decisions, including proposing amendments, are made by a majority vote of the board. The critical aspect here is that the board must adopt the amendment, and a simple majority of those present at a valid meeting constitutes adoption.

South Dakota Codified Law (SDCL) Chapter 38-16 governs agricultural producer organizations, including cooperatives. When a cooperative organized under this chapter faces dissolution, the distribution of its remaining assets after satisfying liabilities is subject to specific provisions. SDCL 38-16-32 outlines that any residual assets upon dissolution shall be distributed among the members of the cooperative in proportion to the patronage they have contributed to the cooperative during the fiscal year immediately preceding the dissolution. Patronage is typically measured by the volume or value of business conducted with the cooperative by each member. This ensures that members who have actively supported the cooperative receive a share of the remaining assets reflective of their engagement. Therefore, the distribution is not based on the number of shares held, nor is it left to the discretion of the board of directors without regard to prior patronage, nor is it typically donated to a general charitable fund unless the cooperative’s articles or bylaws specifically allow for such a disposition after member distribution and such a distribution would be secondary to member entitlement.

South Dakota Codified Law § 38-17-2 outlines the requirements for a nonprofit corporation to obtain a Certificate of Authority to conduct affairs in the state. This section specifies that an application must be filed with the Secretary of State, including the corporation’s name, the state or country of its incorporation, its principal office address, and the name and address of its registered agent in South Dakota. Furthermore, the application must be accompanied by a certificate of existence or a similar document from the state or country of incorporation, authenticated by the proper official. The fee for filing this application is also stipulated. For a foreign nonprofit corporation to be authorized to conduct affairs in South Dakota, it must adhere to these statutory provisions. The scenario describes a Wyoming-based nonprofit seeking to operate in South Dakota. The crucial step for this entity is to properly register with the South Dakota Secretary of State by submitting the requisite application and supporting documentation as mandated by state law. Failure to do so means the corporation is not legally authorized to conduct its activities within South Dakota.

South Dakota Codified Law § 38-17-1 defines a “charitable trust” as any property held or administered by a trustee for the benefit of a charitable purpose. Charitable purposes are broadly defined and include relief of poverty, advancement of education, advancement of religion, promotion of health, governmental or municipal purposes, and other purposes the accomplishment of which is beneficial to the community. The South Dakota Uniform Prudent Investor Act, as codified in SDCL Chapter 55-5B, governs the investment of trust assets. A trustee has a duty to invest and manage trust assets prudently. This includes considering the purposes, terms, distribution requirements, and other circumstances of the trust, as well as the general economic conditions, the possible effect of inflation or deflation, the expected tax consequences, the role that each investment plays within the portfolio, and the expected return from income and the expected appreciation of capital. The Act emphasizes diversification of investments unless the circumstances do not warrant it. The South Dakota Nonprofit Corporation Act, found in SDCL Chapter 38-17, outlines the governance and operational requirements for nonprofit corporations, including duties of directors and officers, member rights, and dissolution procedures. When a charitable trust is established or managed by a nonprofit corporation, the trustee’s duties under the Prudent Investor Act and the nonprofit corporation’s duties under the Nonprofit Corporation Act must be considered in tandem. The prudent investor standard requires a trustee to act with the care, skill, and caution that a prudent person familiar with such matters would use. This includes making reasonable efforts to verify facts relevant to the investment and management of assets.

South Dakota Codified Law (SDCL) Chapter 37-23 governs the operation of nonprofit corporations. Specifically, SDCL 37-23-34 addresses the process for dissolving a nonprofit corporation. This statute outlines that a nonprofit corporation may be dissolved by the unanimous consent of all members entitled to vote on dissolution, or by a resolution adopted by the board of directors and then submitted to the members for approval by a vote of two-thirds of the members entitled to vote thereon. The statute also mandates that after dissolution is authorized, the corporation must cease conducting its business, except as necessary to wind up its affairs. This winding up process involves collecting its assets, paying its debts and liabilities, and distributing any remaining assets to one or more domestic or foreign corporations or entities qualifying as exempt under Section 501(c)(3) of the Internal Revenue Code, or to the members if the corporation is a non-stock corporation with no charitable purpose. The filing of articles of dissolution with the South Dakota Secretary of State is the final step to formally dissolve the corporation. The scenario presented involves a situation where a majority of the board of directors, without member approval or unanimous director consent, attempts to dissolve the corporation. This action bypasses the statutory requirements for dissolution under SDCL 37-23-34, which requires either unanimous member consent or a specific board resolution followed by member approval. Therefore, the dissolution initiated solely by a majority vote of the board is not in compliance with South Dakota law.

South Dakota Codified Law (SDCL) Chapter 28-6 governs the formation and operation of nonprofit corporations. Specifically, SDCL 28-6-12 outlines the requirements for annual reports. A nonprofit corporation is required to file an annual report with the Secretary of State within 60 days following the anniversary date of its incorporation. This report must include updated information on the corporation’s name, registered agent, principal office, and the names and addresses of its directors and principal officers. Failure to file the annual report can lead to administrative dissolution of the corporation. The question tests the understanding of the specific timeline for filing this crucial document under South Dakota law. The anniversary date of incorporation for “Prairie Winds Foundation” is May 15th. Therefore, the annual report must be filed within 60 days of May 15th. Counting 60 days from May 15th: May has 31 days, so 31 – 15 = 16 days remaining in May. This leaves 60 – 16 = 44 days for June and July. June has 30 days. 44 – 30 = 14 days into July. Thus, the deadline is July 14th.

South Dakota Codified Law § 38-17-14 governs the dissolution of nonprofit corporations. Specifically, it outlines the process for distributing assets upon dissolution. When a nonprofit corporation dissolves, its assets must be distributed for one or more exempt purposes. This means that the remaining property and assets cannot be distributed to the members, directors, or officers of the corporation. Instead, these assets must be transferred to another organization that is also recognized as exempt under federal law (such as Section 501(c)(3) of the Internal Revenue Code) or to a governmental entity for a public purpose. The law aims to ensure that the charitable or public benefit purpose for which the nonprofit was established continues to be served, even after its dissolution. This principle is often referred to as the “dissolution for charitable purposes” or “cy pres” doctrine in a broader legal context, although South Dakota Codified Law § 38-17-14 provides the specific statutory framework. The key is that the assets are dedicated to furthering similar charitable or public objectives, preventing private inurement.

South Dakota Codified Law (SDCL) Chapter 37-23, the South Dakota Nonprofit Corporation Act, governs the formation, operation, and dissolution of nonprofit corporations in the state. A critical aspect of this act pertains to the powers and duties of the board of directors, particularly concerning conflicts of interest and the duty of loyalty. When a director has a personal interest in a transaction or contract with the corporation, SDCL 37-23-35 addresses this situation. This statute requires that such an interested director must disclose the nature and extent of their interest to the board. Furthermore, the transaction or contract must be approved by a majority of the disinterested directors. If the board fails to approve it, the transaction can still be ratified by a majority vote of the members, provided the disclosure requirements are met. The statute emphasizes transparency and fairness to protect the corporation’s assets and interests from self-dealing by its fiduciaries. Failure to adhere to these provisions can lead to legal challenges and potential invalidation of the transaction. The core principle is that decisions affecting the corporation should be made in its best interest, free from undue personal influence. The specific threshold for approval by disinterested directors is a majority vote, not necessarily a supermajority unless the bylaws specify otherwise. The total number of directors, regardless of whether they are disinterested or not, is not the basis for the majority calculation for approval of the transaction itself, but rather the majority of those directors who are not interested in the matter.

South Dakota Codified Law § 38-17-10 outlines the requirements for a nonprofit corporation to amend its articles of incorporation. Specifically, it mandates that any such amendment must be adopted by a resolution approved by a majority of the votes cast by the members entitled to vote on the amendment, or if there are no members or no provision for members to vote, by a majority of the directors. The process typically involves a formal board meeting where the proposed amendment is discussed and voted upon, followed by the filing of the amended articles with the South Dakota Secretary of State. The question probes the specific procedural hurdle for amending the articles of incorporation in South Dakota when a nonprofit has a membership structure that allows for voting on such matters. The critical element is the requirement for a majority of votes cast by the members entitled to vote, not a majority of all members or a supermajority unless otherwise specified in the articles or bylaws. This distinction is crucial for proper governance and adherence to statutory requirements, ensuring that decisions reflect the will of the voting membership as prescribed by law.

South Dakota Codified Law § 38-17-10 outlines the requirements for a nonprofit corporation to amend its articles of incorporation. Specifically, it mandates that any amendment must be adopted by a resolution of the board of directors and then submitted to the members for approval. The law specifies that for amendments affecting the rights of members, a majority vote of the members present at a meeting where a quorum is present is required. For other amendments, a majority vote of the entire membership may be stipulated in the bylaws. In this scenario, the proposed amendment to change the organization’s name directly affects the identity and likely the rights associated with membership in the corporation. Therefore, the amendment must be approved by the members. The board of directors initiating the process is a necessary first step, but member approval is the critical requirement for effectiveness. Without member approval, the amendment to the articles of incorporation is not legally effective under South Dakota law.

The South Dakota Codified Law 35-21-10 outlines the requirements for the dissolution of a nonprofit corporation. Specifically, it mandates that upon dissolution, the corporation shall apply its remaining assets to the extent possible in the discharge of all liabilities and obligations. Any remaining assets thereafter are to be distributed to one or more domestic or foreign corporations or organizations qualifying as exempt under section 501(c)(3) of the Internal Revenue Code, or to the extent permitted by law, to any other person or persons as the court shall direct. This ensures that assets are used for charitable or public purposes rather than private gain, adhering to the fundamental principles of nonprofit governance. The process involves formal steps to wind up affairs, settle debts, and distribute remaining property in accordance with the corporation’s articles of incorporation and South Dakota law. Failure to follow these procedures can lead to personal liability for directors and officers. The key is that the distribution must be to organizations that themselves are tax-exempt under federal law, ensuring continuity of charitable intent.

South Dakota Codified Law § 38-17-14 addresses the dissolution of a nonprofit corporation. Specifically, it outlines the process for distributing assets upon dissolution. If a nonprofit corporation is dissolved, its assets must be distributed for one or more exempt purposes specified in its articles of incorporation or bylaws. If the articles of incorporation or bylaws do not specify exempt purposes, or if they are not sufficient to cover all of the corporation’s assets, then the assets must be distributed to any one or more domestic or foreign corporations, societies, or organizations engaged in exempt purposes. The key is that the distribution must be to organizations that themselves qualify for tax-exempt status under federal law, such as those described in Section 501(c)(3) of the Internal Revenue Code, or for charitable, religious, educational, or scientific purposes. This ensures that the assets continue to serve a public benefit, aligning with the original intent of a nonprofit entity. The law does not permit distribution to members, officers, or directors, nor does it allow for distribution to the state of South Dakota unless the state itself is designated as a recipient for specific charitable purposes. The scenario presented involves a rural South Dakota historical society that has ceased operations. Its articles of incorporation are silent on asset distribution upon dissolution. Therefore, the board must identify and distribute the remaining assets to another organization that carries out similar exempt purposes, such as a state-level historical preservation entity or a federally recognized 501(c)(3) foundation dedicated to cultural heritage.