Nevada business owners and those who are considering starting a business sometimes have questions about corporate formation documents and their relevance. The most important corporate document in most states is the articles of incorporation. In Nevada, the filing of the articles of incorporation with the Secretary of State is the action that brings the corporate entity into existence. Typically, following the filing of the articles of incorporation, the shareholders or board of directors meet to adopt bylaws, appoint officers and issue stock certificates.
Corporate bylaws set forth the rules and guidelines by which the corporation will operate. They will typically include provisions stating where and when shareholders’ meetings will take place, the process for calling a meeting, the quorum and voting requirements and how notice for special shareholders’ meetings will be given. Corporate bylaws might include anything required for the operation of the corporation, but they cannot conflict with the articles of incorporation or violate state law.
A shareholders’ agreement may set forth specifics of the shareholders’ relationships to one another with regard to matters that the corporate bylaws do not address. A typical provision, for example, might state what happens when a shareholder can no longer participate in the enterprise. It might require the other shareholders to purchase the shares and set forth the terms of such a purchase. Where there is a conflict between the shareholders’ agreement and the bylaws, the shareholders’ agreement typically governs.
In a case where a Nevada resident wants to incorporate a business, an attorney may be able to help. An attorney with experience in business formation and planning might begin by drafting and filing the necessary legal documents to establish the entity or create a shareholders’ agreement for use by corporate ownership. An attorney may also be helpful during the process of outlining the rights and responsibilities of the parties involved in the business.