USA – NEVADA Trends and Developments Contributed by: Krisanne Cunningham, David Lewandowski, Christopher Walther and Jeffrey Zucker, Fennemore
Practical implications for M&A practitioners For practitioners advising on M&A transactions, Nevada offers a distinct set of advantages. The statu - tory clarity of its corporate law reduces interpretive uncertainty, while its pro-responsible business and Board-friendly orientation limits litigation risk and facilitates efficient deal execution. These legal features are complemented by Nevada’s broader business environment, which includes the absence of a corporate income tax, relatively low annual fees and strong privacy protections. Togeth - er, these factors contribute to Nevada’s continuing, growing appeal as a corporate domicile. Nevada offers a corporate law framework that is both distinct from other states and increasingly relevant in the M&A context. Its emphasis on statutory clarity, strong protections for responsible businesses, contin - ual modernisation efforts and limited judicial interven - tion all provide a level of predictability that contrasts with more case law-driven jurisdictions. As recent legislative developments demonstrate, Nevada remains committed to refining its corporate statutes to maintain competitiveness and address evolving market needs. For practitioners – particularly those seeking a more predictable and management- protective framework – Nevada represents a jurisdic - tion that warrants close consideration.
Notable aspects of AB 239 include the following. • Clarification that stockholders (at least in their capacity as a stockholder) generally have no fiduci - ary duties to either the corporation or the other stockholders, and are entitled to vote (or not vote) their shares based on their own personal interests, with only a limited exception to this general rule for controlling stockholders. • Codification of a clear controlling stockholder definition, defining controlling stockholders only as those stockholders that have the voting power to elect at least a majority of the corporation’s direc - tors (ie, leaving out arbitrary ownership thresholds or subjective standards). • Express provision that the only fiduciary duty of a controlling stockholder of a corporation in their capacity as a stockholder is to refrain from exert - ing undue influence over a director or officer of the corporation with the purpose and proximate effect of inducing a breach of fiduciary duty by such director or officer for which the director or officer is liable pursuant to NRS Section 78.138 and the breach relates to a contract or transaction to which the controlling stockholder is a party or results in a material financial benefit to the controlling stock - holder that results in a material detriment to the other stockholders generally. • Adding a new provision that a corporation’s articles of incorporation may waive a jury trial for internal actions. These developments are consistent with Nevada’s broader policy objective of preserving a stable and predictable corporate law environment while remain - ing responsive to market developments.
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