Nevada § 89.070 - Restrictions on ownership and transfer of shares

§ 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 incapacitated 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. 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. 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.