AB239 - Revises provisions relating to business entities. (BDR 7-669)

- 83rd Session (2025) Assembly Bill No. 239–Assemblymember Dalia CHAPTER.......... AN ACT relating to business entities; revising provisions relating to notice or other communications by business entities; making a conforming change relating to fiduciary duties owed by directors and officers of a corporation; revising provisions governing voting relating to the approval of a reverse stock split of a corporation; removing certain provisions governing the issuance of shares of a corporation; making changes to certain approvals by a board of directors; clarifying provisions relating to voting agreements by stockholders; revising provisions governing the amendment of articles of incorporation after issuance of stock; revising certain terms relating to business entities; revising provisions relating to the last known address of members and managers of a limited-liability company and the dissolution of a limited- liability company; establishing a process by which a corporation may reorganize through the formation of a holding corporation; revising provisions relating to the approval of a plan of merger, conversion or exchange of a domestic corporation and the conversion of a domestic entity into a foreign entity; revising provisions governing the right of a stockholder to dissent from certain corporate actions; making various other changes relating to business entities; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law sets forth various provisions governing business entities, including private corporations and limited-liability companies. (Chapters 78 and 86 of NRS) This bill makes various changes to business entities. Section 1 of this bill clarifies that the inclusion of certain materials provided with a notice or other communication by a business entity are deemed to be part of the notice or communication. Section 1.5 of this bill authorizes the articles of incorporation of a corporation to require certain internal actions to be tried before a judge and not a jury. Section 2 of this bill makes a conforming change relating to the fiduciary duties of directors and officers of a private corporation for consistency within existing law. Sections 3 and 4 of this bill require that votes relating to the approval of a reverse stock split be approved by the vote of the relevant stockholders of such a class or series of stock. Sections 5 and 9 of this bill remove the phrase “share dividend” from provisions governing the issuance of shares of a private corporation. Section 5.5 of this bill sets forth provisions relating to the fiduciary duties of certain stockholders of a corporation, limits the individual liability of a stockholder of a corporation under certain circumstances and defines certain terms for such purposes. – 2 – - 83rd Session (2025) Section 6 of this bill authorizes a board of directors of a private corporation to take certain actions in final form or such preliminary form as the directors deem appropriate in their business judgment. Section 7 of this bill: (1) provides that voting agreements entered into by stockholders may include a private corporation; and (2) makes conforming changes authorizing the reference in such an agreement to facts or events outside of the agreement as provided in existing law. Section 8 of this bill: (1) provides that a proposed amendment to the articles of incorporation of a private corporation after the issuance of stock that designates one or more new series of an existing class does not adversely alter or change the preferences or rights of the existing series; and (2) authorizes a publicly traded corporation to amend its articles of incorporation to increase or decrease the shares it is authorized to issue through a stockholder vote. Section 11 of this bill clarifies the notice required if the approval of a dissolution of a corporation was obtained by written consent and replaces the phrase “certificate of dissolution” with “articles of dissolution” for purposes of provisions relating to the dissolution of a corporation. Sections 10-12, 15 and 18- 21 of this bill make conforming changes to reference “articles of dissolution” for purposes of provisions relating to the dissolution of a corporation or a limited- liability company, as applicable. Section 13 of this bill makes a conforming change to replace “certificate of dissolution” with “record of dissolution.” Section 16 of this bill provides an effective date and time for filing the articles of dissolution of a limited-liability company. Sections 14 and 17 of this bill provide for either the residence or business address of members and managers of a limited-liability company to be listed for certain records. Section 22 of this bill establishes a new process by which a corporation may: (1) reorganize through the formation of a holding corporation; and (2) issue stockholders shares in the new holding corporation in exchange for their previous shares. Section 23 of this bill: (1) revises the steps required for a board of directors to approve a plan of merger, conversion or exchange; and (2) removes provisions of existing law which allowed for the board to cancel a proposed meeting to consider or remove a plan of merger, conversion or exchange. Section 24 of this bill makes a conforming change relating to voting for purposes of the new process of reorganization into a holding corporation. Section 25 of this bill makes a technical change relating to one domestic entity converting into one foreign entity. Section 26 of this bill provides that the right to dissent is the exclusive remedy for stockholders who have the ability to dissent from a particular corporate action. EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 75.150 is hereby amended to read as follows: 75.150 1. Except as otherwise provided by specific statute: (a) Any notice or other communication described in this title may be given or sent by any method of delivery [;] and each agreement, instrument, certificate or other document enclosed – 3 – - 83rd Session (2025) with, or annexed or appended to, such notice or other communication shall be deemed part of the notice or communication solely for purposes of determining whether notice was duly given under this title and the organic rules of the entity giving or sending the notice or other communication; and (b) An electronic transmission must be in accordance with this section. 2. A notice or other communication given or sent pursuant to the organic law or organic rules of an entity may be delivered by electronic transmission if: (a) Consented to by the recipient or authorized by subsection 9; and (b) The electronic transmission contains or is accompanied by information from which the recipient can determine the date of the transmission. 3. Any consent under subsection 2 may be revoked by the person who consented by written or electronic notice to the person to whom the consent was delivered. Any such consent is deemed revoked if: (a) The person is unable to receive two consecutive electronic transmissions given by the entity or organization in accordance with such consent; and (b) Such inability becomes known to the secretary of the entity sending the electronic transmissions or to the transfer agent or other person responsible for the giving of notice or other communications.  The inadvertent failure to treat any such inability as a revocation does not invalidate any meeting or other action. 4. Unless otherwise agreed between sender and recipient, an electronic transmission is received when: (a) It enters an information processing system that the recipient has designated or uses for the purpose of receiving electronic transmissions or information of the type sent; and (b) It is in a form ordinarily capable of being processed by that system. 5. Receipt of an electronic acknowledgment from an information processing system described in paragraph (a) of subsection 4 establishes that an electronic transmission was received but, by itself, does not establish that the content sent corresponds to the content received. 6. An electronic transmission is received under this section even if no natural person is aware of its receipt. – 4 – - 83rd Session (2025) 7. Except as otherwise provided by specific statute, any notice or other communication, if in a comprehensible form or manner, is effective at the earliest of the following: (a) If in a physical form, when it is left at: (1) The address of a stockholder, member, partner or other owner of an entity, whichever is applicable, as it appears upon the records of the entity; (2) The residence or usual place of business of a director, manager or general partner, whichever is applicable; (3) The entity’s principal place of business; or (4) If to a recipient other than a stockholder, director, member, partner or other owner of an entity or an entity, such person’s residence or usual place of business; (b) If mailed by United States mail postage prepaid and correctly addressed to a stockholder, member, partner or other owner of an entity, upon deposit in the United States mail; (c) If mailed by United States mail postage prepaid and correctly addressed to a recipient other than a stockholder, member, partner or other owner of an entity, the earliest of: (1) If sent by registered or certified mail, return receipt requested, the date shown on the return receipt signed by or on behalf of the addressee; or (2) Five days after it is deposited in the United States mail; (d) If an electronic transmission, when it is received as provided in subsection 4; and (e) If oral, when communicated.  In the absence of fraud, an affidavit of the secretary of the entity or the transfer agent or any other agent of the entity that the notice has been given by a form of electronic transmission is prima facie evidence of the facts stated in the affidavit. 8. A notice or other communication may be in the form of an electronic transmission that cannot be directly reproduced in paper form by the recipient through an automated process used in conventional commercial practice only if: (a) The electronic transmission is otherwise retrievable in perceivable form; and (b) The sender and the recipient have consented in writing to the use of such form of electronic transmission. 9. If any provision of this title prescribes requirements for notices or other communication in particular circumstances, those requirements govern. If the organic rules of an entity prescribe requirements for notices or other communications, not inconsistent with this section or other provisions of this title, those requirements – 5 – - 83rd Session (2025) govern. The organic rules of an entity may authorize, require or prohibit delivery of notices of meetings of directors, managers, members, partners or other owners of the entity by electronic transmission. 10. In the event that any provisions of this section are deemed to modify, limit or supersede the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. §§ 7001 et seq., the provisions of this section shall be deemed to control to the maximum extent permitted by section 102(a)(2) of that Act, 15 U.S.C. § 7002(a)(2). 11. As used in this section: (a) “Entity” has the meaning ascribed to it in NRS 77.060. (b) “Organic law” has the meaning ascribed to it in NRS 77.170. (c) “Organic rules” has the meaning ascribed to it in NRS 77.180. Sec. 1.5. NRS 78.046 is hereby amended to read as follows: 78.046 1. The articles of incorporation or bylaws of a corporation may require, to the extent not inconsistent with any applicable jurisdictional requirements and the laws of the United States, that any, all or certain: (a) Concurrent jurisdiction actions must be brought solely or exclusively in the court or courts specified in the requirement; and (b) Internal actions must be brought solely or exclusively in the court or courts specified in the requirement, which must include at least one court in this State. 2. Unless otherwise expressly set forth in the articles of incorporation or bylaws, any requirement described in subsection 1 must not be interpreted as prohibiting any corporation from consenting, or requiring any corporation to consent, to any alternative forum in any instance. 3. The provisions of this section do not create or authorize any cause of action against a corporation , [or] its directors or officers [.] or any controlling stockholder. 4. The articles of incorporation of a corporation may require, to the extent not inconsistent with any applicable laws of the United States, that any, all or certain internal actions to be tried in any court of this State must be tried before the presiding judge as the trier of fact and not before a jury. Upon and during its effectiveness, any such requirement must conclusively operate as a waiver of the right to trial by jury by each party to any internal action to which such requirement applies. Nothing in this section or any such requirement shall be construed as to limit or – 6 – - 83rd Session (2025) otherwise affect any right to a jury trial in any action, suit or proceeding that is not an internal action. 5. As used in this section: (a) “Concurrent jurisdiction action” means any action, suit or proceeding against the corporation or any of its directors or officers, that: (1) Asserts a cause of action under the laws of the United States; (2) Could be properly commenced in either a federal forum or a forum of this State or any other state; and (3) Is brought by or in the name or on behalf of: (I) The corporation; (II) Any stockholder of the corporation; or (III) Any subscriber for, or purchaser or offeree of, any shares or other securities of the corporation. (b) “Controlling stockholder” has the meaning ascribed to it in NRS 78.240. (c) “Court” means any court of: (1) This State, including, without limitation, those courts in any county having a business court, as that term is defined in NRS 13.050; (2) A state other than this State; or (3) The United States. [(c)] (d) “Internal action” means any action, suit or proceeding: (1) Brought in the name or right of the corporation or on its behalf, including, without limitation, any action subject to NRS 41.520; (2) For or based upon any breach of any fid [Text truncated for display. Full text available on LegiScan.]