Senate Bill No. 51–Committee on Judiciary

 

Prefiled January 24, 2001

 

(On Behalf of Encouraging Businesses to Organize and
Conduct Business in Nevada (S.C.R. 19))

 

____________

 

Referred to Committee on Judiciary

 

SUMMARY—Makes various changes concerning requirements for formation, maintenance and management of business associations. (BDR 7‑255)

 

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.

Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

 

AN ACT relating to business associations; providing for the decrease of issued and outstanding shares of stock in certain circumstances; providing for the voting rights of fiduciaries and joint owners of stock; revising provisions governing the forfeiture of stock by delinquent subscribers; providing for the registration and management of foreign limited-liability companies; revising provisions governing the merger, conversion and exchange of business entities; providing for the domestication of certain foreign business entities; making various other changes pertaining to business associations; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1    Section 1.  Chapter 78 of NRS is hereby amended by adding thereto

1-2  the provisions set forth as sections 2 and 3 of this act.

1-3    Sec. 2.  1.  A person holding stock in a fiduciary capacity is entitled

1-4  to vote the shares so held.

1-5    2.  A person whose stock is pledged is entitled to vote, unless in the

1-6  pledge the pledgor has expressly empowered the pledgee to vote the stock,

1-7  in which case only the pledgee or the proxy of the pledgee may vote the

1-8  stock.

1-9    3.  If shares or other securities having voting power stand of record

1-10  in the names of two or more persons, whether fiduciaries, joint tenants,

1-11  tenants in common or otherwise, or if two or more persons have the same

1-12  fiduciary relationship respecting the shares or securities, unless the


2-1  secretary of the corporation is given written notice to the contrary and is

2-2  furnished with a copy of the instrument or order appointing them or

2-3  creating the relationship, their acts with respect to voting have the

2-4  following effect:

2-5    (a) If only one votes, that person’s act binds all;

2-6    (b) If more than one votes, the act chosen by a majority of votes binds

2-7  all; or

2-8    (c) If more than one votes, but the vote is evenly split on any

2-9  particular matter, each faction may vote the shares or securities in

2-10  question proportionally.

2-11    Sec. 3.  1.  Unless otherwise provided in the articles of

2-12  incorporation, a corporation that desires to decrease the number of

2-13  issued and outstanding shares of a class or series held by each

2-14  stockholder of record at the effective date and time of the change without

2-15  correspondingly decreasing the number of authorized shares of the same

2-16  class or series may do so if:

2-17    (a) The board of directors adopts a resolution setting forth the

2-18  proposal to decrease the number of issued and outstanding shares of a

2-19  class or series; and

2-20    (b) The proposal is approved by the vote of stockholders holding a

2-21  majority of the voting power of the affected class or series, or such

2-22  greater proportion as may be provided in the articles of incorporation,

2-23  regardless of limitations or restrictions on the voting power of the

2-24  affected class or series.

2-25    2.  If the proposal required by subsection 1 is approved by the

2-26  stockholders entitled to vote, the corporation may reissue its stock in

2-27  accordance with the proposal after the effective date and time of the

2-28  change.

2-29    3.  If a proposed decrease in the number of issued and outstanding

2-30  shares of any class or series would adversely alter or change any

2-31  preference, or any relative or other right given to any other class or

2-32  series of outstanding shares, then the decrease must be approved by the

2-33  vote, in addition to any vote otherwise required, of the shares

2-34  representing a majority of the voting power of each class or series whose

2-35  preference or rights are adversely affected by the decrease, or such

2-36  greater proportion as may be provided in the articles of incorporation,

2-37  regardless of limitations or restrictions on the voting power of the

2-38  adversely affected class or series.

2-39    4.  Any proposal to decrease the number of issued and outstanding

2-40  shares of any class or series, if any, that includes provisions pursuant to

2-41  which only money will be paid or scrip will be issued to stockholders

2-42  who:

2-43    (a) Before the decrease in the number of shares becomes effective,

2-44  hold 1 percent or more of the outstanding shares of the affected class or

2-45  series; and

2-46    (b) Would otherwise be entitled to receive fractions of shares in

2-47  exchange for the cancellation of all their outstanding shares,

2-48  is subject to the provisions of NRS 92A.300 to 92A.500, inclusive. If the

2-49  proposal is subject to those provisions, any stockholder who is obligated


3-1  to accept money or scrip rather than receive a fraction of a share

3-2  resulting from the action taken pursuant to this section may dissent in

3-3  accordance with the provisions of NRS 92A.300 to 92A.500, inclusive,

3-4  and obtain payment of the fair value of the fraction of a share to which

3-5  the stockholder would otherwise be entitled.

3-6    Sec. 4.  NRS 78.010 is hereby amended to read as follows:

3-7    78.010  1.  As used in this chapter:

3-8    (a) “Approval” and “vote” as describing action by the directors or

3-9  stockholders mean the vote of directors in person or by written consent or

3-10  of stockholders in person, by proxy or by written consent.

3-11    (b) “Articles,” “articles of incorporation” and “certificate of

3-12  incorporation” are synonymous terms and unless the context otherwise

3-13  requires, include all certificates filed pursuant to NRS 78.030, 78.1955,

3-14  78.209, 78.380, 78.385 and 78.390 and any articles of merger [or] ,

3-15  conversion, exchange or domestication filed pursuant to NRS 92A.200 to

3-16  92A.240, inclusive [.] , and sections 76 to 82, inclusive, of this act. Unless

3-17  the context otherwise requires, these terms include restated articles and

3-18  certificates of incorporation.

3-19    (c) “Directors” and “trustees” are synonymous terms.

3-20    (d) “Receiver” includes receivers and trustees appointed by a court as

3-21  provided in this chapter or in chapter 32 of NRS.

3-22    (e) “Registered office” means the office maintained at the street address

3-23  of the resident agent.

3-24    (f) “Resident agent” means the agent appointed by the corporation upon

3-25  whom process or a notice or demand authorized by law to be served upon

3-26  the corporation may be served.

3-27    (g) “Sign” means to affix a signature to a document.

3-28    (h) “Signature” means a name, word or mark executed or adopted by a

3-29  person with the present intention to authenticate a document. The term

3-30  includes, without limitation, a digital signature as defined in NRS 720.060.

3-31    (i) “Stockholder of record” means a person whose name appears on the

3-32  stock ledger of the corporation.

3-33    (j) “Street address” of a resident agent means the actual physical

3-34  location in this state at which a resident agent is available for service of

3-35  process.

3-36    2.  General terms and powers given in this chapter are not restricted by

3-37  the use of special terms, or by any grant of special powers contained in this

3-38  chapter.

3-39    Sec. 5.  NRS 78.125 is hereby amended to read as follows:

3-40    78.125  1.  Unless it is otherwise provided in the articles of

3-41  incorporation, the board of directors may designate one or more

3-42  committees which, to the extent provided in the resolution or resolutions or

3-43  in the bylaws of the corporation, have and may exercise the powers of the

3-44  board of directors in the management of the business and affairs of the

3-45  corporation . [, and may have power to authorize the seal of the corporation

3-46  to be affixed to all papers on which the corporation desires to place a seal.]

3-47    2.  The committee or committees must have such name or names as

3-48  may be stated in the bylaws of the corporation or as may be determined

3-49  from time to time by resolution adopted by the board of directors.


4-1    3.  Each committee must include at least one director. Unless the

4-2  articles of incorporation or the bylaws provide otherwise, the board of

4-3  directors may appoint natural persons who are not directors to serve on

4-4  committees.

4-5    4.  The board of directors may designate one or more directors as

4-6  alternate members of a committee to replace any member who is

4-7  disqualified or absent from a meeting of the committee. The bylaws of the

4-8  corporation may provide that, unless the board of directors appoints

4-9  alternate members pursuant to this subsection, the member or members

4-10  of a committee present at a meeting and not disqualified from voting,

4-11  whether or not the member or members constitute a quorum, may

4-12  unanimously appoint another member of the board of directors to act at

4-13  the meeting in the place of an absent or disqualified member of the

4-14  committee.

4-15    Sec. 6.  NRS 78.150 is hereby amended to read as follows:

4-16    78.150  1.  A corporation organized [under] pursuant to the laws of

4-17  this state shall, on or before the first day of the second month after the

4-18  filing of its articles of incorporation with the secretary of state, file with the

4-19  secretary of state a list, on a form furnished by him, containing:

4-20    (a) The name of the corporation;

4-21    (b) The file number of the corporation, if known;

4-22    (c) The names and titles of the president, secretary, treasurer and of all

4-23  the directors of the corporation;

4-24    (d) The mailing or street address, either residence or business, of each

4-25  officer and director listed, following the name of the officer or director;

4-26  and

4-27    (e) The signature of an officer of the corporation certifying that the list

4-28  is true, complete and accurate.

4-29    2.  The corporation shall annually thereafter, on or before the last day

4-30  of the month in which the anniversary date of incorporation occurs in each

4-31  year, file with the secretary of state, on a form furnished by him, an

4-32  [amended] annual list containing all of the information required in

4-33  subsection 1.

4-34    3.  Upon filing [a list of officers and directors,] the annual list required

4-35  by subsection 2, the corporation shall pay to the secretary of state a fee of

4-36  $85.

4-37    4.  The secretary of state shall, 60 days before the last day for filing the

4-38  annual list required by subsection 2, cause to be mailed to each corporation

4-39  which is required to comply with the provisions of NRS 78.150 to 78.185,

4-40  inclusive, and which has not become delinquent, a notice of the fee due

4-41  pursuant to subsection 3 and a reminder to file [a list of officers and

4-42  directors.] the annual list required by subsection 2. Failure of any

4-43  corporation to receive a notice or form does not excuse it from the penalty

4-44  imposed by law.

4-45    5.  If the list to be filed pursuant to the provisions of subsection 1 or 2

4-46  is defective in any respect or the fee required by subsection 3 , 6 or 7 is not

4-47  paid, the secretary of state may return the list for correction or payment.

 


5-1    6.  An annual list for a corporation not in default which is received by

5-2  the secretary of state more than 60 days before its due date shall be deemed

5-3  an amended list for the previous year and [does not satisfy the requirements

5-4  of subsection 2 for the year to which the due date is applicable.] must be

5-5  accompanied by a fee of $85 for filing. A payment submitted pursuant to

5-6  this subsection does not satisfy the requirements of subsection 2 for the

5-7  year to which the due date is applicable.

5-8    7.  If the corporation is an association as defined in NRS 116.110315,

5-9  the secretary of state shall not accept the filing required by this section

5-10  unless it is accompanied by evidence of the payment of the fee required to

5-11  be paid pursuant to NRS 116.31155 that is provided to the association

5-12  pursuant to subsection 4 of that section.

5-13    Sec. 7.  NRS 78.175 is hereby amended to read as follows:

5-14    78.175  1.  The secretary of state shall notify, by letter addressed to its

5-15  resident agent, each corporation deemed in default pursuant to NRS

5-16  78.170. The notice must be accompanied by a statement indicating the

5-17  amount of the filing fee, penalties and costs remaining unpaid.

5-18    2.  On the first day of the [ninth month following] second anniversary

5-19  of the month in which the filing was required, the charter of the corporation

5-20  is revoked and its right to transact business is forfeited.

5-21    3.  The secretary of state shall compile a complete list containing the

5-22  names of all corporations whose right to do business has been forfeited.

5-23  The secretary of state shall forthwith notify, by letter addressed to its

5-24  resident agent, each such corporation of the forfeiture of its charter. The

5-25  notice must be accompanied by a statement indicating the amount of the

5-26  filing fee, penalties and costs remaining unpaid.

5-27    4.  If the charter of a corporation is revoked and the right to transact

5-28  business is forfeited as provided in subsection 2, all of the property and

5-29  assets of the defaulting domestic corporation must be held in trust by the

5-30  directors of the corporation as for insolvent corporations, and the same

5-31  proceedings may be had with respect thereto as are applicable to insolvent

5-32  corporations. Any person interested may institute proceedings at any time

5-33  after a forfeiture has been declared, but if the secretary of state reinstates

5-34  the charter the proceedings must at once be dismissed and all property

5-35  restored to the officers of the corporation.

5-36    5.  Where the assets are distributed they must be applied in the

5-37  following manner:

5-38    (a) To the payment of the filing fee, penalties and costs due to the state;

5-39    (b) To the payment of the creditors of the corporation; and

5-40    (c) Any balance remaining to distribution among the stockholders.

5-41    Sec. 8.  NRS 78.180 is hereby amended to read as follows:

5-42    78.180  1.  Except as otherwise provided in subsections 3 and 4, the

5-43  secretary of state shall reinstate a corporation which has forfeited its right

5-44  to transact business [under] pursuant to the provisions of this chapter and

5-45  restore to the corporation its right to carry on business in this state, and to

5-46  exercise its corporate privileges and immunities, if it:

5-47    (a) Files with the secretary of state the list required by NRS 78.150; and

5-48    (b) Pays to the secretary of state:


6-1       (1) The annual filing fee and penalty set forth in NRS 78.150 and

6-2  78.170 for each year or portion thereof during which [its charter was

6-3  revoked;] it failed to file each required annual list in a timely manner;

6-4  and

6-5       (2) A fee of $50 for reinstatement.

6-6    2.  When the secretary of state reinstates the corporation, he shall:

6-7    (a) Immediately issue and deliver to the corporation a certificate of

6-8  reinstatement authorizing it to transact business as if the filing fee or fees

6-9  had been paid when due; and

6-10    (b) Upon demand, issue to the corporation one or more certified copies

6-11  of the certificate of reinstatement.

6-12    3.  The secretary of state shall not order a reinstatement unless all

6-13  delinquent fees and penalties have been paid, and the revocation of the

6-14  charter occurred only by reason of failure to pay the fees and penalties.

6-15    4.  If a corporate charter has been revoked pursuant to the provisions of

6-16  this chapter and has remained revoked for a period of 5 consecutive years,

6-17  the charter must not be reinstated.

6-18    Sec. 9.  NRS 78.195 is hereby amended to read as follows:

6-19    78.195  1.  If a corporation desires to have more than one class or

6-20  series of stock, the articles of incorporation must prescribe, or vest

6-21  authority in the board of directors to prescribe, the classes, series and the

6-22  number of each class or series of stock and the voting powers,

6-23  designations, preferences, limitations, restrictions and relative rights of

6-24  each class or series of stock. If more than one class or series of stock is

6-25  authorized, the articles of incorporation or the resolution of the board of

6-26  directors passed pursuant to a provision of the articles must prescribe a

6-27  distinguishing designation for each class and series. The voting powers,

6-28  designations, preferences, limitations, restrictions, relative rights and

6-29  distinguishing designation of each class or series of stock must be

6-30  described in the articles of incorporation or the resolution of the board of

6-31  directors before the issuance of shares of that class or series.

6-32    2.  All shares of a series must have voting powers, designations,

6-33  preferences, limitations, restrictions and relative rights identical with those

6-34  of other shares of the same series and, except to the extent otherwise

6-35  provided in the description of the series, with those of other series of the

6-36  same class.

6-37    3.  Unless otherwise provided in the articles of incorporation, no stock

6-38  issued as fully paid up may ever be assessed and the articles of

6-39  incorporation must not be amended in this particular.

6-40    4.  Any rate, condition or time for payment of distributions on any class

6-41  or series of stock may be made dependent upon any fact or event which

6-42  may be ascertained outside the articles of incorporation or the resolution

6-43  providing for the distributions adopted by the board of directors if the

6-44  manner in which a fact or event may operate upon the rate, condition or

6-45  time of payment for the distributions is stated in the articles of

6-46  incorporation or the resolution. As used in this subsection, “fact or event”

6-47  includes, without limitation, the existence of a fact or occurrence of an

6-48  event, including, without limitation, a determination or action by a


7-1  person, government, governmental agency or political subdivision of a

7-2  government.

7-3    5.  The provisions of this section do not restrict the directors of a

7-4  corporation from taking action to protect the interests of the corporation

7-5  and its stockholders, including, but not limited to, adopting or executing

7-6  plans, arrangements or instruments that grant rights to stockholders or

7-7  that deny rights, privileges, power or authority to a holder of a specified

7-8  number of shares or percentage of share ownership or voting power.

7-9    Sec. 10.  NRS 78.1955 is hereby amended to read as follows:

7-10    78.1955  1.  If the voting powers, designations, preferences,

7-11  limitations, restrictions and relative rights of any class or series of stock

7-12  have been established by a resolution of the board of directors pursuant to a

7-13  provision in the articles of incorporation, a certificate of designation setting

7-14  forth the resolution must be signed by an officer of the corporation and

7-15  filed with the secretary of state . [setting forth the resolution. The

7-16  certificate of designation must be executed by the president or vice

7-17  president and secretary or assistant secretary and acknowledged by the

7-18  president or vice president before a person authorized by the laws of

7-19  Nevada to take acknowledgments of deeds. The] A certificate of

7-20  designation [so executed and acknowledged must be filed] signed and filed

7-21  pursuant to this section must become effective before the issuance of any

7-22  shares of the class or series.

7-23    2.  Unless otherwise provided in the articles of incorporation or the

7-24  certificate of designation being amended, if no shares of a class or series of

7-25  stock established by a resolution of the board of directors have been issued,

7-26  the designation of the class or series, the number of the class or series and

7-27  the voting powers, designations, preferences, limitations, restrictions and

7-28  relative rights of the class or series may be amended by a resolution of the

7-29  board of directors pursuant to a certificate of amendment filed in the

7-30  manner provided in subsection 4.

7-31    3.  Unless otherwise provided in the articles of incorporation or the

7-32  certificate of designation, if shares of a class or series of stock established

7-33  by a resolution of the board of directors have been issued, the designation

7-34  of the class or series, the number of the class or series and the voting

7-35  powers, designations, preferences, limitations, restrictions and relative

7-36  rights of the class or series may be amended by a resolution of the board of

7-37  directors only if the amendment is approved as provided in this subsection.

7-38  Unless otherwise provided in the articles of incorporation or the certificate

7-39  of designation, the proposed amendment adopted by the board of directors

7-40  must be approved by the vote of stockholders holding shares in the

7-41  corporation entitling them to exercise a majority of the voting power, or

7-42  such greater proportion of the voting power as may be required by the

7-43  articles of incorporation or the certificate of designation, of:

7-44    (a) The class or series of stock being amended; and

7-45    (b) Each class and each series of stock which, before amendment, is

7-46  senior to the class or series being amended as to the payment of

7-47  distributions upon dissolution of the corporation, regardless of any

7-48  limitations or restrictions on the voting power of that class or series.


8-1    4.  A certificate of amendment to a certificate of designation must be

8-2  signed by an officer of the corporation and filed with the secretary of state

8-3  and must:

8-4    (a) Set forth the original designation and the new designation, if the

8-5  designation of the class or series is being amended;

8-6    (b) State that no shares of the class or series have been issued or state

8-7  that the approval of the stockholders required pursuant to subsection 3 has

8-8  been obtained; and

8-9    (c) Set forth the amendment to the class or series or set forth the

8-10  designation of the class or series, the number of the class or series and the

8-11  voting powers, designations, preferences, limitations, restrictions and

8-12  relative rights of the class or series, as amended.

8-13  [The certificate of amendment must be executed by the president or vice

8-14  president and secretary or assistant secretary and acknowledged by the

8-15  president or vice president before a person authorized by the laws of

8-16  Nevada to take acknowledgments of deeds.]

8-17    5.  A certificate filed pursuant to subsection 1 or 4 becomes effective

8-18  upon filing with the secretary of state or upon a later date specified in the

8-19  certificate, which must not be later than 90 days after the certificate is

8-20  filed.

8-21    6.  If shares of a class or series of stock established by a certificate of

8-22  designation are not outstanding, the corporation may file a certificate:

8-23    (a) Stating that no shares of the class or series are outstanding; and

8-24    (b) Containing the resolution of the board of directors authorizing the

8-25  withdrawal of the certificate of designation establishing the class or

8-26  series of stock. The certificate must be signed by an officer of the

8-27  corporation and filed with the secretary of state. Upon filing the

8-28  certificate and payment of the fee required pursuant to NRS 78.765, all

8-29  matters contained in the certificate of designation regarding the class or

8-30  series of stock are eliminated from the articles of incorporation.

8-31    7.  NRS 78.380, 78.385 and 78.390 do not apply to certificates of

8-32  amendment filed pursuant to this section.

8-33    Sec. 11.  NRS 78.196 is hereby amended to read as follows:

8-34    78.196  1.  Each corporation must have:

8-35    (a) One or more classes or series of shares that together have unlimited

8-36  voting rights; and

8-37    (b) One or more classes or series of shares that together are entitled to

8-38  receive the net assets of the corporation upon dissolution.

8-39  If the articles of incorporation provide for only one class of stock, that class

8-40  of stock has unlimited voting rights and is entitled to receive the net assets

8-41  of the corporation upon dissolution.

8-42    2.  The articles of incorporation, or a resolution of the board of

8-43  directors pursuant thereto, may authorize one or more classes or series of

8-44  stock that:

8-45    (a) Have special, conditional or limited voting powers, or no right to

8-46  vote, except to the extent otherwise provided by this Title;

8-47    (b) Are redeemable or convertible:

8-48      (1) At the option of the corporation, the stockholders or another

8-49  person, or upon the occurrence of a designated event;


9-1       (2) For cash, indebtedness, securities or other property; or

9-2       (3) In a designated amount or in an amount determined in accordance

9-3  with a designated formula or by reference to extrinsic data or events;

9-4    (c) Entitle the stockholders to distributions calculated in any manner,

9-5  including dividends that may be cumulative, noncumulative or partially

9-6  cumulative;

9-7    (d) Have preference over any other class or series of shares with respect

9-8  to distributions, including dividends and distributions upon the dissolution

9-9  of the corporation;

9-10    (e) Have par value; or

9-11    (f) Have powers, designations, preferences, limitations, restrictions and

9-12  relative rights dependent upon any fact or event which may be ascertained

9-13  outside of the articles of incorporation or the resolution if the manner in

9-14  which the fact or event may operate on such class or series of stock is

9-15  stated in the articles of incorporation or the resolution.

9-16    3.  Unless otherwise provided in the articles of incorporation or in a

9-17  resolution of the board of directors establishing a class or series of stock,

9-18  shares which are subject to redemption and which have been called for

9-19  redemption are not deemed to be outstanding shares for purposes of

9-20  voting or determining the total number of shares entitled to vote on a

9-21  matter on and after the date on which:

9-22    (a) Written notice of redemption has been sent to the holders of such

9-23  shares; and

9-24    (b) A sum sufficient to redeem the shares has been irrevocably

9-25  deposited or set aside to pay the redemption price to the holders of the

9-26  shares upon surrender of any certificates.

9-27    4.  The description of voting powers, designations, preferences,

9-28  limitations, restrictions and relative rights of the classes or series of shares

9-29  contained in this section is not exclusive.

9-30    Sec. 12.  NRS 78.205 is hereby amended to read as follows:

9-31    78.205  1.  A corporation is not [obliged] obligated to but may

9-32  execute and deliver a certificate for or including a fraction of a share.

9-33    2.  In lieu of executing and delivering a certificate for a fraction of a

9-34  share, a corporation may:

9-35    (a) Pay to any person otherwise entitled to become a holder of a fraction

9-36  of a share:

9-37      (1) The appraised value of that share if the appraisal was properly

9-38  demanded [;] pursuant to this chapter or chapter 92A of NRS; or

9-39      (2) If no appraisal was demanded or an appraisal was not properly

9-40  demanded, an amount in cash specified for that purpose as the value of the

9-41  fraction in the articles, plan of reorganization, plan of merger or exchange,

9-42  resolution of the board of directors, or other instrument pursuant to which

9-43  the fractional share would otherwise be issued, or, if not specified, then as

9-44  may be determined for that purpose by the board of directors of the issuing

9-45  corporation;

9-46    (b) Issue such additional fraction of a share as is necessary to increase

9-47  the fractional share to a full share; or

9-48    (c) Execute and deliver registered or bearer scrip over the manual or

9-49  facsimile signature of an officer of the corporation or of its agent for that


10-1  purpose, exchangeable as provided on the scrip for full share certificates,

10-2  but the scrip does not entitle the holder to any rights as a stockholder

10-3  except as provided on the scrip. The scrip may provide that it becomes void

10-4  unless the rights of the holders are exercised within a specified period and

10-5  may contain any other provisions or conditions that the corporation deems

10-6  advisable. Whenever any scrip ceases to be exchangeable for full share

10-7  certificates, the shares that would otherwise have been issuable as provided

10-8  on the scrip are deemed to be treasury shares unless the scrip contains other

10-9  provisions for their disposition.

10-10  3.  The provisions of this section do not prevent a person who holds a

10-11  fractional share from disputing the appraised value of a share pursuant

10-12  to NRS 92A.300 to 92A.500, inclusive, if the person is otherwise entitled

10-13  to exercise such rights.

10-14  Sec. 13.  NRS 78.207 is hereby amended to read as follows:

10-15  78.207  1.  Unless otherwise provided in the articles of incorporation,

10-16  a corporation [organized and existing under the laws of this state] that

10-17  desires to change the number of shares of a class [and] or series, if any, of

10-18  its authorized stock by increasing or decreasing the number of authorized

10-19  shares of the class [and] or series and correspondingly increasing or

10-20  decreasing the number of issued and outstanding shares of the same class

10-21  [and] or series held by each stockholder of record at the effective date and

10-22  time of the change, may, except as otherwise provided in subsections 2 and

10-23  3, do so by a resolution adopted by the board of directors, without

10-24  obtaining the approval of the stockholders. The resolution may also

10-25  provide for a change of the par value, if any, of the same class [and] or

10-26  series of the shares increased or decreased. After the effective date and

10-27  time of the change, the corporation may issue its stock in accordance

10-28  therewith.

10-29  2.  A proposal to increase or decrease the number of authorized shares

10-30  of any class [and] or series, if any, that includes provisions pursuant to

10-31  which only money will be paid or scrip will be issued to stockholders who:

10-32  (a) Before the increase or decrease in the number of shares becomes

10-33  effective, in the aggregate hold 10 percent or more of the outstanding

10-34  shares of the affected class [and] or series; and

10-35  (b) Would otherwise be entitled to receive fractions of shares in

10-36  exchange for the cancellation of all of their outstanding shares,

10-37  must be approved by the vote of stockholders holding a majority of the

10-38  voting power of the affected class [and] or series, or such greater

10-39  proportion as may be provided in the articles of incorporation, regardless of

10-40  limitations or restrictions on the voting power thereof.

10-41  3.  If a proposed increase or decrease in the number of authorized

10-42  shares of any class or series would adversely alter or change any preference

10-43  or any relative or other right given to any other class or series of

10-44  outstanding shares, then the increase or decrease must be approved by the

10-45  vote, in addition to any vote otherwise required, of the holders of shares

10-46  representing a majority of the voting power of each class or series whose

10-47  preference or rights are adversely affected by the increase or decrease,

10-48  regardless of limitations or restrictions on the voting power thereof.


11-1    4.  Any proposal to increase or decrease the number of authorized

11-2  shares of any class [and] or series, if any, that includes provisions pursuant

11-3  to which only money will be paid or scrip will be issued to stockholders

11-4  who:

11-5    (a) Before the increase or decrease in the number of shares becomes

11-6  effective, hold 1 percent or more of the outstanding shares of the affected

11-7  class [and] or series; and

11-8    (b) Would otherwise be entitled to receive a fraction of a share in

11-9  exchange for the cancellation of all of their outstanding shares,

11-10  is subject to the provisions of NRS 92A.300 to 92A.500, inclusive. If the

11-11  proposal is subject to those provisions, any stockholder who is obligated to

11-12  accept money or scrip rather than receive a fraction of a share resulting

11-13  from the action taken pursuant to this section may dissent in accordance

11-14  with those provisions and obtain payment of the fair value of the fraction

11-15  of a share to which the stockholder would otherwise be entitled.

11-16  Sec. 14.  NRS 78.209 is hereby amended to read as follows:

11-17  78.209  1.  A change pursuant to NRS 78.207 is not effective until

11-18  after the filing in the office of the secretary of state of a certificate, signed

11-19  by [the corporation’s president, or a vice president, and its secretary, or an

11-20  assistant secretary, and acknowledged by the president or vice president

11-21  before a person authorized by the laws of this state to take

11-22  acknowledgments of deeds,] an officer of the corporation, setting forth:

11-23  (a) The current number of authorized shares and the par value, if any, of

11-24  each class [and] or series, if any, of shares before the change;

11-25  (b) The number of authorized shares and the par value, if any, of each

11-26  class [and] or series, if any, of shares after the change;

11-27  (c) The number of shares of each affected class [and] or series, if any, to

11-28  be issued after the change in exchange for each issued share of the same

11-29  class or series;

11-30  (d) The provisions, if any, for the issuance of fractional shares, or for

11-31  the payment of money or the issuance of scrip to stockholders otherwise

11-32  entitled to a fraction of a share and the percentage of outstanding shares

11-33  affected thereby; and

11-34  (e) That any required approval of the stockholders has been obtained . [;

11-35  and

11-36  (f) Whether the change is effective on filing the certificate or, if not, the

11-37  date and time at which the change will be effective, which must not be

11-38  more than 90 days after the certificate is filed.]

11-39  The provisions in the articles of incorporation of the corporation regarding

11-40  the authorized number and par value, if any, of the changed class [and] or

11-41  series, if any, of shares shall be deemed amended as provided in the

11-42  certificate at the effective date and time of the change.

11-43  2.  Unless an increase or decrease of the number of authorized shares

11-44  pursuant to NRS 78.207 is accomplished by an action that otherwise

11-45  requires an amendment to the [corporation’s] articles of incorporation [,] of

11-46  the corporation, such an amendment is not required by that section.

11-47  3.  A certificate filed pursuant to subsection 1 becomes effective upon

11-48  filing with the secretary of state or upon a later date specified in the


12-1  certificate, which must not be later than 90 days after the certificate is

12-2  filed.

12-3    4.  If a certificate filed pursuant to subsection 1 specifies an effective

12-4  date, the board of directors may terminate the effectiveness of the

12-5  certificate by resolution. A certificate of termination must:

12-6    (a) Be filed with the secretary of state before the effective date

12-7  specified in the certificate filed pursuant to subsection 1;

12-8    (b) Identify the certificate being terminated;

12-9    (c) State that the effectiveness of the certificate has been terminated;

12-10  (d) Be signed by an officer of the corporation; and

12-11  (e) Be accompanied by the fee required pursuant to NRS 78.765.

12-12  Sec. 15.  NRS 78.211 is hereby amended to read as follows:

12-13  78.211  1.  The board of directors may authorize shares to be issued

12-14  for consideration consisting of any tangible or intangible property or

12-15  benefit to the corporation, including, but not limited to, cash, promissory

12-16  notes, services performed, contracts for services to be performed or other

12-17  securities of the corporation.

12-18  [2.  Before the corporation issues shares, the board of directors must

12-19  determine that the consideration received or to be received for the shares to

12-20  be issued is adequate.] The judgment of the board of directors as to [the

12-21  adequacy of] the consideration received for the shares issued is conclusive

12-22  in the absence of actual fraud in the transaction.

12-23  [3.] 2.  When the corporation receives the consideration for which the

12-24  board of directors authorized the issuance of shares, the shares issued

12-25  therefor are fully paid.

12-26  [4.] 3.  The corporation may place in escrow shares issued for a

12-27  contract for future services or benefits or a promissory note, or make any

12-28  other arrangements to restrict the transfer of the shares. The corporation

12-29  may credit distributions made for the shares against their purchase price,

12-30  until the services are performed, the benefits are received or the promissory

12-31  note is paid. If the services are not performed, the benefits are not received

12-32  or the promissory note is not paid, the shares escrowed or restricted and the

12-33  distributions credited may be canceled in whole or in part.

12-34  Sec. 16.  NRS 78.220 is hereby amended to read as follows:

12-35  78.220  1.  Subscriptions to the shares of a corporation, whether made

12-36  before or after its organization, [shall] must be paid in full at such time or

12-37  in such installments at such times as determined by the board of directors.

12-38  Any call made by the board of directors for payment on subscriptions

12-39  [shall] must be uniform as to all shares of the same class or series.

12-40  2.  If default is made in the payment of any installment or call, the

12-41  corporation may proceed to collect the amount due in the same manner as

12-42  any debt due the corporation. In addition, the corporation may sell a

12-43  sufficient number of the subscriber’s shares at public auction to pay for the

12-44  installment or call and any incidental charges incurred as a result of the

12-45  sale. No penalty causing a forfeiture of a subscription, of stock for which a

12-46  subscription has been executed, or of amounts paid thereon, may be

12-47  declared against any subscriber unless the amount due remains unpaid for

12-48  30 days after written demand. Such written demand shall be deemed made

12-49  when it is mailed by registered or certified mail, return receipt requested, to


13-1  the subscriber’s last known address. If any of the subscriber’s shares are

13-2  sold at public auction, any excess of the proceeds over the total of the

13-3  amount due plus any incidental charges of the sale [shall] must be paid to

13-4  the subscriber or his legal representative. If an action is brought to recover

13-5  the amount due on a subscription or call, any judgment in favor of the

13-6  corporation [shall] must be reduced by the amount of the net proceeds of

13-7  any sale by the corporation of the subscriber’s stock.

13-8    3.  All stock subject to a delinquent installment or call and all

13-9  amounts previously paid by a delinquent subscriber for the stock must be

13-10  forfeited to the corporation if an amount due from a subscriber remains

13-11  unpaid, the corporation has complied with the requirements of

13-12  subsection 2 and:

13-13  (a) A bidder does not purchase the subscriber’s shares at public

13-14  auction; or

13-15  (b) The corporation does not collect the defaulted amount by an

13-16  action at law.

13-17  4.  If a receiver of a corporation has been appointed, all unpaid

13-18  subscriptions [shall] must be paid at such times and in such installments as

13-19  the receiver or the court may direct, subject, however, to the provisions of

13-20  the subscription contract.

13-21  [4.] 5.  A subscription for shares of a corporation to be organized is

13-22  irrevocable for 6 months unless otherwise provided by the subscription

13-23  agreement or unless all of the subscribers consent to the revocation of the

13-24  subscription.

13-25  Sec. 17.  NRS 78.235 is hereby amended to read as follows:

13-26  78.235  1.  Except as otherwise provided in subsection 4, every

13-27  stockholder is entitled to have a certificate, signed by officers or agents

13-28  designated by the corporation for the purpose, certifying the number of

13-29  shares owned by him in the corporation.

13-30  2.  Whenever any certificate is countersigned or otherwise

13-31  authenticated by a transfer agent or transfer clerk, and by a registrar, then a

13-32  facsimile of the signatures of the officers or agents, the transfer agent or

13-33  transfer clerk or the registrar of the corporation may be printed or

13-34  lithographed upon the certificate in lieu of the actual signatures. If a

13-35  corporation uses facsimile signatures of its officers and agents on its stock

13-36  certificates, it cannot act as registrar of its own stock, but its transfer agent

13-37  and registrar may be identical if the institution acting in those dual

13-38  capacities countersigns or otherwise authenticates any stock certificates in

13-39  both capacities.

13-40  3.  If any officer or officers who have signed, or whose facsimile

13-41  signature or signatures have been used on, any certificate or certificates for

13-42  stock cease to be an officer or officers of the corporation, whether because

13-43  of death, resignation or other reason, before the certificate or certificates

13-44  have been delivered by the corporation, the certificate or certificates may

13-45  nevertheless be adopted by the corporation and be issued and delivered as

13-46  though the person or persons who signed the certificate or certificates, or

13-47  whose facsimile signature or signatures have been used thereon, had not

13-48  ceased to be an officer or officers of the corporation.


14-1    4.  [A corporation may provide in its] Unless otherwise provided in the

14-2  articles of incorporation or [in its bylaws for] bylaws, the board of

14-3  directors may authorize the issuance of uncertificated shares of some or all

14-4  of the shares of any or all of its classes or series. The issuance of

14-5  uncertificated shares has no effect on existing certificates for shares until

14-6  surrendered to the corporation, or on the respective rights and obligations

14-7  of the stockholders. Unless otherwise provided by a specific statute, the

14-8  rights and obligations of stockholders are identical whether or not their

14-9  shares of stock are represented by certificates.

14-10  5.  Within a reasonable time after the issuance or transfer of shares

14-11  without certificates, the corporation shall send the stockholder a written

14-12  statement containing the information required on the certificates pursuant

14-13  to subsection 1. At least annually thereafter, the corporation shall provide

14-14  to its stockholders of record, a written statement confirming the

14-15  information contained in the informational statement previously sent

14-16  pursuant to this subsection.

14-17  6.  Unless otherwise provided in the articles of incorporation or

14-18  bylaws, a corporation may issue a new certificate of stock or, if

14-19  authorized by the board of directors pursuant to subsection 4,

14-20  uncertificated shares in place of a certificate previously issued by it and

14-21  alleged to have been lost, stolen or destroyed. A corporation may require

14-22  an owner or legal representative of an owner of a lost, stolen or destroyed

14-23  certificate to give the corporation a bond or other security sufficient to

14-24  indemnify it against any claim that may be made against it for the alleged

14-25  loss, theft or destruction of a certificate, or the issuance of a new

14-26  certificate or uncertificated shares.

14-27  Sec. 18.  NRS 78.257 is hereby amended to read as follows:

14-28  78.257  1.  Any person who has been a stockholder of record of any

14-29  corporation and owns not less than 15 percent of all of the issued and

14-30  outstanding shares of the stock of such corporation or has been authorized

14-31  in writing by the holders of at least 15 percent of all its issued and

14-32  outstanding shares, upon at least 5 days’ written demand, is entitled to

14-33  inspect in person or by agent or attorney, during normal business hours, the

14-34  books of account and all financial records of the corporation, to make

14-35  [extracts therefrom,] copies of records, and to conduct an audit of such

14-36  records. Holders of voting trust certificates representing 15 percent of the

14-37  issued and outstanding shares of the corporation shall be regarded as

14-38  stockholders for the purpose of this subsection. The right of stockholders to

14-39  inspect the corporate records may not be limited in the articles or bylaws of

14-40  any corporation.

14-41  2.  All costs for making [extracts] copies of records or conducting an

14-42  audit must be borne by the person exercising his rights [under] set forth in

14-43  subsection 1.

14-44  3.  The rights authorized by subsection 1 may be denied to any

14-45  stockholder upon his refusal to furnish the corporation an affidavit that

14-46  such inspection, [extracts] copies or audit is not desired for any purpose not

14-47  related to his interest in the corporation as a stockholder. Any stockholder

14-48  or other person, exercising rights [under] set forth in subsection 1, who

14-49  uses or attempts to use information, documents, records or other data


15-1  obtained from the corporation, for any purpose not related to the

15-2  stockholder’s interest in the corporation as a stockholder, is guilty of a

15-3  gross misdemeanor.

15-4    4.  If any officer or agent of any corporation keeping records in this

15-5  state willfully neglects or refuses to permit an inspection of the books of

15-6  account and financial records upon demand by a person entitled to inspect

15-7  them, or refuses to permit an audit to be conducted, as provided in

15-8  subsection 1, the corporation shall forfeit to the state the sum of $100 for

15-9  every day of such neglect or refusal, and the corporation, officer or agent

15-10  thereof is jointly and severally liable to the person injured for all damages

15-11  resulting to him.

15-12  5.  A stockholder who brings an action or proceeding to enforce any

15-13  right [under] set forth in this section or to recover damages resulting from

15-14  its denial:

15-15  (a) Is entitled to costs and reasonable attorney’s fees, if he prevails; or

15-16  (b) Is liable for such costs and fees, if he does not prevail,

15-17  in the action or proceeding.

15-18  6.  Except as otherwise provided in this subsection, the provisions of

15-19  this section do not apply to any corporation listed and traded on any

15-20  recognized stock exchange nor do they apply to any corporation that

15-21  furnishes to its stockholders a detailed, annual financial statement. A

15-22  person who owns, or is authorized in writing by the owners of, at least 15

15-23  percent of the issued and outstanding shares of the stock of a corporation

15-24  that has elected to be governed by subchapter S of the Internal Revenue

15-25  Code and whose shares are not listed or traded on any recognized stock

15-26  exchange is entitled to inspect the books of the corporation pursuant to

15-27  subsection 1 and has the rights, duties and liabilities provided in

15-28  subsections 2 to 5, inclusive.

15-29  Sec. 19.  NRS 78.288 is hereby amended to read as follows:

15-30  78.288  1.  Except as otherwise provided in subsection 2 and the

15-31  articles of incorporation, a board of directors may authorize and the

15-32  corporation may make distributions to its stockholders [.] , including

15-33  distributions on shares that are partially paid.

15-34  2.  No distribution may be made if, after giving it effect:

15-35  (a) The corporation would not be able to pay its debts as they become

15-36  due in the usual course of business; or

15-37  (b) Except as otherwise specifically allowed by the articles of

15-38  incorporation, the corporation’s total assets would be less than the sum of

15-39  its total liabilities plus the amount that would be needed, if the corporation

15-40  were to be dissolved at the time of distribution, to satisfy the preferential

15-41  rights upon dissolution of stockholders whose preferential rights are

15-42  superior to those receiving the distribution.

15-43  3.  The board of directors may base a determination that a distribution

15-44  is not prohibited [under] pursuant to subsection 2 on:

15-45  (a) Financial statements prepared on the basis of accounting practices

15-46  that are reasonable in the circumstances;

15-47  (b) A fair valuation, including, but not limited to, unrealized

15-48  appreciation and depreciation; or

15-49  (c) Any other method that is reasonable in the circumstances.


16-1    4.  The effect of a distribution [under] pursuant to subsection 2 must

16-2  be measured:

16-3    (a) In the case of a distribution by purchase, redemption or other

16-4  acquisition of the corporation’s shares, as of the earlier of:

16-5      (1) The date money or other property is transferred or debt incurred

16-6  by the corporation; or

16-7      (2) The date upon which the stockholder ceases to be a stockholder

16-8  with respect to the acquired shares.

16-9    (b) In the case of any other distribution of indebtedness, as of the date

16-10  the indebtedness is distributed.

16-11  (c) In all other cases, as of:

16-12     (1) The date the distribution is authorized if the payment occurs

16-13  within 120 days after the date of authorization; or

16-14     (2) The date the payment is made if it occurs more than 120 days

16-15  after the date of authorization.

16-16  5.  A corporation’s indebtedness to a stockholder incurred by reason of

16-17  a distribution made in accordance with this section is at parity with the

16-18  corporation’s indebtedness to its general unsecured creditors except to the

16-19  extent subordinated by agreement.

16-20  6.  Indebtedness of a corporation, including indebtedness issued as a

16-21  distribution, is not considered a liability for purposes of determinations

16-22  [under] pursuant to subsection 2 if its terms provide that payment of

16-23  principal and interest are made only if and to the extent that payment of a

16-24  distribution to stockholders could then be made pursuant to this section. If

16-25  the indebtedness is issued as a distribution, each payment of principal or

16-26  interest must be treated as a distribution, the effect of which must be

16-27  measured on the date the payment is actually made.

16-28  Sec. 20.  NRS 78.310 is hereby amended to read as follows:

16-29  78.310  1.  Meetings of stockholders and directors of any corporation

16-30  organized [under] pursuant to the provisions of this chapter may be held

16-31  within or without this state, in the manner provided by the bylaws of the

16-32  corporation. The articles of incorporation may designate any place or

16-33  places where such stockholders’ or directors’ meetings may be held, but in

16-34  the absence of any provision therefor in the articles of incorporation, then

16-35  the meetings must be held within or without this state, as directed from

16-36  time to time by the bylaws of the corporation.

16-37  2.  Unless otherwise provided in the articles of incorporation or

16-38  bylaws, the entire board of directors, any two directors or the president

16-39  may call annual and special meetings of the stockholders and directors.

16-40  Sec. 21.  NRS 78.315 is hereby amended to read as follows:

16-41  78.315  1.  Unless the articles of incorporation or the bylaws provide

16-42  for a [different] greater or lesser proportion, a majority of the board of

16-43  directors of the corporation then in office, at a meeting duly assembled, is

16-44  necessary to constitute a quorum for the transaction of business, and the act

16-45  of directors holding a majority of the voting power of the directors, present

16-46  at a meeting at which a quorum is present, is the act of the board of

16-47  directors.

 


17-1    2.  Unless otherwise restricted by the articles of incorporation or

17-2  bylaws, any action required or permitted to be taken at a meeting of the

17-3  board of directors or of a committee thereof may be taken without a

17-4  meeting if, before or after the action, a written consent thereto is signed by

17-5  all the members of the board or of the committee.

17-6    3.  Unless otherwise restricted by the articles of incorporation or

17-7  bylaws, members of the board of directors or the governing body of any

17-8  corporation, or of any committee designated by such board or body, may

17-9  participate in a meeting of the board, body or committee by means of a

17-10  telephone conference or similar [method] methods of communication by

17-11  which all persons participating in the meeting can hear each other.

17-12  Participation in a meeting pursuant to this subsection constitutes presence

17-13  in person at the meeting.

17-14  Sec. 22.  NRS 78.320 is hereby amended to read as follows:

17-15  78.320  1.  Unless this chapter, the articles of incorporation or the

17-16  bylaws provide for different proportions:

17-17  (a) A majority of the voting power, which includes the voting power

17-18  that is present in person or by proxy, regardless of whether the proxy has

17-19  authority to vote on all matters, constitutes a quorum for the transaction of

17-20  business; and

17-21  (b) Action by the stockholders on a matter other than the election of

17-22  directors is approved if the number of votes cast in favor of the action

17-23  exceeds the number of votes cast in opposition to the action.

17-24  2.  Unless otherwise provided in the articles of incorporation or the

17-25  bylaws, any action required or permitted to be taken at a meeting of the

17-26  stockholders may be taken without a meeting if, before or after the action,

17-27  a written consent thereto is signed by stockholders holding at least a

17-28  majority of the voting power, except that if a different proportion of voting

17-29  power is required for such an action at a meeting, then that proportion of

17-30  written consents is required.

17-31  3.  In no instance where action is authorized by written consent need a

17-32  meeting of stockholders be called or notice given.

17-33  4.  Unless otherwise restricted by the articles of incorporation or

17-34  bylaws, stockholders may participate in a meeting of stockholders by

17-35  means of a telephone conference or similar [method] methods of

17-36  communication by which all persons participating in the meeting can hear

17-37  each other. Participation in a meeting pursuant to this subsection

17-38  constitutes presence in person at the meeting.

17-39  5.  Unless otherwise provided in this chapter, the articles of

17-40  incorporation or the bylaws, if voting by a class or series of stockholders

17-41  is permitted or required, a majority of the voting power of the class or

17-42  series that is present in person or by proxy, regardless of whether the

17-43  proxy has authority to vote on all matters, constitutes a quorum for the

17-44  transaction of business. An act by the stockholders of each class or series

17-45  is approved if a majority of the voting power of a quorum of the class or

17-46  series votes for the action.

17-47  Sec. 23.  NRS 78.330 is hereby amended to read as follows:

17-48  78.330  1.  Unless elected pursuant to NRS 78.320, directors of every

17-49  corporation must be elected at the annual meeting of the stockholders by a


18-1  plurality of the votes cast at the election. Unless otherwise provided in this

18-2  chapter or in the bylaws, the board of directors [have] has the authority to

18-3  set the date, time and place for the annual meeting of the stockholders. If

18-4  for any reason directors are not elected pursuant to NRS 78.320 or at the

18-5  annual meeting of the stockholders, they may be elected at any special

18-6  meeting of the stockholders which is called and held for that purpose.

18-7  Unless otherwise provided in the articles of incorporation or bylaws, each

18-8  director holds office after the expiration of his term until his successor is

18-9  elected and qualified, or until he resigns or is removed.

18-10  2.  The articles of incorporation or the bylaws may provide for the

18-11  classification of directors as to the duration of their respective terms of

18-12  office or as to their election by one or more authorized classes or series of

18-13  shares, but at least one-fourth in number of the directors of every

18-14  corporation must be elected annually. If an amendment reclassifying the

18-15  directors would otherwise increase the term of a director, unless the

18-16  amendment is to the articles of incorporation and otherwise provides, the

18-17  term of each incumbent director on the effective date of the amendment

18-18  terminates on the date it would have terminated had there been no

18-19  reclassification.

18-20  3.  The articles of incorporation may provide that the voting power of

18-21  individual directors or classes of directors may be greater than or less than

18-22  that of any other individual directors or classes of directors, and the

18-23  different voting powers may be stated in the articles of incorporation or

18-24  may be dependent upon any fact or event that may be ascertained outside

18-25  the articles of incorporation if the manner in which the fact or event may

18-26  operate on those voting powers is stated in the articles of incorporation. If

18-27  the articles of incorporation provide that any directors may have voting

18-28  power greater than or less than other directors, every reference in this

18-29  chapter to a majority or other proportion of directors shall be deemed to

18-30  refer to a majority or other proportion of the voting power of all of the

18-31  directors or classes of directors, as may be required by the articles of

18-32  incorporation.

18-33  Sec. 24.  NRS 78.3783 is hereby amended to read as follows:

18-34  78.3783  1.  Except as otherwise provided in subsection 2,

18-35  “acquisition” means the direct or indirect acquisition of a controlling

18-36  interest.

18-37  2.  “Acquisition” does not include any acquisition of shares in good

18-38  faith, and without an intent to avoid the requirements of NRS 78.378 to

18-39  78.3793, inclusive:

18-40  (a) By an acquiring person authorized pursuant to NRS 78.378 to

18-41  78.3793, inclusive, to exercise voting rights, to the extent that the new

18-42  acquisition does not result in the acquiring person obtaining a controlling

18-43  interest greater than that previously authorized; or

18-44  (b) Pursuant to:

18-45     (1) The laws of descent and distribution;

18-46     (2) The enforcement of a judgment;

18-47     (3) The satisfaction of a pledge or other security interest; or

 


19-1      (4) A merger , exchange, conversion, domestication or

19-2  reorganization effected in compliance with the provisions of NRS 78.622 ,

19-3  [or] 92A.200 to 92A.240, inclusive, or sections 78 to 82, inclusive, of this

19-4  act to which the issuing corporation is a party.

19-5    Sec. 25.  NRS 78.3791 is hereby amended to read as follows:

19-6    78.3791  Except as otherwise provided by the articles of incorporation

19-7  of the issuing corporation, a resolution of the stockholders granting voting

19-8  rights to the control shares acquired by an acquiring person must be

19-9  approved by:

19-10  1.  The holders of a majority of the voting power of the corporation;

19-11  and

19-12  2.  If the acquisition will result in any change of the kind described in

19-13  subsection [3] 2 of NRS 78.390, the holders of a majority of each class or

19-14  series affected,

19-15  excluding those shares as to which any interested stockholder exercises

19-16  voting rights.

19-17  Sec. 26.  NRS 78.3793 is hereby amended to read as follows:

19-18  78.3793  [1.]  Unless otherwise provided in the articles of

19-19  incorporation or the bylaws of the issuing corporation in effect on the 10th

19-20  day following the acquisition of a controlling interest by an acquiring

19-21  person, if the control shares are accorded full voting rights pursuant to

19-22  NRS 78.378 to 78.3793, inclusive, and the acquiring person has acquired

19-23  control shares with a majority or more of all the voting power, any

19-24  stockholder [of record,] , as that term is defined in NRS 92A.325, other

19-25  than the acquiring person, [who has] whose shares are not voted in favor

19-26  of authorizing voting rights for the control shares [is entitled to demand

19-27  payment for] may dissent in accordance with the provisions of NRS

19-28  92A.300 to 92A.500, inclusive, and obtain payment of the fair value of his

19-29  shares.

19-30  [2.  The board of directors of the issuing corporation shall, within 20

19-31  days after the vote of the stockholders authorizing voting rights for the

19-32  control shares, cause a notice to be sent to any stockholder, other than the

19-33  acquiring person, who has not voted in favor of authorizing voting rights

19-34  for the control shares, advising him of the fact and of his right to receive

19-35  fair value for his shares as provided in subsection 3.

19-36  3.  Within 20 days after the mailing of the notice described in

19-37  subsection 2, any stockholder of the corporation, other than the acquiring

19-38  person, who has not voted in favor of authorizing voting rights for the

19-39  control shares, may deliver to the registered office of the corporation a

19-40  written demand that the corporation purchase, for fair value, all or any

19-41  portion of his shares. The corporation shall comply with the demand within

19-42  30 days after its delivery.]

19-43  Sec. 27.  NRS 78.380 is hereby amended to read as follows:

19-44  78.380  1.  At least two-thirds of the incorporators or of the board of

19-45  directors of any corporation, before issuing any stock, may amend the

19-46  [original] articles of incorporation [thereof as may be desired by executing

19-47  or proving in the manner required for original articles of incorporation,] of

19-48  the corporation by signing and filing with the secretary of state a


20-1  certificate amending, modifying, changing or altering the [original]

20-2  articles, in whole or in part. The certificate must state that:

20-3    (a) [Declare that the] The signers thereof are at least two-thirds of the

20-4  incorporators or of the board of directors of the corporation, and state the

20-5  [corporation’s name.] name of the corporation; and

20-6    (b) [State the date upon which the original articles thereof were filed

20-7  with the secretary of state.

20-8    (c) Affirmatively declare that to] As of the date of the certificate, no

20-9  stock of the corporation has been issued.

20-10  2.  [The amendment] A certificate filed pursuant to this section is

20-11  effective upon [the filing of] filing the certificate with the secretary of state

20-12  or upon a later date specified in the certificate, which must not be later

20-13  than 90 days after the certificate is filed.

20-14  3.  If a certificate specifies an effective date and if no stock of the

20-15  corporation has been issued, the board of directors may terminate the

20-16  effectiveness of a certificate by filing a certificate of termination with the

20-17  secretary of state that:

20-18  (a) Identifies the certificate being terminated;

20-19  (b) States that no stock of the corporation has been issued;

20-20  (c) States that the effectiveness of the certificate has been terminated;

20-21  (d) Is signed by at least two-thirds of the board of directors of the

20-22  corporation; and

20-23  (e) Is accompanied by the fee required pursuant to NRS 78.765.

20-24  4.  This section does not permit the insertion of any matter not in

20-25  conformity with this chapter.

20-26  Sec. 28.  NRS 78.390 is hereby amended to read as follows:

20-27  78.390  1.  Every amendment adopted pursuant to the provisions of

20-28  NRS 78.385 must be made in the following manner:

20-29  (a) The board of directors must adopt a resolution setting forth the

20-30  amendment proposed and declaring its advisability, and either call a

20-31  special meeting [, either annual or special,] of the stockholders entitled to

20-32  vote on the amendment or direct that the proposed amendment be

20-33  considered at the next annual meeting of the stockholders entitled to vote

20-34  [for the consideration thereof.] on the amendment.

20-35  (b) At the meeting, of which notice must be given to each stockholder

20-36  entitled to vote pursuant to the provisions of this section, a vote of the

20-37  stockholders entitled to vote in person or by proxy must be taken for and

20-38  against the proposed amendment. If it appears upon the canvassing of the

20-39  votes that stockholders holding shares in the corporation entitling them to

20-40  exercise at least a majority of the voting power, or such greater proportion

20-41  of the voting power as may be required in the case of a vote by classes or

20-42  series, as provided in subsections [3 and 5,] 2 and 4, or as may be required

20-43  by the provisions of the articles of incorporation, have voted in favor of the

20-44  amendment, [the president, or vice president, and secretary, or assistant

20-45  secretary, shall execute] an officer of the corporation shall sign a

20-46  certificate setting forth the amendment, or setting forth the articles of

20-47  incorporation as amended, and the vote by which the amendment was

20-48  adopted.


21-1    (c) The certificate so [executed] signed must be filed [in the office of]

21-2  with the secretary of state.

21-3    [2.  Upon filing the certificate the articles of incorporation are amended

21-4  accordingly.

21-5    3. ] 2.  If any proposed amendment would adversely alter or change

21-6  any preference or any relative or other right given to any class or series of

21-7  outstanding shares, then the amendment must be approved by the vote, in

21-8  addition to the affirmative vote otherwise required, of the holders of shares

21-9  representing a majority of the voting power of each class or series

21-10  adversely affected by the amendment regardless of limitations or

21-11  restrictions on the voting power thereof.

21-12  [4.] 3.  Provision may be made in the articles of incorporation

21-13  requiring, in the case of any specified amendments, a larger proportion of

21-14  the voting power of stockholders than that required by this section.

21-15  [5.] 4.  Different series of the same class of shares do not constitute

21-16  different classes of shares for the purpose of voting by classes except when

21-17  the series is adversely affected by an amendment in a different manner than

21-18  other series of the same class.

21-19  5.  The resolution of the stockholders approving the proposed

21-20  amendment may provide that at any time before the effective date of the

21-21  amendment, notwithstanding approval of the proposed amendment by the

21-22  stockholders, the board of directors may, by resolution, abandon the

21-23  proposed amendment without further action by the stockholders.

21-24  6.  A certificate filed pursuant to subsection 1 becomes effective upon

21-25  filing with the secretary of state or upon a later date specified in the

21-26  certificate, which must not be later than 90 days after the certificate is

21-27  filed.

21-28  7.  If a certificate filed pursuant to subsection 1 specifies an effective

21-29  date and if the resolution of the stockholders approving the proposed

21-30  amendment provides that the board of directors may abandon the

21-31  proposed amendment pursuant to subsection 5, the board of directors

21-32  may terminate the effectiveness of the certificate by resolution and by

21-33  filing a certificate of termination with the secretary of state that:

21-34  (a) Is filed before the effective date specified in the certificate filed

21-35  pursuant to subsection 1;

21-36  (b) Identifies the certificate being terminated;

21-37  (c) States that, pursuant to the resolution of the stockholders, the

21-38  board of directors is authorized to terminate the effectiveness of the

21-39  certificate;

21-40  (d) States that the effectiveness of the certificate has been terminated;

21-41  (e) Is signed by an officer of the corporation; and

21-42  (f) Is accompanied by the fee required pursuant to NRS 78.765.

21-43  Sec. 29.  NRS 78.403 is hereby amended to read as follows:

21-44  78.403  1.  A corporation may restate, or amend and restate, in a

21-45  single certificate the entire text of its articles of incorporation as amended

21-46  by filing with the secretary of state a certificate signed by an officer of the

21-47  corporation and entitled “Restated Articles of Incorporation of ................,”

21-48  which must set forth the articles as amended to the date of the certificate. If

21-49  the certificate alters or amends the articles in any manner, it must comply


22-1  with the provisions of this chapter governing such amendments and must

22-2  be accompanied by:

22-3    (a) A resolution; or

22-4    (b) A form prescribed by the secretary of state,

22-5  setting forth which provisions of the articles of incorporation on file with

22-6  the secretary of state are being altered or amended.

22-7    2.  If the certificate does not alter or amend the articles, it must be

22-8  signed by [the president or vice president and the secretary or assistant

22-9  secretary] an officer of the corporation and state that [they have] he has

22-10  been authorized to execute the certificate by resolution of the board of

22-11  directors adopted on the date stated, and that the certificate correctly sets

22-12  forth the text of the articles of incorporation as amended to the date of the

22-13  certificate.

22-14  3.  The following may be omitted from the restated articles:

22-15  (a) The names, addresses, signatures and acknowledgments of the

22-16  incorporators;

22-17  (b) The names and addresses of the members of the past and present

22-18  boards of directors; and

22-19  (c) The name and address of the resident agent.

22-20  4.  Whenever a corporation is required to file a certified copy of its

22-21  articles, in lieu thereof it may file a certified copy of the most recent

22-22  certificate restating its articles as amended, subject to the provisions of

22-23  subsection 2, together with certified copies of all certificates of amendment

22-24  filed subsequent to the restated articles and certified copies of all

22-25  certificates supplementary to the original articles.

22-26  Sec. 30.  NRS 78.565 is hereby amended to read as follows:

22-27  78.565  [Every]

22-28  1.  Unless otherwise provided in the articles of incorporation, every

22-29  corporation may, by action taken at any meeting of its board of directors,

22-30  sell, lease or exchange all of its property and assets, including its good will

22-31  and its corporate franchises, upon such terms and conditions as its board of

22-32  directors may [deem expedient and for the best interests of the

22-33  corporation,] approve, when and as authorized by the affirmative vote of

22-34  stockholders holding stock in the corporation entitling them to exercise at

22-35  least a majority of the voting power given at a stockholders’ meeting called

22-36  for that purpose . [but:

22-37  1.  The articles of incorporation may require the vote of a larger

22-38  proportion of the stockholders and the separate vote or consent of any class

22-39  of stockholders; and]

22-40  2.  Unless otherwise provided in the articles of incorporation [provide

22-41  otherwise, no] , a vote of stockholders is not necessary [for] :

22-42  (a) For a transfer of assets by way of mortgage, or in trust or in pledge

22-43  to secure indebtedness of the corporation [.] ; or

22-44  (b) To abandon the sale, lease or exchange of assets.

22-45  Sec. 31.  NRS 78.750 is hereby amended to read as follows:

22-46  78.750  1.  In any action commenced against any corporation in any

22-47  court of this state, service of process may be made in the manner provided

22-48  by law and rule of court for the service of civil process.


23-1    2.  Service of process on a corporation whose charter has been

23-2  revoked or which has been continued as a body corporate [under] pursuant

23-3  to NRS 78.585 may be made by mailing copies of the process and any

23-4  associated documents by certified mail, with return receipt requested, to:

23-5    (a) The resident agent of the corporation, if there is one; and

23-6    (b) Each officer and director of the corporation as named in the list last

23-7  filed with the secretary of state before the dissolution or expiration of the

23-8  corporation or the forfeiture of its charter.

23-9  The manner of serving process described in this subsection does not affect

23-10  the validity of any other service authorized by law.

23-11  Sec. 32.  NRS 78.751 is hereby amended to read as follows:

23-12  78.751  1.  Any discretionary indemnification [under] pursuant to

23-13  NRS 78.7502 , unless ordered by a court or advanced pursuant to

23-14  subsection 2, may be made by the corporation only as authorized in the

23-15  specific case upon a determination that indemnification of the director,

23-16  officer, employee or agent is proper in the circumstances. The

23-17  determination must be made:

23-18  (a) By the stockholders;

23-19  (b) By the board of directors by majority vote of a quorum consisting of

23-20  directors who were not parties to the action, suit or proceeding;

23-21  (c) If a majority vote of a quorum consisting of directors who were not

23-22  parties to the action, suit or proceeding so orders, by independent legal

23-23  counsel in a written opinion; or

23-24  (d) If a quorum consisting of directors who were not parties to the

23-25  action, suit or proceeding cannot be obtained, by independent legal counsel

23-26  in a written opinion.

23-27  2.  The articles of incorporation, the bylaws or an agreement made by

23-28  the corporation may provide that the expenses of officers and directors

23-29  incurred in defending a civil or criminal action, suit or proceeding must be

23-30  paid by the corporation as they are incurred and in advance of the final

23-31  disposition of the action, suit or proceeding, upon receipt of an undertaking

23-32  by or on behalf of the director or officer to repay the amount if it is

23-33  ultimately determined by a court of competent jurisdiction that he is not

23-34  entitled to be indemnified by the corporation. The provisions of this

23-35  subsection do not affect any rights to advancement of expenses to which

23-36  corporate personnel other than directors or officers may be entitled under

23-37  any contract or otherwise by law.

23-38  3.  The indemnification pursuant to NRS 78.7502 and advancement of

23-39  expenses authorized in or ordered by a court pursuant to this section:

23-40  (a) Does not exclude any other rights to which a person seeking

23-41  indemnification or advancement of expenses may be entitled under the

23-42  articles of incorporation or any bylaw, agreement, vote of stockholders or

23-43  disinterested directors or otherwise, for either an action in his official

23-44  capacity or an action in another capacity while holding his office, except

23-45  that indemnification, unless ordered by a court pursuant to NRS 78.7502 or

23-46  for the advancement of expenses made pursuant to subsection 2, may not

23-47  be made to or on behalf of any director or officer if a final adjudication

23-48  establishes that his acts or omissions involved intentional misconduct,


24-1  fraud or a knowing violation of the law and was material to the cause of

24-2  action.

24-3    (b) Continues for a person who has ceased to be a director, officer,

24-4  employee or agent and inures to the benefit of the heirs, executors and

24-5  administrators of such a person.

24-6    Sec. 33.  NRS 78.760 is hereby amended to read as follows:

24-7    78.760  1.  The fee for filing articles of incorporation is prescribed in

24-8  the following schedule:

24-9    If the amount represented by the total number of shares provided for

24-10  in the articles [or agreement] is:

24-11  $25,000 or less.............................. $125

24-12  Over $25,000 and not over $75,000. 175

24-13  Over $75,000 and not over $200,000 225

24-14  Over $200,000 and not over $500,000   325

24-15  Over $500,000 and not over $1,000,000   425

24-16  Over $1,000,000:

24-17  For the first $1,000,000................... 425

24-18  For each additional $500,000 or fraction thereof................................................. 225

24-19  2.  The maximum fee which may be charged [under] pursuant to this

24-20  section is $25,000 for:

24-21  (a) The original filing of articles of incorporation.

24-22  (b) A subsequent filing of any instrument which authorizes an increase

24-23  in stock.

24-24  3.  For the purposes of computing the filing fees according to the

24-25  schedule in subsection 1, the amount represented by the total number of

24-26  shares provided for in the articles of incorporation is:

24-27  (a) The aggregate par value of the shares, if only shares with a par value

24-28  are therein provided for;

24-29  (b) The product of the number of shares multiplied by $1, regardless of

24-30  any lesser amount prescribed as the value or consideration for which shares

24-31  may be issued and disposed of, if only shares without par value are therein

24-32  provided for; or

24-33  (c) The aggregate par value of the shares with a par value plus the

24-34  product of the number of shares without par value multiplied by $1,

24-35  regardless of any lesser amount prescribed as the value or consideration for

24-36  which the shares without par value may be issued and disposed of, if shares

24-37  with and without par value are therein provided for.

24-38  For the purposes of this subsection, shares with no prescribed par value

24-39  shall be deemed shares without par value.

24-40  4.  The secretary of state shall calculate filing fees pursuant to this

24-41  section with respect to shares with a par value of less than one-tenth of a

24-42  cent as if the par value were one-tenth of a cent.

24-43  Sec. 34.  NRS 78.765 is hereby amended to read as follows:

24-44  78.765  1.  The fee for filing a certificate changing the number of

24-45  authorized shares pursuant to NRS 78.209 or a certificate of amendment to

24-46  articles of incorporation that increases the corporation’s authorized stock or

24-47  a certificate of correction that increases the corporation’s authorized stock

24-48  is the difference between the fee computed at the rates specified in NRS

24-49  78.760 upon the total authorized stock of the corporation, including the


25-1  proposed increase, and the fee computed at the rates specified in NRS

25-2  78.760 upon the total authorized capital, excluding the proposed increase.

25-3  In no case may the amount be less than $75.

25-4    2.  The fee for filing a certificate of amendment to articles of

25-5  incorporation that does not increase the corporation’s authorized stock or a

25-6  certificate of correction that does not increase the corporation’s authorized

25-7  stock is $75.

25-8    3.  The fee for filing a certificate or an amended certificate pursuant to

25-9  NRS 78.1955 is $75.

25-10  4.  The fee for filing a certificate of termination pursuant to NRS

25-11  78.1955, 78.209, 78.380 or 78.390 is $75.

25-12  Sec. 35.  NRS 80.015 is hereby amended to read as follows:

25-13  80.015  1.  For the purposes of this chapter, the following activities do

25-14  not constitute doing business in this state:

25-15  (a) Maintaining, defending or settling any proceeding;

25-16  (b) Holding meetings of the board of directors or stockholders or

25-17  carrying on other activities concerning internal corporate affairs;

25-18  (c) Maintaining accounts in banks or credit unions;

25-19  (d) Maintaining offices or agencies for the transfer, exchange and

25-20  registration of the corporation’s own securities or maintaining trustees or

25-21  depositaries with respect to those securities;

25-22  (e) Making sales through independent contractors;

25-23  (f) Soliciting or receiving orders outside of this state through or in

25-24  response to letters, circulars, catalogs or other forms of advertising,

25-25  accepting those orders outside of this state and filling them by shipping

25-26  goods into this state;

25-27  (g) Creating or acquiring indebtedness, mortgages and security interests

25-28  in real or personal property;

25-29  (h) Securing or collecting debts or enforcing mortgages and security

25-30  interests in property securing the debts;

25-31  (i) Owning, without more, real or personal property;

25-32  (j) Isolated transactions completed within 30 days and not a part of a

25-33  series of similar transactions;

25-34  (k) The production of motion pictures as defined in NRS 231.020;

25-35  (l) Transacting business as an out-of-state depository institution

25-36  pursuant to the provisions of Title 55 of NRS; and

25-37  (m) Transacting business in interstate commerce.

25-38  2.  The list of activities in subsection 1 is not exhaustive.

25-39  3.  A person who is not doing business in this state within the meaning

25-40  of this section need not qualify or comply with any provision of NRS

25-41  80.010 to 80.280, inclusive, chapter 645A, 645B or 645E of NRS or Title

25-42  55 or 56 of NRS unless he:

25-43  (a) Maintains an office in this state for the transaction of business; or

25-44  (b) Solicits or accepts deposits in the state, except pursuant to the

25-45  provisions of chapter 666 or 666A of NRS.

25-46  4.  As used in this section and for the purposes of NRS 80.016,

25-47  “deposits” means demand deposits, savings deposits and time deposits, as

25-48  those terms are defined in chapter 657 of NRS.


26-1    Sec. 36.  Chapter 86 of NRS is hereby amended by adding thereto the

26-2  provisions set forth as sections 37 to 54, inclusive, of this act.

26-3    Sec. 37.  “Articles” and “articles of organization” are synonymous

26-4  terms and, unless the context otherwise requires, include certificates and

26-5  restated articles of organization filed pursuant to NRS 86.221 and

26-6  articles of merger, conversion, exchange or domestication filed pursuant

26-7  to NRS 92A.200 to 92A.240, inclusive, and sections 78 to 82, inclusive, of

26-8  this act.

26-9    Sec. 38.  “Noneconomic member” means a member of a limited-

26-10  liability company who:

26-11  1.  Does not own a member’s interest in the company;

26-12  2.  Does not have an obligation to contribute capital to the company;

26-13  3.  Does not have a right to participate in or receive distributions of

26-14  profits of the company or an obligation to contribute to the losses of the

26-15  company; and

26-16  4.  May have voting rights and other rights and privileges given to

26-17  noneconomic members of the company by the articles of organization or

26-18  operating agreement.

26-19  Sec. 39.  The provisions of this chapter may be amended or repealed

26-20  at the pleasure of the legislature. A limited-liability company created

26-21  pursuant to the provisions of this chapter or availing itself of any of the

26-22  provisions of this chapter and all members and managers of the limited-

26-23  liability company are bound by the amendment. An amendment or repeal

26-24  does not take away or impair any remedy against a limited-liability

26-25  company or its managers or members for a liability that has been

26-26  previously incurred. The provisions of this chapter and all amendments

26-27  thereof are a part of the articles of every limited-liability company.

26-28  Sec. 40.  1.  A limited-liability company may correct a document

26-29  filed by the secretary of state if the document contains an incorrect

26-30  statement or was defectively executed, attested, sealed, verified or

26-31  acknowledged.

26-32  2.  To correct a document, the limited-liability company must:

26-33  (a) Prepare a certificate of correction that:

26-34     (1) States the name of the limited-liability company;

26-35     (2) Describes the document, including, without limitation, its filing

26-36  date;

26-37     (3) Identifies the incorrect statement and specifies the reason it is

26-38  incorrect, or the manner in which the execution or other formal

26-39  authentication was defective;

26-40     (4) Corrects the incorrect statement or defective execution; and

26-41     (5) Is signed by a manager of the company, or if management is not

26-42  vested in a manager, by a member of the company.

26-43  (b) Deliver the certificate to the secretary of state for filing.

26-44  (c) Pay the fee required pursuant to NRS 86.561 to the secretary of

26-45  state.

26-46  3.  A certificate of correction is effective on the effective date of the

26-47  document it corrects except as to persons relying on the uncorrected

26-48  document and adversely affected by the correction. As to those persons,

26-49  the certificate is effective when filed.


27-1    Sec. 41.  The articles of organization or operating agreement of a

27-2  limited-liability company may create classes of members or managers,

27-3  define their relative rights, powers and duties, and may authorize the

27-4  creation, in the manner provided in the operating agreement, of

27-5  additional classes of members or managers with the relative rights,

27-6  powers and duties as may from time to time be established, including,

27-7  without limitation, rights, powers and duties senior to existing classes of

27-8  members or managers. The articles of organization or operating

27-9  agreement may provide that any member, or class or group of members,

27-10  has voting rights that differ from other classes or groups.

27-11  Sec. 42.  Upon application by or for a member, the district court may

27-12  decree dissolution of a limited-liability company whenever it is not

27-13  reasonably practicable to carry on the business of the company in

27-14  conformity with the articles of organization or operating agreement.

27-15  Sec. 43.  A member who owns a member’s interest in a limited-

27-16  liability company or a noneconomic member, when permitted by the

27-17  terms of the articles of organization or operating agreement, may bring

27-18  an action in the right of a limited-liability company to recover a

27-19  judgment in its favor if managers or members with authority to do so

27-20  have refused to bring the action or if an effort to cause those managers

27-21  or members to bring the action is not likely to succeed.

27-22  Sec. 44.  In a derivative action, the plaintiff must be a member who

27-23  owns a member’s interest or a noneconomic member at the time of

27-24  bringing the action and at the time of the transaction of which he

27-25  complains.

27-26  Sec. 45.  In a derivative action, the complaint must set forth with

27-27  particularity:

27-28  1.  The effort of the plaintiff to secure initiation of the action by a

27-29  manager or member; or

27-30  2.  The reasons for the plaintiff not making the effort to secure

27-31  initiation of the action by a manager or member.

27-32  Sec. 46.  If a derivative action is successful, in whole or in part, or if

27-33  anything is received by the plaintiff as a result of a judgment,

27-34  compromise or settlement of an action or claim, the court may award the

27-35  plaintiff reasonable expenses, including reasonable attorney’s fees, and

27-36  shall direct him to remit to the limited-liability company the remainder of

27-37  those proceeds received by him.

27-38  Sec. 47.  Subject to the constitution of this state:

27-39  1.  The laws of the state, pursuant to which a foreign limited-liability

27-40  company is organized, govern its organization, internal affairs and the

27-41  liability of its managers and members; and

27-42  2.  A foreign limited-liability company may not be denied registration

27-43  by reason of any difference between the laws of the state of organization

27-44  and the laws of this state.

27-45  Sec. 48.  Before transacting business in this state, a foreign limited-

27-46  liability company must register with the secretary of state. In order to

27-47  register, a foreign limited-liability company must submit to the secretary

27-48  of state an application for registration as a foreign limited-liability

27-49  company, signed by a manager of the company or, if management is not


28-1  vested in a manager, a member of the company and a signed certificate

28-2  of acceptance of a resident agent. The application for registration must

28-3  set forth:

28-4    1.  The name of the foreign limited-liability company and, if different,

28-5  the name under which it proposes to register and transact business in

28-6  this state;

28-7    2.  The state and date of its formation;

28-8    3.  The name and address of the resident agent whom the foreign

28-9  limited-liability company elects to appoint;

28-10  4.  A statement that the secretary of state is appointed the agent of the

28-11  foreign limited-liability company for service of process if the authority of

28-12  the resident agent has been revoked, or if the resident agent has resigned

28-13  or cannot be found or served with the exercise of reasonable diligence;

28-14  5.  The address of the office required to be maintained in the state of

28-15  its organization by the laws of that state or, if not so required, of the

28-16  principal office of the foreign limited-liability company;

28-17  6.  The name and business address of each manager or, if

28-18  management is not vested in a manager, each member; and

28-19  7.  The address of the office at which is kept a list of the names and

28-20  addresses of the members and their capital contributions, together with

28-21  an undertaking by the foreign limited-liability company to keep those

28-22  records until the registration in this state of the foreign limited-liability

28-23  company is canceled or withdrawn.

28-24  Sec. 49.  If the secretary of state finds that an application for

28-25  registration conforms to law and all requisite fees have been paid, he

28-26  shall issue a certificate of registration to transact business in this state

28-27  and mail it to the person who filed the application or his representative.

28-28  Sec. 50.  A foreign limited-liability company may register with the

28-29  secretary of state under any name, whether or not it is the name under

28-30  which it is registered in its state of organization, which contains the

28-31  words required by NRS 86.171 and which could be registered by a

28-32  domestic limited-liability company.

28-33  Sec. 51.  1.  A foreign limited-liability company may cancel its

28-34  registration by filing with the secretary of state a certificate of

28-35  cancellation signed by a manager of the company or, if management is

28-36  not vested in a manager, a member of the company. The certificate,

28-37  which must be accompanied by the required fees, must set forth:

28-38  (a) The name of the foreign limited-liability company;

28-39  (b) The date upon which its certificate of registration was filed;

28-40  (c) The effective date of the cancellation if other than the date of the

28-41  filing of the certificate of cancellation; and

28-42  (d) Any other information deemed necessary by the manager of the

28-43  company or, if management is not vested in a manager, a member of the

28-44  company.

28-45  2.  A cancellation pursuant to this section does not terminate the

28-46  authority of the secretary of state to accept service of process on the

28-47  foreign limited-liability company with respect to causes of action arising

28-48  from the transaction of business in this state by the foreign limited-

28-49  liability company.


29-1    Sec. 52.  1.  A foreign limited-liability company transacting

29-2  business in this state may not maintain any action, suit or proceeding in

29-3  any court of this state until it has registered in this state.

29-4    2.  The failure of a foreign limited-liability company to register in this

29-5  state does not impair the validity of any contract or act of the foreign

29-6  limited-liability company, or prevent the foreign limited-liability company

29-7  from defending any action, suit or proceeding in any court of this state.

29-8    3.  A foreign limited-liability company, by transacting business in this

29-9  state without registration, appoints the secretary of state as its agent for

29-10  service of process with respect to causes of action arising out of the

29-11  transaction of business in this state by the foreign limited-liability

29-12  company.

29-13  Sec. 53.  The attorney general may bring an action to restrain a

29-14  foreign limited-liability company from transacting business in this state

29-15  in violation of this section and sections 47 to 52, inclusive, of this act.

29-16  Sec. 54.  The articles of organization or operating agreement of a

29-17  limited-liability company may provide for one or more noneconomic

29-18  members or classes of noneconomic members.

29-19  Sec. 55.  NRS 86.011 is hereby amended to read as follows:

29-20  86.011  As used in this chapter, unless the context otherwise requires,

29-21  the words and terms defined in NRS [86.021] 86.031 to 86.128, inclusive,

29-22  and sections 37 and 38 of this act have the meanings ascribed to them in

29-23  those sections.

29-24  Sec. 56.  NRS 86.081 is hereby amended to read as follows:

29-25  86.081  “Member” means the owner of [an] a member’s interest in a

29-26  limited-liability company [.] or a noneconomic member.

29-27  Sec. 57.  NRS 86.201 is hereby amended to read as follows:

29-28  86.201  1.  [Upon filing the articles of organization and the certificate

29-29  of acceptance of the resident agent, and the payment of filing fees, the] A

29-30  limited-liability company is considered legally organized pursuant to this

29-31  chapter [.] upon:

29-32  (a) Filing the articles of organization with the secretary of state or

29-33  upon a later date specified in the articles of organization;

29-34  (b) Filing the certificate of acceptance of the resident agent with the

29-35  secretary of state; and

29-36  (c) Paying the required filing fees to the secretary of state.

29-37  2.  A limited-liability company must not transact business or incur

29-38  indebtedness, except that which is incidental to its organization or to

29-39  obtaining subscriptions for or payment of contributions, until the [secretary

29-40  of state has filed the articles of organization and the certificate of

29-41  acceptance.] company is considered legally organized pursuant to

29-42  subsection 1.

29-43  Sec. 58.  NRS 86.226 is hereby amended to read as follows:

29-44  86.226  1.  A signed certificate of amendment, or a certified copy of a

29-45  judicial decree of amendment, must be filed with the secretary of state. A

29-46  person who executes a certificate as an agent, officer or fiduciary of the

29-47  limited-liability company need not exhibit evidence of his authority as a

29-48  prerequisite to filing. Unless the secretary of state finds that a certificate


30-1  does not conform to law, upon his receipt of all required filing fees he shall

30-2  file the certificate.

30-3    2.  [Upon the filing of a] A certificate of amendment or judicial decree

30-4  of amendment [in the office of] is effective upon filing with the secretary

30-5  of state [, the articles of organization are amended as set forth therein.] or

30-6  upon a later date specified in the certificate or judicial decree, which

30-7  must not be more than 90 days after the certificate or judicial decree is

30-8  filed.

30-9    3.  If a certificate specifies an effective date and if the resolution of

30-10  the members approving the proposed amendment provides that one or

30-11  more managers, or, if management is not vested in a manager, one or

30-12  more members may abandon the proposed amendment, then those

30-13  managers or members may terminate the effectiveness of the certificate

30-14  by filing a certificate of termination with the secretary of state that:

30-15  (a) Is filed before the effective date specified in the certificate or

30-16  judicial decree filed pursuant to subsection 1;

30-17