South Dakota corporate bylaws create the internal rulebook that guides a corporation’s governance, structure, and operations. The corporation’s board of directors or incorporators tailor this document to ensure it meets their needs and promotes the organization’s smooth and efficient functioning.
These bylaws include various details, such as the powers and responsibilities of directors and officers, the procedure for amending policies, and the mechanisms for addressing specific challenges that may arise. Even though you don’t have to file bylaws with the South Dakota Secretary of State, they hold significant legal authority within the corporation.
Legal Requirements
South Dakota law requires corporations to have bylaws. Here are some other legal requirements to be aware of when you create bylaws for your corporation:
- Annual Meetings – The company may hold its annual meetings in or out of state at the place that its bylaws specify. [1]
- Corporate Bylaws – The board of directors or incorporators adopt initial bylaws for the corporation’s operations. [2] The bylaws may contain any provision that is not inconsistent with state law or the articles of incorporation.
- Issuance of Stock – The company can issue the number of shares of each series or class that the articles of incorporation authorize. [3] It shouldn’t issue stocks or bonds except for money, labor performed, or intangible or tangible property actually received. [4] Some issuances of shares may require the approval of shareholders. [5]
Naming Considerations
- Required Words: “Corporation,” “Incorporated,” “Company,” “Limited,” an abbreviation thereof, or words/abbreviations of like import in other languages (choose one).
- Prohibited Words: Don’t use any language stating or implying that you’ve organized the entity for impermissible purposes.
- Name Reservation Period: 120 days.
- Renewal Period: Nonrenewable. Must wait 60 days after the expiration of the initial registration date to reserve the name again.
- Transferability: Yes.
Emergency Bylaws
If the articles of incorporation don’t state otherwise, the corporation’s board of directors can adopt bylaws to use during emergencies. The shareholders can repeal or amend them as necessary. [6]
Emergency bylaws can only be used in situations where it would be impractical to establish a quorum of board members due to a catastrophic event. The bylaws are only effective during the emergency and cease thereafter.
