The Nevada Close Corporation is designed for corporations that have less than thirty (30) shareholders and where free transferability of the stock is not desired. The Nevada Close Corporation statute is found in NRS 78A.001 et seq. and provides for a fully legitimate corporation but with fewer of the ordinary “corporate” statutory formality requirements and a simpler corporate structure. The stock of the Nevada Close Corporation may not be freely transferable and the stock certificates themselves must contain a restrictive endorsement on the certificate to notify potential stock purchasers that the transferability of the shares may be restricted under the company’s policies. The shareholders always have the option to agree to a proposed transfer/sale of shares. NRS 78A.050 also provides for a specific list of exceptions to the restriction on ability to transfer shares of stock. The close corporation may elect to operate without a board of directors. Unlike a ordinary corporation, annual and special meetings of the close corporation are optional but not required by law. NRS 78A.120 specifically provides that:
“Personal liability may not be imposed upon shareholders of a close corporation solely as a result of the failure of the close corporation to observe the usual corporate formalities or requirements relating to the exercise of corporate powers or management of its business and affairs, where such failure results from the distinct nature and permissible functioning of a close corporation.”
NRS 78A.030 allows and provides the procedure for an ordinary corporation to convert to a Close Corporation. NRS 78A.170 allows for a Nevada Close Corporation to terminate its status as a Close Corporation if it chooses to do so.