Nevada Assembly Bill AB126

Nevada 2023 Regular Session

• Introduced: 2/9/23
• Refer: 2/9/23
• Report Pass: 4/19/23
• Engrossed: 4/24/23
• Refer: 4/24/23
• Report Pass: 5/19/23
• Enrolled: 5/26/23
• Chaptered: 5/30/23
• Passed: 5/30/23

Caption

Revises provisions governing business entities. (BDR 7-762)

Impact

The bill outlines procedures for changing a corporation's name and reduces the procedural requirements for decreasing the number of outstanding shares without shareholder votes in certain cases. These alterations could provide corporations with more flexibility in their governance and operational decision-making. Additionally, the bill clarifies restrictions on stock transfers, thereby strengthening protections for existing shareholders against undesirable ownership changes while also offering a clearer framework for compliance and enforcement.

Summary

Assembly Bill No. 126, introduced by Assemblyman Nguyen, proposes comprehensive modifications to existing laws governing business entities in Nevada. Key provisions include the authorization for corporations to correct erroneously filed records with the Secretary of State. This change ensures that corporations can rectify mistakes without significant legal hurdles, thereby enhancing operational efficiency and accountability. Furthermore, the bill clarifies the types of records that must be maintained by corporations and establishes conditions under which these records can be made accessible to shareholders and other stakeholders.

Contention

Notably, provisions introduce the ability for corporate boards to impose confidentiality agreements on those wishing to inspect corporate records. This aspect has raised concerns among transparency advocates, as it may limit shareholder access to critical information. Critics emphasize the importance of maintaining an open record access policy to support informed decision-making by shareholders. On the other hand, proponents argue that such measures are necessary to protect sensitive corporate information and that they create a more secure operating environment for businesses.