CHAPTER 47-11E
NURSING CORPORATIONS
47-11E-1 Professional service corporations and limited liability companies for the practice of nursing authorized.
47-11E-1.1 Definition of terms.
47-11E-2 Formation of corporation authorized.
47-11E-3 Powers and privileges.
47-11E-4 Name of corporation or limited liability company.
47-11E-5 Shareholders must be licensed and engaged in practice of nursing.
47-11E-5.1 Revocable trust as shareholder--Conditions.
47-11E-6 Ineligible shareholder to dispose of shares.
47-11E-7 Qualifications of president, directors and officers.
47-11E-8 47-11E-8 to 47-11E-12. Repealed by SL 2005, ch 240, § 8.
47-11E-12.1 Personal liability of shareholders, directors, and officers of professional corporations or members or managers of limited liability companies limited for corporate or individual obligations--Exception.
47-11E-12.2 Amendment of articles of incorporation to be consistent with law.
47-11E-12.3 Application of repealed provisions to acts, errors, or omissions occurring before July 1, 2005.
47-11E-13 Filing of articles of incorporation.
47-11E-14 Corporations not to engage in practice of nursing outside of chapter.
47-11E-15 Pension profit sharing, health and accident insurance or welfare plan for employees--Restrictions.
47-11E-16 Standards of professional conduct--Compliance.
47-11E-17 Suspension of corporation or members from practice of nursing.
47-11E-18 Standards of professional conduct--Discipline.
47-11E-19 Effect of act.
47-11E-20 Board of Nursing to promulgate rules.
47-11E-1. Professional service corporations and limited liability companies for the practice of nursing authorized.
One or more registered nurses, licensed practical nurses, certified registered nurse anesthetists, or clinical nurse specialists licensed pursuant to chapter 36-9 or certified nurse practitioners or certified nurse midwives licensed pursuant to chapter 36-9A may form a professional service corporation for the practice of nursing under the South Dakota Business Corporation Act. The articles of incorporation of the corporation shall contain provisions complying with the requirements of §§ 47-11E-1 to 47-11E-19, inclusive.
Registered nurses, licensed practical nurses, certified registered nurse anesthetists, or clinical nurse specialists licensed pursuant to chapter 36-9 or certified nurse practitioners or certified nurse midwives licensed pursuant to chapter 36-9A may form a professional limited liability company under the South Dakota Limited Liability Company Act if the limited liability company is organized and operated in accordance with the provisions of this chapter. The articles of organization of the limited liability company shall contain provisions complying with the requirements of §§ 47-11E-1 to 47-11E-19, inclusive.
Source: SL 1996, ch 228, § 1; SL 2000, ch 222, § 2; SL 2017, ch 171, § 50.
47-11E-1.1. Definition of terms.
Terms used in this chapter shall also include the following terms:
(1) "Articles of incorporation," the articles of organization of a limited liability company;
(2) "Corporation," both corporations under the South Dakota Business Corporations Act and limited liability companies under the South Dakota Limited Liability Company Act;
(3) "Director" or "officer," any manager of a limited liability company or the members of a limited liability company that does not have managers;
(4) "Incorporation," the members of a limited liability company;
(5) "Shareholders," the members of a limited liability company;
(6) "Shares" or "stock," membership interests in a limited liability company.
Source: SL 2000, ch 222, § 3.
47-11E-2. Formation of corporation authorized.
A corporation formed pursuant to § 47-11E-1 shall be organized solely for the purpose of conducting the practice of nursing only through persons qualified to practice nursing in the State of South Dakota.
Source: SL 1996, ch 228, § 2.
47-11E-3. Powers and privileges.
A corporation formed pursuant to § 47-11E-1 may exercise the powers and privileges conferred upon corporations by the laws of the State of South Dakota only in furtherance of and subject to its corporate purpose.
Source: SL 1996, ch 228, § 3.
47-11E-4. Name of corporation or limited liability company.
The name of a corporation formed pursuant to § 47-11E-1 shall contain the words, professional company or professional corporation or abbreviations thereof, such as Prof. Co., Prof. Corp., P.C., or PC. The name of a limited liability company formed under § 47-11E-1 shall contain the words, professional limited liability company, or the abbreviation, Prof. L.L.C., Prof. LLC, P.L.L.C., or PLLC. The name of the corporation or limited liability company shall always meet the ethical standards established for the names of nursing firms by the canons of professional ethics of the South Dakota Board of Nursing as if all the stockholders of the corporation were partners.
Source: SL 1996, ch 228, § 4; SL 2000, ch 222, § 4; SL 2020, ch 197, § 6.
47-11E-5. Shareholders must be licensed and engaged in practice of nursing.
All shareholders of a corporation formed pursuant to § 47-11E-1 shall be persons duly licensed by the South Dakota Board of Nursing to practice nursing in the State of South Dakota and who at all times own their shares in their own right. They shall be individuals who, except for illness, accident, time spent in the armed services, on vacations, and on leaves of absence not to exceed one year, are actively engaged in the practice of nursing in the offices of the corporation.
Source: SL 1996, ch 228, § 5.
47-11E-5.1. Revocable trust as shareholder--Conditions.
Notwithstanding any other provisions of this chapter, a revocable trust may be a shareholder in a corporation or limited liability company organized under this chapter, for so long as the grantor of the revocable trust is living and is eligible to be a shareholder of a corporation organized under this chapter. After the death of the grantor, the shares owned by a revocable trust are subject to any divestiture and redemption provisions of this chapter as if the shares were directly owned by the grantor of the trust.
Source: SL 2002, ch 205, § 6.
47-11E-6. Ineligible shareholder to dispose of shares.
Provisions shall be made requiring any shareholder who ceases to be eligible to be a shareholder to dispose of all shares forthwith either to the corporation or to any person having the qualifications prescribed in § 47-11E-5.
Source: SL 1996, ch 228, § 6.
47-11E-7. Qualifications of president, directors and officers.
The president of a corporation formed pursuant to § 47-11E-1 shall be a shareholder and director; and, to the extent possible, all other directors and officers shall be persons having the qualifications prescribed in § 47-11E-5. Lay directors and officers may not exercise any authority whatsoever over professional matters.
Source: SL 1996, ch 228, § 7.
47-11E-12.1. Personal liability of shareholders, directors, and officers of professional corporations or members or managers of limited liability companies limited for corporate or individual obligations--Exception.
An obligation of a professional corporation or limited liability company formed pursuant to chapter 47-11A, 47-11B, 47-11C, 47-11D, 47-11E, 47-13A, or 47-13B, whether arising in contract, tort, or otherwise, is the obligation of the professional corporation or limited liability company and the individual whose act or omission gives rise to the obligation. No shareholder, director, or officer of a professional corporation or member or manager of a limited liability company is personally liable, directly or indirectly, by way of contribution or otherwise, for such obligation based solely on such person's capacity as a shareholder, director, or officer of a professional corporation or member or manager of a limited liability company. This limitation of liability does not extend to amounts owed to the State of South Dakota or its political subdivisions for any taxes, or any penalty or interest on such taxes.
Source: SL 2005, ch 240, § 1.
47-11E-12.2. Amendment of articles of incorporation to be consistent with law.
Any professional corporation or limited liability company may amend its articles of incorporation to be consistent with SL 2005, ch 240.
Source: SL 2005, ch 240, § 2.
47-11E-12.3. Application of repealed provisions to acts, errors, or omissions occurring before July 1, 2005.
The repealed provisions contained in SL 2005, ch 240, that limited the liability of a shareholder, director, or officer of a professional corporation or member or manager of a limited liability company by limiting or eliminating the joint and several liability of such person for any act, error, or omission of an employee of the professional corporation or limited liability company by maintaining professional liability insurance meeting certain standards, shall remain in effect for any act, error, or omission, whether arising in contract, tort, or otherwise, occurring before July 1, 2005.
Source: SL 2005, ch 240, § 11.
47-11E-13. Filing of articles of incorporation.
A copy certified by the secretary of state of the articles of incorporation of any corporation formed pursuant to this chapter shall be filed with the South Dakota Board of Nursing, together with a certified copy of all amendments thereto. At the time of filing the original articles with the Board of Nursing, the corporation shall file a written list of shareholders setting forth the names and addresses of each and a written list containing the names and addresses of all persons who are not shareholders who are employed by the corporation and who are authorized to practice nursing in South Dakota. Within ten days after any change in such shareholders or employees, a written list setting forth the information required by the preceding sentence shall be filed with the Board of Nursing.
Source: SL 1996, ch 228, § 13.
47-11E-14. Corporations not to engage in practice of nursing outside of chapter.
Except as provided in this chapter, corporations may not engage in the practice of nursing. Professional service corporations organized and operated in accordance with the provisions of this chapter are not lay agencies within the meaning of the canons of professional ethics.
Source: SL 1996, ch 228, § 14.
47-11E-15. Pension profit sharing, health and accident insurance or welfare plan for employees--Restrictions.
A professional service corporation may adopt a pension profit-sharing (whether cash or deferred), health and accident, insurance, or welfare plan for all or part of its employees including lay employees, if such plan does not require or result in the sharing of specific or identifiable fees with lay employees and any payments made to lay employees or into any such plan in behalf of lay employees are based upon their compensation or length of service, or both, rather than the amount of fees or income received.
Source: SL 1996, ch 228, § 15.
47-11E-16. Standards of professional conduct--Compliance.
The corporation may not do anything which if done by a nurse employed by it would violate the standards of professional conduct established for such nurse pursuant to law. The corporation shall at all times comply with the standards of professional conduct established by the South Dakota Board of Nursing and the provisions of this chapter.
Source: SL 1996, ch 228, § 16.
47-11E-17. Suspension of corporation or members from practice of nursing.
The Board of Nursing may suspend or revoke the right of any corporation, or any of its members, to practice nursing, for any of the following reasons:
(1) The revocation or suspension of the license to practice nursing of any officer, director, shareholder, or employee not promptly removed or discharged by the corporation;
(2) Unethical professional conduct on the part of any officer, director, shareholder, or employee not promptly removed or discharged by the corporation;
(3) The death of the last remaining shareholder; or
(4) A violation of any of the provisions of this chapter or the rules promulgated pursuant to this chapter.
Source: SL 1996, ch 228, § 17.
47-11E-18. Standards of professional conduct--Discipline.
Nothing in this chapter diminishes or changes the obligation of each nurse employed by the corporation to conduct their practice in accordance with the standards of professional conduct promulgated by the South Dakota Board of Nursing. Any nurse who by act or omission causes the corporation to act or fail to act in a way which violates such standards of professional conduct, is personally responsible for such act or omission and is subject to discipline.
Source: SL 1996, ch 228, § 18.
47-11E-19. Effect of act.
This chapter does not alter any law applicable to the relationship between a nurse furnishing nursing service and a person receiving such service, including liability arising out of such service.
Source: SL 1996, ch 228, § 19.
