This office lease provision states that it is an unpermitted assignment for partners to have a change in their share of partnership ownership and thus a default under the lease. Generally, this type of change in ownership is couched in those provisions dealing with changes in share ownerships of corporations.
South Dakota Provision Dealing with Changes in Share Ownership of Corporations and Changes in Share Ownership of Partnership In South Dakota, there are specific provisions in place that deal with changes in share ownership for both corporations and partnerships. These provisions ensure that any changes in ownership are properly recorded and that the rights and responsibilities of all parties involved are protected. Let's take a closer look at the different types of provisions that apply to each entity: South Dakota Corporations: 1. Share Transfer Restrictions: South Dakota corporations may have provisions in their bylaws or articles of incorporation that impose restrictions on the transfer of shares. These restrictions may include preemptive rights, which allow existing shareholders the right of first refusal to purchase any shares being transferred. 2. Shareholder Approval: Certain changes in share ownership, such as a merger or a sale of substantially all assets, may require approval from a majority or super majority of shareholders. This provision ensures that shareholders have a say in significant decisions that can affect the corporation's direction and value. 3. Reporting Requirements: Whenever there is a change in share ownership, South Dakota corporations are generally required to report such changes to the South Dakota Secretary of State. This provision helps maintain accuracy and transparency in corporate ownership records. South Dakota Partnerships: 1. Partnership Agreements: Partnerships in South Dakota typically establish their own provisions for dealing with changes in share ownership through a partnership agreement. This agreement outlines the rights and responsibilities of partners, including provisions regarding the transfer of partnership interests. 2. Consent Requirement: Unless otherwise stated in the partnership agreement, a partner's transfer of their interest to a third party usually requires the consent of the other partners. This provision helps ensure that all partners have a say in approving new partners and maintaining the existing structure of the partnership. 3. Valuation and Buyout: In the event of a change in share ownership in a partnership, provisions may be included to determine the value of the partnership interest being transferred and the mechanism for a buyout. These provisions protect the interests of both the transferring partner and the remaining partners. By incorporating these provisions into the legal framework of South Dakota corporations and partnerships, the state aims to provide a fair and transparent process for dealing with changes in share ownership. It safeguards the rights of shareholders and partners, promotes corporate and partnership stability, and maintains accurate records of ownership.
