SDCL § 51A-3-6: Transfers to surplus.

One-tenth of the net profit for any dividend period shall be carried to the surplus fund until such fund shall amount to twenty percent of the capital stock or members' equity. Any losses sustained in excess of undivided profits may be charged to the surplus account, but no dividends shall thereafter be declared or paid until the surplus fund shall amount to twenty percent of the capital stock or members' equity.

Source: SL 1891, ch 27, § 13; RCivC 1903, § 859; SL 1909, ch 222, art 2, § 36; SL 1911, ch 255, § 14; SL 1915, ch 102, art 2, § 40; RC 1919, §§ 8988, 9044; SDC 1939, § 6.0439; SL 1953, ch 14, § 1; SDCL, § 51-4-23; SL 1969, ch 11, § 3.8; SDCL, §§ 51-17-5.1, 51-17-9; SL 2004, ch 289, § 9.