47-10-1      Purposes of corporations.
47-10-2      Powers of corporations.
47-10-3      Borrowing--Pledging security for borrowings.
47-10-4      Lending--Competition with lending institutions prohibited.
47-10-5      Terms and conditions of loans.
47-10-6      Purchase and sale of property.
47-10-7      Promotion of local development corporations.
47-10-8      Participation in federal programs.
47-10-9      Lending--Duty to give first opportunity to lending institution.
47-10-10      Incorporators.
47-10-11      Directors--Number and term of office.
47-10-12      Capitalization--Minimum capital before commencing business.
47-10-13      Accumulation of surplus--Use of surplus.
47-10-14      Persons authorized to hold common stock.
47-10-15      First annual meeting--Conditions--Subsequent annual meetings.
47-10-16      Classes of members--Stockholder members--Nonstockholder members.
47-10-17      Nonstockholder members--Establishment of line of credit.
47-10-18      Nonstockholder members--Duty to lend.
47-10-19      Nonstockholder members--Right to withdraw--Conditions.
47-10-20      Nonstockholder members--Liability for debts.
47-10-21      Nonstockholder members--Right to share in surplus.
47-10-22      Nonstockholder members--Payment before dissolution of corporation.
47-10-23      Legal investments.
47-10-24      Applicability of other laws.

47-10-1. Purposes of corporations.

Corporations may be organized under this chapter to promote, assist, encourage, and through the cooperative efforts of the institutions and corporations which are members thereof, develop and advance the business prosperity and economy of the state to encourage new industries and to rehabilitate existing industries in the state; to promote and stimulate the expansion of South Dakota business ventures which tend to increase the growth and thrift of the state; to cooperate and act in conjunction with other organizations, the objects of which are the promotion of industrial, agricultural, and recreational developments within the state and to lend to approved and deserving applicants money for the carrying on and development of all kinds of business undertakings in the state, thereby establishing a medium of credit not otherwise readily available therefor.

Source: SL 1957, ch 314, § 2; SDC Supp 1960, § 55.6002.

47-10-2. Powers of corporations.

In furtherance of the purposes set forth in § 47-10-1 and in addition to the powers conferred by the general laws relating to business corporations, any business development credit corporation shall, subject to the restrictions and limitations contained in this chapter, have the powers set forth in §§ 47-10-3 to 47-10-8, inclusive.

Source: SL 1957, ch 314, § 2; SDC Supp 1960, § 55.6002.

47-10-3. Borrowing--Pledging security for borrowings.

Subject to § 47-10-2, any business development credit corporation shall have the power to borrow money on secured or unsecured notes from any bank, savings and loan association, trust company, or insurance company which is a nonstockholder member of the corporation and from other nonmember persons, firms, or corporations; and to pledge bonds, notes, and other securities as collateral therefor.

Source: SL 1957, ch 314, § 2; SDC Supp 1960, § 55.6002 (1).

47-10-4. Lending--Competition with lending institutions prohibited.

Subject to § 47-10-2, any business development credit corporation shall have the power to make secured or unsecured loans; but it is not the intention hereof to take from the lending institutions within the state any loans or commitments desired by such institutions generally in the ordinary course of their business.

Source: SL 1957, ch 314, § 2; SDC Supp 1960, § 55.6002 (2).

47-10-5. Terms and conditions of loans.

Subject to § 47-10-2, any business development credit corporation shall have the power to establish and regulate the terms and conditions of any loans under § 47-10-4 and the charges for interest or service connected therewith.

Source: SL 1957, ch 314, § 2; SDC Supp 1960, § 55.6002 (3).

47-10-6. Purchase and sale of property.

Subject to § 47-10-2, any business development credit corporation shall have the power to purchase, hold, lease, and otherwise acquire and to convey such real and personal estate as it may acquire in the satisfaction of debts, or pursuant to the terms and conditions of loans, or which it acquires in the foreclosure of mortgages thereon, or upon judgments for debt or in settlements to secure debts.

Source: SL 1957, ch 314, § 2; SDC Supp 1960, § 55.6002 (4).

47-10-7. Promotion of local development corporations.

Subject to § 47-10-2, any business development credit corporation shall have the power to promote the establishment of local industrial development corporations in the various communities of the state, to enter into agreements with them, and to cooperate with, assist and otherwise encourage such local foundations.

Source: SL 1957, ch 314, § 2; SDC Supp 1960, § 55.6002 (5).

47-10-8. Participation in federal programs.

Subject to § 47-10-2, any business development credit corporation shall have the power to participate with any duly authorized federal lending agency in the making of loans.

Source: SL 1957, ch 314, § 2; SDC Supp 1960, § 55.6002 (6).

47-10-9. Lending--Duty to give first opportunity to lending institution.

The corporation shall lend money only when credit is not elsewhere readily available. Before granting any loan, the board of directors or a committee thereof shall endeavor, so far as is reasonably possible, to ascertain that the first opportunity to grant such loan has been given to lending institutions which may desire such loans generally in the course of their business.

Source: SL 1957, ch 314, § 7; SDC Supp 1960, § 55.6007.

47-10-10. Incorporators.

Five or more natural persons of the age of twenty-one years or more, may act as incorporators by signing, acknowledging, filing, and recording articles of incorporation for a business development credit corporation.

Source: SL 1957, ch 314, § 1; SDC Supp 1960, § 55.6001.

47-10-11. Directors--Number and term of office.

The corporate powers of any business development credit corporation shall be exercised by a board of directors. The number of directors and their term of office shall be determined in a manner prescribed in the bylaws. At no time shall there be less than five directors. The initial board of directors shall consist of the incorporators and they shall serve until the first annual meeting.

Source: SL 1957, ch 314, § 4; SDC Supp 1960, § 55.6004.

47-10-12. Capitalization--Minimum capital before commencing business.

At least twenty-five percent of the capital stock authorized in the articles of incorporation shall be paid into the treasury of the corporation in cash before the corporation shall be authorized to transact any business other than such as relates to its organization.

Source: SL 1957, ch 314, § 3; SDC Supp 1960, § 55.6003.

47-10-13. Accumulation of surplus--Use of surplus.

Any business development credit corporation shall set apart as a surplus not less than ten percent of its net earnings each year until such surplus, with any unimpaired surplus paid in, shall amount to one-half of the capital stock. The surplus shall be kept to secure against losses and contingencies, and whenever it becomes impaired it shall be reimbursed in the manner provided for its accumulation.

Source: SL 1957, ch 314, § 6; SDC Supp 1960, § 55.6006.

47-10-14. Persons authorized to hold common stock.

At least a majority of the common stock of a business development credit corporation shall at all times be held by residents of this state or by persons, firms, or corporations engaged in doing business therein. Common stock shall at all times be held by stockholder members who have their residences or principal places of business in not less than fifteen counties in this state.

Source: SL 1957, ch 314, § 3; SDC Supp 1960, § 55.6003.

47-10-15. First annual meeting--Conditions--Subsequent annual meetings.

The first annual meeting of a business development credit corporation shall occur at a date to be fixed by the board of directors as soon as reasonably possible after a minimum of twenty-five percent of the capital stock of the corporation is paid into its treasury and a minimum of ten stockholder members of the corporation have qualified as provided in § 47-10-16; and such annual meeting and subsequent annual meetings shall be called and the directors shall be elected in the manner provided in the bylaws.

Source: SL 1957, ch 314, § 4; SDC Supp 1960, § 55.6004.

47-10-16. Classes of members--Stockholder members--Nonstockholder members.

There shall be two classes of members in the corporation with voting rights specified in the articles of incorporation.

(1)    Stockholder members include individuals, corporations, and organizations who qualify by the purchase of common stock.

(2)    Nonstockholder members include banks, savings and loan associations, trust companies, and insurance companies who qualify by making application to lend funds to the corporation upon call.

Source: SL 1957, ch 314, § 5; SDC Supp 1960, § 55.6005.

47-10-17. Nonstockholder members--Establishment of line of credit.

Each nonstockholder member of a business development credit corporation shall establish a line of credit to the corporation as determined in the articles of incorporation.

Source: SL 1957, ch 314, § 5; SDC Supp 1960, § 55.6005 (2) (a).

47-10-18. Nonstockholder members--Duty to lend.

All calls of funds which nonstockholder members of a business development credit corporation are committed to lend to the corporation shall be prorated by the corporation among the nonstockholder members in the same proportion that the individual lines of credit bear to the aggregate line of credit.

Source: SL 1957, ch 314, § 5; SDC Supp 1960, § 55.6005 (2) (b).

47-10-19. Nonstockholder members--Right to withdraw--Conditions.

Upon written notice given sixty days in advance, a nonstockholder member of a business development credit corporation may withdraw from such membership at the expiration date of such notice and after said expiration date shall cease to exercise any of the powers and privileges incidental to such membership and shall be free of any obligations in connection therewith except those obligations which have accrued or for which commitments have been made before said expiration date.

Source: SL 1957, ch 314, § 5; SDC Supp 1960, § 55.6005 (2) (c).

47-10-20. Nonstockholder members--Liability for debts.

Nonstockholder members of a business development credit corporation do not assume any liability for the debts of the corporation.

Source: SL 1957, ch 314, § 5; SDC Supp 1960, § 55.6005 (2) (d).

47-10-21. Nonstockholder members--Right to share in surplus.

Nonstockholder members of a business development credit corporation shall not share in any surplus of the corporation in excess of the obligations due such nonstockholder members.

Source: SL 1957, ch 314, § 5; SDC Supp 1960, § 55.6005 (2) (e).

47-10-22. Nonstockholder members--Payment before dissolution of corporation.

Upon dissolution of a corporation organized under this chapter, obligations due the nonstockholder members are to be paid in full before any payments are made to the stockholder members.

Source: SL 1957, ch 314, § 5; SDC Supp 1960, § 55.6005 (2) (f).

47-10-23. Legal investments.

Notwithstanding any other statute, the notes or other interest-bearing obligations of any corporation organized under this chapter, issued in accordance with this law and the articles of incorporation and bylaws of the corporation shall be legal investments for the banks, savings and loan associations, trust companies, and insurance companies who become members of the corporation.

Source: SL 1957, ch 314, § 9; SDC Supp 1960, § 55.6009.

47-10-24. Applicability of other laws.

The provisions of §§ 47-1A-101 to 47-1A-863.3, inclusive, §§ 47-1A-1401 to 47-1A-1440, inclusive, and §§ 47-1A-1601 to 47-1A-1621.3, inclusive, shall apply to corporations incorporated under this chapter, insofar as they may be applicable and not inconsistent with this chapter.

Source: SL 1957, ch 314, § 8; SDC Supp 1960, § 55.6008; SL 2005, ch 202, § 3.