Legal Question in Business Law in South Dakota

Re: S-Corp By-laws

I'm not licensed in SD, so these comments are very general and should not be considered advice regarding SD law.

Generally, the bylaws can only be changed by affirmative vote of a majority of the shareholders (or sometimes the directors). So, the short answer to your question is "no," unless you can convince the other shareholders to agree -- or if you own more than 50% of the shares.

A better way to look at this is to consider this as an opportunity to discuss with the other shareholders the development of a buy-sell agreement, to anticipate the issues you are discussing.

Sometimes, a buy-sell will provide that life insurance is purchased to enable the remaining shareholder to buy out the heirs of the deceased shareholders. Since your company is an S-Corp, the cost of the life insurance probably is not deductible as a business expense, but you should talk with your accountant about this.

You should probably go talk to an atty who specializes in estate planning and closely-held business succession issues, and get some advice from him/her. Then, propose to your fellow shareholders that you all work with the atty to develop a reasonable succession plan that will allow you to continue running the business, and to buy out the heirs without bankrupting yourself.

Hope that goves you some ideas.

Standard disclaimer: The comments above are based on limited facts and should not be considered legal advice. We do not have an attorney-client relationship.