USA Statutes : nevada
Title : Title 07 - BUSINESS ASSOCIATIONS; SECURITIES; COMMODITIES
Chapter : CHAPTER 89 - PROFESSIONAL CORPORATIONS AND ASSOCIATIONS
This chapter is known and may be cited as
the Professional Corporations and Associations Act.
(Added to NRS by 1963, 865; A 1969, 519)
As used in this chapter, unless the
context requires otherwise:
1. “Employee” means a person licensed or otherwise legally
authorized to render professional service within this State who renders
such service through a professional corporation or a professional
association, but does not include clerks, bookkeepers, technicians or
other persons who are not usually considered by custom and practice of
the profession to be rendering professional services to the public.
2. “Licensed” means legally authorized by the appropriate
regulating board of this State to engage in a regulated profession in
this State.
3. “Professional association” means a common-law association of
two or more persons licensed or otherwise legally authorized to render
professional service within this State when created by written articles
of association which contain in substance the following provisions
characteristic of corporate entities:
(a) The death, insanity, bankruptcy, retirement, resignation,
expulsion or withdrawal of any member of the association does not cause
its dissolution.
(b) The authority to manage the affairs of the association is
vested in a board of directors or an executive board or committee,
elected by the members of the association.
(c) The members of the association are employees of the association.
(d) Members’ ownership is evidenced by certificates.
4. “Professional corporation” means a corporation organized under
this chapter to render a professional service.
5. “Professional service” means any type of personal service which
may legally be performed only pursuant to a license, certificate of
registration or other legal authorization.
6. “Record” means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
7. “Regulating board” means the body which regulates and
authorizes the admission to the profession which a professional
corporation or a professional association is authorized to perform.
8. “Sign” means to affix a signature to a record.
9. “Signature” means a name, word, symbol or mark executed or
otherwise adopted, or a record encrypted or similarly processed in whole
or in part, by a person with the present intent to identify himself and
adopt or accept a record. The term includes, without limitation, an
electronic signature as defined in NRS 719.100 .
(Added to NRS by 1963, 865; A 1969, 519; 1995, 2117; 2003, 3159
)
1. Each record filed with the Secretary of State pursuant to this
chapter must be on or accompanied by a form prescribed by the Secretary
of State.
2. The Secretary of State may refuse to file a record which does
not comply with subsection 1 or which does not contain all of the
information required by statute for filing the record.
3. If the provisions of the form prescribed by the Secretary of
State conflict with the provisions of any record that is submitted for
filing with the form:
(a) The provisions of the form control for all purposes with
respect to the information that is required by statute to appear in the
record in order for the record to be filed; and
(b) Unless otherwise provided in the record, the provisions of the
record control in every other situation.
4. The Secretary of State may by regulation provide for the
electronic filing of records with the Office of the Secretary of State.
(Added to NRS by 2003, 20th Special Session, 111 )
Except as otherwise provided in NRS 89.200
to 89.270 , inclusive, the fees set forth in NRS 78.785
apply to this chapter.
(Added to NRS by 1995, 1139)
No record which is written in a language other than English may
be filed or submitted for filing in the Office of the Secretary of State
pursuant to the provisions of this chapter unless it is accompanied by a
verified translation of that record into the English language.
(Added to NRS by 1995, 1137; A 2003, 3160 )
PROFESSIONAL CORPORATIONS
The laws applicable to other Nevada private corporations
organized under chapter 78 of NRS and all
rights, privileges and duties thereunder shall apply to professional
corporations, except where such laws are in conflict with or inconsistent
with the provisions of this chapter. In case of conflict, the provisions
of this chapter shall apply.
(Added to NRS by 1963, 865)
1. One or more persons may organize a professional corporation in
the manner provided for organizing a private corporation pursuant to
chapter 78 of NRS. Each person organizing the
corporation must, except as otherwise provided in subsection 2 of NRS
89.050 , be authorized to perform the
professional service for which the corporation is organized. The articles
of incorporation must contain the following additional information:
(a) The profession to be practiced by means of the professional
corporation.
(b) The names and addresses, either residence or business, of the
original stockholders and directors of the professional corporation.
(c) Except as otherwise provided in paragraph (d) of this
subsection, a certificate from the regulating board of the profession to
be practiced showing that each of the directors, and each of the
stockholders who is a natural person, is licensed to practice the
profession.
(d) For a professional corporation organized pursuant to this
chapter and practicing pursuant to the provisions of NRS 623.349 , a certificate from the regulating board or boards of the
profession or professions to be practiced showing that control and
two-thirds ownership of the corporation is held by persons registered or
licensed pursuant to the applicable provisions of chapter 623 , 623A or 625 of NRS. As used in this paragraph, “control” has the meaning
ascribed to it in NRS 623.349 .
2. The corporate name of a professional corporation must contain
the words “Professional Corporation” or the abbreviation “Prof. Corp.,”
“P.C.” or “PC,” or the word “Chartered” or the abbreviation “Chtd.,” or
“Limited” or the abbreviation “Ltd.” The corporate name must contain the
last name of one or more of its current or former stockholders. The
corporation may render professional services and exercise its authorized
powers under a fictitious name if the corporation has first registered
the name in the manner required by chapter 602 of NRS.
(Added to NRS by 1963, 865; A 1969, 520; 1979, 122; 1987, 585;
1991, 323, 1305; 1995, 2118; 2001, 1780 ; 2003, 3160 ; 2003, 20th Special Session, 111 )
1. Except as otherwise provided in subsection 2, a professional
corporation may be organized only for the purpose of rendering one
specific type of professional service and may not engage in any business
other than rendering the professional service for which it was organized
and services reasonably related thereto, except that a professional
corporation may own real and personal property appropriate to its
business and may invest its money in any form of real property,
securities or any other type of investment.
2. A professional corporation may be organized to render a
professional service relating to:
(a) Architecture, interior design, residential design, engineering
and landscape architecture, or any combination thereof, and may be
composed of persons:
(1) Engaged in the practice of architecture as provided in
chapter 623 of NRS;
(2) Practicing as a registered interior designer as provided
in chapter 623 of NRS;
(3) Engaged in the practice of residential design as
provided in chapter 623 of NRS;
(4) Engaged in the practice of landscape architecture as
provided in chapter 623A of NRS; and
(5) Engaged in the practice of professional engineering as
provided in chapter 625 of NRS.
(b) Medicine, homeopathy and osteopathy, and may be composed of
persons engaged in the practice of medicine as provided in chapter 630
of NRS, persons engaged in the practice of homeopathic medicine as
provided in chapter 630A of NRS and persons engaged in the practice of osteopathic medicine
as provided in chapter 633 of NRS. Such a professional corporation may market and manage
additional professional corporations which are organized to render a
professional service relating to medicine, homeopathy and osteopathy.
(c) Mental health services, and may be composed of the following
persons, in any number and in any combination:
(1) Any psychologist who is licensed to practice in this
State;
(2) Any social worker who holds a master’s degree in social
work and who is licensed by this State as a clinical social worker;
(3) Any registered nurse who is licensed to practice
professional nursing in this State and who holds a master’s degree in the
field of psychiatric nursing; and
(4) Any marriage and family therapist who is licensed by
this State pursuant to chapter 641A of NRS.
Ê Such a professional corporation may market and manage additional
professional corporations which are organized to render a professional
service relating to mental health services pursuant to this paragraph.
3. A professional corporation may render a professional service
only through its officers and employees who are licensed or otherwise
authorized by law to render the professional service.
(Added to NRS by 1963, 866; A 1969, 705; 1985, 585; 1991, 323,
1306; 1995, 353, 1704; 1997, 206; 2001, 1781 ; 2003, 435 )
The provisions of
this chapter relating to professional corporations do not modify any law
applicable to the relationship between a person furnishing professional
service and a person receiving such service, including liability arising
out of such professional service, but nothing contained in this section
renders:
1. A person personally liable in tort for any act in which he has
not personally participated.
2. A director, officer or employee of a professional corporation
liable in contract for any contract which he signs on behalf of a
professional corporation within the limits of his actual authority.
(Added to NRS by 1963, 866; A 1969, 521; 2003, 3160 )
1. Except as otherwise provided in this section and NRS 623.349
:
(a) No corporation organized under the provisions of this chapter
may issue any of its stock to anyone other than a natural person who is
licensed to render the same specific professional services as those for
which the corporation was incorporated.
(b) No stockholder of a corporation organized under this chapter
may enter into a voting trust agreement or any other type of agreement
vesting another person with the authority to exercise the voting power of
any or all of his stock, unless the other person is licensed to render
the same specific professional services as those for which the
corporation was incorporated.
(c) No shares of a corporation organized under this chapter may be
sold or transferred except to a natural person who is eligible to be a
stockholder of the corporation or to the personal representative or
estate of a deceased or legally incompetent stockholder. The personal
representative or estate of the stockholder may continue to own shares
for a reasonable period, but may not participate in any decisions
concerning the rendering of professional services.
Ê The articles of incorporation or bylaws may provide specifically for
additional restrictions on the transfer of shares and may provide for the
redemption or purchase of the shares by the corporation, its stockholders
or an eligible individual account plan complying with the requirements of
subsection 2 at prices and in a manner specifically set forth. A
stockholder may transfer his shares in the corporation or any other
interest in the assets of the corporation to a revocable trust if he acts
as trustee of the revocable trust and any person who acts as cotrustee
and is not licensed to perform the services for which the corporation was
incorporated does not participate in any decisions concerning the
rendering of those services.
2. Except as otherwise provided in NRS 623.349 , a person not licensed to render the professional services for
which the corporation was incorporated may own a beneficial interest in
any of the assets, including corporate shares, held for his account by an
eligible individual account plan sponsored by the professional
corporation for the benefit of its employees, which is intended to
qualify under section 401 of the Internal Revenue Code, 26 U.S.C. § 401,
if the terms of the trust are such that the total number of shares which
may be distributed for the benefit of persons not licensed to render the
professional services for which the corporation was incorporated is less
than a controlling interest and:
(a) The trustee of the trust is licensed to render the same
specific professional services as those for which the corporation was
incorporated; or
(b) The trustee is not permitted to participate in any corporate
decisions concerning the rendering of professional services in his
capacity as trustee.
Ê A trustee who is individually a stockholder of the corporation may
participate in his individual capacity as a stockholder, director or
officer in any corporate decision.
3. Except as otherwise provided in subsection 4, a professional
corporation in which all the stockholders who are natural persons are
licensed to render the same specific professional service may acquire and
hold stock in another professional corporation, or in a similar
corporation organized pursuant to the corresponding law of another state,
only if all the stockholders who are natural persons of the corporation
whose stock is acquired are licensed in that corporation’s state of
incorporation to render the same specific professional service as the
stockholders who are natural persons of the professional corporation that
acquires the stock.
4. A professional corporation practicing pursuant to NRS 623.349
in which all the stockholders are natural persons, regardless
of whether or not the natural persons are licensed to render the same
specific professional service, may acquire and hold stock in another
professional corporation or in a similar corporation organized pursuant
to the corresponding law of another state if control and two-thirds
ownership of the business organization or association that is acquired is
held by persons registered or licensed pursuant to the applicable
provisions of chapter 623 , 623A or 625 of NRS. As used in this subsection, “control” has the meaning
ascribed to it in NRS 623.349 .
5. Any act in violation of this section is void and does not pass
any rights or privileges or vest any powers, except to an innocent person
who is not a stockholder and who has relied on the effectiveness of the
action.
(Added to NRS by 1963, 866; A 1969, 521; 1977, 643; 1991, 1306;
1995, 2118; 2001, 1781 )
1. If any officer, stockholder, director or employee of a
corporation organized under this chapter who has been rendering
professional service to the public becomes legally disqualified to render
such professional services within this State, he shall sever within a
reasonable period all professional service with and financial interest in
the corporation, but this chapter does not prevent a corporation formed
under this chapter from entering into a contract with an employee which
provides for severance pay or for compensation for past services upon
termination of professional service, whether by death or otherwise.
2. Except as otherwise provided in NRS 623.349 , a natural person may not be an officer or director of a
corporation organized under this chapter unless he is licensed to render
the same specific professional services as those for which the
corporation was incorporated.
3. Upon the death of a stockholder of a corporation who has
transferred his interest in the corporation to a revocable trust as
permitted by NRS 89.070 , the trustee of
the revocable trust may continue to retain any interest so transferred,
including corporate shares, for a reasonable period, but may not exercise
any authority concerning the rendering of professional services and may
not, except as otherwise provided in NRS 623.349 , distribute the corporate interest to any person not licensed
to render the services for which the corporation was incorporated.
4. A corporation’s failure to require compliance with the
provisions of this section is a ground for the forfeiture of its charter.
(Added to NRS by 1963, 866; A 1969, 522; 1991, 1307; 1995, 2119;
2001, 1783 )
The
provisions of this chapter relating to professional corporations do not
bar the regulating board of any profession from taking any action
otherwise within its power, nor do they affect the rules of ethics or
practice of any profession.
(Added to NRS by 1963, 867; A 1969, 522)
No professional corporation may do
any act which is prohibited to be done by natural persons licensed to
practice the profession which the professional corporation is organized
to practice.
(Added to NRS by 1963, 867; A 1995, 2120)
PROFESSIONAL ASSOCIATIONS
[Effective through June 30, 2006.] The
provisions of chapter 87 of NRS (Uniform
Partnership Act) do not apply to professional associations.
(Added to NRS by 1969, 523; A 2005, 443 )
[Effective July 1, 2006.] The provisions of
chapter 87 of NRS do not apply to
professional associations.
(Added to NRS by 1969, 523; A 2005, 443 , effective July 1, 2006)
1. Within 30 days after the organization of a professional
association under this chapter, the association shall file with the
Secretary of State a copy of the articles of association, duly signed,
and shall pay at that time a filing fee of $75. A copy of any amendments
to the articles of association must also be filed with the Secretary of
State within 30 days after the adoption of such amendments. Each copy of
amendments so filed must be certified as true and correct and be
accompanied by a filing fee of $175.
2. The name of such a professional association must contain the
words “Professional Association,” “Professional Organization” or the
abbreviations “Prof. Ass’n” or “Prof. Org.” The association may render
professional services and exercise its authorized powers under a
fictitious name if the association has first registered the name in the
manner required under chapter 602 of NRS.
(Added to NRS by 1969, 523; A 1979, 123; 2001, 3190 ; 2003, 3160 ; 2003, 20th Special Session, 112 )
The provisions of
this chapter relating to professional associations do not modify any law
applicable to the relationship between a person furnishing professional
service and a person receiving such service, including liability arising
out of such professional service, but:
1. A member or employee of a professional association shall not be
personally liable in tort for any act in which he has not personally
participated.
2. A member or employee of a professional association shall not be
personally liable in contract for any contract which he signs on behalf
of a professional association within the limits of his actual authority.
(Added to NRS by 1969, 523; A 2003, 3161 )
Except as otherwise provided in NRS 623.349
, members who organize a professional association must all be
natural persons licensed to render the same specific professional
services as those for which the professional association is organized.
Except as otherwise provided by law, a professional association may
render professional service only through its members and employees who
are licensed or otherwise authorized by law to render the professional
service.
(Added to NRS by 1969, 523; A 1995, 2120; 2001, 1783 )
1. If any member or employee of a professional association who has
been rendering professional service to the public becomes legally
disqualified to render the professional service within this State, he
shall sever within a reasonable period all professional service with and
financial interest in the association; but this chapter does not prevent
a professional association from entering into a contract with a member or
employee which provides for severance pay or for compensation for past
services upon termination of professional service, whether by death or
otherwise. Upon the death of a member of the association who has
transferred his interest in the association to a revocable trust as
permitted by subsection 2, the trustee of the revocable trust may
continue to retain any interest so transferred for a reasonable period,
but may not exercise any authority concerning the rendering of
professional services and may not, except as otherwise provided in NRS
623.349 , distribute the interest in the association or its assets to
any person not licensed to render the services for which the association
was organized.
2. Except as otherwise authorized by NRS 623.349 , a membership interest in a professional association may not
be sold or transferred except to a natural person who is eligible to be a
member of the association or to the personal representative or estate of
a deceased or legally incompetent member, except as provided in this
subsection. The personal representative of such a member may continue to
own such interest for a reasonable period, but may not participate in any
decisions concerning the rendering of professional service. A member may
transfer his interest in the association or any other interest in the
assets of the association to a revocable trust if he acts as trustee of
the revocable trust and any person who acts as cotrustee and is not
licensed to perform the services for which the association is organized
does not participate in any decisions concerning the rendering of those
professional services.
3. The articles of association may provide specifically for
additional restrictions on the transfer of members’ interests and may
provide for the redemption or purchase of such an interest by the
association or its other members at prices and in a manner specifically
set forth in the articles.
(Added to NRS by 1969, 523; A 1991, 1308; 1995, 2120; 2001, 1783
)
1. Except as otherwise provided in subsection 2, a professional
association shall, on or before the last day of the first month after the
filing of its articles of association with the Secretary of State, and
annually thereafter on or before the last day of the month in which the
anniversary date of its organization occurs in each year, file with the
Secretary of State a list showing the names and addresses, either
residence or business, of all members and employees in the professional
association and certifying that all members and employees are licensed to
render professional service in this State.
2. A professional association organized and practicing pursuant to
the provisions of this chapter and NRS 623.349 shall, on or before the last day of the first month after the
filing of its articles of association with the Secretary of State, and
annually thereafter on or before the last day of the month in which the
anniversary date of its organization occurs in each year, file with the
Secretary of State a list:
(a) Showing the names and addresses, either residence or business,
of all members and employees of the professional association who are
licensed or otherwise authorized by law to render professional service in
this State;
(b) Certifying that all members and employees who render
professional service are licensed or otherwise authorized by law to
render professional service in this State; and
(c) Certifying that all members who are not licensed to render
professional service in this State do not render professional service on
behalf of the professional association except as authorized by law.
3. Each list filed pursuant to this section must be:
(a) Made on a form furnished by the Secretary of State and must not
contain any fiscal or other information except that expressly called for
by this section.
(b) Signed by the chief executive officer of the professional
association.
(c) Accompanied by a declaration under penalty of perjury that the
professional association:
(1) Has complied with the provisions of NRS 360.780 ; and
(2) Acknowledges that pursuant to NRS 239.330 , it is a category C felony to knowingly offer
any false or forged instrument for filing in the Office of the Secretary
of State.
4. Upon filing:
(a) The initial list required by this section, the professional
association shall pay to the Secretary of State a fee of $125.
(b) Each annual list required by this section, the professional
association shall pay to the Secretary of State a fee of $125.
(Added to NRS by 1969, 524; A 1995, 1139; 1999, 1625 ; 2001, 101 , 1784 , 2725 , 3190 ; 2003, 194 , 3161 ; 2003, 20th Special Session, 112 , 187 ; 2005, 2270 )
1. Each professional association that is required to make a filing
and pay the fee prescribed in NRS 89.250 but refuses to do so within the time provided
is in default.
2. For default, there must be added to the amount of the fee a
penalty of $75. The fee and penalty must be collected as provided in this
chapter.
(Added to NRS by 1995, 1138; A 2001, 3191 ; 2003, 20th Special Session, 113 )
1. The Secretary of State shall provide written notice to each
professional association which is in default pursuant to the provisions
of NRS 89.252 . The written notice:
(a) Must include a statement indicating the amount of the filing
fee, penalties incurred and costs remaining unpaid.
(b) At the request of the professional association, may be provided
electronically.
2. On the first day of the first anniversary of the month
following the month in which the filing was required, the articles of
association of the professional association are revoked and its right to
transact business is forfeited.
3. The Secretary of State shall compile a complete list containing
the names of all professional associations whose right to transact
business has been forfeited.
4. The Secretary of State shall forthwith notify each professional
association specified in subsection 3 by providing written notice of the
forfeiture of its right to transact business. The written notice:
(a) Must include a statement indicating the amount of the filing
fee, penalties incurred and costs remaining unpaid.
(b) At the request of the professional association, may be provided
electronically.
5. If the articles of association of a professional association
are revoked and the right to transact business is forfeited, all the
property and assets of the defaulting professional association must be
held in trust by its members, as for insolvent corporations, and the same
proceedings may be had with respect to its property and assets as apply
to insolvent corporations. Any interested person may institute
proceedings at any time after a forfeiture has been declared, but, if the
Secretary of State reinstates the articles of association, the
proceedings must be dismissed and all property restored to the members of
the professional association.
6. If the assets of the professional association are distributed,
they must be applied to:
(a) The payment of the filing fee, penalties and costs due to the
State; and
(b) The payment of the creditors of the professional association.
Ê Any balance remaining must be distributed as set forth in the articles
of association or, if no such provisions exist, among the members of the
professional association.
(Added to NRS by 1995, 1138; A 2003, 20th Special Session, 113
)
1. Except as otherwise provided in subsections 3 and 4, the
Secretary of State shall reinstate any professional association which has
forfeited its right to transact business under the provisions of this
chapter and restore the right to carry on business in this State and
exercise its privileges and immunities if it:
(a) Files with the Secretary of State:
(1) The list and certification required by NRS 89.250 ; and
(2) A certificate of acceptance of appointment signed by its
resident agent; and
(b) Pays to the Secretary of State:
(1) The filing fee and penalty set forth in NRS 89.250
and 89.252 for each year or portion thereof during which
the articles of association have been revoked; and
(2) A fee of $300 for reinstatement.
2. When the Secretary of State reinstates the professional
association, he shall issue to the professional association a certificate
of reinstatement if the professional association:
(a) Requests a certificate of reinstatement; and
(b) Pays the required fees pursuant to subsection 8 of NRS 78.785
.
3. The Secretary of State shall not order a reinstatement unless
all delinquent fees and penalties have been paid, and the revocation of
the articles of association occurred only by reason of the failure to pay
the fees and penalties.
4. If the articles of association of a professional association
have been revoked pursuant to the provisions of this chapter and have
remained revoked for 10 consecutive years, the articles must not be
reinstated.
(Added to NRS by 1995, 1138; A 2001, 3191 ; 2003, 20th Special Session, 114 ; 2005, 2271 )
The
provisions of this chapter relating to professional associations do not
bar the regulating board of any profession from taking any action
otherwise within its power, nor do they affect the rules of ethics or
practice of any profession.
(Added to NRS by 1969, 524)
No professional association may do
any act which is prohibited to be done by natural persons licensed to
practice the profession which the professional association is organized
to practice.
(Added to NRS by 1969, 524; A 1995, 2121)
