89.070 - Restrictions on ownership and transfer of shares.
89.070 Restrictions on ownership and transfer of shares.
1. Except as otherwise provided in this section and NRS 623.349:
(a) No professional entity may issue any of its owner’s interest to anyone other than a natural person who is licensed to render the same specific professional services as those for which the professional entity was formed.
(b) No owner 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 or her owner’s interest, unless the other person is licensed to render the same specific professional services as those for which the professional entity was formed.
(c) No owner’s interest may be sold or transferred except to a natural person who is eligible to be an owner or to the personal representative or estate of a deceased or legally incompetent stockholder. The personal representative or estate of the owner may continue to own the owner’s interest for a reasonable period, but may not participate in any decisions concerning the rendering of professional services.
Ê The articles, bylaws or operating agreement of the professional entity may provide specifically for additional restrictions on the transfer of an owner’s interest and may provide for the redemption or purchase of the owner’s interest by the professional entity, its owners or an eligible individual account plan complying with the requirements of subsection 2 at prices and in a manner specifically set forth. An owner may transfer his or her owner’s interest in the professional entity or any other interest in the assets of the professional entity to a revocable trust if the owner 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 professional entity was formed 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 professional entity was formed may own a beneficial interest in any of the assets, including an owner’s interest, held for the person’s account by an eligible individual account plan sponsored by the professional entity 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 professional entity was formed 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 professional entity was formed; or
(b) The trustee is not permitted to participate in any decisions concerning the rendering of professional services in his or her capacity as trustee.
Ê A trustee who is individually an owner may participate in his or her individual capacity as an owner, manager, director or officer in any decision.
3. Except as otherwise provided in subsection 4, a professional entity in which all the owners who are natural persons are licensed to render the same specific professional service may acquire and hold an owner’s interest in another professional entity or in a similar entity organized pursuant to the corresponding law of another state, only if all the owners who are natural persons of the professional entity whose stock is acquired are licensed in that professional entity’s state of formation to render the same specific professional service as the owners who are natural persons of the professional entity that acquires the owner’s interest.
4. A professional entity practicing pursuant to NRS 623.349 in which all the owners are natural persons, regardless of whether or not the natural persons are licensed to render the same specific professional service, may acquire and hold an owner’s interest in another professional entity or in a similar entity 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. An attorney may form a legal services professional entity that is organized or incorporated in the State of Nevada with one or more natural persons, each of whom is a member in good standing and eligible to practice before the bar of any jurisdiction of the United States, and such legal services entity may issue an owner’s interest to a natural person who is a member in good standing and eligible to practice before the bar of any jurisdiction of the United States provided that at least one attorney admitted by the Supreme Court of the State of Nevada to practice law as a member of the State Bar of Nevada owns an owner’s interest in the professional entity.
6. 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 an owner 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; 2007, 2435; 2009, 1715)