South Dakota Agreement Between Board Member and Close Corporation

• Category: Contracts - Board Member
• State: Multi-State
• Control #: US-1035BG
• Format: Word; Rich Text

Description

A corporation whose shares are held by a single shareholder or a closely-knit group of shareholders (such as a family) is known as a close corporation. The shares of stock are not traded publicly. Many of these types of corporations are small firms that in the past would have been operated as a sole proprietorship or partner¬ship, but have been incorporated in order to obtain the advantages of limited liability or a tax benefit or both. A disclaimer is a denial or renunciation of liability. A disclaimer may apply to a denial of responsibility for another's claim and/or may be a statement of non-responsibility.

South Dakota Agreement Between Board Member and Close Corporation is a legally binding document that outlines the terms and conditions between a board member and a close corporation located in South Dakota. This agreement serves as a contract designed to protect the rights and responsibilities of both parties involved. The primary purpose of this agreement is to establish a clear understanding of the board member's role, obligations, and compensation within the close corporation. It ensures transparency and avoids any future conflicts or misunderstandings by outlining the expectations of both parties. Some key elements typically included in the South Dakota Agreement Between Board Member and Close Corporation are: 1. Parties Involved: This section identifies the full legal names of the board member and the close corporation. 2. Term of Agreement: It specifies the duration for which the agreement is valid, including any renewal or termination provisions. 3. Role and Responsibilities: This section outlines the specific duties and responsibilities assigned to the board member, including participation in board meetings, decision-making, strategic planning, and fiduciary obligations. 4. Confidentiality: This clause ensures that the board member agrees to maintain confidentiality regarding sensitive information about the corporation, its operations, financials, and any trade secrets or proprietary information. 5. Compensation: This section details the board member's compensation structure, including any salary, benefits, stock options, or other forms of remuneration. It may also specify expense reimbursements and procedures for review and adjustment of compensation. 6. Indemnification: This clause outlines the corporation's obligation to indemnify the board member from any legal actions or liabilities arising out of their role as a board member, subject to certain limitations and conditions. 7. Termination and Removal: It establishes the procedures and grounds for terminating the agreement before its expiration date or removing the board member from their position due to various reasons, such as poor performance, conflicts of interest, or legal issues. Some variations or types of South Dakota Agreement Between Board Member and Close Corporation may include specific provisions tailored to certain industries or sectors. These can include healthcare, technology, finance, or manufacturing, where additional regulations or compliance requirements may be applicable. It is crucial for both parties involved in the agreement to seek legal advice to ensure compliance with South Dakota laws and regulations, as well as any internal bylaws of the close corporation. Consulting an attorney can help customize the agreement to meet the specific needs and circumstances of the board member and the close corporation.