Nevada Revised Statutes 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:
Terms Used In Nevada Revised Statutes 89.254
- Articles: means either the articles of incorporation of a professional corporation or the articles of organization of a professional limited-liability company. See Nevada Revised Statutes 89.020
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- 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 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. See Nevada Revised Statutes 89.020
(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. 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.