(REPRINTED WITH ADOPTED AMENDMENTS) SECOND REPRINT
Senate Bill No. 297-Committee on Judiciary
April 16, 1997
____________
Referred to Committee on Judiciary
SUMMARY--Makes various changes concerning corporations and other business organizations. (BDR 7-926)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: No.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to business organizations; making various changes concerning their organization, operation and merger; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1 Chapter 78 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 5, inclusive, of this act.
Sec. 2 1. A corporation may correct a document filed by the secretary of state if the document contains an incorrect statement or was defectively executed, attested, sealed, verified or acknowledged.
2. To correct a document, the corporation shall:
(a) Prepare a certificate of correction which:
(1) States the name of the corporation;
(2) Describes the document, including, without limitation, its filing date;
(3) Specifies the incorrect statement and the reason it is incorrect or the manner in which the execution or other formal authentication was defective;
(4) Corrects the incorrect statement or defective execution; and
(5) Is signed by an officer of the corporation; and
(b) Deliver the certificate to the secretary of state for filing.
3. A certificate of correction is effective on the effective date of the document it corrects except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, the certificate is effective when filed.
Sec. 3 1. An inspection authorized by NRS 78.105 may be denied to a stockholder or other person upon his refusal to furnish to the corporation an affidavit that the inspection is not desired for a purpose which is in the interest of a business or object other than the business of the corporation and that he has not at any time sold or offered for sale any list of stockholders of any domestic or foreign corporation or aided or abetted any person in procuring any such record of stockholders for any such purpose.
2. It is a defense to any action for penalties or damages under NRS 78.105 that the person suing has at any time sold, or offered for sale, any list of stockholders of the corporation, or any other corporation, or has aided or abetted any person in procuring any such stock list for any such purpose, or that the person suing desired inspection for a purpose which is in the interest of a business or object other than the business of the corporation.
3. This section does not impair the power or jurisdiction of any court to compel the production for examination of the books of a corporation in any proper case.
Sec. 4 1. A change pursuant to NRS 78.207 is not effective until after the filing in the office of the secretary of state of a certificate, signed by the corporation's president, or a vice president, and its secretary, or an assistant secretary, and acknowledged by the president or vice president before a person authorized by the laws of this state to take acknowledgments of deeds, setting forth:
(a) The current number of authorized shares and the par value, if any, of each class and series, if any, of shares before the change;
(b) The number of authorized shares and the par value, if any, of each class and series, if any, of shares after the change;
(c) The number of shares of each affected class and series, if any, to be issued after the change in exchange for each issued share of the same class or series;
(d) The provisions, if any, for the issuance of fractional shares, or for the payment of money or the issuance of scrip to stockholders otherwise entitled to a fraction of a share and the percentage of outstanding shares affected thereby;
(e) That any required approval of the stockholders has been obtained; and
(f) Whether the change is effective on filing the certificate or, if not, the date and time at which the change will be effective, which must not be more than 90 days after the certificate is filed.
The provisions in the articles of incorporation of the corporation regarding the authorized number and par value, if any, of the changed class and series, if any, of shares shall be deemed amended as provided in the certificate at the effective date and time of the change.
2. Unless an increase or decrease of the number of authorized shares pursuant to NRS 78.207 is accomplished by an action that otherwise requires an amendment to the corporation's articles of incorporation, such an amendment is not required by that section.
Sec. 5 1. A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
3. To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections 1 and 2, or in defense of any claim, issue or matter therein, the corporation shall indemnify him against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with the defense.
Sec. 6 NRS 78.010 is hereby amended to read as follows:
78.010 1. As used in this chapter:
(a) "Approval" and "vote" [when used in the context of an] as describing action by the directors or stockholders mean the vote of directors in person or by written consent or of stockholders in person, by proxy or by written consent.
(b) "Articles," "articles of incorporation" and "certificate of incorporation" are synonymous terms and unless the context otherwise requires, include all certificates filed pursuant to NRS 78.030, 78.195, [78.207,] 78.380, 78.385, 78.390 [,] and section 4 of this act and any articles of merger or exchange filed pursuant to NRS 92A.200 to 92A.240, inclusive. Unless the context otherwise requires, these terms include restated articles and certificates of incorporation.
(c) "Directors" and "trustees" are synonymous terms.
(d) "Receiver" includes receivers and trustees appointed by a court as provided in this chapter or in chapter 32 of NRS.
(e) "Registered office" means the office maintained at the street address of the resident agent.
(f) "Resident agent" means the agent appointed by the corporation upon whom process or a notice or demand authorized by law to be served upon the corporation may be served.
(g) "Stockholder of record" means a person whose name appears on the stock ledger of the corporation.
2. General terms and powers given in this chapter are not restricted by the use of special terms, or by any grant of special powers contained in this chapter.
Sec. 7 NRS 78.070 is hereby amended to read as follows:
78.070 Subject to such limitations, if any, as may be contained in its articles of incorporation, every corporation has the following powers:
1. To borrow money and contract debts when necessary for the transaction of its business, or for the exercise of its corporate rights, privileges or franchises, or for any other lawful purpose of its incorporation; to issue bonds, promissory notes, bills of exchange, debentures, and other obligations and evidences of indebtedness, payable at a specified time or times, or payable upon the happening of a specified event or events, whether secured by mortgage, pledge or other security, or unsecured, for money borrowed, or in payment for property purchased, or acquired, or for any other lawful object.
2. To guarantee, purchase, hold, take, obtain, receive, subscribe for, own, use, dispose of, sell, exchange, lease, lend, assign, mortgage, pledge, or otherwise acquire, transfer or deal in or with bonds or obligations of, or shares, securities or interests in or issued by, any person, government, governmental agency or political subdivision of government, and to exercise all the rights, powers and privileges of ownership of such an interest, including the right to vote, if any.
3. To purchase, hold, sell , pledge and transfer shares of its own stock, and use therefor its property or money . [, except that shares of its own stock belonging to the corporation must not be voted upon, directly or indirectly, nor counted as outstanding, to compute any stockholders' quorum or vote.]
4. To conduct business, have one or more offices, and hold, purchase, mortgage and convey real and personal property in this state, and in any of the several states, territories, possessions and dependencies of the United States, the District of Columbia, Puerto Rico, and any foreign countries.
5. To do everything necessary and proper for the accomplishment of the objects enumerated in its articles of incorporation or necessary or incidental to the protection and benefit of the corporation, and, in general, to carry on any lawful business necessary or incidental to the attainment of the objects of the corporation, whether or not the business is similar in nature to the objects set forth in the articles of incorporation, except that:
(a) A corporation created under the provisions of this chapter does not possess the power of issuing bills, notes or other evidences of debt for circulation of money; and
(b) This chapter does not authorize the formation of banking corporations to issue or circulate money or currency within this state, or outside of this state, or at all, except the federal currency, or the notes of banks authorized under the laws of the United States.
6. To make donations for the public welfare or for charitable, scientific or educational purposes.
7. To enter into [partnerships, general or limited, or joint ventures,] any relationship with another person in connection with any lawful activities.
Sec. 8 (Deleted by amendment.)
Sec. 9 NRS 78.105 is hereby amended to read as follows:
78.105 1. A corporation [must] shall keep a copy of the following records at its registered office:
(a) A copy certified by the secretary of state of its articles of incorporation, and all amendments thereto;
(b) A copy certified by an officer of the corporation of its bylaws and all amendments thereto; and
(c) A stock ledger or a duplicate stock ledger, revised annually, containing the names, alphabetically arranged, of all persons who are stockholders of the corporation, showing their places of residence, if known, and the number of shares held by them respectively. In lieu of the stock ledger or duplicate stock ledger, the corporation may keep a statement setting out the name of the custodian of the stock ledger or duplicate stock ledger, and the present and complete post office address, including street and number, if any, where the stock ledger or duplicate stock ledger specified in this section is kept.
2. A corporation [must] shall maintain the records required by subsection 1 in written form or in another form capable of conversion into written form within a reasonable time.
3. Any person who has been a stockholder of record of a corporation for at least 6 months immediately preceding his demand, or any person holding, or thereunto authorized in writing by the holders of, at least 5 percent of all of its outstanding shares, upon at least 5 days' written demand is entitled to inspect in person or by agent or attorney, during usual business hours, the [stock ledger or duplicate stock ledger, whether kept in the registered office of the corporation in this state or elsewhere, and to make extracts] records required by subsection 1 and make copies therefrom. Holders of voting trust certificates representing shares of the corporation must be regarded as stockholders for the purpose of this subsection. Every corporation that neglects or refuses to keep the [stock ledger or duplicate copy thereof] records required by subsection 1 open for inspection, as required in this subsection, shall forfeit to the state the sum of $25 for every day of such neglect or refusal.
4. [An inspection authorized by subsection 3 may be denied to a stockholder or other person upon his refusal to furnish to the corporation an affidavit that the inspection is not desired for a purpose which is in the interest of a business or object other than the business of the corporation and that he has not at any time sold or offered for sale any list of stockholders of any domestic or foreign corporation or aided or abetted any person in procuring any such record of stockholders for any such purpose.
5.] If any corporation willfully neglects or refuses to make any proper entry in the stock ledger or duplicate copy thereof, or neglects or refuses to permit an inspection of the [stock ledger or duplicate thereof] records required by subsection 1 upon demand by a person entitled to inspect [it,] them, or refuses to permit [extracts to be taken] copies to be made therefrom, as provided in [subsections 3 and 4,] subsection 3, the corporation is liable to the person injured for all damages resulting to him therefrom.
[6.] 5. When the corporation keeps a statement in the manner provided for in paragraph (c) of subsection 1, the information contained thereon must be given to any stockholder of the corporation demanding the information, when the demand is made during business hours. Every corporation that neglects or refuses to keep a statement available, as in this subsection required, shall forfeit to the state the sum of $25 for every day of such neglect or refusal.
[7. It is a defense to any action for penalties or damages under this section that the person suing has at any time sold, or offered for sale, any list of stockholders of the corporation, or any other corporation, or has aided or abetted any person in procuring any such stock list for any such purpose, or that the person suing desired inspection for a purpose which is in the interest of a business or object other than the business of the corporation.
8. This section does not impair the power or jurisdiction of any court to compel the production for examination of the books of a corporation in any proper case.
9.] 6. In every instance where an attorney or other agent of the stockholder seeks the right of inspection, the demand must be accompanied by a power of attorney executed by the stockholder authorizing the attorney or other agent to inspect on behalf of the stockholder.
[10.] 7. The right to copy records under subsection 3 includes, if reasonable, the right to make copies by photographic, xerographic or other means.
[11.] 8. The corporation may impose a reasonable charge to recover the costs of labor and materials and the cost of copies of any documents provided to the stockholder.
Sec. 10 NRS 78.140 is hereby amended to read as follows:
78.1401. [No] A contract or other transaction is not void or voidable solely because:
(a) The contract or transaction is between a corporation and [one] :
(1) One or more of its directors or officers [, or between a corporation and any] ; or
(2) Another corporation, firm or association in which one or more of its directors or officers are directors or officers or are financially interested [, is void or voidable solely for this reason or solely because any such] ;
(b) A common or interested director or officer [is] :
(1) Is present at the meeting of the board of directors or a committee thereof which authorizes or approves the contract or transaction [, or because the] ; or
(2) Joins in the execution of a written consent which authorizes or approves the contract or transaction pursuant to subsection 2 of NRS 78.315; or
(c) The vote or votes of a common or interested [directors] director are counted for [that purpose,] the purpose of authorizing or approving the contract or transaction,
if one of the circumstances specified in [any of the following paragraphs exist:] subsection 2 exists.
2. The circumstances in which a contract or other transaction is not void or voidable pursuant to subsection 1 are:
(a) The fact of the common directorship, office or financial interest is [disclosed or] known to the board of directors or committee , [and noted in the minutes,] and the board or committee authorizes, approves or ratifies the contract or transaction in good faith by a vote sufficient for the purpose without counting the vote or votes of the common or interested director or directors.
(b) The fact of the common directorship, office or financial interest is [disclosed or] known to the stockholders, and they approve or ratify the contract or transaction in good faith by a majority vote of stockholders holding a majority of the voting power. The votes of the common or interested directors or officers must be counted in any such vote of stockholders.
(c) The fact of the common directorship, office or financial interest is [not disclosed or] known to the director or officer at the time the transaction is brought before the board of directors of the corporation for action.
(d) The contract or transaction is fair as to the corporation at the time it is authorized or approved.
[2.] 3. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or a committee thereof which authorizes, approves or ratifies a contract or transaction, and if the votes of the common or interested directors are not counted at the meeting, then a majority of the disinterested directors may authorize, approve or ratify a contract or transaction.
[3.] 4. Unless otherwise provided in the articles of incorporation or the bylaws, the board of directors [may fix] , without regard to personal interest, may establish the compensation of directors for services in any capacity. If the board of directors establishes the compensation of directors pursuant to this subsection, such compensation is presumed to be fair to the corporation unless proven unfair by a preponderance of the evidence.
Sec. 11 NRS 78.207 is hereby amended to read as follows:
78.207 1. Unless otherwise provided in the articles of incorporation, a corporation organized and existing under the laws of this state that desires to change the number of shares of a class and series, if any, of its authorized stock by increasing or decreasing the number of authorized shares of the class and series and correspondingly increasing or decreasing the number of issued and outstanding shares of the same class and series held by each stockholder of record at the effective date and time of the change, may, except as otherwise provided in [subsection 2,] subsections 2 and 3, do so by a resolution adopted by the board of directors, without obtaining the approval of the stockholders. The resolution may also provide for a change of the par value, if any, of the same class and series of the shares increased or decreased. After the effective date and time of the change, the corporation may issue its stock in accordance therewith.
2. A proposal to increase or decrease the number of authorized shares of any class and series, if any, that includes provisions pursuant to which only money will be paid or scrip will be issued to stockholders who:
(a) Before the increase or decrease in the number of shares becomes effective, in the aggregate hold 10 percent or more of the outstanding shares of the affected class and series; and
(b) Would otherwise be entitled to receive fractions of shares in exchange for the cancellation of all of their outstanding shares,
must be approved by the vote of stockholders holding a majority of the voting power of the affected class and series, or such greater proportion as may be provided in the articles of incorporation, regardless of limitations or restrictions on the voting power thereof.
3. If a proposed increase or decrease in the number of authorized shares of any class or series would alter or change any preference or any relative or other right given to any other class or series of outstanding shares, then the increase or decrease must be approved by the vote, in addition to any vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series whose preference or rights are affected by the increase or decrease, regardless of limitations or restrictions on the voting power thereof.
4. Any proposal to increase or decrease the number of authorized shares of any class and series, if any, that includes provisions pursuant to which only money will be paid or scrip will be issued to stockholders who:
(a) Before the increase or decrease in the number of shares becomes effective, hold 1 percent or more of the outstanding shares of the affected class and series; and
(b) Would otherwise be entitled to receive a fraction of a share in exchange for the cancellation of all of their outstanding shares,
is subject to the provisions of NRS 92A.300 to 92A.500, inclusive. If the proposal is subject to those provisions, any stockholder who is obligated to accept money or scrip rather than receive a fraction of a share resulting from the action taken pursuant to this section may dissent in accordance with those provisions and obtain payment of the fair value of the fraction of a share to which the stockholder would otherwise be entitled.
[4. A change pursuant to this section is not effective until after the filing in the office of the secretary of state of a certificate, signed by the corporation's president, or a vice president, and its secretary, or an assistant secretary, and acknowledged by the president or vice president before a person authorized by the laws of this state to take acknowledgments of deeds, setting forth:
(a) The current number of authorized shares and the par value, if any, of each class and series, if any, of shares before the change;
(b) The number of authorized shares and the par value, if any, of each class and series, if any, of shares after the change;
(c) The number of shares of each affected class and series, if any, to be issued after the change in exchange for each issued share of the same class or series;
(d) The provisions, if any, for the issuance of fractional shares, or for the payment of money or the issuance of scrip to stockholders otherwise entitled to a fraction of a share and the percentage of outstanding shares affected thereby;
(e) That, if required, the approval of the affected stockholders has been obtained; and
(f) Whether the change is effective on filing the certificate or, if not, the date and time at which the change will be effective, which must not be more than 90 days after the certificate is filed.
The provisions in the articles of incorporation of the corporation regarding the authorized number and par value, if any, of the changed class and series, if any, of shares shall be deemed amended as provided in the certificate at the effective date and time of the change.
5. Unless an increase or decrease of the number of authorized shares pursuant to this section is accomplished by an action that otherwise requires an amendment to the corporation's articles of incorporation, such an amendment is not required by this section.]
Sec. 12 NRS 78.283 is hereby amended to read as follows:
78.283 1. As used in this section, "treasury shares" means shares of a corporation issued and thereafter acquired [, either directly or indirectly,] by the corporation or [a wholly owned subsidiary of the corporation, but not] another entity, the majority of whose outstanding voting power to elect its general partner, directors, managers or members of the governing body is beneficially held, directly or indirectly, by the corporation, which have not been retired or restored to the status of unissued shares.
2. Treasury shares do not carry voting rights or participate in distributions, [and must] may not be counted as outstanding shares for any purpose [, nor] and may not be counted as assets of the corporation for the purpose of computing the amount available for distributions . [, or the purchase of shares issued by the corporation.] Unless the articles of incorporation provide otherwise, treasury shares may be retired and restored to the status of authorized and unissued shares without an amendment to the articles of incorporation or may be disposed of for such consideration as the board of directors may determine.
3. This section does not limit the right of a corporation to vote its shares held by it in a fiduciary capacity.
Sec. 13 NRS 78.315 is hereby amended to read as follows:
78.315 1. Unless the articles of incorporation or the bylaws provide for a different proportion, a majority of the board of directors of the corporation [,] then in office, at a meeting duly assembled, is necessary to constitute a quorum for the transaction of business, and the act of directors holding a majority of the voting power of the directors, present at a meeting at which a quorum is present, is the act of the board of directors.
2. Unless otherwise restricted by the articles of incorporation or bylaws, any action required or permitted to be taken at a meeting of the board of directors or of a committee thereof may be taken without a meeting if, before or after the action, a written consent thereto is signed by all the members of the board or of the committee. [The written consent must be filed with the minutes of proceedings of the board or committee.]
3. Unless otherwise restricted by the articles of incorporation or bylaws, members of the board of directors or the governing body of any corporation, or of any committee designated by such board or body, may participate in a meeting of the board, body or committee by means of a telephone conference or similar method of communication by which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this subsection constitutes presence in person at the meeting.
Sec. 14 NRS 78.320 is hereby amended to read as follows:
78.320 1. Unless this chapter, the articles of incorporation or the bylaws provide for different proportions:
(a) [Stockholders holding at least a] A majority of the voting power [are necessary to constitute] , which includes the voting power that is present in person or by proxy, regardless of whether the proxy has authority to vote on all matters, constitutes a quorum for the transaction of business; and
(b) [The vote of stockholders who hold at least a majority of the voting power present at a meeting at which a quorum is present is the act of the stockholders.] Action by the stockholders on a matter other than the election of directors is approved if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action.
2. Unless otherwise provided in the articles of incorporation or the bylaws, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if a written consent thereto is signed by stockholders holding at least a majority of the voting power, except that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required.
3. In no instance where action is authorized by written consent need a meeting of stockholders be called or notice given. [The written consent must be filed with the minutes of the proceedings of the stockholders.]
4. Unless otherwise restricted by the articles of incorporation or bylaws, stockholders may participate in a meeting of stockholders by means of a telephone conference or similar method of communication by which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this subsection constitutes presence in person at the meeting.
Sec. 15 NRS 78.355 is hereby amended to read as follows:
78.355 1. At any meeting of the stockholders of any corporation any stockholder may designate another person or persons to act as a proxy or proxies. If any stockholder designates two or more persons to act as proxies, a majority of those persons present at the meeting, or, if only one is present, then that one has and may exercise all of the powers conferred by the stockholder upon all of the persons so designated unless the stockholder provides otherwise.
2. Without limiting the manner in which a stockholder may authorize another person or persons to act for him as proxy pursuant to subsection 1, the following constitute valid means by which a stockholder may grant such authority:
(a) A stockholder may execute a writing authorizing another person or persons to act for him as proxy. The proxy may be limited to action on designated matters. Execution may be accomplished by the signing of the writing by the stockholder or his authorized officer, director, employee or agent or by causing the signature of the stockholder to be affixed to the writing by any reasonable means, including, but not limited to, a facsimile signature.
(b) A stockholder may authorize another person or persons to act for him as proxy by transmitting or authorizing the transmission of a telegram, cablegram or other means of electronic transmission to the person who will be the holder of the proxy or to a firm which solicits proxies or like agent who is authorized by the person who will be the holder of the proxy to receive the transmission. Any such telegram, cablegram or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the stockholder. If it is determined that the telegram, cablegram or other electronic transmission is valid, the persons appointed by the corporation to count the votes of stockholders and determine the validity of proxies and ballots or other persons making those determinations must specify the information upon which they relied.
3. Any copy, communication by telecopier, or other reliable reproduction of the writing or transmission created pursuant to subsection 2, may be substituted for the original writing or transmission for any purpose for which the original writing or transmission could be used, if the copy, communication by telecopier, or other reproduction is a complete reproduction of the entire original writing or transmission.
4. No such proxy is valid after the expiration of 6 months from the date of its creation, unless it is coupled with an interest, or unless the stockholder specifies in it the length of time for which it is to continue in force, which may not exceed 7 years from the date of its creation. Subject to these restrictions, any proxy properly created is not revoked and continues in full force and effect until another instrument or transmission revoking it or a properly created proxy bearing a later date is filed with or transmitted to the secretary of the corporation or another person or persons appointed by the corporation to count the votes of stockholders and determine the validity of proxies and ballots.
Sec. 16 NRS 78.390 is hereby amended to read as follows:
78.390 1. Every amendment adopted pursuant to the provisions of NRS 78.385 must be made in the following manner:
(a) The board of directors must adopt a resolution setting forth the amendment proposed and declaring its advisability, and call a meeting, either annual or special, of the stockholders entitled to vote for the consideration thereof.
(b) At the meeting, of which notice must be given to each stockholder entitled to vote pursuant to the provisions of this section, a vote of the stockholders entitled to vote in person or by proxy must be taken for and against the proposed amendment. If it appears upon the canvassing of the votes that stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, as provided in subsections 3 and 5, or as may be required by the provisions of the articles of incorporation, have voted in favor of the amendment, the president, or vice president, and secretary, or assistant secretary, shall execute a certificate setting forth the amendment, or setting forth the articles of incorporation as amended, and the vote by which the amendment was adopted, and the president [,] or vice president [, and secretary, or assistant secretary,] shall acknowledge the certificate before a person authorized by the laws of the place where the acknowledgment is taken to take acknowledgments of deeds.
(c) The certificate so executed and acknowledged must be filed in the office of the secretary of state.
2. Upon filing the certificate the articles of incorporation are amended accordingly.
3. If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless of limitations or restrictions on the voting power thereof.
4. Provision may be made in the articles of incorporation requiring, in the case of any specified amendments, a larger proportion of the voting power of stockholders than that required by this section.
5. Different series of the same class of shares do not constitute different classes of shares for the purpose of voting by classes except when the series is adversely affected by an amendment in a different manner than other series of the same class.
Sec. 17 NRS 78.403 is hereby amended to read as follows:
78.403 1. A corporation may restate, or amend and restate, in a single certificate the entire text of its articles of incorporation as amended by filing with the secretary of state a certificate entitled "Restated Articles of Incorporation of ................," which must set forth the articles as amended to the date of the certificate. If the certificate alters or amends the articles in any manner, it must comply with the provisions of this chapter governing such amendments and must be accompanied by:
(a) A resolution; or
(b) A form prescribed by the secretary of state,
setting forth which provisions of the articles of incorporation on file with the secretary of state are being altered or amended.
2. If the certificate does not alter or amend the articles, it must be signed by the president or vice president and the secretary or assistant secretary of the corporation and [must be verified by their signed affidavits] state that they have been authorized to execute the certificate by resolution of the board of directors adopted on the date stated, and that the certificate correctly sets forth the text of the articles of incorporation as amended to the date of the certificate.
3. The [names, signatures and acknowledgments of the incorporators] following may be omitted from the restated articles [and the names and addresses of the present directors must be included instead of the names and addresses of the original directors.] :
(a) The names, addresses, signatures and acknowledgments of the incorporators;
(b) The names and addresses of the members of the past and present boards of directors; and
(c) The name and address of the resident agent.
4. Whenever a corporation is required to file a certified copy of its articles, in lieu thereof it may file a certified copy of the most recent certificate restating its articles as amended, subject to the provisions of subsection 2, together with certified copies of all certificates of amendment filed subsequent to the restated articles and certified copies of all certificates supplementary to the original articles.
Sec. 18 NRS 78.730 is hereby amended to read as follows:
78.730 1. Any corporation which did exist or is existing under the laws of this state may, upon complying with the provisions of NRS 78.180, procure a renewal or revival of its charter for any period, together with all the rights, franchises, privileges and immunities, and subject to all its existing and preexisting debts, duties and liabilities secured or imposed by its original charter and amendments thereto, or existing charter, by filing:
(a) A certificate with the secretary of state, which must set forth:
(1) The name of the corporation, which must be the name of the corporation at the time of the renewal or revival, or its name at the time its original charter expired.
(2) The name of the person designated as the resident agent of the corporation, his street address for the service of process, and his mailing address if different from his street address.
(3) The date when the renewal or revival of the charter is to commence or be effective, which may be, in cases of a revival, before the date of the certificate.
(4) Whether or not the renewal or revival is to be perpetual, and, if not perpetual, the time for which the renewal or revival is to continue.
(5) That the corporation desiring to renew or revive its charter is, or has been, organized and carrying on the business authorized by its existing or original charter and amendments thereto, and desires to renew or continue through revival its existence pursuant to and subject to the provisions of this chapter.
(b) A list of its president, secretary and treasurer and all of its directors and their post office box or street addresses, either residence or business.
2. A corporation whose charter has not expired and is being renewed shall cause the certificate to be signed by its president or vice president and secretary or assistant secretary [, verified] and acknowledged by those officers before any person authorized by the laws of this state to [administer oaths or affirmations.] take acknowledgments of deeds. The certificate must be approved by a majority of the voting power of the shares.
3. A corporation seeking to revive its original or amended charter shall cause the certificate to be signed by a person or persons designated or appointed by the stockholders of the corporation and [verified] acknowledged by the signer or signers before any person authorized to [administer oaths or affirmations.] take acknowledgments of deeds. The execution and filing of the certificate must be approved by the written consent of [all the] stockholders of the corporation holding at least a majority of the voting power and must contain a recital that [unanimous] this consent was secured. If no stock has been issued, the certificate must contain a statement of that fact, and a majority of the directors then in office may designate the person to sign the certificate. The corporation shall pay to the secretary of state the fee required to establish a new corporation pursuant to the provisions of this chapter.
4. The filed certificate, or a copy thereof which has been certified under the hand and seal of the secretary of state, must be received in all courts and places as prima facie evidence of the facts therein stated and of the existence and incorporation of the corporation therein named.
Sec. 19 NRS 78.751 is hereby amended to read as follows:
78.751 1. [A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
3. To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections 1 and 2, or in defense of any claim, issue or matter therein, he must be indemnified by the corporation against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with the defense.
4.] Any discretionary indemnification under [subsections 1 and 2,] section 5 of this act, unless ordered by a court or advanced pursuant to subsection [5, must] 2, may be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting of directors who were not parties to the [act,] action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not parties to the [act,] action, suit or proceeding so orders, by independent legal counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the [act,] action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion.
[5.] 2. The articles of incorporation, the bylaws or an agreement made by the corporation may provide that the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the corporation. The provisions of this subsection do not affect any rights to advancement of expenses to which corporate personnel other than directors or officers may be entitled under any contract or otherwise by law.
[6.] 3. The indemnification and advancement of expenses authorized in or ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in his official capacity or an action in another capacity while holding his office, except that indemnification, unless ordered by a court pursuant to [subsection 2] section 5 of this act or for the advancement of expenses made pursuant to subsection [5,] 2, may not be made to or on behalf of any director or officer if a final adjudication establishes that his acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors and administrators of such a person.
Sec. 20 NRS 78.765 is hereby amended to read as follows:
78.7651. The fee for filing a certificate changing the number of authorized shares pursuant to [NRS 78.207] section 4 of this act or a certificate of amendment to articles of incorporation that increases the corporation's authorized stock or a certificate of correction that increases the corporation's authorized stock is the difference between the fee computed at the rates specified in NRS 78.760 upon the total authorized stock of the corporation, including the proposed increase, and the fee computed at the rates specified in NRS 78.760 upon the total authorized capital, excluding the proposed increase. In no case may the amount be less than $75.
2. The fee for filing a certificate of amendment to articles of incorporation that does not increase the corporation's authorized stock or a certificate of correction that does not increase the corporation's authorized stock is $75.
3. The fee for filing a certificate pursuant to NRS 78.195 or an amended certificate pursuant to NRS 78.1955 is $75.
Sec. 21 Chapter 80 of NRS is hereby amended by adding thereto a new section to read as follows:
1. A foreign corporation may correct a document filed by the secretary of state if the document contains an incorrect statement or was defectively executed, attested, sealed, verified or acknowledged.
2. To correct a document, the corporation shall:
(a) Prepare a certificate of correction which:
(1) States the name of the corporation;
(2) Describes the document, including, without limitation, its filing date;
(3) Specifies the incorrect statement and the reason it is incorrect or the manner in which the execution or other formal authentication was defective;
(4) Corrects the incorrect statement or defective execution; and
(5) Is signed by an officer of the corporation; and
(b) Deliver the certificate to the secretary of state for filing.
3. A certificate of correction is effective on the effective date of the document it corrects except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, the certificate is effective when filed.
Sec. 22 NRS 80.015 is hereby amended to read as follows:
80.015 1. For the purposes of this chapter, the following activities do not constitute doing business in this state:
(a) Maintaining, defending or settling any proceeding;
(b) Holding meetings of the board of directors or stockholders or carrying on other activities concerning internal corporate affairs;
(c) Maintaining bank accounts;
(d) Maintaining offices or agencies for the transfer, exchange and registration of the corporation's own securities or maintaining trustees or depositaries with respect to those securities;
(e) Making sales through independent contractors;
(f) Soliciting or receiving orders outside of this state through or in response to letters, circulars, catalogs or other forms of advertising, accepting those orders outside of this state and filling them by shipping goods into this state;
(g) Creating or acquiring indebtedness, mortgages and security interests in real or personal property;
(h) Securing or collecting debts or enforcing mortgages and security interests in property securing the debts;
(i) Owning, without more, real or personal property;
(j) Isolated transactions completed within 30 days and not a part of a series of similar transactions;
(k) The production of motion pictures as defined in NRS 231.020;
(l) Transacting business as an out-of-state depository institution pursuant to the provisions of Title 55 of NRS; and
(m) Transacting business in interstate commerce.
2. The list of activities in subsection 1 is not exhaustive.
3. A person who is not doing business in this state within the meaning of this section need not qualify or comply with any provision of NRS 80.010 to [80.220,] 80.270, inclusive, chapter 645A or 645B of NRS or [Titles 55 and] Title 55 or 56 of NRS unless he:
(a) Maintains an office in this state for the transaction of business; or
(b) Solicits or accepts deposits in the state, except pursuant to the provisions of chapter 666 or 666A of NRS.
Sec. 23 NRS 81.010 is hereby amended to read as follows:
81.0101. Nonprofit cooperative corporations may be formed by the voluntary association of any three or more persons in the manner prescribed in NRS 81.010 to 81.160, inclusive. A majority of the persons must be residents of this state, and such a corporation has and may exercise the powers necessarily incident thereto. [The] Except as otherwise provided in subsection 2, the provisions of chapter 78 of NRS govern each nonprofit cooperative corporation organized pursuant to NRS 81.010 to 81.160, inclusive. If such a nonprofit cooperative corporation is organized without shares of stock, the members shall be deemed to be "shareholders" or "stockholders" as these terms are used in chapter 78 of NRS.
2. If the term for which a nonprofit cooperative corporation was to exist has expired but the corporation has continued to perform the activities authorized by its original articles of incorporation or any amendment thereto, revival of its corporate existence does not require the consent of its members or stockholders. Each required action to accomplish a revival may be taken by a majority of the surviving directors. The revival is effective as of the date of expiration of the original term.
Sec. 24 Chapter 82 of NRS is hereby amended by adding thereto a new section to read as follows:
1. The board of directors of a corporation without shares of stock which was organized before October 1, 1991, pursuant to any provision of chapter 81 of NRS or a predecessor statute and whose permissible term of existence as stated in the articles of incorporation has expired may, within 10 years after the date of the expiration of its existence, elect to revive its charter and accept this chapter by adopting a resolution reviving the expired charter and adopting new articles of incorporation conforming to this chapter and any other statutes pursuant to which the corporation may have been organized. The new articles of incorporation need not contain the names, addresses, signatures or acknowledgments of the incorporators.
2. A certificate of election to accept this chapter pursuant to this section must be signed by the president or a vice president and acknowledged before a person authorized by the laws of this state to take acknowledgments of deeds, and must set forth:
(a) The name of the corporation.
(b) A statement by the corporation that it has elected to accept this chapter and adopt new articles of incorporation conforming to the provisions of this chapter and any other statutes pursuant to which the corporation may have been organized.
(c) A statement by the corporation that since the expiration of its charter it has remained organized and continued to carry on the activities for which it was formed and authorized by its original articles of incorporation and amendments thereto, and desires to continue through revival its existence pursuant to and subject to the provisions of this chapter.
(d) A statement that the attached copy of the articles of incorporation of the corporation are the new articles of incorporation of the corporation.
(e) A statement setting forth the date of the meeting of the board of directors at which the election to accept and adopt was made, that a quorum was present at the meeting and that the acceptance and adoption were authorized by a majority vote of the directors present at the meeting.
3. The certificate so signed and acknowledged, and a certificate of acceptance of appointment executed by the resident agent of the corporation, must be filed in the office of the secretary of state.
4. If the corporation is not in compliance with the provisions of NRS 82.146 or 82.176, it must comply with the provisions of those sections and pay the fees required by NRS 82.146 to 82.171, inclusive.
5. The new articles of incorporation become effective on the date of filing the certificate. The corporation's existence continues from the date of expiration of the original term, with all the corporation's rights, franchises, privileges and immunities and subject to all its existing and preexisting debts, duties and liabilities.
Sec. 25 NRS 82.061 is hereby amended to read as follows:
82.0611. A certificate of election to accept this chapter pursuant to NRS 82.056 must be signed by the president or a vice president and by the secretary or an assistant secretary and acknowledged before a person authorized by the laws of this state to take acknowledgments of deeds and must set forth:
(a) The name of the corporation.
(b) A statement by the corporation that it has elected to accept this chapter and adopt new articles of incorporation conforming to the provisions of this chapter and any other statutes pursuant to which the corporation may have been organized.
(c) If there are members or stockholders entitled to vote thereon, a statement setting forth the date of the meeting of the members or stockholders at which the election to accept this chapter and adopt new articles was made, that a quorum was present at the meeting and that acceptance and adoption was authorized by at least a majority of the votes which members or stockholders present at the meeting in person or by proxy were entitled to cast.
(d) If there are no members or stockholders entitled to vote thereon, a statement of that fact, the date of the meeting of the board of directors at which the election to accept and adopt was made, that a quorum was present at the meeting and that the acceptance and adoption were authorized by a majority vote of the directors present at the meeting.
(e) A statement that, in addition, the corporation followed the requirements of the law under which it was organized, its old articles of incorporation and its old bylaws so far as applicable in effecting the acceptance.
(f) A statement that the attached copy of the articles of incorporation of the corporation are the new articles of incorporation of the corporation.
(g) If the corporation has issued shares of stock, a statement of that fact including the number of shares theretofore authorized, the number issued and outstanding and that upon the effective date of the certificate of acceptance the authority of the corporation to issue shares of stock is thereby terminated.
2. The certificate so signed and acknowledged must be filed in the office of the secretary of state.
Sec. 26 NRS 82.066 is hereby amended to read as follows:
82.066Upon filing [the] a certificate of acceptance, the election of [the] a corporation to accept this chapter is effective and the corporation has the powers and privileges and is subject to the duties, restrictions, penalties and liabilities given to and imposed upon the corporation by this chapter and by any other statutes pursuant to which it was created. The articles of incorporation attached to the certificate are thereafter the articles of incorporation of the corporation. The holders of shares of stock issued by the corporation [shall thereafter be] are thereafter members of the corporation with one vote for each share of stock so surrendered, unless the articles so adopted and attached to the certificate provide otherwise.
Sec. 27 NRS 82.271 is hereby amended to read as follows:
82.271 1. Unless the articles or the bylaws provide for a different proportion, a majority of the board of directors or delegates of the corporation, at a meeting duly assembled, is necessary to constitute a quorum for the transaction of business at their respective meetings, and the act of a majority of the directors or delegates present at a meeting at which a quorum is present is the act of the board of directors or delegates.
2. Unless otherwise restricted by the articles or bylaws, any action required or permitted to be taken at any meeting of the board of directors or the delegates or of any committee thereof may be taken without a meeting if, before or after the action, a written consent thereto is signed by a majority of the board of directors or the delegates or of such committee. If the vote of a different proportion of the directors or delegates is required for an action, then the different proportion of written consents is required. [The written consent must be filed with the minutes of proceedings of the board, the delegates or the committee.]
3. Unless otherwise restricted by the articles or bylaws, members of the board of directors, the delegates or of any committee designated by the board or the delegates may participate in a meeting by means of a telephone conference or similar method of communication by which all persons participating in the meeting can hear each other. Participating in a meeting pursuant to this subsection constitutes presence in person at the meeting.
Sec. 28 NRS 82.276 is hereby amended to read as follows:
82.276 1. Unless otherwise provided in the articles or bylaws, any action which may be taken by the vote of members at a meeting may be taken without a meeting if authorized by the written consent of members holding at least a majority of the voting power, except that:
(a) If any greater proportion of voting power is required for such an action at a meeting, then the greater proportion of written consents is required; and
(b) This general provision for action by written consent does not supersede any specific provision for action by written consent contained in this chapter.
2. In no instance where action is authorized by written consent need a meeting of members be called or notice given. [The written consent must be filed with the minutes of proceedings of the members.]
3. Unless otherwise restricted by the articles or bylaws, members may participate in a meeting by means of a telephone conference or similar method of communication by which all persons participating in the meeting can hear each other. Participating in a meeting pursuant to this subsection constitutes presence in person at the meeting.
Sec. 29 NRS 82.371 is hereby amended to read as follows:
82.371 1. A corporation may restate, or amend and restate, in a single certificate the entire text of its articles as amended by filing with the secretary of state a certificate entitled "Restated Articles of Incorporation of .........................," which must set forth the articles as amended to the date of the certificate. If the certificate alters or amends the articles in any manner, it must comply with the provisions of this chapter governing such amendments and must be accompanied by:
(a) A resolution; or
(b) A form prescribed by the secretary of state,
setting forth which provisions of the articles of incorporation on file with the secretary of state are being altered or amended.
2. If the certificate does not alter or amend the articles, it must be signed by the chairman of the board or the president or vice president, and the secretary or assistant secretary, of the corporation and must [be verified by their signed affidavits] state that they have been authorized to execute the certificate by resolution of the board of directors adopted on the date stated, and that the certificate correctly sets forth the text of the articles as amended to the date of the certificate.
3. The [signatures and acknowledgments of the incorporators] following may be omitted from the restated articles [.] :
(a) The names, addresses, signatures and acknowledgments of the incorporators;
(b) The names and addresses of the members of the past and present board of directors; and
(c) The name and address of the resident agent.
4. Whenever a corporation is required to file a certified copy of its articles, in lieu thereof it may file a certified copy of the most recent certificate restating its articles as amended, subject to the provisions of subsection 2, together with certified copies of all certificates of amendment filed after the restated articles and certified copies of all certificates supplementary to the original articles.
Sec. 30 NRS 82.531 is hereby amended to read as follows:
82.5311. The fee for filing articles of incorporation, amendments to or restatements of articles of incorporation , certificates pursuant to NRS 82.061 and section 24 of this act, and documents for dissolution is $25 for each document.
2. Except as otherwise provided in NRS 82.146 and 82.171 and subsection 1 , [of this section,] the fees for filing documents are those set forth in NRS 78.765 to 78.785, inclusive.
Sec. 31 Chapter 86 of NRS is hereby amended by adding thereto the provisions set forth as sections 32 to 34.5, inclusive, of this act.
Sec. 32 1. A distribution of the profits of a limited-liability company must not be made if, after giving it effect:
(a) The company would not be able to pay its debts as they become due in the usual course of business; or
(b) Except as otherwise specifically permitted by the articles of organization, the total assets of the company would be less than the sum of its total liabilities.
2. The manager or, if management of the company is not vested in a manager or managers, the members may base a determination that a distribution is not prohibited under this section on:
(a) Financial statements prepared on the basis of accounting practices that are reasonable in the circumstances;
(b) A fair valuation, including unrealized appreciation and depreciation; or
(c) Any other method that is reasonable in the circumstances.
3. The effect of a distribution under this section must be measured:
(a) In the case of a distribution by purchase, redemption or other acquisition by the company of member's interests, as of the earlier of:
(1) The date on which money or other property is transferred or debt incurred by the company; or
(2) The date on which the member ceases to be a member with respect to his acquired interest.
(b) In the case of any other distribution of indebtedness, as of the date on which the indebtedness is distributed.
(c) In all other cases, as of:
(1) The date on which the distribution is authorized if the payment occurs within 120 days after the date of authorization; or
(2) The date on which the payment is made if it occurs more than 120 days after the date of authorization.
4. Indebtedness of the company, including indebtedness issued as a distribution, is not considered a liability for purposes of determinations under this section if its terms provide that payment of principal and interest are to be made only if and to the extent that payment of a distribution to the members could then be made pursuant to this section. If the indebtedness is issued as a distribution, each payment of principal or interest must be treated as a distribution, the effect of which must be measured as of the date of payment.
Sec. 33 Unless otherwise provided in its articles of organization or operating agreement, a limited-liability company has perpetual existence.
Sec. 34 Except as otherwise provided in this chapter, chapter 463 of NRS, the articles of organization or the operating agreement:
1. If the resignation or withdrawal of a member violates the operating agreement:
(a) The amount payable to the member who has resigned or withdrawn is the fair market value of his interest reduced by the amount of all damages sustained by the company or its other members as a result of the violation; and
(b) The company may defer the payment for so long as necessary to prevent unreasonable hardship to the company.
2. Except as otherwise provided in chapter 463 of NRS, the articles of organization or the operating agreement, a member who resigns or withdraws ceases to be a member, has no voting rights and has no right to participate in the management of the company, even if under this section a payment due him from the company is deferred.
Sec. 34.5. 1. Except as otherwise provided by statute, an agency, board or commission that regulates an occupation or profession pursuant to Title 54, 55 or 56 of NRS may grant a license to a limited-liability company or a foreign limited-liability company if the agency, board or commission is authorized to grant a license to a corporation formed pursuant to chapter 78 of NRS.
2. An agency, board or commission that makes a license available to a limited-liability company or foreign limited-liability company pursuant to subsection 1 shall adopt regulations:
(a) Listing the persons in the limited-liability company or foreign limited-liability company who must qualify for the license or indicating that the agency, board or commission will use other means to determine whether the limited-liability company or foreign limited-liability company qualifies for a license;
(b) Listing the persons who may engage in the activity for which the license is required on behalf of the limited-liability company or foreign limited-liability company;
(c) Indicating whether the limited-liability company or foreign limited-liability company may engage in a business other than the business for which the license is required;
(d) Listing the changes, if any, in the management or control of the limited-liability company or foreign limited-liability company that require notice, review, approval or other action by the agency, board or commission;
(e) Setting forth the conditions under which a limited-liability company or foreign limited-liability company may obtain a license.
3. An agency, board or commission that adopts regulations pursuant to subsection 2 shall not impose a restriction or requirement on a limited-liability company or foreign limited-liability company which is significantly different from or more burdensome than the restrictions or requirements imposed on a partnership or corporation.
Sec. 35 NRS 86.065 is hereby amended to read as follows:
86.065 "Majority in interest" means a majority of the interests in [capital and] the current profits of [the members of] a limited-liability company . [which:
1. In the case of capital, is determined as of the date of the dissolution event.
2. In the case of profits, is based on any reasonable estimate of profits for the period beginning on the date of the dissolution event or the date the members consider any proposed transfer or assignment of the interest of a member of the company and ending on the anticipated date of the dissolution of the company, including any present or future division of profits distributed pursuant to the operating agreement of the company in effect on the date the members consider the proposed transfer or assignment or the date of the dissolution event.]
Sec. 36 NRS 86.071 is hereby amended to read as follows:
86.071 "Manager" means a person [elected by the members] , or one of several persons, designated in or selected pursuant to the articles of organization or operating agreement of a limited-liability company to manage the company . [pursuant to NRS 86.291.]
Sec. 37 NRS 86.081 is hereby amended to read as follows:
86.081 "Member" means [a person who owns] the owner of an interest in a limited-liability company.
Sec. 38 NRS 86.091 is hereby amended to read as follows:
86.091 "Member's interest" means [a member's] his share of the [profits and losses of] economic interests in a limited-liability company [and the right to receive distributions of the company's] , including profits, losses and distributions of assets.
Sec. 39 NRS 86.151 is hereby amended to read as follows:
86.151 1. One or more persons may form a limited-liability company by:
(a) Executing, acknowledging and filing [in the office of] with the secretary of state articles of organization for the company; and
(b) Filing with the secretary of state a certificate of acceptance of appointment, executed by the resident agent of the company . [, in the office of the secretary of state,
but the articles must list one or more managers or, if there are no managers, two or more members.]
2. Upon the filing of the articles of organization and the certificate of acceptance [,] with the secretary of state, and the payment to him of the required filing fees, the secretary of state shall issue to the company a certificate that the articles, containing the required statement of facts, have been filed.
3. A signer of the articles of organization or a manager designated in the articles does not thereby become a member of the company. At all times after commencement of business by the company, the company must have [two] one or more members. The filing of the articles does not, by itself, constitute commencement of business by the company.
Sec. 40 NRS 86.161 is hereby amended to read as follows:
86.161 1. The articles of organization must set forth:
(a) The name of the limited-liability company;
(b) [The latest date upon which the company is to dissolve;
(c)] The name and complete street address of its resident agent, and the mailing address of the resident agent if different from the street address;
[(d) The right, if given, of the remaining members of the company to continue the business on the death, retirement, resignation, expulsion, bankruptcy or dissolution of a member or occurrence of any other event which terminates the continued membership of a member in the company; and
(e)] (c) The name and post office or street address, either residence or business, of each of the organizers executing the articles [.] ;
(d) If the company is to be managed by one or more managers, the name and post office or street address, either residence or business, of each manager; and
(e) If the company is to be managed by the members, the name and post office or street address, either residence or business, of each member.
2. The articles may set forth any other provision, not inconsistent with law, which the members elect to set out in the articles of organization for the regulation of the internal affairs of the company, including any provisions which under this chapter are required or permitted to be set out in the operating agreement of the company.
3. [If the company is to be managed by a manager or managers, the articles of organization must so state and must set out the names and post office box or street addresses, either residence or business, of the manager or managers who are to serve until the first annual meeting of members or until their successors are elected and qualify. If the management of a limited-liability company is reserved to the members, the names and post office box or street addresses, either residence or business, of the members must be set] It is not necessary to set out in the articles of organization [, and the] :
(a) The rights, if any, of the members to contract debts on behalf of the limited-liability company [.
4. It is not necessary to set out in the articles of organization any] ; or
(b) Any of the powers enumerated in this chapter.
Sec. 41 NRS 86.221 is hereby amended to read as follows:
86.2211. The articles of organization of a limited-liability company [must be amended when:
(a) There is a change in the name of the company;
(b) There is a change in the time as stated in the articles of organization for the dissolution of the company; or
(c) A time is fixed for the dissolution of the company if no time is specified in the articles of organization.
2. The articles] may be amended for any [other] purpose, not inconsistent with law, as determined by all of the members or permitted by the articles or an operating agreement.
[3.] 2. An amendment must be made in the form of a certificate setting forth:
(a) The name of the limited-liability company;
(b) The date of filing of the articles of organization; and
(c) The amendment to the articles of organization.
[4.] 3. The certificate of amendment must be signed and acknowledged by a manager of the company, or if [there is no manager, then] management is not vested in a manager, by a member.
[5.] 4. Restated articles of organization may be executed and filed in the same manner as a certificate of amendment.
Sec. 42 NRS 86.226 is hereby amended to read as follows:
86.226 1. A signed and acknowledged certificate of amendment, or a certified copy of a judicial decree of amendment, must be filed with the secretary of state. A person who executes a certificate as an agent, officer or fiduciary of the limited-liability company need not exhibit evidence of his authority as a prerequisite to filing. Unless the secretary of state finds that a certificate does not conform to law, upon his receipt of all required filing fees [required by law] he shall file the certificate.
2. Upon the filing of a certificate of amendment or judicial decree of amendment in the office of the secretary of state, the articles of organization are amended as set forth therein.
Sec. 43 NRS 86.235 is hereby amended to read as follows:
86.235 [Whenever] If a limited-liability company created pursuant to this chapter desires to change the location within this state of its registered office, or change its resident agent, or both, the change may be effected by filing with the secretary of state a certificate of change that sets forth:
1. The name of the limited-liability company;
2. That the change authorized by this section is effective upon the filing of the certificate of change;
3. The street address of its present registered office;
4. If the present registered office is to be changed, the street address of the new registered office;
5. The name of its present resident agent; and
6. If the present resident agent is to be changed, the name of the new resident agent. The new resident agent's certificate of acceptance must be a part of or attached to the certificate of change.
The certificate of change must be signed by a manager of the limited-liability company or, if no manager has been elected, by a member of the company . [, and must be acknowledged before a person authorized by the laws of the state to take acknowledgments.]
Sec. 44 (Deleted by amendment.)
Sec. 45 NRS 86.281 is hereby amended to read as follows:
86.281 A limited-liability company organized and existing under this chapter may:
1. Sue and be sued, complain and defend, in its name;
2. Purchase, take, receive, lease or otherwise acquire, own, hold, improve, use and otherwise deal in and with real or personal property, or an interest in it, wherever situated;
3. Sell, convey, mortgage, pledge, lease, exchange, transfer and otherwise dispose of all or any part of its property and assets;
4. Lend money to and otherwise assist its members;
5. Purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge or otherwise dispose of, and otherwise use and deal in and with shares , member's interests or other interests in or obligations of domestic or foreign limited-liability companies, domestic or foreign corporations, joint ventures or similar associations, general or limited partnerships or natural persons, or direct or indirect obligations of the United States or of any government, state, territory, governmental district or municipality or of any instrumentality of it;
6. Make contracts and guarantees and incur liabilities, borrow money at such rates of interest as the company may determine, issue its notes, bonds and other obligations and secure any of its obligations by mortgage or pledge of all or any part of its property, franchises and income;
7. Lend , [money for its proper purposes,] invest and reinvest its money and take and hold real property and personal property for the payment of money so loaned or invested;
8. Conduct its business, carry on its operations and have and exercise the powers granted by this chapter in any state, territory, district or possession of the United States, or in any foreign country;
9. [Elect or appoint] Appoint managers and agents, [and] define their duties and fix their compensation;
10. [Make and alter operating agreements, not inconsistent with its articles of organization or with the laws of this state, for the administration and regulation of the affairs of the limited-liability company;
11.] Cease its activities and surrender its articles of organization;
[12. Have and exercise]
11. Exercise all powers necessary or convenient to effect any of the purposes for which the company is organized;
[13. Become a member of a general partnership, limited partnership, joint venture or similar association, or any other limited-liability company; and
14.] and
12. Hold a license issued pursuant to the provisions of chapter 463 of NRS.
Sec. 46 NRS 86.286 is hereby amended to read as follows:
86.286 [An operating agreement may be adopted for a] A limited-liability company [, but] may, but is not required to, adopt an operating agreement. An operating agreement may be adopted only by the unanimous vote or unanimous written consent of the members [.] , and the operating agreement must be in writing. Unless otherwise provided in the operating agreement, amendments to the agreement may [only] be adopted only by the unanimous vote or unanimous written consent of the persons who are members at the time of amendment.
Sec. 47 NRS 86.291 is hereby amended to read as follows:
86.291Except as otherwise provided in this section , the articles of organization or [in] the operating agreement, management of a limited-liability company is vested in its members in proportion to their contribution to its capital, as adjusted from time to time to reflect properly any additional contributions or withdrawals by the members. If provision is made in the articles of organization, management of the company may be vested in a manager or managers , who [must be elected annually by the members] may but need not be members, in the manner prescribed by the operating agreement of the company. [One or more members may be elected to serve as manager or managers.] The manager or managers also hold the offices and have the responsibilities accorded to them by the members and set out in the operating agreement.
Sec. 48 NRS 86.301 is hereby amended to read as follows:
86.301Except as otherwise provided in this chapter [,] or in its articles of organization, no debt may be contracted or liability incurred by or on behalf of a limited-liability company, except by one or more of its managers if management of the limited-liability company has been vested by the members in a manager or managers or, if management of the limited-liability company is retained by the members, then as provided in the articles of organization.
Sec. 49 NRS 86.311 is hereby amended to read as follows:
86.311Real and personal property owned or purchased by a limited-liability company must be held and owned, and conveyance made, in the name of the company. [Instruments] Except as otherwise provided in the articles of organization, instruments and documents providing for the acquisition, mortgage or disposition of property of the company are valid and binding upon the company if executed by one or more managers of a company which has a manager or managers or as provided by the articles of organization of a company in which management has been retained by the members.
Sec. 50 NRS 86.321 is hereby amended to read as follows:
86.321The contributions to capital of a member to a limited-liability company may be in cash, property or services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services.
Sec. 51 NRS 86.331 is hereby amended to read as follows:
86.3311. [A] Except as otherwise provided in chapter 463 of NRS, other applicable law, the articles of organization or the operating agreement, a member may not resign or withdraw as a member from a limited-liability company [at the time or upon the happening of events specified in the articles of organization or an operating agreement. If the articles of organization or operating agreement do not otherwise provide the time or the events upon the happening of which a member may resign, a member may resign upon not less than 6 months' prior written notice to the limited-liability company at the office of its resident agent and to a manager, or if there is no manager, each member at the member's or manager's address as set forth on the records of the company. The articles of organization or an operating agreement may provide that a member may not resign from a company or assign his interest] before the dissolution and winding up of the company . [, subject to the provisions of chapter 463 of NRS or other applicable law.
2. The]
2. If a member has a right to resign or withdraw, the amount that a resigning or withdrawing member is entitled to receive from the company for his interest must be determined pursuant to the provisions of this chapter, chapter 463 of NRS, the articles of organization or the operating agreement. If not otherwise provided therein, [then] a resigning or withdrawing member is entitled to receive, within a reasonable time after resignation [,] or withdrawal, the fair market value of his interest [, as of] on the date of resignation [, based upon his right to share in distributions from the company.] or withdrawal.
Sec. 52 NRS 86.341 is hereby amended to read as follows:
86.341A limited-liability company may, from time to time, divide the profits of its business and distribute them to its members , and any transferee as his interest may appear, upon the basis stipulated in the operating agreement . [, if after distribution is made, the assets of the company are in excess of all liabilities of the company except liabilities to members on account of their contributions.] If the operating agreement does not otherwise provide, profits and losses must be allocated proportionately to the value, as shown in the records of the company, of the contributions made by each member and not returned.
Sec. 53 NRS 86.346 is hereby amended to read as follows:
86.3461. Unless otherwise provided in the operating agreement, a member, regardless of the nature of his contributions, or a transferee, regardless of the nature of his predecessor's contributions, has no right to demand or receive any distribution from a limited-liability company in any form other than cash.
2. Except as otherwise provided in NRS 86.391 and 86.521, and unless otherwise provided in the operating agreement, at the time a member or transferee becomes entitled to receive a distribution he has the status of and is entitled to all remedies available to a creditor of the [limited-liability] company with respect to the distribution.
Sec. 54 NRS 86.351 is hereby amended to read as follows:
86.3511. The interest of each member of a limited-liability company is personal property . [, and except as otherwise provided in this section may be transferred or assigned as provided in the operating agreement. If less than a majority in interest of the other members of the company other than the member proposing to dispose of his interest does not approve of the proposed transfer or assignment, the] The articles of organization or operating agreement may prohibit or regulate the transfer of a member's interest. Unless otherwise provided in the articles or agreement, a transferee of [the] a member's interest has no right to participate in the management of the business and affairs of the company or to become a member [.] unless a majority in interest of the other members approve the transfer. If so approved, the transferee becomes a substituted member. The transferee is only entitled to receive the share of profits or other compensation by way of income, and the return of contributions, to which [that member] his transferor would otherwise be entitled.
2. A substituted member [is a person admitted to all the rights of a member who has died or has assigned his interest in a limited-liability company with the approval of a majority in interest of the members of the company. The substituted member] has all the rights and powers and is subject to all the restrictions and liabilities of his [assignor,] transferor, except that the substitution of the [assignee] transferee does not release the [assignor] transferor from any liability to the company . [under this section.]
Sec. 55 NRS 86.391 is hereby amended to read as follows:
86.3911. A member is liable to a limited-liability company:
(a) For [the] a difference between his contributions to capital as actually made and [that] as stated in the articles of organization or operating agreement as having been made; and
(b) For any unpaid contribution to capital which he agreed in the articles of organization or operating agreement to make in the future at the time and on the conditions stated in the articles of organization or operating agreement.
2. A member holds as trustee for the company:
(a) Specific property stated in the articles of organization or operating agreement as contributed by him, but which was not contributed or which has been wrongfully or erroneously returned; and
(b) Money or other property wrongfully paid or conveyed to him on account of his contribution [.] or the contribution of a predecessor with respect to his member's interest.
3. The liabilities of a member as set out in this section can be waived or compromised only by the consent of all of the members, but a waiver or compromise does not affect the right of a creditor of the company [who] to enforce the liabilities if he extended credit or [whose] his claim arose [after the filing and before a cancellation or] before the effective date of an amendment of the articles of organization or operating agreement [, to enforce the liabilities.] effecting the waiver or compromise.
4. When a contributor has rightfully received the return in whole or in part of his contribution to capital, the contributor is liable to the company for any sum, not in excess of the return with interest, necessary to discharge its liability to all of its creditors who extended credit or whose claims arose before the return.
Sec. 56 NRS 86.411 is hereby amended to read as follows:
86.411A limited-liability company may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the company, by reason of the fact that he is or was a manager, member, employee or agent of the company, or is or was serving at the request of the company as a manager, member, employee or agent of another limited-liability company, corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorney's fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the limited-liability company, and that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.
Sec. 57 NRS 86.421 is hereby amended to read as follows:
86.421A limited-liability company may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the company to procure a judgment in its favor by reason of the fact that he is or was a manager, member, employee or agent of the company, or is or was serving at the request of the company as a manager, member, employee or agent of another limited-liability company, corporation, partnership, joint venture, trust or other enterprise against expenses, including [amount] amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner in which he reasonably believed to be in or not opposed to the best interests of the company. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the company or for amounts paid in settlement to the company, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, he is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
Sec. 58 NRS 86.431 is hereby amended to read as follows:
86.4311. To the extent that a manager, member, employee or agent of a limited-liability company has been successful on the merits or otherwise in defense of any action, suit or proceeding described in NRS 86.411 and 86.421, or in defense of any claim, issue or matter therein, the company shall indemnify him against expenses, including attorney's fees, actually and reasonably incurred by him in connection with the defense.
2. Any indemnification under NRS 86.411 and 86.421, unless ordered by a court or advanced pursuant to NRS 86.441, may be made by the limited-liability company only as authorized in the specific case upon a determination that indemnification of the manager, member, employee or agent is proper in the circumstances. The determination must be made:
(a) By the members or managers as provided in the articles of organization or the operating agreement;
(b) If there is no provision in the articles of organization or the operating agreement, by [the owners of more than 50 percent of the interests owned by] a majority in interest of the members who are not parties to the [act,] action, suit or proceeding;
(c) If [members who own more than 50 percent of the interests owned by] a majority in interest of the members who are not parties to the [act,] action, suit or proceeding so order, by independent legal counsel in a written opinion; or
(d) If members who are not parties to the [act,] action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion.
Sec. 59 NRS 86.441 is hereby amended to read as follows:
86.441The articles of organization , [and] the operating agreement or a separate agreement made by a limited-liability company may provide that the expenses of members and managers incurred in defending a civil or criminal action, suit or proceeding must be paid by the company as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the manager or member to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the company. The provisions of this section do not affect any rights to advancement of expenses to which personnel of the company other than managers or members may be entitled under any contract or otherwise by law.
Sec. 60 NRS 86.451 is hereby amended to read as follows:
86.451[The indemnification and] Indemnification or advancement of expenses authorized in or ordered by a court pursuant to NRS 86.411 to 86.441, inclusive:
1. Does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the articles of organization or any operating agreement, vote of members or disinterested managers, if any, or otherwise, for an action in his official capacity or an action in another capacity while holding his office, except that indemnification, unless ordered by a court pursuant to NRS 86.421 or for the advancement of expenses made pursuant to NRS 86.441, may not be made to or on behalf of any member or manager if a final adjudication establishes that his acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action.
2. Continues for a person who has ceased to be a member, manager, employee or agent and inures to the benefit of his heirs, executors and administrators.
Sec. 61 NRS 86.491 is hereby amended to read as follows:
86.491A limited-liability company organized under this chapter must be dissolved and its affairs wound up:
1. At the time , if any, specified in the articles of organization;
2. Upon the occurrence of an event specified in an operating agreement; or
3. By the unanimous written agreement of all members . [; or
4. Upon the death, insanity, retirement, resignation, expulsion, bankruptcy or dissolution of a member or occurrence of any other event which terminates his continued membership in the company, unless the business of the company is continued by the consent of not less than a majority in interest of all the remaining members under a right to do so stated in the articles of organization of the company or a majority in interest of all remaining members agrees in writing within 90 days after the event to continue the business of the company.]
Sec. 62 NRS 86.505 is hereby amended to read as follows:
86.505The dissolution of a limited-liability company does not impair any remedy or cause of action available to or against it or its managers or members arising before its dissolution and commenced within 2 years after the date of the dissolution. [It] A dissolved company continues as a company for the purpose of prosecuting and defending suits, actions, proceedings and claims of any kind or nature by or against it and of enabling it gradually to settle and close its business, to collect and discharge its obligations, to dispose of and convey its property, and to distribute its assets, but not for the purpose of continuing the business for which it was established.
Sec. 63 NRS 88.315 is hereby amended to read as follows:
88.315As used in this chapter, unless the context otherwise requires:
1. "Certificate of limited partnership" means the certificate referred to in NRS 88.350, and the certificate as amended or restated.
2. "Contribution" means any cash, property, services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services, which a partner contributes to a limited partnership in his capacity as a partner.
3. "Event of withdrawal of a general partner" means an event that causes a person to cease to be a general partner as provided in NRS 88.450.
4. "Foreign limited partnership" means a partnership formed under the laws of any state other than this state and having as partners one or more general partners and one or more limited partners.
5. "General partner" means a person who has been admitted to a limited partnership as a general partner in accordance with the partnership agreement and named in the certificate of limited partnership as a general partner.
6. "Limited partner" means a person who has been admitted to a limited partnership as a limited partner in accordance with the partnership agreement.
7. "Limited partnership" and "domestic limited partnership" mean a partnership formed by two or more persons under the laws of this state and having one or more general partners and one or more limited partners.
8. "Partner" means a limited or general partner.
9. "Partnership agreement" means any valid agreement, written or oral, of the partners as to the affairs of a limited partnership and the conduct of its business.
10. "Partnership interest" means a partner's share of the profits and losses of a limited partnership and the right to receive distributions of partnership assets.
11. ["Person" means a natural person, partnership, limited partnership (domestic or foreign), trust, estate, association or corporation.] "Registered office" means the office maintained at the street address of the resident agent.
12. "Resident agent" means the agent appointed by the limited partnership upon whom process or a notice or demand authorized by law to be served upon the limited partnership may be served.
13. "State" means a state, territory or possession of the United States, the District of Columbia or the Commonwealth of Puerto Rico.
Sec. 64 NRS 88.331 is hereby amended to read as follows:
88.331[Whenever] If a limited partnership created pursuant to this chapter desires to change the location within this state of its registered office, or change its resident agent, or both, the change may be effected by filing with the secretary of state a certificate that sets forth:
1. The name of the limited partnership;
2. That the change authorized by this section is effective upon the filing of the certificate of change;
3. The street address of its present registered office;
4. If the present registered office is to be changed, the street address of the new registered office;
5. The name of its present resident agent; and
6. If the present resident agent is to be changed, the name of the new resident agent. The new resident agent's certificate of acceptance must be a part of or attached to the certificate of change.
The certificate of change must be signed by a general partner of the limited partnership . [and acknowledged before a person authorized by the laws of the state to take acknowledgments.]
Sec. 65 NRS 88.335 is hereby amended to read as follows:
88.3351. [Each] A limited partnership shall keep at the office referred to in paragraph (a) of subsection 1 of NRS 88.330 the following:
(a) A current list of the full name and last known business address of each partner separately identifying the general partners in alphabetical order and the limited partners in alphabetical order;
(b) A copy of the certificate of limited partnership and all certificates of amendment thereto, together with executed copies of any powers of attorney pursuant to which any certificate has been executed;
(c) Copies of the limited partnership's federal, state, and local income tax returns and reports, if any, for the 3 most recent years;
(d) Copies of any then effective written partnership agreements and of any financial statements of the limited partnership for the 3 most recent years; and
(e) Unless contained in a written partnership agreement, a writing setting out:
(1) The amount of cash and a description and statement of the agreed value of the other property or services contributed by each partner and which each partner has agreed to contribute;
(2) The times at which or events on the happening of which any additional contributions agreed to be made by each partner are to be made;
(3) Any right of a partner to receive, or of a general partner to make, distributions to a partner which include a return of all or any part of the partner's contribution; and
(4) Any events upon the happening of which the limited partnership is to be dissolved and its affairs wound up.
2. Records kept pursuant to this section are subject to inspection and copying at the reasonable request, and at the expense, of any partner during ordinary business hours.
Sec. 66 Chapter 92A of NRS is hereby amended by adding thereto a new section to read as follows:
"Approval" and "vote" as describing action by directors or stockholders mean the vote by directors in person or by written consent, or action of stockholders in person, by proxy or by written consent.
Sec. 67 NRS 92A.005 is hereby amended to read as follows:
92A.005As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 92A.010 to 92A.080, inclusive, and section 66 of this act, have the meanings ascribed to them in those sections.
Sec. 68 NRS 92A.025 is hereby amended to read as follows:
92A.025"Domestic corporation" means a corporation organized and existing under chapter 78 , [or] 78A or 89 of NRS, or a nonprofit cooperative corporation organized pursuant to NRS 81.010 to 81.160, inclusive.
Sec. 69 NRS 92A.100 is hereby amended to read as follows:
92A.1001. Except as limited by NRS 78.411 to 78.444, inclusive, one or more domestic entities may merge into another entity if the plan of merger is approved pursuant to the provisions of this chapter.
2. The plan of merger must set forth:
(a) The name, address and [place] jurisdiction of organization and governing law of each constituent entity;
(b) The name, [place] jurisdiction of organization [and governing law] and kind of entity or entities that will survive the merger;
(c) The terms and conditions of the merger; and
(d) The manner and basis of converting the owner's interests of each constituent entity into owner's interests, rights to purchase owner's interests, or other securities of the surviving or other entity or into cash or other property in whole or in part.
3. The plan of merger may set forth:
(a) Amendments to the constituent documents of the surviving entity; and
(b) Other provisions relating to the merger.
4. The plan of merger must be in writing.
Sec. 70 NRS 92A.110 is hereby amended to read as follows:
92A.1101. Except as a corporation is limited by NRS 78.411 to 78.444, inclusive, one or more domestic entities may acquire all of the outstanding owner's interests of one or more classes or series of another entity not already owned by the acquiring entity or an affiliate thereof if the plan of exchange is approved pursuant to the provisions of this chapter.
2. The plan of exchange must set forth:
(a) The name, address and [place] jurisdiction of organization and governing law of each constituent entity;
(b) The name, [place] jurisdiction of organization and kind of each entity whose [entity] owner's interests will be acquired by one or more other entities;
(c) The terms and conditions of the exchange; and
(d) The manner and basis of exchanging the owner's interests to be acquired for owner's interests, rights to purchase owner's interests, or other securities of the acquiring or any other entity or for cash or other property in whole or in part.
3. The plan of exchange may set forth other provisions relating to the exchange.
4. This section does not limit the power of a domestic entity to acquire all or part of the owner's interests or one or more class or series of owner's interests of another person through a voluntary exchange or otherwise.
5. The plan of exchange must be in writing.
Sec. 71 NRS 92A.140 is hereby amended to read as follows:
92A.1401. Unless otherwise provided in the partnership agreement or the certificate of limited partnership, a plan of merger or exchange involving a domestic limited partnership must be approved by all general partners and by limited partners who own a majority in interest of the partnership then owned by all the limited partners. If the partnership has more than one class of limited partners, the plan of merger must be approved by those limited partners who own a majority in interest of the partnership then owned by the limited partners in each class.
2. For the purposes of this section, "majority in interest of the partnership" means a majority of the interests in capital and profits of the limited partners of a domestic limited partnership which:
(a) In the case of capital, is determined as of the date of the approval of the plan of merger or exchange.
(b) In the case of profits, is based on any reasonable estimate of profits for the period beginning on the date of the approval of the plan of merger or exchange and ending on the anticipated date of the termination of the domestic limited partnership, including any present or future division of profits distributed pursuant to the partnership agreement.
Sec. 72 NRS 92A.150 is hereby amended to read as follows:
92A.150Unless otherwise provided in the articles of organization or an operating agreement, a plan of merger or exchange involving a domestic limited-liability company must be approved by members who own a majority [in interest] of the interests in the current profits of the company then owned by all of the members. If the company has more than one class of members, the plan of merger must be approved by those members who own a majority [in interest] of the interests in the current profits of the company then owned by the members in each class.
Sec. 73 NRS 92A.180 is hereby amended to read as follows:
92A.1801. A parent domestic corporation, whether or not for profit, parent domestic limited-liability company or parent domestic limited partnership owning at least 90 percent of the outstanding shares of each class of a subsidiary corporation, 90 percent of the percentage or other interest in the capital and profits of a subsidiary limited partnership then owned by both the general and each class of limited partners or 90 percent of the percentage or other interest in the capital and profits of a domestic subsidiary limited-liability company then owned by each class of members may merge the subsidiary into itself without approval of the owners of the owner's interests of the parent domestic corporation, domestic limited-liability company or domestic limited partnership [.] or the owners of the owner's interests of a subsidiary domestic corporation, subsidiary domestic limited-liability company or subsidiary domestic limited partnership.
2. The board of directors of the parent domestic corporation, the managers of a parent domestic limited-liability company with managers unless otherwise provided in the operating agreement, all the members of a parent domestic limited-liability company without managers unless otherwise provided in the operating agreement, or all the general partners of the parent domestic limited partnership shall adopt a plan of merger that sets forth:
(a) The names of the parent and subsidiary; and
(b) The manner and basis of converting the owner's interests of the subsidiary into the owner's interests, obligations or other securities of the parent or any other entity or into cash or other property in whole or in part.
3. The parent shall mail a copy or summary of the plan of merger to each owner of the subsidiary who does not waive the mailing requirement in writing.
4. The parent may not deliver articles of merger to the secretary of state for filing until at least 30 days after the date the parent mailed a copy of the plan of merger to each owner of the subsidiary who did not waive the requirement of mailing.
5. Articles of merger under this section may not contain amendments to the constituent documents of the parent entity.
Sec. 74 NRS 92A.190 is hereby amended to read as follows:
92A.1901. One or more foreign entities may merge or enter into an exchange of owner's interests with one or more domestic entities if:
(a) In a merger, the merger is permitted by the law of the jurisdiction under whose law each foreign entity is organized and governed and each foreign entity complies with that law in effecting the merger;
(b) In an exchange, the entity whose owner's interests will be acquired is a domestic entity, whether or not an exchange of owner's interests is permitted by the law of the jurisdiction under whose law the acquiring entity is organized;
(c) The foreign entity complies with NRS 92A.200 to 92A.240, inclusive, if it is the surviving entity in the merger or acquiring entity in the exchange and sets forth in the articles of merger or exchange its address where copies of process may be sent by the secretary of state [;] , but the execution, and acknowledgment if applicable, of the articles of merger or exchange by the foreign entity are subject to the laws governing it rather than to NRS 92A.200 to 92A.240, inclusive; and
(d) Each domestic entity complies with the applicable provisions of NRS 92A.100 to 92A.180, inclusive, and, if it is the surviving entity in the merger or acquiring entity in the exchange, with NRS 92A.200 to 92A.240, inclusive.
2. When the merger or exchange takes effect, the surviving foreign entity in a merger and the acquiring foreign entity in an exchange shall be deemed:
(a) To appoint the secretary of state as its agent for service of process in a proceeding to enforce any obligation or the rights of dissenting owners of each domestic entity that was a party to the merger or exchange. Service of such process must be made by personally delivering to and leaving with the secretary of state duplicate copies of the process and the payment of a fee of $25 for accepting and transmitting the process. The secretary of state shall forthwith send by registered or certified mail one of the copies to the surviving or acquiring entity at its specified address, unless the surviving or acquiring entity has designated in writing to the secretary of state a different address for that purpose, in which case it must be mailed to the last address so designated.
(b) To agree that it will promptly pay to the dissenting owners of each domestic entity that is a party to the merger or exchange the amount, if any, to which they are entitled under or created pursuant to NRS 92A.300 to 92A.500, inclusive.
3. This section does not limit the power of a foreign entity to acquire all or part of the owner's interests of one or more classes or series of a domestic entity through a voluntary exchange or otherwise.
Sec. 75 NRS 92A.200 is hereby amended to read as follows:
92A.200After a plan of merger or exchange is approved as required by this chapter, the surviving or acquiring entity shall deliver to the secretary of state for filing articles of merger or exchange setting forth:
1. The name and [place] jurisdiction of organization [and governing law] of each constituent entity;
2. That a plan of merger or exchange has been adopted by each constituent entity;
3. If approval of the owners of the parent was not required, a statement to that effect;
4. If approval of owners of one or more constituent entities was required, a statement that:
(a) The plan was approved by the unanimous consent of the owners; or
(b) A plan was submitted to the owners pursuant to this chapter including:
(1) The designation, percentage of total vote or number of votes entitled to be cast by each class of owner's interests entitled to vote separately on the plan; and
(2) Either the total number of votes or percentage of owner's interests cast for and against the plan by the owners of each class of interests entitled to vote separately on the plan or the total number of undisputed votes or undisputed total percentage of owner's interests cast for the plan separately by the owners of each class,
and the number of votes or percentage of owner's interests cast for the plan by the owners of each class of interests was sufficient for approval by the owners of that class;
5. In the case of a merger, the amendment to the articles of incorporation, articles of organization or certificate of limited partnership of the surviving entity; and
6. If the entire plan of merger or exchange is not set forth, a statement that the complete executed plan of merger or plan of exchange is on file at the registered office if a corporation or limited-liability company, office described in paragraph (a) of subsection 1 of NRS 88.330 if a limited partnership, principal place of business if a general partnership, or other place of business of the surviving entity or the acquiring entity, respectively.
Sec. 76 NRS 92A.230 is hereby amended to read as follows:
92A.2301. Articles of merger or exchange must be signed and acknowledged by each domestic constituent entity as follows:
[1.] (a) By the president [and secretary] or a vice-president of a domestic corporation, whether or not for profit;
[2.] (b) By all the general partners of a domestic limited partnership; and
[3.] (c) By a manager of a domestic limited-liability company with managers or by all the members of a domestic limited-liability company without managers.
2. If the entity is a corporation, the articles must also be signed by the secretary or an assistant secretary, but the signature need not be acknowledged.
Sec. 77 (Deleted by amendment.)
Sec. 78 NRS 92A.410 is hereby amended to read as follows:
92A.4101. If a proposed corporate action creating dissenters' rights is submitted to a vote at a stockholders' meeting, the notice of the meeting must state that stockholders are or may be entitled to assert dissenters' rights under NRS 92A.300 to 92A.500, inclusive, and be accompanied by a copy of those sections.
2. If the corporate action creating dissenters' rights is taken by written consent of the stockholders or without a vote of the stockholders, the domestic corporation shall notify in writing all stockholders entitled to assert dissenters' rights that the action was taken and send them the dissenter's notice described in NRS 92A.430.
Sec. 79 NRS 92A.440 is hereby amended to read as follows:
92A.4401. A stockholder to whom a dissenter's notice is sent must:
(a) Demand payment;
(b) Certify whether he acquired beneficial ownership of the shares before the date required to be set forth in the dissenter's notice for this certification; and
(c) Deposit his certificates, if any, in accordance with the terms of the notice.
2. The stockholder who demands payment and deposits his certificates, if any, before the proposed corporate action is taken retains all other rights of a stockholder until those rights are canceled or modified by the taking of the proposed corporate action.
3. The stockholder who does not demand payment or deposit his certificates where required, each by the date set forth in the dissenter's notice, is not entitled to payment for his shares under this chapter.
Sec. 80 NRS 41.520 is hereby amended to read as follows:
41.5201. As used in this section "corporation" includes an unincorporated association, and "board of directors" includes the managing body of an unincorporated association.
2. In an action brought to enforce a secondary right on the part of one or more shareholders in a corporation or association, incorporated or unincorporated, because the corporation or association refuses to enforce rights which may properly be asserted by it, the complaint [shall] must be verified by oath and [shall] must aver that the plaintiff was a shareholder at the time of the transaction of which he complains or that his share thereafter devolved on him by operation of law. The complaint [shall] must also set forth with particularity the efforts of the plaintiff to secure from the board of directors or trustees and, if necessary, from the shareholders such action as he desires, and the reasons for his failure to obtain such action or the reasons for not making such effort.
3. In any such action, at any time within 30 days after service of summons upon the corporation or any defendant who is an officer or director of the corporation, or held such office at the time of the acts complained of, the corporation or such defendant may move the court for an order, upon notice and hearing, requiring the plaintiff to furnish security as hereinafter provided. Such motion [shall] must be based upon one or more of the following grounds:
(a) That there is no reasonable possibility that the prosecution of the cause of action alleged in the complaint against the moving party will benefit the corporation or its security holders.
(b) That the moving party, if other than the corporation, did not participate in the transaction complained of in any capacity.
The court on application of the corporation or any defendant may, for good cause shown, extend [such] the 30-day period for an additional period or periods not exceeding 60 days.
4. At the hearing upon such motion, the court shall consider such evidence, written or oral, by witnesses or affidavit, as may be material:
(a) To the ground or grounds upon which the motion is based; or
(b) To a determination of the probable reasonable expenses, including attorney's fees, of the corporation and the moving party which will be incurred in the defense of the action. If the court determines, after hearing the evidence adduced by the parties at the hearing, that the moving party has established a probability in support of any of the grounds upon which the motion is based, the court shall fix the nature and amount of security to be furnished by the plaintiff for reasonable expenses, including attorney's fees, which may be incurred by the moving party and the corporation in connection with such action, including expenses which the corporation may incur by reason of any obligation which it may have to indemnify its officers or directors pursuant to [NRS 78.751] section 5 of this act or otherwise. A determination by the court that security either [shall or shall] must or must not be furnished or [shall] must be furnished as to one or more defendants and not as to others shall not be deemed a determination of any one or more issues in the action or of the merits thereof. The corporation and the moving party [shall] have recourse to [such] the security in such amount as the court [shall determine] determines upon the termination of [such] the action. The amount of [such] the security may thereafter from time to time be increased or decreased in the discretion of the court upon showing that the security provided has or may become inadequate or is excessive. If the court, upon any such motion, makes a determination that security [shall] must be furnished by the plaintiff as to any one or more defendants, the action [shall] must be dismissed as to such defendant or defendants, unless the security required by the court [shall have been] is furnished within such reasonable time as may be fixed by the court.
5. If any such motion is filed, no pleadings need be filed by the corporation or any other defendants, and the prosecution of [such action shall] the action must be stayed, until 10 days after [such] the motion has been disposed of.
Sec. 81 NRS 463.4866 is hereby amended to read as follows:
463.4866"Manager" means a person [elected by the members of a limited-liability company] designated or selected to manage [the company pursuant to NRS 86.291.] a limited-liability company.
Sec. 82 NRS 86.041, 86.106 and 92A.065 are hereby repealed.
Sec. 83 1. This section and sections 23, 24, 25, 26 and 30 of this act become effective upon passage and approval.
2. Sections 1 to 22, inclusive, 27, 28, 29 and 31 to 82, inclusive, of this act become effective on October 1, 1997.
TEXT OF REPEALED SECTIONS
86.041"Contribution" defined. "Contribution" means anything of value which a person contributes to the limited-liability company as a prerequisite for or in connection with membership, including cash, property or services rendered or a promissory note or other binding obligation to contribute cash or property or to perform services.
86.106"Participating member" defined. "Participating member" means a member who has the right to participate in the management of the business and affairs of the company.
92A.065"Majority in interest" defined. "Majority in interest" means a majority of the interests in capital and profits of the members of a domestic limited-liability company or of the limited partners of a domestic limited partnership which:
1. In the case of capital, is determined as of the date of the approval of the plan of merger or exchange.
2. In the case of profits, is based on any reasonable estimate of profits for the period beginning on the date of the approval of the plan of merger or exchange and ending on the anticipated date of the termination of the domestic limited partnership or domestic limited-liability company, including any present or future division of profits distributed pursuant to the operating agreement of the domestic limited-liability company or the partnership agreement of the domestic limited partnership.