§ 47-34A-702 — Liability of series for debts of limited liability company or other series.

South Dakota § 47-34A-702

• Jurisdiction: South Dakota
• Title 47: CORPORATIONS
• Ch. 47-34: UNIFORM LIMITED LIABILITY COMPANY ACT

Text

(a) Notwithstanding any other provisions of law to the contrary, the debts, liabilities, and obligations incurred, contracted for, or otherwise existing with respect to a particular series shall be enforceable against the assets of such series only, and not against the assets of the limited liability company generally or any other series thereof, if all of the following apply: (1) The operating agreement creates one or more series; (2) Separate and distinct records are maintained for or on behalf of any such series; (3) The assets associated with any such series, whether held directly or indirectly, including through a nominee or otherwise, are accounted for separately from the other assets of the limited liability company or of any other series; (4) The operating agreement provides for the limitations on liabilities of a series described in this subsection; (5) Notice of the limitation on liabilities of a series described in this subsection is included in the limited liability company’s articles of organization; and (6) A certificate of designation has been issued for each series that is to have limited liability under this section. (b) A particular series shall be deemed to have possession, custody, and control only of the books, records, information, and documentation related to such series and not of the books, records, information, and documentation related to the limited liability company as a whole or any other series thereof. (c) With respect to a particular series, unless otherwise provided in the operating agreement, none of the debts, liabilities, obligations, and expenses incurred, contracted for or otherwise existing with respect to a limited liability company generally, or any other series thereof, are enforceable against the assets of such series, subject to the provisions of subsection (a). (d) Compliance with subdivisions (a)(5) and (a)(6) of this section shall constitute notice of such limitation of liability of a series. (e) A series with limited liability shall be treated as a separate entity to the extent set forth in the articles of organization. Each series with limited liability may, in its own name, contract, hold title to assets, including real and personal property, whether tangible or intangible, grant security interests, sue and be sued, and otherwise conduct business and exercise the powers of a limited liability company under this chapter. The limited liability company and any of its series may elect to consolidate its operations as a single taxpayer to the extent permitted under applicable law, elect to work cooperatively, elect to contract jointly, or elect to be treated as a single business for the purposes of qualification or authorization to do business in this or any other state. Such elections do not affect the limitation of liability set forth in this section except to the extent that the series have specifically accepted joint liability by contract.

Legislative History

SL 2020, ch 200, § 2, eff. Nov. 15, 2020.