CHAPTER 47-13B
PROFESSIONAL CORPORATIONS FOR THE PRACTICE OF PUBLIC ACCOUNTING
47-13B-1 Formation of corporations or limited liability companies authorized.
47-13B-1.1 Definition of terms.
47-13B-2 Purpose of corporation.
47-13B-3 Powers exercised only for authorized purpose--Incompatible services prohibited.
47-13B-4 Corporate name.
47-13B-5 47-13B-5. Repealed by SL 2002, ch 179, § 72
47-13B-5.1 Revocable trust as shareholder--Conditions.
47-13B-6 Disposition of shares held by person no longer qualified.
47-13B-7 Qualifications of directors and officers--Restrictions on powers of lay directors and officers.
47-13B-8 47-13B-8 to 47-13B-12. Repealed by SL 2005, ch 240, § 10.
47-13B-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.
47-13B-12.2 Amendment of articles of incorporation to be consistent with law.
47-13B-12.3 Application of repealed provisions to acts, errors, or omissions occurring before July 1, 2005.
47-13B-13 Articles of incorporation filed with board of accountancy--List of shareholders and professional employees--Notice of changes.
47-13B-14 Restrictions on corporate practice of accounting.
47-13B-15 Pension and insurance plans for employees.
47-13B-16 Corporation held to professional standards of conduct--Violation as ground for suspension or revocation of professional certificate.
47-13B-17 Professional obligations unchanged by incorporation--Personal responsibility for corporate acts in violation.
47-13B-18 Accountant-client privileges unchanged.
47-13B-1. Formation of corporations or limited liability companies authorized.
Public accountants may form professional service corporations or limited liability companies for the practice of public accounting under the South Dakota Business Corporation Act as amended, or the South Dakota Limited Liability Act as amended, respectively, providing that such corporations and limited liability companies are organized and operated in accordance with the provisions of this chapter.
Source: SL 1971, ch 260, § 1; SL 1993, ch 344, § 39Y.
47-13B-1.1. Definition of terms.
Terms used in this chapter mean:
(1) "Articles of incorporation," includes 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," includes any manager of a limited liability company or the members of a limited liability company that does not have managers;
(4) "Incorporation," includes the members of a limited liability company;
(5) "Shareholders," includes the members of a limited liability company;
(6) "Shares" or "stock," includes membership interests in a limited liability company.
Source: SL 1993, ch 344, § 39Z.
47-13B-2. Purpose of corporation.
The corporation shall be organized solely for the purpose of conducting the practice of accountancy.
Source: SL 1971, ch 260, § 1 (2); SL 2002, ch 179, § 71.
47-13B-3. Powers exercised only for authorized purpose--Incompatible services prohibited.
The corporation 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, the practice of accountancy in the State of South Dakota, and shall not provide services that are incompatible with the practice of public accountancy.
Source: SL 1971, ch 260, § 1 (3).
47-13B-4. Corporate name.
The name of the corporation shall contain words "professional company," or "professional corporation" or abbreviations thereof, such as "Prof. Co.," "Prof. Corp.," "P.C.", "PC", "Incorporated," "Corporation," "Corp.," "Association," "Ltd.," "Chartered," or "Inc." The name of a limited liability company shall contain the words "professional limited liability company" or the abbreviation "Prof. L.L.C.", "Prof. LLC", "P.L.L.C.", or "PLLC". In addition, any name of a corporation or limited liability company shall always meet the ethical standards established for the names of professional accounting firms by the board of the State of South Dakota, and in accordance with the code of professional ethics of the American Institute of Certified Public Accountants.
Source: SL 1971, ch 260, § 1 (1); SL 1993, ch 344, § 39AA; SL 1994, ch 305, § 8; SL 2020, ch 197, § 10.
47-13B-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, § 10.
47-13B-6. Disposition of shares held by person no longer qualified.
Provisions shall be made requiring any shareholder who ceases to be eligible to be a shareholder to dispose of all his shares forthwith, either to the corporation or to any person having the qualifications prescribed in § 47-13B-5.
Source: SL 1971, ch 260, § 1 (5).
47-13B-7. Qualifications of directors and officers--Restrictions on powers of lay directors and officers.
The principal executive officer shall be a shareholder and a director and, to the extent possible, all other directors and principal officers shall be shareholders, and lay directors and officers shall not exercise any authority whatsoever over professional matters.
Source: SL 1971, ch 260, § 1 (6).
47-13B-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.
47-13B-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.
47-13B-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.
47-13B-13. Articles of incorporation filed with board of accountancy--List of shareholders and professional employees--Notice of changes.
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 secretary of the South Dakota Board of Accountancy, together with a certified copy of all amendments thereto. At the time of filing the original articles with the secretary, the corporation shall file with him a written list of shareholders setting forth the names and addresses of each and a written list containing the names and addresses for all persons who are not shareholders who are employed by the corporation and who are authorized to practice accounting in South Dakota. Within thirty 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 said secretary.
Source: SL 1971, ch 260, § 2.
47-13B-14. Restrictions on corporate practice of accounting.
Except as provided in this chapter, corporations shall not engage in the practice of accounting. Professional service corporations organized and operated in accordance with the provisions of this chapter shall not be deemed lay agencies within the meaning of the laws of this state and the rules and regulations of the South Dakota Board of Accountancy or the code of professional ethics of the American Institute of Certified Public Accountants.
Source: SL 1971, ch 260, § 4.
47-13B-15. Pension and insurance plans for employees.
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, providing that such plan does not require or result in the sharing of specific or identifiable fees with any 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 1971, ch 260, § 3.
47-13B-16. Corporation held to professional standards of conduct--Violation as ground for suspension or revocation of professional certificate.
The corporation shall do nothing which if done by an accountant employed by it would violate the standards of professional conduct established for such accountant pursuant to law, including rules of the South Dakota State Board of Accountancy. The corporation shall at all times comply with the standards of professional conduct established by the South Dakota State Board of Accountancy and the provisions of this chapter and the American Institute of Certified Public Accountants. Any violation of this chapter by the corporation shall be grounds for the South Dakota State Board of Accountancy to suspend or revoke or refuse to renew the license or certificate of any of its members' right to practice accountancy.
Source: SL 1971, ch 260, § 2.
47-13B-17. Professional obligations unchanged by incorporation--Personal responsibility for corporate acts in violation.
Nothing in this chapter shall be deemed to diminish or change the obligation of each accountant employed by the corporation to conduct his practice in accordance with the rules and regulations of the South Dakota State Board of Accountancy or by the code of professional ethics of the American Institute of Certified Public Accountants; any accountant who by act or omission causes the corporation to act or fail to act in a way which violates such standards of professional conduct, including any provision of this chapter, shall be deemed personally responsible for such act or omission and shall be subject to discipline therefor.
Source: SL 1971, ch 260, § 2.
47-13B-18. Accountant-client privileges unchanged.
Nothing in this chapter shall be deemed to modify the accountant-client privilege established by the Legislature and any comparable common privilege.
Source: SL 1971, ch 260, § 2.
