Nevada Business Associations; Securities; Commodities
Sec. § 78.0296
Ratification or validation of noncompliant corporate acts.


1.

Except to the extent expressly prohibited in the articles of incorporation or an amendment thereto, in each case filed and effective on or after October 1, 2015, any corporate act not in compliance, or purportedly not in compliance, with this title or the articles of incorporation or bylaws in effect at the time of such corporate act may be ratified or validated in accordance with this section. This section does not apply to circumvent or contravene the provisions of NRS 78.378 to 78.3793, inclusive, or NRS 78.411 to 78.444, inclusive. Except as otherwise determined by the district court pursuant to its authority under subsection 5, a ratification or validation of a corporate act in accordance with this section is conclusive in the absence of actual fraud in the transaction. Ratification or validation under this section must not be the exclusive means by which a corporate act may be ratified or validated. This section shall not be construed to limit the authority of the board of directors, the stockholders or the corporation to effect any lawful means of ratification or validation of a corporate act or correction of a record, including, without limitation, the authority of:

(a)

The board of directors to act, or to consent to an action before or after the action, pursuant to NRS 78.315;

(b)

The stockholders to act, or to consent to an action before or after the action, pursuant to NRS 78.320; or

(c)

The corporation to correct a record filed in the Office of the Secretary of State pursuant to NRS 78.0295.

2.

Any ratification or validation of a corporate act pursuant to this section must be approved by the board of directors and, as applicable, the stockholders in accordance with this title and the articles of incorporation and bylaws in effect at the time of such ratification or validation, unless a higher approval standard was or would have been applicable to the original taking or purported taking of the corporate act, in which case such ratification or validation must be approved in accordance with such higher approval standard. The voting power of any shares issued or purportedly issued pursuant to the corporate act being ratified or validated must be disregarded for all purposes of the stockholder approval of such corporate act as required by this subsection, including for purposes of determining a quorum at a meeting of stockholders.

3.

Notice of any ratification or validation of a corporate act pursuant to this section must be given not later than 10 days after the approval of such ratification or validation pursuant to subsection 2, to each stockholder of record at the time of such ratification or validation, whether or not action by the stockholders is required for such ratification or validation.

4.

If a corporate act ratified or validated pursuant to this section would have required any filing with the Secretary of State pursuant to the provisions of this title, or if such ratification or validation would cause any such filing to be inaccurate or incomplete in any material respect, the corporation shall make, amend or correct each such filing in accordance with this title, including this subsection. Any such filing, amendment or correction:

(a)

Must be accompanied by a certificate of validation indicating that the filing, amendment or correction is being made in connection with a ratification or validation of a corporate act in accordance with this section and specifying the effective date and time of the filing, amendment or correction, which may be before the date and time of filing; and

(b)

Must otherwise be filed with the Secretary of State in accordance with the requirements of this title.

5.

The district court has plenary and exclusive jurisdiction in equity, upon application of any person adversely affected, to administer and provide equitable relief under this section, including, without limitation, the authority to confirm, nullify, modify or compel any ratification or validation taken or proposed to be taken pursuant to this section, including any filing, amendment or correction pursuant to subsection 4. The provisions of this section shall not be construed to prescribe or circumscribe which facts and circumstances the court may consider or which remedies the court may grant in exercising its jurisdiction under this section. Any action, application or petition relating to a ratification or validation taken or proposed to be taken pursuant to this section must be filed in the district court:

(a)

Not later than 180 days after the notice required by subsection 3 is given; and

(b)

In the county where the principal office of the corporation is located or, if the principal office is not located in this State, in the county in which the corporations registered office is located.

6.

Unless otherwise determined by the district court pursuant to its authority under subsection 5, a ratification or validation of a corporate act in accordance with this section relates back to the date of the corporate act.

7.

As used in this section:

(a)

Corporate act means:

(1)

Any act or purported act of the board of directors;

(2)

Any act or purported act of the stockholders; or

(3)

Any other act or transaction taken or purportedly taken by or on behalf of the corporation, including, without limitation, any issuance or purported issuance of stock or other securities of the corporation.

(b)

Higher approval standard means any provision set forth in the articles of incorporation or bylaws in effect at the time of the original taking or purported taking of a corporate act:

(1)

Requiring action of the directors or stockholders, at a meeting or by written consent, to be taken by a proportion greater than otherwise would have been required pursuant to this chapter if the articles of incorporation and bylaws were silent as to the required proportion;

(2)

Requiring a greater proportion of the directors or stockholders to constitute a quorum for the transaction of business at a meeting than otherwise would have been required pursuant to this chapter if the articles of incorporation and bylaws were silent as to the required proportion;

(3)

Requiring, prohibiting or prescribing conditions on action of the directors or stockholders at a meeting or by written consent;

(4)

Requiring separate action of the holders of shares of any class or series of the corporations stock, unless no shares of such class or series are outstanding at the time of the ratification or validation of the corporate act pursuant to this section;

(5)

Requiring separate action of the holders of securities of the corporation other than stock, unless such securities are not outstanding at the time of the ratification or validation of the corporate act pursuant to this section; or

(6)

Requiring separate action of any specified person or persons.
Source
Last accessed
Dec. 15, 2019