USA – NEVADA Trends and Developments Contributed by: Krisanne Cunningham, David Lewandowski, Christopher Walther and Jeffrey Zucker, Fennemore
Nevada as a Leading-Edge Corporate and M&A Jurisdiction Introduction Nevada’s corporate law framework emphasises statu - tory clarity, protections for directors and officers of responsible businesses, and a policy orientation favouring the continual, thoughtful modernisation of Nevada’s business statutes in light of new develop - ments and business trends. Nevada’s body of corporate law relies heavily on its clear statutes rather than judge-made law. Key prin - ciples governing fiduciary duties, board of directors (Board) and manager authority, and M&A approvals are set forth directly in the statutes, namely Chapters 78, 86 and 92A of the Nevada Revised Statutes (NRS). Nevada’s well-defined statutory approach arguably offers a greater degree of predictability compared to judge-made law. Nevada has made a deliberate policy choice to pri - oritise predictability and certainty, while ensuring that Nevada is a leader in business-friendly, modern cor - porate law statutes. As the Nevada State Bar Business Law Section Executive Committee summary noted in connection with Nevada’s 2025 business law legisla - tive amendments, amendments are made with a view to maintaining and solidifying Nevada’s position as “a leader in stable, predictable, and common-sense corporate law”. Along these lines, Nevada’s statutory construct discourages nuisance suits and focuses on substantive, intentional Board misconduct, rather than second-guessing good faith Board decisions. Board authority and the codified business judgement rule NRS Chapter 78 expressly provides that the business and affairs of a corporation are managed under the direction of the Board, and this broad authority is rein - forced by a strong, codified version of the business judgement rule. Namely, under NRS Section 78.138 (3), directors and officers are statutorily presumed to act in good faith, on an informed basis, and with a view to the interests of the corporation. This presumption is commonly referred to as the business judgement rule. As a note, a prudent Board will want to document its decision-
making process with respect to a transaction (includ - ing documenting the information on which the Board is relying in approving the transaction) notwithstand - ing the protection of NRS Section 78.138 (3). This presumption applies to all corporate actions except for actions resisting a change in corporate control which impedes the right of stockholders to vote for or remove directors. With that one exception, unlike Delaware, there are no enhanced scrutiny, entire fair - ness or similar special rules that might apply based on the nature of the particular transaction. Also, significantly, NRS Section 78.138 is a constitu - ency statute, and NRS Sections 78.138 (4) and (5) authorise the Board to consider multiple constituen - cies in connection with a proposed transaction and confirm that the Board is not required to consider any particular constituency as a dominant factor. Accord - ingly, NRS Section 78.138 provides the Board with significant flexibility to consider and weigh a variety of factors in connection with a potential transaction rather than solely focusing on maximising value to the stockholders. Furthermore, and importantly, under NRS Section 78.138 (7), directors and officers do not have personal liability unless the above business judgement rule pre - sumption is rebutted, and it is also established that (i) they breached their fiduciary duties and (ii) the breach involved intentional misconduct, fraud or a knowing violation of law. This statutory formulation sets a nota - bly high threshold for personal liability and serves as a meaningful constraint on specious fiduciary duty claims. The statutory business judgement rule aims to insulate directors “from liability for innocent mistakes while preserving liability for knowing misconduct” (Benjamin P. Edwards & Lori D. Johnson, 1 Nevada Business and Commercial Law § 6.22 (2026)). Nevada case law has reinforced the primacy of this statutory standard. In Chur v Eighth Judicial District Court , 458 P.3d 336 (Nev. 2020), the Nevada Supreme Court made clear that NRS Section 78.138 provides the sole mechanism for imposing individual liability on directors and officers for damages, and specifically rejected gross negligence as an independent basis for director and officer liability. The Supreme Court also clarified the meaning of “intentional misconduct”,
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