<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 47-1A-640.4 - Indebtedness of corporation for purposes of determinations under § 47-1A-640.1. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2068145Normal { margin-top: 0; margin-bottom: 0; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2068145SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2068145CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2068145Normal-000000 { margin-top: 0; margin-bottom: 0; text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2068145DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2068145000001 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2068145SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2068145SCL-000002 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } body { text-decoration-skip-ink: none; } </style></head><body><div><p dir="ltr" class="s2068145Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=47-1A-640.4"><span class="s2068145SENU">47-1A-640.4</span></a><span xml:space="preserve" class="s2068145SENU">. </span><span xml:space="preserve" class="s2068145CL">Indebtedness of corporation for purposes of determinations under § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=47-1A-640.1"><span class="s2068145CL">47-1A-640.1</span></a><span class="s2068145CL">.</span></p><p dir="ltr" class="s2068145Normal-000000"><span xml:space="preserve" class="s2068145DefaultParagraphFont">Indebtedness of a corporation, including indebtedness issued as a distribution, is not considered a liability for purposes of determinations under § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=47-1A-640.1"><span class="s2068145DefaultParagraphFont">47-1A-640.1</span></a><span xml:space="preserve" class="s2068145DefaultParagraphFont"> if its terms provide that payment of principal and interest are made only if and to the extent that payment of a distribution to shareholders could then be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is actually made.</span></p><p dir="ltr" class="s2068145Normal"><span xml:space="preserve" class="s2068145000001"> </span></p><p dir="ltr" class="s2068145Normal"><span class="s2068145SCL">Source:</span><span xml:space="preserve" class="s2068145SCL-000002"> SL 2005, ch 239, § 84.</span></p></div></body></html>