Nevada Revised Statutes 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.
Terms Used In Nevada Revised Statutes 89.080
- Contract: A legal written agreement that becomes binding when signed.
- 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. See Nevada Revised Statutes 89.020
- Licensed: means legally authorized by the appropriate regulating board of this State to engage in a regulated profession in this State. See Nevada Revised Statutes 89.020
- Owner: means the owner of stock in a professional corporation or the owner of a member"s interest, as defined in Nevada Revised Statutes 89.020
- person: means a natural person, any form of business or social organization and any other nongovernmental legal entity including, but not limited to, a corporation, partnership, association, trust or unincorporated organization. See Nevada Revised Statutes 0.039
- Professional entity: means either a professional corporation or a professional limited-liability company. See Nevada Revised Statutes 89.020
- 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. See Nevada Revised Statutes 89.020
- Revocable trust: A trust agreement that can be canceled, rescinded, revoked, or repealed by the grantor (person who establishes the trust).
- Trustee: A person or institution holding and administering property in trust.
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.