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.
~
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