Nevada panel hears bill to update corporate law, including jury-trial waivers and holding-company conversions

Assemblyman Joe Dalia, the bill sponsor, introduced Assembly Bill 239 on behalf of the Business Law Section of the State Bar of Nevada and told the Assembly Judiciary Committee the measure is intended to "strengthen Nevada's business law statutes" and keep the state competitive with jurisdictions such as Delaware and Texas.

The bill package, drafted by corporate practitioners, would make several targeted changes to Nevada's corporate statutes. Presenters described edits that are largely technical cleanups and a few substantive changes: clarifying fiduciary-duty language to include acting on an "informed basis," allowing boards to approve transactions based on "substantially complete" drafts rather than final documents, enabling a statutory one-step conversion to a holding-company structure, and narrowing the standard for approving increases in authorized shares so public companies may use a majority-of-votes-present standard once a quorum is established.

Robert Kim, chair of the Business Law Section, told the committee the change to directors' duties (referred to in the bill as section 78.138) adds "an informed basis" to align the statutory language with the existing presumption of conduct. Kim said the draft also clarifies that boards may act on substantially complete transaction drafts under NRS 78.315 to reflect common practice in large transactions.

A provision that drew sustained attention would let corporations include in their governing documents a waiver of jury trial for a narrow class of internal corporate disputes (for example, derivative claims and fiduciary-duty suits). "This provision is an option for corporations," said Albert Kovacs, co-chair of the Business Law Section, and must be adopted in the articles of incorporation or approved by boards and stockholders before it would bind investors. Kovacs said the waiver is intended to increase predictability by routing specified internal matters to a judge rather than a jury.

Committee members pressed presenters on public-interest tradeoffs and potential side effects. Assemblymember Albrecht Oredlicher asked whether the package "sells out the public" in pursuit of incorporations; Kim responded that the section's work aims for clarity and predictability, not to favor particular constituencies, and noted that fee revenue from filings benefits the state's general fund.

Assemblymember Cole asked whether a one-step conversion to a holding-company structure could be used to avoid real-property transfer taxes. Kim said transfers among wholly owned entities are already exempt under current law and that the proposed conversion would not change ownership for tax purposes.

Several business and economic-development groups testified in support. John Sandy (Las Vegas Sands and Nevada franchise auto dealers), Paul Moradkhan (Vegas Chamber), Amber Stidham (Las Vegas Global Economic Alliance) and others said clearer corporate law could help retain Nevada startups and attract incorporations that bring downstream economic activity and state filing revenue. The Business Law Section said the State Bar's board of governors approved permitting the section to advocate for the bill; presenters clarified that the section's advocacy does not necessarily represent the full board or the general membership.

Opposition was limited; the Nevada Justice Association testified neutral. Committee members repeatedly asked for assurances about local economic benefit versus merely becoming a domicile "on paper" for out-of-state entities; presenters said the goal includes helping Nevada-based startups access capital without being forced to reincorporate elsewhere.

No committee vote on AB239 was recorded in the hearing transcript. Sponsors said they will advance a friendly amendment to add two items: the jury-trial waiver option and a statutory framework addressing fiduciary duties of controlling stockholders, which the presenters described as defining a controlling stockholder by the ability to control a majority of director votes and limiting duties to preventing undue influence that causes breach of directors' fiduciary duties.

Supporters framed the bill as incremental modernization. Critics and some members sought more specifics on taxation, Secretary of State workload, and whether the changes would produce tangible local jobs and investment rather than paper incorporations.

The committee opened public testimony and heard several organizations voice support; no formal committee action on AB239 is shown in the transcript.

The bill's sponsors and the Business Law Section said they will continue to work with committee members on clarifications and the friendly amendment before further committee action.