United States · Nevada

How to issue shares in Nevada corporations

Nevada is a popular state of incorporation for asset-protection-oriented and privacy-oriented corporations, with statutes that are favourable to management and limit shareholder inspection rights. NRS Chapter 78 governs Nevada corporations.

Governing statute
Nevada Revised Statutes Chapter 78, NRS Ch. 78
NRS § 78.195Issuance of shares
NRS § 78.211Consideration for shares
NRS § 78.215Forms of consideration
NRS § 78.235Stock certificates; uncertificated shares
NRS § 78.105Stock ledger; shareholder list; inspection
NRS § 90.530Nevada Uniform Securities Act exemptions
At a glance
  • Authorized by the board under NRS § 78.195; consideration determined under §§ 78.211 and 78.215
  • Future services permitted as consideration (§ 78.215)
  • Uncertificated shares permitted under § 78.235
  • Inspection rights under § 78.105 distinctively require 15% ownership (one of the highest US thresholds)
  • Nevada Uniform Securities Act under NRS Chapter 90 for state filings

Board authorization under NRS § 78.195

Stock issuance is authorized by the board under NRS § 78.195. The board determines consideration under §§ 78.211 and 78.215. Nevada permits broad consideration including services and contracts for services to be performed. The board's determination of consideration adequacy is conclusive absent fraud, and Nevada courts give substantial deference to board determinations (Nevada is one of the more management-protective state regimes).

Consideration under § 78.215

NRS § 78.215 permits consideration in the form of money, services performed, contracts for services to be performed, securities or debts of the corporation, or any other benefit to the corporation. Future services are permitted. Promissory notes are permitted as consideration. The flexibility is similar to Florida and Texas, more permissive than Delaware or New York.

Uncertificated shares under § 78.235

NRS § 78.235 permits the corporation to issue certificated or uncertificated shares. Election is by board resolution. Modern Nevada-incorporated corporations typically elect uncertificated. The corporation may use a transfer agent or maintain the stock ledger internally.

Inspection rights under NRS § 78.105 (the 15% threshold)

Nevada's inspection regime is distinctive. NRS § 78.105 grants inspection rights to shareholders holding at least 15% of the outstanding shares (one of the highest thresholds in the US, much higher than DGCL § 220's no-threshold proper-purpose standard or California's 5% under § 1601(a)). The 15% threshold significantly limits minority-shareholder inspection rights and is one reason Nevada is chosen for governance-protective purposes.

Nevada Uniform Securities Act compliance

Offerings to Nevada residents are governed by NRS Chapter 90 (Nevada Uniform Securities Act). § 90.530 lists exemptions including the limited offering exemption and accredited investor variants. NSMIA pre-empts Chapter 90 for Rule 506 offerings but not the notice filing. The Nevada Secretary of State administers Chapter 90.

Common mistakes

Common Nevada-specific failure points in share issuance:

  • Treating Delaware case law as controlling on Nevada-specific provisions (15% inspection threshold has no Delaware parallel)
  • Inspection demand from a sub-15% shareholder being denied without clear documentation
  • Failing to maintain the NRS § 78.105 stock ledger and shareholder list
  • Missing the NRS Ch. 90 notice filing for offerings to Nevada residents
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FAQ

Common questions in Nevada

Nevada's primary draws are management-protective governance rules (broader business-judgment-rule deference), the 15% inspection threshold (limiting minority-shareholder discovery), no state corporate income tax, and historically lower franchise fees. The trade-off is less developed case law than Delaware Chancery and less institutional-investor familiarity. Most US venture-backed startups still choose Delaware; Nevada is more common for privately held holdcos and asset-protection structures.

NRS § 78.105 grants the right to inspect corporate books and records to shareholders holding at least 15% of the outstanding shares (or to a shareholder authorized in writing by 15%-or-more shareholders). This threshold is the highest of any major US jurisdiction and is one of Nevada's most distinctive features. Compare to DGCL § 220 (no threshold but proper-purpose required) and California § 1601 (5% threshold or any holder of voting trust certificates).

Yes, Nevada's Business Court (a division of the Eighth Judicial District Court in Clark County) handles business and commercial disputes. The court is less developed than Delaware Chancery but is increasingly used for complex commercial matters. Nevada's case law on Nevada-specific corporate provisions (like the 15% inspection threshold and broader business-judgment-rule deference) is the strongest authority for those issues.
Records that comply with NRS Ch. 78
Issue shares the right way in Nevada.

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