When we last analyzed Nevada’s Assembly Bill No. 239 (AB 239), it had just been signed into law in May 2025. While revisiting the bill, well into 2026, the practical implications of this historic corporate legislation are becoming clearer. Nevada received a lot of interest from Delaware corporations as many believed it to be more protective of key stockholders and its board of directors and officers. Between 2024 and 2025, Nevada welcomed many large-market-share companies that opted to domesticate their corporations to Nevada. For corporations, especially Delaware corporations still considering a move to Nevada, the dust is beginning to settle. For the Nevada business lawyer and corporate attorney professionals advising them, the picture has considerably improved.
Understanding Controlling Stockholders
AB 239’s most significant changes remain as originally passed. In Nevada, directors and officers of corporations have fiduciary duties explicitly codified under Nevada Revised Statutes (NRS) § 78.138. Stockholders in Nevada corporations generally owe no fiduciary duties to the corporation or fellow stockholders. However, AB 239 added limited exceptions for “controlling stockholders,” defined as those with voting power to elect a majority of directors. For those controlling parties, the fiduciary duty is to refrain from influencing directors or officers to breach their obligations for controlling stockholders’ financial benefit.
What Nevada AB 239 Means for Controlling Stockholders
AB 239 aims to provide a more predictable avenue to prove the presence of a conflict of interest, intentional misconduct, or fraud within the corporation. In Nevada, there are certain stock percentage thresholds that must be met to inspect or conduct a financial audit of corporations (NRS § 78.257). In addition, under NRS 78.138(7), a director or officer is not personally liable for damages unless both of the following are proven:
- The presumption that a director or officer acted in good faith has been proven false, and
- The breach involved intentional misconduct, fraud, or a knowing violation of law.
This protection for directors and officers now extends, narrowly, to controlling shareholders through AB 239. As mentioned, their duty is to refrain from influencing directors or officers to breach their fiduciary obligations. Additionally, AB 239 offers another layer of protection for controlling shareholders through disinterested parties. Controlling shareholders are presumed to not have breached their duty if the transaction was approved by either: A group of disinterested officers or directors or; A disinterested committee selected by the full board. This mirrors the business judgment rule protections that directors and officers already enjoy.
The Minority Stockholder’s Perspective
For minority stockholders, AB 239 seeks to simplify the remedy available to anyone challenging a corporation’s actions. The bill made changes related to the rules and availability of dissenters’ rights. Minority shareholders looking for an exit strategy when a merger, conversion, or exchange occurs can demand payment of the “fair value” of their shares. Additionally, they cannot concurrently sue to prevent the transaction unless the company specifically failed to get the required votes or committed literal fraud (NRS 92A.380). Before AB 239, the grounds for litigation were much broader making the claims for dissenters and corporations alike less predictable. With these changes, dissenters’ rights become the most viable mechanism for stockholders who object to major corporate actions.
Conclusion
The passage of Assembly Bill 239 has profoundly reshaped Nevada’s corporate landscape, creating both significant opportunities and new compliance obligations for businesses operating in or moving to the state. Whether you are a corporation considering reincorporation, a controlling stockholder seeking to understand your narrowed fiduciary duties, a minority investor assessing your dissenters’ rights, or a board member navigating the new safe harbor provisions, the stakes have never been higher. A Nevada business lawyer can guide you through the reincorporation process, structure transactions to maximize the safe harbors AB 239 provides, and ensure your governing documents align with the current bill. A skilled corporate attorney will help you evaluate whether Nevada is the right jurisdiction for your business and advise on the strategic trade-offs between protection and accountability. The cost of getting it wrong, whether through a failed reincorporation, a flawed dissent notice, or a corporate structure that fails to implement AB 239’s protections, far exceeds the investment in qualified legal guidance.
