DealLawyers.com Blog

As John has shared on TheCorporateCounsel.net, Prof. Ben Edwards has been tracking the status of all 2025 public company Nevada reincorporation proposals. In addition to his tabular scorecard, he’s also been highlighting stated rationales. For the four latest nano-cap companies, cost has been disclosed as a material factor.

His latest blog also addresses some common issues he’s seen from reviewing disclosures by the now 25 companies that have sought to reincorporate to Nevada. The issues largely stem from the fact that various versions of the Nevada Revised Statutes are incomplete or not up to date. Here are his tips for counsel drafting filings related to Nevada reincorporations:

– Nevada’s statute online is out of date. You can access the Nevada Revised Statutes online, but you shouldn’t trust them until they’re updated. The 2025 revisions to the Nevada statute went into effect on May 30, 2025 upon Governor Lombardo’s signature. Westlaw has updated its version of the Nevada Revised Statutes. As of today, LexisNexis has not yet updated and is just as out of date as the Nevada website.

– The Nevada statute exempts public companies from stockholder inspection actions so long as they keep making their securities filings. The 15% threshold is for private companies.

– The Nevada statute does define controlling stockholders. It’s NRS 78.240. It provides that a controlling stockholder is “a stockholder of a corporation having the voting power, by virtue of such stockholder’s relative beneficial ownership of shares or otherwise pursuant to the articles of incorporation, to elect at least a majority of the corporation’s directors.” The statutory duty “is to refrain from exerting undue influence over any director or officer of the corporation with the purpose and proximate effect of inducing a breach of fiduciary duty by such director or officer.” You will not currently find this on the Nevada website or LexisNexis. You should pull it up on Westlaw or use the legislative materials.

These disclosure issues have caused him to “develop concerns that not every firm reincorporating to Nevada has consulted with a Nevada lawyer about Nevada law.”

– Meredith Ervine