STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

November 10, 1971

Miss Alma Larson
Secretary of State
Pierre, South Dakota

OFFICIAL OPINION NO. 71-55

Corporate practice of law in South Dakota. Licensed lawyers as incorporators; number of stockholders. SDCL 47-13A

Dear Miss Larson:

You have requested my opinion in answer to the following question:

May a professional corporation for the practice of law be formed in South Dakota, when it appears that only one of the three incorporators was an attorney at law admitted to practice in the state, and that there will be but a single stockholder in such corporation, such single stockholder being a licensed practitioner of law in South Dakota?

My answer to this question is NO.

Initially, and traditionally, it is settled that a learned profession, such as the law, cannot be incorporated. While statutes have been enacted, such as SDCL 47-13A, authorizing the practice of law by a corporate entity, it is my opinion that such statutes must be strictly construed. In cases of doubt as to the propriety of such corporation, the doubt should be in favor of a finding that such corporation should not be formed.

A review of SDCL 47-13A discloses that such corporation must be incorporated by three persons, one of which must be a resident of South Dakota. Likewise such corporation must be under the direction of a board of directors of three or more persons.

When your question is reduced to its ultimate question, the question asked is whether a sole practitioner of law in South Dakota can incorporate himself under the professional corporation act.

A review of SDCL 47-13A-2 discloses that the legislature talked about "shareholders", "directors", "Officers". The whole tenor of the enacting legislation was that the professional corporation to practice law must consist of more than one attorney engaged in the active practice of law in this state. SDCL 47-13A-l emphasizes this legislative intent more forcibly in providing:

Lawyers may form professional service corporations for the practice of law..... (emphasis added).

Professional corporations for lawyers are not the only professional corporations authorized by our Legislature. It has authorized Medical corporations (47-11), Chiropractic corporations (47-11A), Dental corporations (47-12) and Veterinary corporations (47-13) in addition to corporations practicing law. An examination of the governing statutes of all of these other professional corporations, except veterinary corporations, reveals that the legislature has permitted "one or more persons licensed pursuant to specific statutes may associate to form a corporation pursuant to the provisions of the South Dakota Business Corporation Act, and the provision of the Chapter relative to such professional corporation."

If the Legislature had intended that a single practitioner of law could incorporate under SDCL 47-13A, it would have so provided. There may also be some question as to whether or not the incorporation of a single practitioner of law may be violative of public policy; however, I need not comment upon this aspect, as it is my opinion such an incorporation is not authorized by the statutes.

Respectfully submitted,

Gordon Mydland
Attorney General