Nrs: Chapter 89 - Professional Entities And Associations

Link to law: https://www.leg.state.nv.us/NRS/NRS-089.html
Published: 2015

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[Rev. 2/10/2015 4:09:45

PM--2014R2]

CHAPTER 89 - PROFESSIONAL ENTITIES AND

ASSOCIATIONS

GENERAL PROVISIONS

NRS 89.010             Short

title.

NRS 89.020             Definitions.

NRS 89.022             Prohibition

against formation of entity for certain illegal purposes.

NRS 89.023             Form

required for filing of records.

NRS 89.025             Fees.

NRS 89.027             Filing

of records written in language other than English.

NRS 89.028             Secretary

of State authorized to adopt certain regulations to allow professional entity

or professional association to carry out powers and duties through most recent

technology.

PROFESSIONAL ENTITIES

NRS 89.030             Applicability

of chapters 78 and 86 of NRS.

NRS 89.040             Filing

requirements; required provisions of articles; name.

NRS 89.045             List

or statement to be maintained at registered office or principal place of

business; requirement to assist in criminal investigation; failure to comply;

regulations.

NRS 89.050             Scope

of business; property and investments; professional services by officers and

employees.

NRS 89.060             Professional

relationship preserved.

NRS 89.070             Restrictions

on ownership and transfer of shares.

NRS 89.080             Duties

upon legal disqualification of officer, stockholder, director, member, manager

or employee; qualifications of officer, director or manager; death of owner

whose interest is in revocable trust.

NRS 89.100             Authority

of regulating boards not affected.

NRS 89.110             Scope

of authority.

PROFESSIONAL ASSOCIATIONS

NRS 89.200             Inapplicability

of chapter 87 of NRS.

NRS 89.210             Filing

requirements; name of association.

NRS 89.215             Penalty

for purporting to do business as professional association without filing

articles of association; enforcement; regulations.

NRS 89.220             Professional

relationship preserved.

NRS 89.230             Restrictions

on membership and rendering of professional services.

NRS 89.240             Duties

upon legal disqualification of member or employee; redemption of and

restrictions on transfer and ownership of member’s interest.

NRS 89.250             Annual

list: Filing requirements; fees; regulations.

NRS 89.251             List

or statement to be maintained at registered office or principal place of

business; requirement to assist in criminal investigation; failure to comply;

regulations.

NRS 89.252             Defaulting

associations: Identification; penalty.

NRS 89.254             Defaulting

associations: Duties of Secretary of State; forfeiture of right to transact

business; assets held in trust; distribution of assets.

NRS 89.256             Defaulting

associations: Conditions and procedure for reinstatement.

NRS 89.260             Authority

of regulating boards not affected.

NRS 89.270             Scope

of authority.

_________

 

GENERAL PROVISIONS

      NRS 89.010  Short title.  This

chapter is known and may be cited as the Professional Entities and Associations

Act.

      (Added to NRS by 1963, 865; A 1969, 519)

      NRS 89.020  Definitions.  As

used in this chapter, unless the context requires otherwise:

      1.  “Articles” means either the articles of

incorporation of a professional corporation or the articles of organization of

a professional limited-liability company.

      2.  “Employee” means a person licensed or

otherwise legally authorized to render professional service within this State

who renders such service through a professional entity 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.

      3.  “Licensed” means legally authorized by

the appropriate regulating board of this State to engage in a regulated

profession in this State.

      4.  “Owner” means the owner of stock in a

professional corporation or the owner of a member’s interest, as defined in NRS 86.091, in a professional

limited-liability company.

      5.  “Owner’s interest” means the stock of a

professional corporation or a member’s interest, as defined in NRS 86.091, of a professional

limited-liability company.

      6.  “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.

      7.  “Professional corporation” means a

corporation organized under this chapter to render a professional service.

      8.  “Professional entity” means either a

professional corporation or a professional limited-liability company.

      9.  “Professional limited-liability

company” means a limited-liability company organized pursuant to this chapter

to render professional service.

      10.  “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.

      11.  “Regulating board” means the body

which regulates and authorizes the admission to the profession which a professional

entity or a professional association is authorized to perform.

      (Added to NRS by 1963, 865; A 1969, 519; 1995, 2117; 2003, 3159; 2007, 2432; 2011, 2811)

      NRS 89.022  Prohibition against formation of entity for certain illegal

purposes.  A person shall not form

an entity pursuant to this chapter for any illegal purpose or with the

fraudulent intent to conceal any business activity, or lack thereof, from

another person or a governmental agency.

      (Added to NRS by 2013, 896)

      NRS 89.023  Form required for filing of records.

      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)

      NRS 89.025  Fees.  Except as

otherwise provided in NRS 89.200 to 89.270, inclusive, the fees set forth in NRS 78.755 to 78.785, inclusive, apply to professional

corporations and the fees set forth in NRS

86.561 apply to professional limited-liability companies.

      (Added to NRS by 1995, 1139; A 2007, 2433; 2009, 1714)

      NRS 89.027  Filing of records written in language other than English.  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)

      NRS 89.028  Secretary of State authorized to adopt certain regulations to

allow professional entity or professional association to carry out powers and

duties through most recent technology.  The

Secretary of State may adopt regulations to define, for the purposes of certain

provisions of this chapter, the terms “meeting,” “writing,” “written” and other

terms to allow a professional entity, professional association or other entity

which is subject to the provisions of this chapter to carry out its powers and

duties as prescribed by this chapter through the use of the most recent

technology available including, without limitation, the use of electronic

communications, videoconferencing and telecommunications.

      (Added to NRS by 2011, 781)

PROFESSIONAL ENTITIES

      NRS 89.030  Applicability of chapters 78

and 86 of NRS.  The

laws applicable to other Nevada corporations organized under chapter 78 of NRS and limited-liability

companies organized under chapter 86 of NRS

and all rights, privileges and duties thereunder shall apply to professional

corporations and professional limited-liability companies, respectively, 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; A 2007, 2433)

      NRS 89.040  Filing requirements; required provisions of articles; name.

      1.  One or more persons may organize a

professional entity in the manner provided for organizing a corporation

pursuant to chapter 78 of NRS or a

limited-liability company pursuant to chapter 86

of NRS. Each person organizing the professional entity must, except as otherwise

provided in subsection 2 of NRS 89.050, be

authorized to perform the professional service for which the professional

entity is organized. The articles must contain the following additional

information:

      (a) The profession to be practiced by means of

the professional entity.

      (b) The names and addresses, either residence or

business, of the original stockholders and directors of the professional

corporation or the original members and managers of the professional

limited-liability company.

      (c) Except as otherwise provided in paragraphs

(d) and (e), a certificate from the regulating board of the profession to be

practiced showing that each of the directors, stockholders, managers or members

who is a natural person is licensed to practice the profession.

      (d) For a professional entity 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 professional entity 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.

      (e) For a professional entity formed pursuant to

subsection 5 of NRS 89.070, a certificate from the

State Bar of Nevada showing at least one stockholder or member who is a natural

person is admitted by the Supreme Court of the State of Nevada to practice law

as a member of the State Bar of Nevada.

      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.

      3.  The name of a professional

limited-liability company must contain the words “Professional

Limited-Liability Company” or the abbreviations “Prof. L.L.C.,” “Prof. LLC,”

“P.L.L.C.,” “PLLC,” or the word “Chartered” or the abbreviation “Chtd.,” or

“Limited” or the abbreviation “Ltd.” The name of a professional

limited-liability company must contain the last name of one or more of its

current or former members.

      4.  The professional entity may render

professional services and exercise its authorized powers under a fictitious

name if the professional entity 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; 2007, 2433; 2009, 1714)

      NRS 89.045  List or statement to be maintained at registered office or

principal place of business; requirement to assist in criminal investigation;

failure to comply; regulations.

      1.  A professional entity shall maintain at

its registered office or principal place of business in this State:

      (a) A current list of its owners of record; or

      (b) A statement indicating where such a list is

maintained.

      2.  Upon the request of the Secretary of

State, the professional entity shall:

      (a) Provide the Secretary of State with the name

and contact information of the custodian of the list described in subsection 1.

The information required pursuant to this paragraph shall be kept confidential

by the Secretary of State.

      (b) Provide written notice to the Secretary of

State within 10 days after any change in the information contained in the list

described in subsection 1.

      3.  Upon the request of any law enforcement

agency in the course of a criminal investigation, the Secretary of State may

require a professional entity to:

      (a) Submit to the Secretary of State, within 3

business days, a copy of the list required to be maintained pursuant to

subsection 1; or

      (b) Answer any interrogatory submitted by the

Secretary of State that will assist in the criminal investigation.

      4.  If a professional entity fails to

comply with any requirement pursuant to subsection 3, the Secretary of State

may take any action necessary, including, without limitation, the suspension or

revocation of the corporate charter.

      5.  The Secretary of State shall not

reinstate or revive a charter that was revoked or suspended pursuant to

subsection 4 unless:

      (a) The professional entity complies with the

requirements of subsection 3; or

      (b) The law enforcement agency conducting the

investigation advises the Secretary of State to reinstate or revive the

corporate charter.

      6.  The Secretary of State may adopt

regulations to administer the provisions of this section.

      (Added to NRS by 2007, 1335; A 2009, 2858)

      NRS 89.050  Scope of business; property and investments; professional

services by officers and employees.

      1.  Except as otherwise provided in

subsection 2, a professional entity 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

entity 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 entity 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 entity may market and manage additional professional entities

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;

             (4) Any marriage and family therapist who

is licensed by this State pursuant to chapter 641A

of NRS; and

             (5) Any clinical professional counselor

who is licensed by this State pursuant to chapter

641A of NRS.

Ê Such a

professional entity may market and manage additional professional entities

which are organized to render a professional service relating to mental health

services pursuant to this paragraph.

      3.  A professional entity may render a

professional service only through its officers, managers 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; 2007, 2434, 3077)

      NRS 89.060  Professional relationship preserved.  The

provisions of this chapter relating to professional entities 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 the person has not personally participated.

      2.  A director, officer or employee of a

professional entity liable in contract for any contract which the director,

officer or employee signs on behalf of a professional entity within the limits

of his or her actual authority.

      (Added to NRS by 1963, 866; A 1969, 521; 2003, 3160; 2007, 2435)

      NRS 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)

      NRS 89.080  Duties upon legal disqualification of officer, stockholder,

director, member, manager or employee; qualifications of officer, director or

manager; death of owner whose interest is in revocable trust.

      1.  If any officer, stockholder, director,

member, manager or employee of a professional entity 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

or she shall sever within a reasonable period all professional service with and

financial interest in the professional entity, but this chapter does not

prevent a professional entity 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, director or manager of a professional entity formed under this

chapter unless the natural person is licensed to render the same specific

professional services as those for which the professional entity was formed.

      3.  Upon the death of an owner of a

professional entity who has transferred his or her interest in the professional

entity to a revocable trust as permitted by NRS 89.070,

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 owner’s interest to any person not licensed to render the

services for which the professional entity was formed.

      4.  A professional entity’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; 2007, 2437)

      NRS 89.100  Authority of regulating boards not affected.  The provisions of this chapter relating to professional

entities 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; 2007, 2437)

      NRS 89.110  Scope of authority.  No

professional entity may do any act which is prohibited to be done by natural

persons licensed to practice the profession which the professional entity is

organized to practice.

      (Added to NRS by 1963, 867; A 1995, 2120; 2007, 2438)

PROFESSIONAL ASSOCIATIONS

      NRS 89.200  Inapplicability of chapter 87

of NRS.  The provisions of chapter 87 of NRS do not apply to professional

associations.

      (Added to NRS by 1969, 523; A 2005, 443)

      NRS 89.210  Filing requirements; name of association.

      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)

      NRS 89.215  Penalty for purporting to do business as professional

association without filing articles of association; enforcement; regulations.

      1.  Every person who is purporting to do

business in this State as a professional association and who willfully fails or

neglects to file with the Secretary of State articles of association is subject

to a fine of not less than $1,000 but not more than $10,000, to be recovered in

a court of competent jurisdiction.

      2.  When the Secretary of State is advised

that a person is subject to the fine described in subsection 1, the Secretary

of State may, as soon as practicable, refer the matter to the district attorney

of the county in which the person’s principal place of business is located or

the Attorney General, or both, for a determination of whether to institute

proceedings to recover the fine. The district attorney of the county in which

the person’s principal place of business is located or the Attorney General may

institute and prosecute the appropriate proceedings to recover the fine. If the

district attorney or the Attorney General prevails in a proceeding to recover

the fine described in subsection 1, the district attorney or the Attorney

General is entitled to recover the costs of the proceeding, including, without

limitation, the cost of any investigation and reasonable attorney’s fees.

      3.  In the course of an investigation of a

violation of this section, the Secretary of State may require a person to

answer any interrogatory submitted by the Secretary of State that will assist

in the investigation.

      4.  The Secretary of State may adopt

regulations to administer the provisions of this section.

      (Added to NRS by 2009, 1714;

A 2013, 896)

      NRS 89.220  Professional relationship preserved.  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 the

member or employee has not personally participated.

      2.  A member or employee of a professional

association shall not be personally liable in contract for any contract which

the member or employee signs on behalf of a professional association within the

limits of his or her actual authority.

      (Added to NRS by 1969, 523; A 2003, 3161)

      NRS 89.230  Restrictions on membership and rendering of professional

services.  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)

      NRS 89.240  Duties upon legal disqualification of member or employee;

redemption of and restrictions on transfer and ownership of member’s interest.

      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, the member or employee 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 or her 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 or her interest in the association or any other interest in the

assets of the association to a revocable trust if the member 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)

      NRS 89.250  Annual list: Filing requirements; fees; regulations.

      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 or, if the professional association has selected an

alternative due date pursuant to subsection 7, on or before that alternative

due date, and annually thereafter on or before the last day of the month in

which the anniversary date of its organization occurs in each year or, if

applicable, on or before the last day of the month in which the anniversary

date of the alternative due date 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 or, if the professional association has selected an

alternative due date pursuant to subsection 7, on or before that alternative

due date, and annually thereafter on or before the last day of the month in

which the anniversary date of its organization occurs in each year or, if

applicable, on or before the last day of the month in which the anniversary

date of the alternative due date 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 or by some other person specifically authorized by the

chief executive officer to sign the list.

      (c) Accompanied by a declaration under penalty of

perjury that:

             (1) The professional association has

complied with the provisions of chapter 76 of

NRS;

             (2) The professional association

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; and

             (3) None of the members or employees

identified in the list has been identified in the list with the fraudulent

intent of concealing the identity of any person or persons exercising the power

or authority of a member or employee in furtherance of any unlawful conduct.

      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.

      5.  A person who files with the Secretary

of State an initial list or annual list required by this section which

identifies a member or an employee of a professional association with the

fraudulent intent of concealing the identity of any person or persons

exercising the power or authority of a member or employee in furtherance of any

unlawful conduct is subject to the penalty set forth in NRS 225.084.

      6.  For the purposes of this section, a

person is not deemed to exercise actual control of the daily operations of a

professional association based solely on the fact that the person holds an

ownership interest in the professional association.

      7.  The Secretary of State may allow a

professional association to select an alternative due date for filing the

initial list required by this section.

      8.  The Secretary of State may adopt

regulations to administer the provisions of subsection 7.

      (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; 2009, 2045;

2013, 896)

      NRS 89.251  List or statement to be maintained at registered office or

principal place of business; requirement to assist in criminal investigation;

failure to comply; regulations.

      1.  A professional association shall

maintain at its registered office or principal place of business in this State:

      (a) A current list of each member; or

      (b) A statement indicating where such a list is

maintained.

      2.  Upon the request of the Secretary of

State, the professional association shall:

      (a) Provide the Secretary of State with the name

and contact information of the custodian of the list described in subsection 1.

The information required pursuant to this paragraph shall be kept confidential

by the Secretary of State.

      (b) Provide written notice to the Secretary of

State within 10 days after any change in the information contained in the list

described in subsection 1.

      3.  Upon the request of any law enforcement

agency in the course of a criminal investigation, the Secretary of State may

require a professional association to:

      (a) Submit to the Secretary of State, within 3

business days, a copy of the list required to be maintained pursuant to

subsection 1; or

      (b) Answer any interrogatory submitted by the

Secretary of State that will assist in the criminal investigation.

      4.  If a professional association fails to

comply with any requirement pursuant to subsection 3, the Secretary of State

may take any action necessary, including, without limitation, the suspension or

revocation of the articles of association.

      5.  The Secretary of State shall not

reinstate or revive articles of association that were revoked or suspended

pursuant to subsection 4 unless:

      (a) The professional association complies with

the requirements of subsection 3; or

      (b) The law enforcement agency conducting the

investigation advises the Secretary of State to reinstate or revive the

articles of association.

      6.  The Secretary of State may adopt regulations

to administer the provisions of this section.

      (Added to NRS by 2007, 1335; A 2009, 2858)

      NRS 89.252  Defaulting associations: Identification; penalty.

      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)

      NRS 89.254  Defaulting associations: Duties of Secretary of State;

forfeiture of right to transact business; assets held in trust; distribution of

assets.

      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)

      NRS 89.256  Defaulting associations: Conditions and procedure for

reinstatement.

      1.  Except as otherwise provided in

subsections 3 and 4 and NRS 89.251, 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;

             (2) The information required pursuant to NRS 77.310; and

             (3) A declaration under penalty of

perjury, on a form provided by the Secretary of State, that the reinstatement

is authorized by a court of competent jurisdiction in this State or by the duly

selected chief executive officer of the professional association; 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, the Secretary of State 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

7 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.

      5.  A reinstatement pursuant to this

section relates back to the date on which the professional association

forfeited its right to transact business under the provisions of this chapter

and reinstates the professional association’s right to transact business as if

such right had at all times remained in full force and effect.

      (Added to NRS by 1995, 1138; A 2001, 3191; 2003,

20th Special Session, 114; 2005, 2271; 2007, 1336, 2438, 2701; 2013, 897)

      NRS 89.260  Authority of regulating boards not affected.  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)

      NRS 89.270  Scope of authority.  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)