A.B. 239
- *AB239*
ASSEMBLY BILL NO. 239–ASSEMBLYMEMBER DALIA
FEBRUARY 17, 2025
____________
Referred to Committee on Judiciary
SUMMARY—Revises provisions relating to business entities.
(BDR 7-669)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State: No.
~
EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
AN ACT relating to business entities; revising provisions relating to
notice or other communications by business entities;
making a conforming change relating to fiduciary duties
owed by directors and officers of a corporation; revising
provisions governing voting relating to the approval of a
reverse stock split of a corporation; removing certain
provisions governing the issuance of shares of a
corporation; making changes to certain approvals by a
board of directors; clarifying provisions relating to voting
agreements by stockholders; revising provisions
governing the amendment of articles of incorporation
after issuance of stock; revising certain terms relating to
business entities; revising provisions relating to the last
known address of members and managers of a limited-
liability company and the dissolution of a limited-liability
company; establishing a process by which a corporation
may reorganize through the formation of a holding
corporation; revising provisions relating to the approval
of a plan of merger, conversion or exchange of a domestic
corporation and the conversion of a domestic entity into a
foreign entity; revising provisions governing the right of a
stockholder to dissent from certain corporate actions; and
providing other matters properly relating thereto.
– 2 –
- *AB239*
Legislative Counsel’s Digest:
Existing law sets forth various provisions governing business entities, including 1
private corporations and limited-liability companies. (Chapters 78 and 86 of NRS) 2
This bill makes various changes to business entities. 3
Section 1 of this bill clarifies that the inclusion of certain materials provided 4
with a notice or other communication by a business entity are deemed to be part of 5
the notice or communication. Section 2 of this bill makes a conforming change 6
relating to the fiduciary duties of directors and officers of a private corporation for 7
consistency within existing law. 8
Sections 3 and 4 of this bill require that votes relating to the approval of a 9
reverse stock split be approved by the vote of the relevant stockholders of such a 10
class or series of stock. Sections 5 and 9 of this bill remove the phrase “share 11
dividend” from provisions governing the issuance of shares of a private 12
corporation. 13
Section 6 of this bill authorizes a board of directors of a private corporation to 14
take certain actions in final form or such preliminary form as the directors deem 15
appropriate in their business judgment. 16
Section 7 of this bill: (1) provides that voting agreements entered into by 17
stockholders may include a private corporation; and (2) makes conforming changes 18
authorizing the reference in such an agreement to facts or events outside of the 19
agreement as provided in existing law. Section 8 of this bill: (1) provides that a 20
proposed amendment to the articles of incorporation of a private corporation after 21
the issuance of stock that designates one or more new series of an existing class 22
does not adversely alter or change the preferences or rights of the existing series; 23
and (2) authorizes a publicly traded corporation to amend its articles of 24
incorporation to increase or decrease the shares it is authorized to issue through a 25
stockholder vote. 26
Section 11 of this bill clarifies the notice required if the approval of a 27
dissolution of a corporation was obtained by written consent and replaces the 28
phrase “certificate of dissolution” with “articles of dissolution” for purposes of 29
provisions relating to the dissolution of a corporation. Sections 10-12, 15 and 18-30
21 of this bill make conforming changes to reference “articles of dissolution” for 31
purposes of provisions relating to the dissolution of a corporation or a limited-32
liability company, as applicable. Section 13 of this bill makes a conforming change 33
to replace “certificate of dissolution” with “record of dissolution.” Section 16 of 34
this bill provides an effective date and time for filing the articles of dissolution of a 35
limited-liability company. 36
Sections 14 and 17 of this bill provide for either the residence or business 37
address of members and managers of a limited-liability company to be listed for 38
certain records. 39
Section 22 of this bill establishes a new process by which a corporation may: 40
(1) reorganize through the formation of a holding corporation; and (2) issue 41
stockholders shares in the new holding corporation in exchange for their previous 42
shares. Section 23 of this bill: (1) revises the steps required for a board of directors 43
to approve a plan of merger, conversion or exchange; and (2) removes provisions of 44
existing law which allowed for the board to cancel a proposed meeting to consider 45
or remove a plan of merger, conversion or exchange. Section 24 of this bill makes a 46
conforming change relating to voting for purposes of the new process of 47
reorganization into a holding corporation. 48
Section 25 of this bill makes a technical change relating to one domestic entity 49
converting into one foreign entity. 50
Section 26 of this bill provides that the right to dissent is the exclusive remedy 51
for stockholders who have the ability to dissent from a particular corporate action. 52
– 3 –
- *AB239*
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. NRS 75.150 is hereby amended to read as follows: 1
75.150 1. Except as otherwise provided by specific statute: 2
(a) Any notice or other communication described in this title 3
may be given or sent by any method of delivery [;] and each 4
agreement, instrument, certificate or other document enclosed 5
with, or annexed or appended to, such notice or other 6
communication shall be deemed part of the notice or 7
communication solely for purposes of determining whether notice 8
was duly given under this title and the organic rules of the entity 9
giving or sending the notice or other communication; and 10
(b) An electronic transmission must be in accordance with this 11
section. 12
2. A notice or other communication given or sent pursuant to 13
the organic law or organic rules of an entity may be delivered by 14
electronic transmission if: 15
(a) Consented to by the recipient or authorized by subsection 9; 16
and 17
(b) The electronic transmission contains or is accompanied by 18
information from which the recipient can determine the date of the 19
transmission. 20
3. Any consent under subsection 2 may be revoked by the 21
person who consented by written or electronic notice to the person 22
to whom the consent was delivered. Any such consent is deemed 23
revoked if: 24
(a) The person is unable to receive two consecutive electronic 25
transmissions given by the entity or organization in accordance with 26
such consent; and 27
(b) Such inability becomes known to the secretary of the entity 28
sending the electronic transmissions or to the transfer agent or other 29
person responsible for the giving of notice or other communications. 30
The inadvertent failure to treat any such inability as a revocation 31
does not invalidate any meeting or other action. 32
4. Unless otherwise agreed between sender and recipient, an 33
electronic transmission is received when: 34
(a) It enters an information processing system that the recipient 35
has designated or uses for the purpose of receiving electronic 36
transmissions or information of the type sent; and 37
(b) It is in a form ordinarily capable of being processed by that 38
system. 39
5. Receipt of an electronic acknowledgment from an 40
information processing system described in paragraph (a) of 41
subsection 4 establishes that an electronic transmission was received 42
– 4 –
- *AB239*
but, by itself, does not establish that the content sent corresponds to 1
the content received. 2
6. An electronic transmission is received under this section 3
even if no natural person is aware of its receipt. 4
7. Except as otherwise provided by specific statute, any notice 5
or other communication, if in a comprehensible form or manner, is 6
effective at the earliest of the following: 7
(a) If in a physical form, when it is left at: 8
(1) The address of a stockholder, member, partner or other 9
owner of an entity, whichever is applicable, as it appears upon the 10
records of the entity; 11
(2) The residence or usual place of business of a director, 12
manager or general partner, whichever is applicable; 13
(3) The entity’s principal place of business; or 14
(4) If to a recipient other than a stockholder, director, 15
member, partner or other owner of an entity or an entity, such 16
person’s residence or usual place of business; 17
(b) If mailed by United States mail postage prepaid and 18
correctly addressed to a stockholder, member, partner or other 19
owner of an entity, upon deposit in the United States mail; 20
(c) If mailed by United States mail postage prepaid and correctly 21
addressed to a recipient other than a stockholder, member, partner or 22
other owner of an entity, the earliest of: 23
(1) If sent by registered or certified mail, return receipt 24
requested, the date shown on the return receipt signed by or on 25
behalf of the addressee; or 26
(2) Five days after it is deposited in the United States mail; 27
(d) If an electronic transmission, when it is received as provided 28
in subsection 4; and 29
(e) If oral, when communicated. 30
In the absence of fraud, an affidavit of the secretary of the entity 31
or the transfer agent or any other agent of the entity that the notice 32
has been given by a form of electronic transmission is prima facie 33
evidence of the facts stated in the affidavit. 34
8. A notice or other communication may be in the form of an 35
electronic transmission that cannot be directly reproduced in paper 36
form by the recipient through an automated process used in 37
conventional commercial practice only if: 38
(a) The electronic transmission is otherwise retrievable in 39
perceivable form; and 40
(b) The sender and the recipient have consented in writing to the 41
use of such form of electronic transmission. 42
9. If any provision of this title prescribes requirements for 43
notices or other communication in particular circumstances, those 44
requirements govern. If the organic rules of an entity prescribe 45
– 5 –
- *AB239*
requirements for notices or other communications, not inconsistent 1
with this section or other provisions of this title, those requirements 2
govern. The organic rules of an entity may authorize, require or 3
prohibit delivery of notices of meetings of directors, managers, 4
members, partners or other owners of the entity by electronic 5
transmission. 6
10. In the event that any provisions of this section are deemed 7
to modify, limit or supersede the federal Electronic Signatures in 8
Global and National Commerce Act, 15 U.S.C. §§ 7001 et seq., the 9
provisions of this section shall be deemed to control to the 10
maximum extent permitted by section 102(a)(2) of that Act, 15 11
U.S.C. § 7002(a)(2). 12
11. As used in this section: 13
(a) “Entity” has the meaning ascribed to it in NRS 77.060. 14
(b) “Organic law” has the meaning ascribed to it in NRS 77.170. 15
(c) “Organic rules” has the meaning ascribed to it in 16
NRS 77.180. 17
Sec. 2. NRS 78.138 is hereby amended to read as follows: 18
78.138 1. The fiduciary duties of directors and officers are to 19
exercise their respective powers in good faith , on an informed 20
basis and with a view to the interests of the corporation. 21
2. In exercising their respective powers, directors and officers 22
may, and are entitled to, rely on information, opinions, reports, 23
books of account or statements, including financial statements and 24
other financial data, that are prepared or presented by: 25
(a) One or more directors, officers or employees of the 26
corporation reasonably believed to be reliable and competent in the 27
matters prepared or presented; 28
(b) Counsel, public accountants, financial advisers, valuation 29
advisers, investment bankers or other persons as to matters 30
reasonably believed to be within the preparer’s or presenter’s 31
professional or expert competence; or 32
(c) A committee on which the director or officer relying thereon 33
does not serve, established in accordance with NRS 78.125, as to 34
matters within the committee’s designated authority and matters on 35
which the committee is reasonably believed to merit confidence, 36
but a director or officer is not entitled to rely on such 37
information, opinions, reports, books of account or statements if the 38
director or officer has knowledge concerning the matter in question 39
that would cause reliance thereon to be unwarranted. 40
3. Except as otherwise provided in subsection 1 of NRS 41
78.139, directors and officers, in deciding upon matters of business, 42
are presumed to act in good faith, on an informed basis and with a 43
view to the interests of the corporation. A director or officer is not 44
individually liable for damages as a result of an act or failure to act 45
– 6 –
- *AB239*
in his or her capacity as a director or officer except as described in 1
subsection 7. 2
4. Directors and officers, in exercising their respective powers 3
with a view to the interests of the corporation, may: 4
(a) Consider all relevant facts, circumstances, contingencies or 5
constituencies, which may include, without limitation, one or more 6
of the following: 7
(1) The interests of the corporation’s employees, suppliers, 8
creditors or customers; 9
(2) The economy of the State or Nation; 10
(3) The interests of the community or of society; 11
(4) The long-term or short-term interests of the corporation, 12
including the possibility that these interests may be best served by 13
the continued independence of the corporation; or 14
(5) The long-term or short-term interests of the corporation’s 15
stockholders, including the possibility that these interests may be 16
best served by the continued independence of the corporation. 17
(b) Consider or assign weight to the interests of any particular 18
person or group, or to any other relevant facts, circumstances, 19
contingencies or constituencies. 20
5. Directors and officers are not required to consider, as a 21
dominant factor, the effect of a proposed corporate action upon any 22
particular group or constituency having an interest in the 23
corporation. 24
6. The provisions of subsections 4 and 5 do not create or 25
authorize any causes of action against the corporation or its directors 26
or officers. 27
7. Except as otherwise provided in NRS 35.230, 90.660, 28
91.250, 452.200, 452.270, 668.045 and 694A.030, or unless the 29
articles of incorporation or an amendment thereto, in each case filed 30
on or after October 1, 2003, provide for greater individual liability, a 31
director or officer is not individually liable to the corporation or its 32
stockholders or creditors for any damages as a result of any act or 33
failure to act in his or her capacity as a director or officer unless: 34
(a) The presumption established by subsection 3 has been 35
rebutted; and 36
(b) It is proven that: 37
(1) The director’s or officer’s act or failure to act constituted 38
a breach of his or her fiduciary duties as a director or officer; and 39
(2) Such breach involved intentional misconduct, fraud or a 40
knowing violation of law. 41
8. This section applies to all cases, circumstances and matters, 42
including, without limitation, any change or potential change in 43
control of the corporation unless otherwise provided in the articles 44
of incorporation or an amendment thereto. 45
– 7 –
- *AB239*
Sec. 3. NRS 78.2055 is hereby amended to read as follows: 1
78.2055 1. Unless otherwise provided in the articles of 2
incorporation, a corporation that desires to decrease the number of 3
issued and outstanding shares of a class or series held by each 4
stockholder of record at the effective date and time of the change 5
without correspondingly decreasing the number of authorized shares 6
of the same class or series may do so if: 7
(a) The board of directors adopts a resolution setting forth the 8
proposal to decrease the number of issued and outstanding shares of 9
a class or series; and 10
(b) If the corporation is: 11
(1) A publicly traded corporation, the proposal is approved 12
by the stockholders of the affected class or series, regardless of 13
limitations or restrictions on the voting power of the affected class 14
or series; or 15
(2) Not a publicly traded corporation, the proposal is 16
approved by the vote of stockholders holding a majority of the 17
voting power of the affected class or series, 18
or such greater proportion as may be provided in the articles of 19
incorporation, regardless of limitations or restrictions on the voting 20
power of the affected class or series. 21
2. If the proposal required by subsection 1 is approved by the 22
stockholders entitled to vote, the corporation may reissue its stock in 23
accordance with the proposal after the effective date and time of the 24
change. 25
3. Except as otherwise provided in this subsection [,] and 26
unless the articles of incorporation require a greater proportion, if 27
a proposed decrease in the number of issued and outstanding shares 28
of any class or series would adversely alter or change any 29
preference, or any relative or other right given to any other class or 30
series of outstanding shares, then the decrease must be approved , 31
[by the vote,] in addition to any vote otherwise required [, of] : 32
(a) If the corporation is a publicly traded corporation, by the 33
vote of the stockholders of each class or series whose preference 34
or rights are adversely affected by the decrease; or 35
(b) If the corporation is not a publicly traded corporation, by 36
the holders of shares representing a majority of the voting power of 37
each class or series whose preference or rights are adversely 38
affected by the decrease, 39
[or such greater proportion as may be provided in the articles of 40
incorporation,] regardless of limitations or restrictions on the voting 41
power of the adversely affected class or series. The decrease does 42
not have to be approved by the vote of the holders of shares 43
representing a majority of the voting power of each class or series 44
whose preference or rights are adversely affected by the decrease if 45
– 8 –
- *AB239*
the articles of incorporation specifically deny the right to vote on 1
such a decrease. 2
4. If any proposed corporate action pursuant to this section 3
would result in only money being paid or scrip being issued to 4
stockholders who: 5
(a) Before the decrease in the number of shares becomes 6
effective, in the aggregate hold 1 percent or more of the outstanding 7
shares of the affected class or series; and 8
(b) Would otherwise be entitled to receive a fraction of a share 9
in exchange for the cancellation of all their outstanding shares, 10
any stockholder who is obligated, as a result of the corporate 11
action taken pursuant to this section, to accept money or scrip rather 12
than receive a fraction of a share in exchange for the cancellation of 13
all the stockholder’s outstanding shares, may dissent in accordance 14
with the provisions of NRS 92A.300 to 92A.500, inclusive, and 15
obtain payment of the fair value of the fraction of a share to which 16
the stockholder would otherwise be entitled. 17
Sec. 4. NRS 78.207 is hereby amended to read as follows: 18
78.207 1. Unless otherwise provided in the articles of 19
incorporation, a corporation that desires to change the number of 20
shares of a class or series, if any, of its authorized stock by 21
increasing or decreasing the number of authorized shares of the 22
class or series and correspondingly increasing or decreasing the 23
number of issued and outstanding shares of the same class or series 24
held by each stockholder of record at the effective date and time of 25
the change, may, except as otherwise provided in subsections 2 and 26
3, do so by a resolution adopted by the board of directors, without 27
obtaining the approval of the stockholders. The resolution may also 28
provide for a change of the par value, if any, of the same class or 29
series of the shares increased or decreased. After the effective date 30
and time of the change, the corporation may issue its stock in 31
accordance therewith. 32
2. A proposal to increase or decrease the number of authorized 33
shares of any class or series, if any, that includes provisions 34
pursuant to which only money will be paid or scrip will be issued to 35
stockholders who: 36
(a) Before the increase or decrease in the number of shares 37
becomes effective, in the aggregate hold 10 percent or more of the 38
outstanding shares of the affected class or series; and 39
(b) Would otherwise be entitled to receive a fraction of a share 40
in exchange for the cancellation of all their outstanding shares, 41
must be approved by the vote of stockholders holding a majority 42
of the voting power of the affected class or series, or such greater 43
proportion as may be provided in the articles of incorporation, 44
regardless of limitations or restrictions on the voting power thereof. 45
– 9 –
- *AB239*
3. Except as otherwise provided in this subsection [,] and 1
unless the articles of incorporation require a greater proportion, if 2
a proposed increase or decrease in the number of authorized shares 3
of any class or series would adversely alter or change any preference 4
or any relative or other right given to any other class or series of 5
outstanding shares, then the increase or decrease must be approved , 6
[by the vote,] in addition to any vote otherwise required [, of] : 7
(a) If the corporation is a publicly traded corporation, by the 8
vote of stockholders of each class or series whose preference or 9
rights are adversely affected by the increase or decrease; and 10
(b) If the corporation is not a publicly traded corporation, by 11
the holders of shares representing a majority of the voting power of 12
each class or series whose preference or rights are adversely 13
affected by the increase or decrease, 14
regardless of limitations or restrictions on the voting power 15
thereof. The increase or decrease does not have to be approved by 16
the vote of the holders of shares [representing a majority of the 17
voting power in each] of any class or series whose preference or 18
rights are adversely affected by the increase or decrease if the 19
articles of incorporation specifically deny the holders of shares of 20
such class or series the right to vote on such an increase or 21
decrease. 22
4. If any proposed corporate action pursuant to this section 23
would result in only money being paid or scrip being issued to 24
stockholders who: 25
(a) Before the increase or decrease in the number of shares 26
becomes effective, in the aggregate hold 1 percent or more of the 27
outstanding shares of the affected class or series; and 28
(b) Would otherwise be entitled to receive a fraction of a share 29
in exchange for the cancellation of all of their outstanding shares, 30
any stockholder who is obligated, as a result of the corporate 31
action taken pursuant to this section, to accept money or scrip rather 32
than receive a fraction of a share in exchange for the cancellation of 33
all the stockholder’s outstanding shares, may dissent in accordance 34
with the provisions of NRS 92A.300 to 92A.500, inclusive, and 35
obtain payment of the fair value of the fraction of a share to which 36
the stockholder would otherwise be entitled. 37
Sec. 5. NRS 78.215 is hereby amended to read as follows: 38
78.215 1. A corporation may issue and dispose of its 39
authorized shares for such consideration as may be prescribed in the 40
articles of incorporation or, if no consideration is so prescribed, then 41
for such consideration as may be fixed by the board of directors. 42
2. If a consideration is prescribed for shares without par value, 43
that consideration must not be used to determine the fees required 44
for filing articles of incorporation pursuant to NRS 78.760. 45
– 10 –
- *AB239*
3. Unless the articles of incorporation provide otherwise [,] 1
and except as otherwise provided by subsection 4, shares may be 2
issued pro rata and without consideration to the corporation’s 3
stockholders or to the stockholders of one or more classes or series. 4
[An issuance of shares under this subsection is a share dividend.] 5
4. Shares of one class or series may not be issued [as a share 6
dividend] pursuant to subsection 3 in respect of shares of another 7
class or series unless: 8
(a) The articles of incorporation so authorize; 9
(b) A majority of the votes entitled to be cast by the class or 10
series to be issued approve the issue; or 11
(c) There are no outstanding shares of the class or series to be 12
issued. 13
5. If the board of directors does not fix the record date for 14
determining stockholders entitled to [a share dividend,] shares 15
issued pursuant to subsection 3, it is the date the board of directors 16
authorizes the [share dividend.] issuance. 17
Sec. 6. NRS 78.315 is hereby amended to read as follows: 18
78.315 1. Unless the articles of incorporation or the bylaws 19
provide for a greater or lesser proportion, a majority of the board of 20
directors of the corporation then in office, at a meeting duly 21
assembled, is necessary to constitute a quorum for the transaction of 22
business, and the act of directors holding a majority of the voting 23
power of the directors, present at a meeting at which a quorum is 24
present, is the act of the board of directors. 25
2. Unless otherwise restricted by the articles of incorporation 26
or bylaws, any action required or permitted to be taken at a meeting 27
of the board of directors or of a committee thereof may be taken 28
without a meeting if, before or after the action, a written consent 29
thereto is signed by all the members of the board or of the 30
committee, except that such written consent is not required to be 31
signed by: 32
(a) A common or interested director who abstains in writing 33
from providing consent to the action. If a common or interested 34
director abstains in writing from providing consent: 35
(1) The fact of the common directorship, office or financial 36
interest must be known to the board of directors or committee before 37
a written consent is signed by all the members of the board of the 38
committee. 39
(2) Such fact must be described in the written consent. 40
(3) The board of directors or committee must approve, 41
authorize or ratify the action in good faith by unanimous consent 42
without counting the abstention of the common or interested 43
director. 44
– 11 –
- *AB239*
(b) A director who is a party to an action, suit or proceeding 1
who abstains in writing from providing consent to the action of the 2
board of directors or committee. If a director who is a party to an 3
action, suit or proceeding abstains in writing from providing consent 4
on the basis that he or she is a party to an action, suit or proceeding, 5
the board of directors or committee must: 6
(1) Make a determination pursuant to NRS 78.7502 that 7
indemnification of the director is proper under the circumstances. 8
(2) Approve, authorize or ratify the action of the board of 9
directors or committee in good faith by unanimous consent without 10
counting the abstention of the director who is a party to an action, 11
suit or proceeding. 12
3. Unless otherwise restricted by the articles of incorporation 13
or bylaws, members of the board of directors or the governing body 14
of any corporation, or of any committee designated by such board or 15
body, may participate in a meeting of the board, body or committee 16
through electronic communications, videoconferencing, 17
teleconferencing or other available technology if the corporation has 18
implemented reasonable measures to: 19
(a) Verify the identity of each person participating through such 20
means as a director or member of the governing body or committee, 21
as the case may be; and 22
(b) Provide the directors or members a reasonable opportunity to 23
participate in the meeting and to vote on matters submitted to the 24
directors or members, as the case may be, including an opportunity 25
to communicate and to read or hear the proceedings of the meeting 26
in a substantially concurrent manner with such proceedings. 27
4. Participation in a meeting pursuant to subsection 3 28
constitutes presence in person at the meeting. 29
5. Whenever this title expressly requires the board of 30
directors to approve or take other action with respect to any 31
agreement, instrument, certificate or other document, including, 32
without limitation, any agreement, instrument, certificate or other 33
document required to be filed with the Secretary of State, the 34
directors may approve, adopt or otherwise act upon such 35
agreement, instrument, certificate or other document in final form 36
or such preliminary form as the directors deem appropriate in 37
their business judgment. 38
Sec. 7. NRS 78.365 is hereby amended to read as follows: 39
78.365 1. A stockholder, by agreement in writing, may 40
transfer his or her stock to a voting trustee or trustees for the 41
purpose of conferring the right to vote the stock for a period not 42
exceeding 15 years upon the terms and conditions therein stated. 43
Any certificates of stock so transferred must be surrendered and 44
cancelled and new certificates for the stock issued to the trustee or 45
– 12 –
- *AB239*
trustees in which it must appear that they are issued pursuant to the 1
agreement, and in the entry of ownership in the proper books of the 2
corporation that fact must also be noted, and thereupon the trustee or 3
trustees may vote the stock so transferred during the terms of the 4
agreement. A duplicate of every such agreement must be filed in the 5
registered office of the corporation and at all times during its terms 6
be open to inspection by any stockholder or his or her attorney. 7
2. At any time within the 2 years next preceding the expiration 8
of an agreement entered into pursuant to the provisions of 9
subsection 1, or the expiration of an extension of that agreement, 10
any beneficiary of the trust may, by written agreement with the 11
trustee or trustees, extend the duration of the trust for a time not to 12
exceed 15 years after the scheduled expiration date of the original 13
agreement or the latest extension. An extension is not effective 14
unless the trustee, before the expiration date of the original 15
agreement or the latest extension, files a duplicate of the agreement 16
providing for the extension in the registered office of the 17
corporation. An agreement providing for an extension does not 18
affect the rights or obligations of any person not a party to that 19
agreement. An agreement entered into pursuant to the provisions of 20
subsection 1 is not invalidated by the fact that, by its terms, its 21
duration is more than 15 years, but its duration shall be deemed 22
amended to conform with the provisions of this section. 23
3. An agreement between two or more stockholders, or 24
between the corporation and one or more stockholders, if in 25
writing and signed by each [stockholder] party to be bound thereby, 26
may provide that in exercising any voting rights, the stock held by 27
each such stockholder must be voted: 28
(a) Pursuant to the provisions of the agreement; 29
(b) As [they] the parties to the agreement may subsequently 30
agree; [or] 31
(c) In accordance with a procedure [agreed upon.] specified in 32
the agreement; or 33
(d) In a manner dependent upon any fact or event which may 34
be ascertained outside of the agreement if the manner in which a 35
fact or event may operate upon the exercise of the voting rights is 36
stated in the agreement. As used in this paragraph, “fact or event” 37
includes, without limitation, the existence of a fact or an 38
occurrence of an event, including, without limitation, a 39
determination or action by a person, the corporation itself or any 40
government, governmental agency or political subdivision of a 41
government. 42
4. An agreement pursuant to the provisions of subsection 3 is 43
valid and enforceable against the transferee of a stockholder party to 44
the agreement only: 45
– 13 –
- *AB239*
(a) If and to the extent that the transferee agrees in writing to be 1
bound by the agreement; or 2
(b) If the agreement expressly provides that it is enforceable 3
against the transferee of a stockholder party to the agreement and: 4
(1) The transferee had actual knowledge of the existence of 5
the agreement before the transfer; or 6
(2) The existence of the agreement is noted conspicuously on 7
the front or back of the stock certificate or is contained in the written 8
statement of information required by subsection 5 of NRS 78.235. 9
5. An agreement pursuant to the provisions of subsection 3, or 10
an amendment thereto or an extension thereof, in each case entered 11
into before October 1, 2021, is not: 12
(a) Effective for a term of more than 15 years, but at any time 13
within the 2 years next preceding the expiration of the agreement the 14
parties thereto may extend its duration for such period as is stated in 15
the extension; and 16
(b) Invalidated by the fact that by its terms its duration is more 17
than 15 years, but its duration shall be deemed amended to conform 18
with the provisions of this section. 19
Sec. 8. NRS 78.390 is hereby amended to read as follows: 20
78.390 1. Except as otherwise provided in subsection 8 or in 21
NRS 77.340 or 78.209 or chapter 92A of NRS, every amendment to 22
the articles of incorporation must be made and approved in the 23
following manner: 24
(a) The board of directors must adopt a resolution setting forth 25
the amendment proposed and submit the proposed amendment to the 26
stockholders for approval [. 27
(b) If] and if the corporation is: 28
(1) A publicly traded corporation and the amendment 29
proposed relates solely to an increase or decrease in the number of 30
shares the corporation is authorized to issue, the stockholders of 31
the affected class or series, regardless of limitations or restrictions 32
on the voting power of the affected class or series, must approve 33
the proposed amendment; or 34
(2) Not a publicly traded corporation, the stockholders 35
holding shares in the corporation representing at least a majority of 36
the voting power, or such greater proportion of the voting power as 37
may be required in the case of a vote by classes or series, as 38
provided in subsections 2 and 4, or as may be required by the 39
provisions of the articles of incorporation, [have approved] must 40
approve the proposed amendment. 41
Upon the approval of the proposed amendment [,] by the 42
stockholders as provided in this subsection, an officer of the 43
corporation shall sign a certificate setting forth the amendment, or 44
– 14 –
- *AB239*
setting forth the articles of incorporation as amended, and the vote 1
by which the amendment was adopted. 2
[(c)] (b) The certificate so signed must be filed with the 3
Secretary of State. 4
(c) An amendment adopted pursuant to this subsection that 5
would have the effect of decreasing the number of shares of a 6
class or series of shares the corporation is authorized to issue 7
below the number of shares of such class or series then issued and 8
outstanding shall be void and of no effect. 9
2. Except as otherwise provided in this subsection, if any 10
proposed amendment would adversely alter or change any 11
preference or any relative or other right given to any class or series 12
of outstanding shares, then, in addition to any approval otherwise 13
required, the amendment must be approved by the holders of shares 14
representing a majority of the voting power of each class or series 15
adversely affected by the amendment regardless of limitations or 16
restrictions on the voting power thereof. The amendment does not 17
have to be approved by the holders of shares [representing a 18
majority of the voting power] of [each] any class or series whose 19
preference or rights are adversely affected by the amendment if the 20
articles of incorporation specifically deny the holders of such class 21
or series the right to vote on such an amendment. Except as 22
otherwise provided in the articles of incorporation, a proposed 23
amendment that designates one or more new series of an existing 24
class as having any preference or any relative or other right that 25
has higher or equal seniority to the corresponding preference or 26
relative or other right of an existing series of the same class does 27
not, solely by virtue of the higher or equal seniority of the 28
preference or right of the proposed new series, constitute an 29
amendment that would adversely alter or change the preference or 30
rights of the existing series. 31
3. Provision may be made in the articles of incorporation 32
requiring, in the case of any specified amendments, approval by a 33
larger proportion of the voting power of stockholders than that 34
required by this section. 35
4. Different series of the same class of shares do not constitute 36
different classes of shares for the purpose of voting by classes 37
except when the series is adversely affected by an amendment in a 38
different manner than other series of the same class. 39
5. The board of directors may, by resolution, abandon the 40
proposed amendment without further action by the stockholders if 41
the resolution of the stockholders approving the proposed 42
amendment authorizes the board of directors to do so. The board of 43
directors may, by resolution, abandon a proposed amendment 44
pursuant to subsection 8 without any action by the stockholders. 45
– 15 –
- *AB239*
6. A certificate filed pursuant to subsection 1 is effective at the 1
time of the filing of the certificate with the Secretary of State or 2
upon a later date and time as specified in the certificate, which date 3
must not be more than 90 days after the date on which the certificate 4
is filed. If a certificate filed pursuant to subsection 1 specifies a later 5
effective date but does not specify an effective time, the certificate 6
is effective at 12:01 a.m. in the Pacific time zone on the specified 7
later date. 8
7. If a certificate filed pursuant to subsection 1 specifies a later 9
effective date or time and if the board of directors is authorized to 10
abandon the proposed amendment pursuant to subsection 5, the 11
board of directors may terminate the effectiveness of the certificate 12
by resolution and by filing a certificate of termination with the 13
Secretary of State that: 14
(a) Is filed before the effective time of the certificate filed with 15
the Secretary of State pursuant to subsection 1; 16
(b) Identifies the certificate being terminated; 17
(c) States that the board of directors is authorized to terminate 18
the effectiveness of the certificate; 19
(d) States that the effectiveness of the certificate has been 20
terminated; 21
(e) Is signed by an officer of the corporation; and 22
(f) Is accompanied by a filing fee of $175. 23
8. No action by the stockholders is required if the proposed 24
amendment to the articles of incorporation consists only of a change 25
in the name of the corporation. The articles of incorporation may 26
forbid a corporation from amending the articles of incorporation 27
pursuant to this subsection without stockholder approval. 28
Sec. 9. NRS 78.416 is hereby amended to read as follows: 29
78.416 “Combination,” when used in reference to any resident 30
domestic corporation and any interested stockholder of the resident 31
domestic corporation, means any of the following: 32
1. Any merger or consolidation of the resident domestic 33
corporation or any subsidiary of the resident domestic corporation 34
with: 35
(a) The interested stockholder; or 36
(b) Any other entity, whether or not itself an interested 37
stockholder of the resident domestic corporation, which is, or after 38
and as a result of the merger or consolidation would be, an affiliate 39
or associate of the interested stockholder. 40
2. Any sale, lease, exchange, mortgage, pledge, transfer or 41
other disposition, in one transaction or a series of transactions, to or 42
with the interested stockholder or any affiliate or associate of the 43
interested stockholder of assets of the resident domestic corporation 44
or any subsidiary of the resident domestic corporation: 45
– 16 –
- *AB239*
(a) Having an aggregate market value equal to more than 5 1
percent of the aggregate market value of all the assets, determined 2
on a consolidated basis, of the resident domestic corporation; 3
(b) Having an aggregate market value equal to more than 5 4
percent of the aggregate market value of all the outstanding voting 5
shares of the resident domestic corporation; or 6
(c) Representing more than 10 percent of the earning power or 7
net income, determined on a consolidated basis, of the resident 8
domestic corporation. 9
3. The issuance or transfer by the resident domestic corporation 10
or any subsidiary of the resident domestic corporation, in one 11
transaction or a series of transactions, of any shares of the resident 12
domestic corporation or any subsidiary of the resident domestic 13
corporation that have an aggregate market value equal to 5 percent 14
or more of the aggregate market value of all the outstanding voting 15
shares of the resident domestic corporation to the interested 16
stockholder or any affiliate or associate of the interested stockholder 17
except under the exercise of warrants or rights to purchase shares 18
offered, or a dividend or distribution paid or made, pro rata to all 19
stockholders of the resident domestic corporation. 20
4. The adoption of any plan or proposal for the liquidation or 21
dissolution of the resident domestic corporation under any 22
agreement, arrangement or understanding, whether or not in writing, 23
with the interested stockholder or any affiliate or associate of the 24
interested stockholder. 25
5. Except for any transaction or series of transactions that 26
would not constitute a combination pursuant to subsection 3, any: 27
(a) Reclassification of securities, including, without limitation, 28
any splitting of shares [, share dividend,] or other [distribution] 29
issuance of shares with respect to other shares, or any issuance of 30
new shares in exchange for a proportionately greater number of old 31
shares; 32
(b) Recapitalization of the resident domestic corporation; 33
(c) Merger or consolidation of the resident domestic corporation 34
with any subsidiary of the resident domestic corporation; or 35
(d) Other transaction, whether or not with or into or otherwise 36
involving the interested stockholder, 37
under any agreement, arrangement or understanding, whether or 38
not in writing, with the interested stockholder or any affiliate or 39
associate of the interested stockholder, which has the immediate and 40
proximate effect of increasing the proportionate share of the 41
outstanding shares of any class or series of voting shares or 42
securities convertible into voting shares of the resident domestic 43
corporation or any subsidiary of the resident domestic corporation 44
which is beneficially owned by the interested stockholder or any 45
– 17 –
- *AB239*
affiliate or associate of the interested stockholder, except as a result 1
of immaterial changes because of adjustments of fractional shares. 2
6. Any receipt by the interested stockholder or any affiliate or 3
associate of the interested stockholder of the benefit, directly or 4
indirectly, except proportionately as a stockholder of the resident 5
domestic corporation, of any loan, advance, guarantee, pledge or 6
other financial assistance or any tax credit or other tax advantage 7
provided by or through the resident domestic corporation. 8
Sec. 10. NRS 78.573 is hereby amended to read as follows: 9
78.573 1. The Secretary of State shall authorize a corporation 10
whose charter has been revoked to dissolve without paying 11
additional fees and penalties, other than the fee for filing [a 12
certificate] articles of dissolution required by NRS 78.780, if the 13
corporation provides evidence satisfactory to the Secretary of State 14
that the corporation did not transact business in this State or as a 15
corporation organized pursuant to the laws of this State: 16
(a) During the entire period for which its charter was revoked; or 17
(b) During a portion of the period for which its charter was 18
revoked and the corporation paid the fees and penalties for the 19
portion of that period in which the corporation transacted business 20
in this State or as a corporation organized pursuant to the laws of 21
this State. 22
2. The Secretary of State may adopt regulations to administer 23
the provisions of this section. 24
Sec. 11. NRS 78.580 is hereby amended to read as follows: 25
78.580 1. If the board of directors of any corporation 26
organized under this chapter decides that the corporation should be 27
dissolved, the board may adopt a resolution to that effect. 28
2. If the corporation has issued no stock, only the directors 29
need to approve the dissolution. 30
3. If the corporation has issued stock, the directors must 31
recommend the dissolution to the stockholders. The board of 32
directors may condition its submission of the proposal for 33
dissolution on any lawful basis. Unless the dissolution is to be 34
approved by written consent pursuant to subsection 2 of NRS 35
78.320, the corporation shall notify each stockholder, whether or not 36
entitled to vote on dissolution, of the proposed dissolution and the 37
stockholders entitled to vote must approve the dissolution. If the 38
dissolution is approved by written consent pursuant to subsection 2 39
of NRS 78.320, the corporation shall notify , [each stockholder 40
whose written consent was not solicited of the dissolution,] in 41
writing, not later than 10 days after the effective date of the 42
dissolution [.] , each stockholder whose written consent was not 43
solicited to approve the dissolution. 44
– 18 –
- *AB239*
4. If the dissolution is approved by the directors or both the 1
directors and stockholders, as respectively provided in subsections 2 2
and 3, the corporation shall file with the Secretary of State [a 3
certificate] articles of dissolution signed by an officer of the 4
corporation setting forth the name of the corporation, that the 5
dissolution has been approved by the directors, or by the directors 6
and the stockholders, [and] a list of the names and addresses, either 7
residence or business, of the corporation’s president, secretary and 8
treasurer, or the equivalent thereof, and all of its directors [.] , and 9
the effective date and time of the dissolution. 10
5. The dissolution takes effect at the time of the filing of the 11
[certificate] articles of dissolution with the Secretary of State or 12
upon a later date and time as specified in the [certificate,] articles of 13
dissolution, which date must be not more than 90 days after the date 14
on which the [certificate is] articles of dissolution are filed. If [a 15
certificate] the articles of dissolution [specifies] specify a later 16
effective date but [does] do not specify an effective time, the 17
[certificate] dissolution is effective at 12:01 a.m. in the Pacific time 18
zone on the specified later date. 19
Sec. 12. NRS 78.780 is hereby amended to read as follows: 20
78.780 The fee for filing [a certificate] articles of dissolution, 21
whether it occurs before or after payment of capital and beginning 22
of business, is $100. 23
Sec. 13. NRS 82.442 is hereby amended to read as follows: 24
82.442 1. The Secretary of State shall authorize a nonprofit 25
corporation whose charter has been revoked to dissolve without 26
paying additional fees and penalties, other than the fee for filing a 27
[certificate] record of dissolution required by NRS 82.531, if the 28
nonprofit corporation provides evidence satisfactory to the Secretary 29
of State that the nonprofit corporation did not transact business in 30
this State or as a nonprofit corporation organized pursuant to the 31
laws of this State: 32
(a) During the entire period for which its charter was revoked; or 33
(b) During a portion of the period for which its charter was 34
revoked and the nonprofit corporation paid the fees and penalties for 35
the portion of that period in which the nonprofit corporation 36
transacted business in this State or as a nonprofit corporation 37
organized pursuant to the laws of this State. 38
2. The Secretary of State may adopt regulations to administer 39
the provisions of this section. 40
Sec. 14. NRS 86.241 is hereby amended to read as follows: 41
86.241 1. Each limited-liability company shall continuously 42
keep at its principal office in this State or with its custodian of 43
records whose name and street address are available at its registered 44
– 19 –
- *AB239*
office, unless otherwise provided by an operating agreement, the 1
following: 2
(a) A current list of the full name and last known [business] 3
address , either residence or business, of each member and 4
manager, separately identifying the members in alphabetical order 5
and the managers, if any, in alphabetical order; 6
(b) A copy of the filed articles of organization and all 7
amendments thereto, together with signed copies of any powers of 8
attorney pursuant to which any record has been signed; and 9
(c) Copies of any then effective operating agreement of the 10
company. 11
2. Each member of a limited-liability company is entitled to 12
obtain from the company, from time to time upon reasonable 13
demand, for any purpose reasonably related to the interest of the 14
member as a member of the company: 15
(a) The records required to be maintained pursuant to 16
subsection 1; 17
(b) True and, in light of the member’s stated purpose, complete 18
records regarding the activities and the status of the business and 19
financial condition of the company; 20
(c) Promptly after becoming available, a copy of the company’s 21
federal, state and local income tax returns for each year; 22
(d) True and complete records regarding the amount of cash and 23
a description and statement of the agreed value of any other property 24
or services contributed by each member and which each member 25
has agreed to contribute in the future, and the date on which each 26
became a member; and 27
(e) Other records regarding the affairs of the company as is just 28
and reasonable under the circumstances and in light of the member’s 29
stated purpose for demanding such records. 30
The right to obtain records under this subsection includes, if 31
reasonable, the right to make copies or abstracts by photographic, 32
xerographic, electronic or other means. 33
3. Each manager of a limited-liability company managed by a 34
manager or managers is entitled to examine from time to time upon 35
reasonable demand, for a purpose reasonably related to the 36
manager’s rights, powers and duties as such, the records described 37
in subsection 2. 38
4. Any demand by a member or manager under subsection 2 or 39
3 is subject to such reasonable standards regarding at what time and 40
location and at whose expense records are to be furnished as may be 41
set forth in the articles of organization or in an operating agreement 42
adopted or amended as provided in subsection 8, or, if no such 43
standards are set forth in the articles of organization or operating 44
agreement, the records must be provided or made available for 45
– 20 –
- *AB239*
examination, as the case may be, during ordinary business hours, at 1
the expense of the demanding member or manager. 2
5. If the records subject to a demand pursuant to subsection 2 3
or 3 are not available to obtain or made available for examination, as 4
applicable, at a location within this State upon a reasonable demand 5
made pursuant to subsection 2 or 3, the manager or member may 6
serve a demand upon the limited-liability company’s registered 7
agent that the records to be obtained or examined be sent to the 8
demanding manager or member. Upon such a demand, the limited-9
liability company shall send copies of the requested records 10
described in subsection 2 either in paper or electronic form to the 11
manager or member within 10 business days after the demand is 12
served upon the registered agent. 13
6. Any demand by a member or manager under this section 14
must be in writing and must state the purpose of such demand. 15
When a demanding member seeks to obtain or a manager seeks to 16
examine the records described in subsection 2, the demanding 17
member or manager must first establish that: 18
(a) The demanding member or manager has complied with the 19
provisions of this section respecting the form and manner of making 20
a demand for obtaining or examining such records; and 21
(b) The records sought by the demanding member or manager 22
are reasonably related to the member’s interest as a member or the 23
manager’s rights, powers and duties as a manager, as the case may 24
be. 25
7. In every instance where an attorney or other agent of a 26
member or manager seeks to exercise any right arising under this 27
section on behalf of such member or manager, the demand must be 28
accompanied by a power of attorney signed by the member or 29
manager authorizing the attorney or other agent to exercise such 30
rights on behalf of the member or manager. 31
8. The rights of a member to obtain or a manager to examine 32
records as provided in this section may be restricted or denied 33
entirely in the articles of organization or in an operating agreement 34
adopted by all of the members or by the sole member or in any 35
subsequent amendment adopted by all of the members at the time of 36
amendment. 37
Sec. 15. NRS 86.490 is hereby amended to read as follows: 38
86.490 1. Before the commencement of business by any 39
limited-liability company where management is vested in one or 40
more managers and where no member’s interest in the limited-41
liability company has been issued, at least two-thirds of the 42
organizers or the managers of the limited-liability company may 43
dissolve the limited-liability company by filing with the Secretary of 44
– 21 –
- *AB239*
State [a certificate] articles of dissolution to dissolve the limited-1
liability company. 2
2. [A certificate] Any articles of dissolution filed with the 3
Secretary of State pursuant to subsection 1 must state that: 4
(a) The management of the limited-liability company is vested 5
in one or more managers; 6
(b) The limited-liability company has not commenced business; 7
and 8
(c) No member’s interest in the limited-liability company has 9
been issued. 10
Sec. 16. NRS 86.531 is hereby amended to read as follows: 11
86.531 1. Except in the case of a dissolution pursuant to NRS 12
86.490, as soon as practicable after the [dissolution of] 13
determination that a limited-liability company [,] should be 14
dissolved, articles of dissolution must be prepared and signed setting 15
forth: 16
(a) The name of the limited-liability company; 17
(b) That the [company has been dissolved;] dissolution has 18
been approved or is otherwise required pursuant to NRS 86.491, 19
or has been decreed by the district court pursuant to NRS 86.495; 20
and 21
(c) The effective date and time of the dissolution, which [may 22
not] must be [later than] at the [effective date and] time of the filing 23
of the articles of dissolution [.] with the Secretary of State or upon 24
a later date and time as specified in the articles of dissolution, 25
which date must not be more than 90 days after the date on which 26
the articles of dissolution are filed. If the articles of dissolution 27
specify a later effective date but do not specify an effective time, 28
the dissolution is effective at 12:01 a.m. in the Pacific time zone on 29
the specified later date. 30
2. The articles of dissolution must be signed by: 31
(a) A manager of the company, if management of the company 32
is vested in a manager; 33
(b) A member of the company, if management of the company 34
is not vested in a manager; or 35
(c) The personal representative of the last remaining member, if 36
there is no remaining manager or member, unless otherwise 37
provided in the articles of organization or operating agreement. 38
Sec. 17. NRS 86.544 is hereby amended to read as follows: 39
86.544 1. Before transacting business in this State, a foreign 40
limited-liability company must register with the Secretary of State. 41
A person shall not register a foreign limited-liability company with 42
the Secretary of State for any illegal purpose or with the fraudulent 43
intent to conceal any business activity, or lack thereof, from another 44
person or a governmental agency. 45
– 22 –
- *AB239*
2. In order to register, a foreign limited-liability company must 1
submit to the Secretary of State an application for registration as a 2
foreign limited-liability company, signed by a manager of the 3
company or, if management is not vested in a manager, a member of 4
the company, or by some other person specifically authorized by the 5
foreign limited-liability company to sign the application. The 6
application for registration must set forth: 7
(a) The name of the foreign limited-liability company and, if 8
different, the name under which it proposes to register and transact 9
business in this State; 10
(b) The jurisdiction and date of its formation; 11
(c) A declaration of the existence of the foreign limited-liability 12
company and that the foreign limited-liability company is in good 13
standing in the jurisdiction in which it was formed; 14
(d) The information required pursuant to NRS 77.310; 15
(e) A statement that the Secretary of State is appointed the agent 16
of the foreign limited-liability company for service of process if the 17
authority of the registered agent has been revoked, or if the 18
registered agent has resigned or cannot be found or served with 19
the exercise of reasonable diligence; 20
(f) The address of the office required to be maintained in the 21
state of its organization by the laws of that state or, if not so 22
required, of the principal office of the foreign limited-liability 23
company; 24
(g) The name and [business] address , either residence or 25
business, of each manager or, if management is not vested in a 26
manager, each member; 27
(h) The address of the office at which is kept a list of the names 28
and addresses of the members and their capital contributions, 29
together with an undertaking by the foreign limited-liability 30
company to keep those records until the registration in this State of 31
the foreign limited-liability company is cancelled or withdrawn; and 32
(i) If the foreign limited-liability company has one or more 33
series of members and if the debts or liabilities of a series are 34
enforceable against the assets of that series only and not against the 35
assets of the company generally or another series, a statement to that 36
effect. 37
Sec. 18. NRS 87.4343 is hereby amended to read as follows: 38
87.4343 A partner is dissociated from a partnership upon the 39
occurrence of any of the following events: 40
1. The partnership’s having notice of the partner’s express will 41
to withdraw as a partner or on a later date specified by the partner; 42
2. An event agreed to in the partnership agreement as causing 43
the partner’s dissociation; 44
– 23 –
- *AB239*
3. The partner’s expulsion pursuant to the partnership 1
agreement; 2
4. The partner’s expulsion by the unanimous vote of the other 3
partners if: 4
(a) It is unlawful to carry on the partnership business with that 5
partner; 6
(b) There has been a transfer of all or substantially all of that 7
partner’s transferable interest in the partnership, other than a transfer 8
for security purposes, or a court order charging the partner’s 9
interest, which has not been foreclosed; 10
(c) Within 90 days after the partnership notifies a corporate 11
partner that it will be expelled because it has filed [a certificate] 12
articles of dissolution or the equivalent, its charter has been revoked 13
or its right to conduct business has been suspended by the 14
jurisdiction of its incorporation, there is no revocation of the 15
[certificate] articles of dissolution or no reinstatement of its charter 16
or its right to conduct business; or 17
(d) A partnership that is a partner has been dissolved and its 18
business is being wound up; 19
5. On application by the partnership or another partner, the 20
partner’s expulsion by judicial determination because: 21
(a) The partner engaged in wrongful conduct that adversely and 22
materially affected the partnership business; 23
(b) The partner willfully or persistently committed a material 24
breach of the partnership agreement or of a duty owed to the 25
partnership or the other partners under NRS 87.4336; or 26
(c) The partner engaged in conduct relating to the partnership 27
business which makes it not reasonably practicable to carry on the 28
business in partnership with the partner; 29
6. The partner’s: 30
(a) Becoming a debtor in bankruptcy; 31
(b) Executing an assignment for the benefit of creditors; 32
(c) Seeking, consenting to or acquiescing in the appointment of 33
a trustee, receiver or liquidator of that partner or of all or 34
substantially all of that partner’s property; or 35
(d) Failing, within 90 days after the appointment, to have 36
vacated or stayed the appointment of a trustee, receiver or liquidator 37
of the partner or of all or substantially all of the partner’s property 38
obtained without the partner’s consent or acquiescence, or failing 39
within 90 days after the expiration of a stay to have the appointment 40
vacated; 41
7. In the case of a partner who is a natural person: 42
(a) The partner’s death; 43
(b) The appointment of a guardian or general conservator for the 44
partner; or 45
– 24 –
- *AB239*
(c) A judicial determination that the partner has otherwise 1
become incapable of performing the partner’s duties under the 2
partnership agreement; 3
8. In the case of a partner that is a trust or is acting as a partner 4
by virtue of being a trustee of a trust, distribution of the trust’s entire 5
transferable interest in the partnership, but not merely by reason of 6
the substitution of a successor trustee; 7
9. In the case of a partner that is an estate or is acting as a 8
partner by virtue of being a personal representative of an estate, 9
distribution of the estate’s entire transferable interest in the 10
partnership, but not merely by reason of the substitution of a 11
successor personal representative; or 12
10. Termination of a partner who is not a natural person, 13
partnership, corporation, trust or estate. 14
Sec. 19. NRS 87A.435 is hereby amended to read as follows: 15
87A.435 1. A person does not have a right to withdraw as a 16
limited partner before the termination of the limited partnership. 17
2. A person is withdrawn from a limited partnership as a 18
limited partner upon the occurrence of any of the following events: 19
(a) The limited partnership’s having notice of the person’s 20
express will to withdraw as a limited partner or on a later date 21
specified by the person; 22
(b) An event agreed to in the partnership agreement as causing 23
the person’s withdrawal as a limited partner; 24
(c) The person’s expulsion as a limited partner pursuant to the 25
partnership agreement; 26
(d) The person’s expulsion as a limited partner by the 27
unanimous consent of the other partners if: 28
(1) It is unlawful to carry on the limited partnership’s 29
activities with the person as a limited partner; 30
(2) There has been a transfer of all of the person’s 31
transferable interest in the limited partnership, other than a transfer 32
for security purposes, or a court order charging the person’s interest, 33
which has not been foreclosed; 34
(3) The person is a corporation and, within 90 days after the 35
limited partnership notifies the person that it will be expelled as a 36
limited partner because it has filed [a certificate] articles of 37
dissolution or the equivalent, its charter has been revoked or its right 38
to conduct business has been suspended by the jurisdiction of its 39
incorporation, there is no revocation of the [certificate] articles of 40
dissolution or no reinstatement of its charter or its right to conduct 41
business; or 42
(4) The person is a limited-liability company or partnership 43
that has been dissolved and whose business is being wound up; 44
– 25 –
- *AB239*
(e) On application by the limited partnership, the person’s 1
expulsion as a limited partner by judicial order because: 2
(1) The person engaged in wrongful conduct that adversely 3
and materially affected the limited partnership’s activities; 4
(2) The person willfully or persistently committed a material 5
breach of the partnership agreement or of the obligation of good 6
faith and fair dealing under subsection 2 of NRS 87A.340; or 7
(3) The person engaged in conduct relating to the limited 8
partnership’s activities which makes it not reasonably practicable to 9
carry on the activities with the person as limited partner; 10
(f) In the case of a person who is a natural person, the person’s 11
death; 12
(g) In the case of a person that is a trust or is acting as a limited 13
partner by virtue of being a trustee of a trust, distribution of the 14
trust’s entire transferable interest in the limited partnership, but not 15
merely by reason of the substitution of a successor trustee; 16
(h) In the case of a person that is an estate or is acting as a 17
limited partner by virtue of being a personal representative of an 18
estate, distribution of the estate’s entire transferable interest in the 19
limited partnership, but not merely by reason of the substitution of a 20
successor personal representative; 21
(i) Termination of a limited partner that is not a natural person, 22
partnership, limited-liability company, corporation, trust or estate; 23
or 24
(j) The limited partnership’s participation in a conversion or 25
merger if the limited partnership: 26
(1) Is not the converted or surviving entity; or 27
(2) Is the converted or surviving entity but, as a result of the 28
conversion or merger, the person ceases to be a limited partner. 29
Sec. 20. NRS 87A.445 is hereby amended to read as follows: 30
87A.445 A person is withdrawn from a limited partnership as a 31
general partner upon the occurrence of any of the following events: 32
1. The limited partnership’s having notice of the person’s 33
express will to withdraw as a general partner or on a later date 34
specified by the person; 35
2. An event agreed to in the partnership agreement as causing 36
the person’s withdrawal as a general partner; 37
3. The person’s expulsion as a general partner pursuant to the 38
partnership agreement; 39
4. The person’s expulsion as a general partner by the 40
unanimous consent of the other partners if: 41
(a) It is unlawful to carry on the limited partnership’s activities 42
with the person as a general partner; 43
(b) There has been a transfer of all or substantially all of the 44
person’s transferable interest in the limited partnership, other than a 45
– 26 –
- *AB239*
transfer for security purposes, or a court order charging the person’s 1
interest, which has not been foreclosed; 2
(c) The person is a corporation and, within 90 days after the 3
limited partnership notifies the person that it will be expelled as a 4
general partner because it has filed [a certificate] articles of 5
dissolution or the equivalent, its charter has been revoked or its right 6
to conduct business has been suspended by the jurisdiction of its 7
incorporation, there is no revocation of the [certificate] articles of 8
dissolution or no reinstatement of its charter or its right to conduct 9
business; or 10
(d) The person is a limited-liability company or partnership that 11
has been dissolved and whose business is being wound up; 12
5. On application by the limited partnership, the person’s 13
expulsion as a general partner by judicial determination because: 14
(a) The person engaged in wrongful conduct that adversely and 15
materially affected the limited partnership activities; 16
(b) The person willfully or persistently committed a material 17
breach of the partnership agreement or of a duty owed to the 18
partnership or the other partners under NRS 87A.385; or 19
(c) The person engaged in conduct relating to the limited 20
partnership’s activities which makes it not reasonably practicable to 21
carry on the activities of the limited partnership with the person as a 22
general partner; 23
6. The person’s: 24
(a) Becoming a debtor in bankruptcy; 25
(b) Execution of an assignment for the benefit of creditors; 26
(c) Seeking, consenting to or acquiescing in the appointment of 27
a trustee, receiver or liquidator of the person or of all or 28
substantially all of the person’s property; or 29
(d) Failure, within 90 days after the appointment, to have 30
vacated or stayed the appointment of a trustee, receiver or liquidator 31
of the general partner or of all or substantially all of the person’s 32
property obtained without the person’s consent or acquiescence, or 33
failing within 90 days after the expiration of a stay to have the 34
appointment vacated; 35
7. In the case of a person who is a natural person: 36
(a) The person’s death; 37
(b) The appointment of a guardian or general conservator for the 38
person; or 39
(c) A judicial determination that the person has otherwise 40
become incapable of performing the person’s duties as a general 41
partner under the partnership agreement; 42
8. In the case of a person that is a trust or is acting as a general 43
partner by virtue of being a trustee of a trust, distribution of the 44
– 27 –
- *AB239*
trust’s entire transferable interest in the limited partnership, but not 1
merely by reason of the substitution of a successor trustee; 2
9. In the case of a person that is an estate or is acting as a 3
general partner by virtue of being a personal representative of an 4
estate, distribution of the estate’s entire transferable interest in the 5
limited partnership, but not merely by reason of the substitution of a 6
successor personal representative; 7
10. Termination of a general partner that is not a natural 8
person, partnership, limited-liability company, corporation, trust or 9
estate; or 10
11. The limited partnership’s participation in a conversion or 11
merger under chapter 92A of NRS, if the limited partnership: 12
(a) Is not the converted or surviving entity; or 13
(b) Is the converted or surviving entity but, as a result of the 14
conversion or merger, the person ceases to be a general partner. 15
Sec. 21. NRS 88.450 is hereby amended to read as follows: 16
88.450 Except as approved by the specific written consent of 17
all partners at the time, a person ceases to be a general partner of a 18
limited partnership upon the happening of any of the following 19
events: 20
1. The general partner withdraws from the limited partnership 21
as provided in NRS 88.495; 22
2. The general partner ceases to be a member of the limited 23
partnership as provided in NRS 88.530; 24
3. The general partner is removed as a general partner in 25
accordance with the partnership agreement; 26
4. Unless otherwise provided in writing in the partnership 27
agreement, the general partner: 28
(a) Makes an assignment for the benefit of creditors; 29
(b) Files a voluntary petition in bankruptcy; 30
(c) Is adjudicated a bankrupt or insolvent; 31
(d) Files a petition or answer seeking for the general partner any 32
reorganization, arrangement, composition, readjustment, liquidation, 33
dissolution or similar relief under any statute, law or regulation; 34
(e) Files an answer or other pleading admitting or failing to 35
contest the material allegations of a petition filed against the general 36
partner in any proceeding of this nature; or 37
(f) Seeks, consents to or acquiesces in the appointment of a 38
trustee, receiver or liquidator of the general partner or of all or any 39
substantial part of the general partner’s properties; 40
5. Unless otherwise provided in writing in the partnership 41
agreement, 120 days after the commencement of any proceeding 42
against the general partner seeking reorganization, arrangement, 43
composition, readjustment, liquidation, dissolution or similar relief 44
under any statute, law or regulation, the proceeding has not been 45
– 28 –
- *AB239*
dismissed, or if within 90 days after the appointment without the 1
general partner’s consent or acquiescence of a trustee, receiver or 2
liquidator of the general partner or of all or any substantial part of 3
the general partner’s properties, the appointment is not vacated or 4
stayed, or within 90 days after the expiration of any such stay, the 5
appointment is not vacated; 6
6. In the case of a general partner who is a natural person: 7
(a) The general partner’s death; or 8
(b) The entry by a court of competent jurisdiction adjudicating 9
the general partner to be incapacitated; 10
7. In the case of a general partner who is acting as a general 11
partner by virtue of being a trustee of a trust, the termination of the 12
trust, but not merely the substitution of a new trustee; 13
8. In the case of a general partner that is a separate partnership, 14
the dissolution and commencement of winding up of the separate 15
partnership; 16
9. In the case of a general partner that is a corporation, the 17
filing of [a certificate] articles of dissolution, or its equivalent, for 18
the corporation or the revocation of its charter; or 19
10. In the case of an estate, the distribution by the fiduciary of 20
the estate’s entire interest in the partnership. 21
Sec. 22. Chapter 92A of NRS is hereby amended by adding 22
thereto a new section to read as follows: 23
1. Unless otherwise expressly required by the articles of 24
incorporation of a constituent corporation, no submission to and 25
no vote of the stockholders of the constituent corporation are 26
necessary to authorize a restructuring merger if the plan of 27
merger expressly permits or requires the merger to be effected 28
under this section and: 29
(a) The constituent corporation and the merger subsidiary are 30
the only constituent entities in the restructuring merger; 31
(b) Each share or fraction of a share of the capital stock of the 32
constituent corporation outstanding immediately before the 33
effective time of the restructuring merger is converted in 34
the restructuring merger into a share or equal fraction of a share 35
of capital stock of the holding corporation that, in comparison to 36
the class or series of capital stock of the constituent corporation 37
being converted: 38
(1) Has the same voting powers, designations, preferences, 39
limitations, restrictions and relative rights; 40
(2) Is likewise registered under applicable securities laws, if 41
such converted share or fraction of a share was so registered 42
immediately before the effective time of the restructuring merger; 43
and 44
– 29 –
- *AB239*
(3) Is likewise eligible or approved for trading on each 1
exchange and in each market, if any, as the converted share or 2
fraction of a share was so eligible or approved immediately before 3
the effective time of the restructuring merger; 4
(c) The organizational documents of the holding corporation 5
immediately following the effective time of the restructuring 6
merger contain only provisions identical to the organizational 7
documents of the constituent corporation immediately before the 8
effective time of the restructuring merger, other than: 9
(1) The name of the holding corporation, if different from 10
the constituent corporation; 11
(2) Any provision that could be omitted from restated 12
articles of incorporation in accordance with NRS 78.403; and 13
(3) The provisions required by paragraph (f); 14
(d) As a result of the restructuring merger, the surviving 15
company becomes a direct or indirect wholly owned subsidiary of 16
the holding corporation; 17
(e) The plan of merger for the restructuring merger requires 18
that the directors and officers of the constituent corporation are 19
the only directors and officers, respectively, of the holding 20
corporation at the effective time of the restructuring merger; 21
(f) The organizational documents of the holding corporation 22
and the surviving company, in each case for a period of not less 23
than 2 years after the effective time of the restructuring merger, 24
contain provisions requiring, by specific reference to this section, 25
that: 26
(1) At least a majority of the voting power of the governing 27
body of the surviving company will be comprised of individuals 28
then serving as a director of the holding corporation, unless the 29
surviving company is a limited-liability company managed by its 30
members and the holding corporation then holds at least a 31
majority of the voting power of the owner’s interests of the 32
surviving company; 33
(2) If the surviving company is a limited-liability company, 34
either: 35
(I) The surviving company will be managed by its 36
members and the holding corporation then holds at least a 37
majority of the voting power of the owner’s interests of the 38
surviving company; or 39
(II) The surviving company will be managed by one or 40
more managers and the organizational documents of the surviving 41
company expressly provide that such a manager shall be subject to 42
non-waivable fiduciary duties identical to those of a director of a 43
domestic corporation and the benefit of the entitlements, 44
– 30 –
- *AB239*
presumptions and protections afforded to such directors under 1
chapter 78 of NRS; 2
(3) The approval of at least a majority of the voting power 3
of the stockholders of the holding corporation or owners of any 4
successor entity thereto will be required, in addition to any vote or 5
other approval required by this chapter or the organizational 6
documents of the holding corporation or the surviving company, 7
for: 8
(I) Any other merger in which the surviving company is 9
a constituent entity, other than a merger of the surviving company 10
with another entity that is wholly owned by the holding 11
corporation immediately before the effective time of such other 12
merger, that requires the approval of the owners of the surviving 13
company; 14
(II) Any sale of the assets of the surviving company that 15
would require the approval of the stockholders pursuant to NRS 16
78.565 if the surviving company were a domestic corporation, 17
regardless of whether the surviving corporation is then a domestic 18
corporation, provided that no approval pursuant to this sub-19
subparagraph will be required in connection with the mortgage or 20
pledge of such assets made in good faith and not in circumvention 21
of any other approval required pursuant to this subparagraph; 22
(III) Any sale, exchange, transfer or other disposition of 23
the owner’s interests of the surviving company holding greater 24
than a majority of the voting power of such owner’s interests with 25
respect to the election of the governing body of the surviving 26
company, provided that no approval pursuant to this sub-27
subparagraph will be required in connection with the mortgage or 28
pledge of such owner’s interests made in good faith and not in 29
circumvention of any other approval required pursuant to this 30
subparagraph; or 31
(IV) Dissolution or other termination of the existence of 32
the surviving company; and 33
(4) The provisions of subparagraph (3) shall not be 34
construed to require the approval of the stockholders of the 35
holding corporation to elect or remove any member of the 36
governing body of the surviving entity; and 37
(g) The board of directors of the constituent corporation 38
determines in good faith that the stockholders of the constituent 39
corporation would not reasonably be expected to recognize gain or 40
loss for United States federal income tax purposes by reason of 41
giving effect to the restructuring merger. 42
2. The articles of incorporation of a domestic corporation 43
may forbid the corporation from entering into a merger pursuant 44
to this section. 45
– 31 –
- *AB239*
3. Nothing in this section shall revive, extinguish or 1
otherwise affect the standing of any person under NRS 41.520 2
with respect to the constituent corporation as of immediately 3
before the effective time of the restructuring merger. 4
4. This section does not apply to circumvent or contravene 5
the provisions of NRS 78.378 to 78.3793, inclusive, or 78.411 to 6
78.444, inclusive. If and to the extent the provisions of NRS 7
78.378 to 78.3793, inclusive, or 78.411 to 78.444, inclusive, 8
applied to the constituent corporation, any class or series of its 9
capital stock or any of its stockholders immediately before the 10
effective time of the restructuring merger, such provisions apply 11
correspondingly to the holding corporation, its capital stock and 12
its stockholders immediately after the effective time of the 13
restructuring merger. Nothing in this section shall be construed 14
to: 15
(a) Affect the status of any stockholder as an interested 16
stockholder, as defined in NRS 78.3787 or 78.423; or 17
(b) Lengthen or shorten the duration of any time period under 18
the provisions of NRS 78.378 to 78.3793, inclusive, or 78.411 to 19
78.444, inclusive, applicable to the constituent corporation, any 20
class or series of its capital stock or any of its stockholders 21
immediately before the effective time of the restructuring merger, 22
and the duration of each such time period as applicable to the 23
holding corporation, its capital stock and its stockholders after the 24
effective time of the restructuring merger, will be determined with 25
reference to the constituent corporation, its capital stock and its 26
stockholders before the effective time of the restructuring merger. 27
5. As used in this section: 28
(a) “Constituent corporation” means a domestic corporation 29
that is a constituent entity in a restructuring merger. 30
(b) “Holding corporation” means a domestic corporation 31
which, from the date of its incorporation through and until the 32
effective time of a restructuring merger, is at all times a direct or 33
indirect wholly owned subsidiary of the constituent corporation 34
and whose shares will be issued to the former stockholders of the 35
constituent corporation in the restructuring merger. 36
(c) “Merger subsidiary” means a domestic corporation or 37
domestic limited-liability company in each case that is a direct or 38
indirect wholly owned subsidiary of the constituent corporation. 39
(d) “Organizational documents” means, when used in 40
reference to: 41
(1) A corporation, the articles of incorporation and bylaws 42
of the corporation; and 43
(2) A limited-liability company, the articles of organization 44
and operating agreement of the limited-liability company. 45
– 32 –
- *AB239*
(e) “Restructuring merger” means the merger of a constituent 1
corporation with a merger subsidiary effected pursuant to this 2
section. 3
(f) “Surviving company” means the surviving entity of the 4
merger of the constituent corporation and the merger subsidiary. 5
Sec. 23. NRS 92A.120 is hereby amended to read as follows: 6
92A.120 1. [After adopting] For a plan of merger, [exchange 7
or] conversion [,] or exchange to be approved, the board of 8
directors of each domestic corporation that is a constituent entity [in 9
the merger or conversion, or the board of directors of the domestic 10
corporation whose shares will be acquired in the exchange,] must 11
[submit] adopt the plan . [of merger, except] 12
2. Except as otherwise provided in NRS 92A.130, 92A.133 13
and 92A.180 [, the plan of conversion or the plan of exchange for 14
approval by its stockholders who are entitled to vote on the plan in 15
accordance with the provisions of this section. 16
2. For a plan of merger, conversion or exchange to be 17
approved:] and section 22 of this act: 18
(a) The board of directors of each domestic corporation that is 19
a constituent entity must recommend the plan [of merger, 20
conversion or exchange] to the stockholders [,] of such a domestic 21
corporation entitled to vote on the plan, unless the board of 22
directors determines that because of a conflict of interest , or 23
because of other special circumstances relating to the composition 24
of the board of directors at the time of its consideration of the 25
plan, it should make no recommendation and it communicates the 26
basis for its determination to the stockholders [with] in its 27
submission of the plan [; and] pursuant to paragraph (b); 28
(b) The board of directors of each domestic corporation that is 29
a constituent entity must submit the plan for approval by the 30
stockholders of such a domestic corporation who are entitled to 31
vote on the plan in accordance with the provisions of this section; 32
and 33
(c) The stockholders of each domestic corporation that is a 34
constituent entity who are entitled to vote on the plan must approve 35
the plan [.] in accordance with the provisions of this section. 36
3. Without limiting the requirements of paragraph (a) of 37
subsection 2: 38
(a) The board of directors may condition its submission to the 39
stockholders of the proposed merger, conversion or exchange on 40
any basis [. The provisions of this section or this chapter must not be 41
construed to permit a board of directors to submit, or to agree to 42
submit, a] ; and 43
(b) If any provision of the plan of merger, conversion or 44
exchange [to the stockholders without the recommendation of the 45
– 33 –
- *AB239*
board required pursuant to paragraph (a) of subsection 2 unless the 1
board of directors determines that because of a conflict of interest or 2
other special circumstances it should make no recommendation and 3
it communicates the basis for its determination to the stockholders 4
with the plan. Any] or of any other agreement [of] requires the 5
board of directors to submit [a] the plan [of merger, conversion or 6
exchange] to the stockholders , notwithstanding an adverse 7
recommendation of the board of directors made in accordance with 8
the terms and conditions of the plan, such provision shall be 9
[deemed to be] void and of no force or effect. 10
4. Unless the plan of merger, conversion or exchange is 11
approved by the written consent of stockholders pursuant to 12
subsection 7, the domestic corporation must notify each stockholder, 13
whether or not the stockholder is entitled to vote, of the proposed 14
stockholders’ meeting in accordance with NRS 78.370. The notice 15
must also state that the purpose, or one of the purposes, of the 16
meeting is to consider the plan of merger, conversion or exchange 17
and must contain or be accompanied by a copy or summary of the 18
plan. 19
5. Unless this chapter, the articles of incorporation, the 20
resolutions of the board of directors establishing the class or series 21
of stock or the board of directors acting pursuant to paragraph (a) 22
of subsection 3 require a greater vote or a vote by classes of 23
stockholders, the plan of merger or conversion must be approved by 24
a majority of the voting power of the stockholders. 25
6. Unless the articles of incorporation or the resolution of the 26
board of directors establishing a class or series of stock provide 27
otherwise, or unless the board of directors acting pursuant to 28
paragraph (a) of subsection 3 requires a greater vote, the plan of 29
exchange must be approved by a majority of the voting power of 30
each class and each series to be exchanged pursuant to the plan 31
of exchange. 32
7. Unless otherwise provided in the articles of incorporation or 33
the bylaws of the domestic corporation, the plan of merger, 34
conversion or exchange may be approved by written consent as 35
provided in NRS 78.320. 36
8. If an officer, director or stockholder of a domestic 37
corporation, which will be the constituent entity in a conversion, 38
will have any liability for the obligations of the resulting entity after 39
the conversion because the officer, director or stockholder will be 40
the owner of an owner’s interest in the resulting entity, then that 41
officer, director or stockholder must also approve the plan of 42
conversion. 43
9. Unless otherwise provided in the articles of incorporation or 44
bylaws of a domestic corporation, a plan of merger, conversion or 45
– 34 –
- *AB239*
exchange may contain a provision that permits amendment of the 1
plan of merger, conversion or exchange at any time after the 2
stockholders of the domestic corporation approve the plan of 3
merger, conversion or exchange, but before the articles of merger, 4
conversion or exchange become effective, without obtaining the 5
approval of the stockholders of the domestic corporation for the 6
amendment if the amendment does not: 7
(a) Alter or change the manner or basis of exchanging an 8
owner’s interest to be acquired for owner’s interests, rights to 9
purchase owner’s interests, or other securities of the acquiring entity 10
or any other entity, or for cash or other property in whole or in part; 11
or 12
(b) Alter or change any of the terms and conditions of the plan 13
of merger, conversion or exchange in a manner that adversely 14
affects the stockholders of the domestic corporation. 15
[10. A board of directors shall cancel the proposed meeting or 16
remove the plan of merger, conversion or exchange from 17
consideration at the meeting if the board of directors determines that 18
it is not advisable to submit the plan of merger, conversion or 19
exchange to the stockholders for approval.] 20
Sec. 24. NRS 92A.133 is hereby amended to read as follows: 21
92A.133 1. Unless otherwise expressly required by the 22
articles of incorporation, no submission to, and no vote of , the 23
stockholders of a domestic corporation [is] are necessary to 24
authorize a merger in which the domestic corporation is a 25
constituent entity if the plan of merger expressly permits or requires 26
the merger to be effected under this section and: 27
(a) The ownership threshold requirement is satisfied without any 28
offer, subject to the provisions of subsection 2; or 29
(b) The ownership threshold requirement is satisfied in whole or 30
in part by way of an offer and: 31
(1) The domestic corporation has been a publicly traded 32
corporation at all times during the period between: 33
(I) The date of the commencement of the offer or the date 34
of the adoption of the plan of merger by the board of directors of the 35
domestic corporation, whichever is earlier; and 36
(II) The effective date of the merger; and 37
(2) The plan of merger requires that: 38
(I) The merger must be effected as soon as practicable 39
following the consummation of the offer if the merger is effected 40
under this section; and 41
(II) Each outstanding share of each class or series of stock 42
of the domestic corporation that is the subject of, and not 43
irrevocably accepted for purchase or exchange in, the offer must be 44
converted in such merger into, or into the right to receive, the same 45
– 35 –
- *AB239*
amount and kind of cash, property, rights or securities to be paid for 1
shares of such class or series of stock of the domestic corporation 2
irrevocably accepted for purchase or exchange in the offer. The plan 3
of merger may expressly provide that the requirements of this sub-4
subparagraph must not apply to specified categories of excluded 5
shares. 6
2. If a merger pursuant to this section is to be effectuated 7
without any offer: 8
(a) The ownership threshold requirement must be satisfied 9
without counting the voting power of any shares of the stock of the 10
domestic corporation acquired from the domestic corporation, or 11
any of the directors, officers, affiliates or associates thereof, within 12
the 6 months immediately preceding the adoption of the plan of 13
merger by the board of directors of the domestic corporation; 14
(b) The domestic corporation must provide notice of the merger 15
to all of its stockholders not less than 30 days before the effective 16
date of the merger; and 17
(c) The domestic corporation must have been a publicly traded 18
corporation at all times during the period between the date of the 19
adoption of the plan of merger by the board of directors of the 20
domestic corporation and the effective date of the merger. 21
3. This section does not apply to circumvent or contravene the 22
provisions of NRS 78.378 to 78.3793, inclusive, or NRS 78.411 to 23
78.444, inclusive. 24
4. As used in this section: 25
(a) “Affiliate” has the meaning ascribed to it in NRS 78.412. 26
(b) “Associate” has the meaning ascribed to it in NRS 78.413. 27
(c) “Consummation” means the irrevocable acceptance for 28
purchase or exchange of shares tendered pursuant to an offer. 29
(d) “Excluded shares” means: 30
(1) Rollover shares; and 31
(2) Shares of the domestic corporation that are owned 32
beneficially or of record at the commencement of an offer by: 33
(I) The domestic corporation; 34
(II) The constituent entity making the offer; 35
(III) Any person who owns, directly or indirectly, all of 36
the outstanding equity interests of the constituent entity making the 37
offer; or 38
(IV) Any direct or indirect wholly owned subsidiary of 39
any of the foregoing. 40
(e) “Offer” means an offer made by the other constituent entity 41
in the merger for all of the outstanding shares of each class or series 42
of stock of the domestic corporation listed on a national securities 43
exchange, on the terms provided in the plan of merger that, absent 44
this section, would be entitled to vote on the approval of the plan of 45
– 36 –
- *AB239*
merger. The other constituent entity in the merger may, but is not 1
required to, engage in the consummation of separate offers for 2
separate classes or series of the stock of the domestic corporation. 3
An offer may, but is not required to: 4
(1) Exclude any excluded shares; and 5
(2) Be conditioned on the tender of a minimum number or 6
proportion of shares of any class or series of the stock of the 7
domestic corporation. 8
(f) “Owned affiliate” means, with respect to a constituent entity, 9
any other person who owns, directly or indirectly, all of the 10
outstanding equity interests of the constituent entity, or any direct or 11
indirect wholly owned subsidiary of the constituent entity or other 12
person. 13
(g) “Ownership threshold requirement” means that the voting 14
power of the stock of the domestic corporation otherwise owned 15
beneficially or of record by the other constituent entity in the merger 16
or any of the owned affiliates of the other constituent entity, 17
together with the voting power of any rollover shares and any shares 18
irrevocably accepted for purchase or exchange pursuant to any offer 19
and received before the expiration of the offer by the agent or 20
depositary appointed to facilitate the consummation of the offer, 21
equals at least that proportion of the voting power of the stock, and 22
of each class or series thereof, of the domestic corporation that, 23
absent this section, would be required to approve the plan of merger 24
under this chapter and the articles of incorporation and bylaws of the 25
domestic corporation. For the purposes of this paragraph, shares are 26
received: 27
(1) If the shares are certificated shares, upon physical receipt 28
by the agent or depositary of a stock certificate with an executed 29
letter of transmittal or other instrument of transfer; 30
(2) If the shares are uncertificated shares held of record by a 31
clearing corporation as nominee, upon transfer into the account of 32
the agent or depositary by way of an agent’s message; and 33
(3) If the shares are uncertificated shares held of record by a 34
person other than a clearing corporation as nominee, upon physical 35
receipt by the agent or depositary of an executed letter of transmittal 36
or other instrument of transfer. 37
(h) “Publicly traded corporation” means a domestic corporation 38
that has a class or series of voting shares which is a covered security 39
under section 18(b)(1)(A) or (B) of the Securities Act of 1933, 15 40
U.S.C. § 77r(b)(1)(A) or (B), as amended. 41
(i) “Rollover shares” means any shares of any class or series of 42
the capital stock of the domestic corporation that are the subject of a 43
written agreement requiring such shares to be contributed or 44
otherwise transferred to the other constituent entity in the merger or 45
– 37 –
- *AB239*
any of the owned affiliates of the other constituent entity in 1
exchange for shares or other equity interest in the other constituent 2
entity or any of its owned affiliates. Shares must cease to be rollover 3
shares if, as of the effective time of the merger, the shares have not 4
been contributed or otherwise transferred pursuant to the written 5
agreement. 6
Sec. 25. NRS 92A.195 is hereby amended to read as follows: 7
92A.195 1. One foreign entity or foreign general partnership 8
may convert into one domestic entity if: 9
(a) The conversion is permitted by the law of the jurisdiction 10
governing the foreign entity or foreign general partnership and the 11
foreign entity or foreign general partnership complies with that law 12
in effecting the conversion; 13
(b) The foreign entity or foreign general partnership complies 14
with the applicable provisions of NRS 92A.205, 92A.207, 92A.210, 15
92A.230 and 92A.240; and 16
(c) The resulting domestic entity complies with the applicable 17
provisions of NRS 92A.205 and 92A.220. 18
2. One domestic entity or domestic general partnership may 19
convert into one foreign entity if: 20
(a) The conversion is permitted by the law of the jurisdiction 21
governing the resulting foreign entity and the resulting foreign entity 22
complies with that law in effecting the conversion; and 23
(b) The domestic entity complies with the applicable provisions 24
of NRS 92A.105, 92A.120, 92A.135, 92A.140, 92A.150, 92A.165, 25
92A.205, 92A.207, 92A.210, 92A.230 and 92A.240. 26
3. When a conversion pursuant to subsection 2 takes effect, the 27
resulting foreign entity shall be deemed to have appointed the 28
Secretary of State as its agent for service of process in a proceeding 29
to enforce any obligation. Service of process must be made 30
personally by delivering to and leaving with the Secretary of State 31
duplicate copies of the process and the payment of a fee of $100 for 32
accepting and transmitting the process. The Secretary of State shall 33
send one of the copies of the process by registered or certified mail 34
to the resulting entity at its specified address, unless the resulting 35
entity has designated in writing to the Secretary of State a different 36
address for that purpose, in which case it must be mailed to the last 37
address so designated. 38
Sec. 26. NRS 92A.380 is hereby amended to read as follows: 39
92A.380 1. Except as otherwise provided in NRS 92A.370 40
and 92A.390 and subject to the limitation in paragraph (f), any 41
stockholder is entitled to dissent from, and obtain payment of the 42
fair value of the stockholder’s shares in the event of any of the 43
following corporate actions: 44
– 38 –
- *AB239*
(a) Consummation of a plan of merger to which the domestic 1
corporation is a constituent entity: 2
(1) If approval by the stockholders is required for the merger 3
by [NRS 92A.120 to 92A.160, inclusive,] this chapter or the articles 4
of incorporation, regardless of whether the stockholder is entitled to 5
vote on the plan of merger; 6
(2) If the domestic corporation is a subsidiary and is merged 7
with its parent pursuant to NRS 92A.180; or 8
(3) If the domestic corporation is a constituent entity in a 9
merger pursuant to NRS 92A.133. 10
(b) Consummation of a plan of conversion to which the 11
domestic corporation is a constituent entity as the corporation whose 12
subject owner’s interests will be converted. 13
(c) Consummation of a plan of exchange to which the domestic 14
corporation is a constituent entity as the corporation whose subject 15
owner’s interests will be acquired, if the stockholder’s shares are to 16
be acquired in the plan of exchange. 17
(d) Any corporate action taken pursuant to a vote of the 18
stockholders to the extent that the articles of incorporation, bylaws 19
or a resolution of the board of directors provides that voting or 20
nonvoting stockholders are entitled to dissent and obtain payment 21
for their shares. 22
(e) Accordance of full voting rights to control shares, as defined 23
in NRS 78.3784, only to the extent provided for pursuant to 24
NRS 78.3793. 25
(f) Any corporate action not described in this subsection 26
pursuant to which the stockholder would be obligated, as a result of 27
the corporate action, to accept money or scrip rather than receive a 28
fraction of a share in exchange for the cancellation of all the 29
stockholder’s outstanding shares, except where the stockholder 30
would not be entitled to receive such payment pursuant to NRS 31
78.205, 78.2055 or 78.207. A dissent pursuant to this paragraph 32
applies only to the fraction of a share, and the stockholder is entitled 33
only to obtain payment of the fair value of the fraction of a share. 34
2. A stockholder who is entitled to dissent and obtain payment 35
pursuant to NRS 92A.300 to 92A.500, inclusive, must not otherwise 36
object to or challenge the corporate action creating the entitlement 37
[unless the action is unlawful or constitutes or] , except to the extent 38
that: 39
(a) The domestic corporation did not obtain the vote or consent 40
of the requisite voting power of the stockholders to approve the 41
action as prescribed under this chapter and the articles of 42
incorporation and bylaws of the domestic corporation; or 43
(b) The corporate action is the proximate result of actual fraud 44
against the stockholder or the domestic corporation. 45
– 39 –
- *AB239*
3. Subject to the limitations in this subsection, from and after 1
the effective date of any corporate action described in subsection 1, 2
no stockholder who has exercised the right to dissent pursuant to 3
NRS 92A.300 to 92A.500, inclusive, is entitled to vote his or her 4
shares for any purpose or to receive payment of dividends or any 5
other distributions on shares. This subsection does not apply to 6
dividends or other distributions payable to stockholders on a date 7
before the effective date of any corporate action from which the 8
stockholder has dissented. If a stockholder exercises the right to 9
dissent with respect to a corporate action described in paragraph (f) 10
of subsection 1, the restrictions of this subsection apply only to the 11
shares to be converted into a fraction of a share and the dividends 12
and distributions to those shares. 13
H