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Here Is Something A Board Can Do Under Nevada, But Not California, Law

The private corporation laws of both California and Nevada both authorize the formation of committees.  Cal. Corp. Code § 311 & NRS 78.125.  There are some differences, however.  California requires that any committee of the board consist of at least two directors while Nevada's statute requires that a committee include "at least one director".  

More unusually, Nevada expressly authorizes the board to appoint natural persons who are not directors to serve on committees. NRS 78.125(2).  Therefore, as long as a committee includes at least one director, a committee could include any number of non-directors.  The board's authority to appoint non-directors, however, may be limited or proscribed by the corporation's articles of incorporation or bylaws.

The statute does not specify whether the non-director committee members owe the same fiduciary duties as directors.  Nor does NRS 78.138, which prescribes the fiduciary duties of directors and officers and limits their liability, expressly apply to members of committees.

© 2010-2023 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume XII, Number 28
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
Partner

Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

949-851-5428
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