Here Is Something A Board Can Do Under Nevada, But Not California, Law

Allen Matkins

Allen Matkins

The private corporation laws of both California and Nevada both authorize the formation of committees.  Cal. Corp. Code § 311 & NRS 78.125.  There are some differences, however.  California requires that any committee of the board consist of at least two directors while Nevada's statute requires that a committee include "at least one director".  

More unusually, Nevada expressly authorizes the board to appoint natural persons who are not directors to serve on committees. NRS 78.125(2).  Therefore, as long as a committee includes at least one director, a committee could include any number of non-directors.  The board's authority to appoint non-directors, however, may be limited or proscribed by the corporation's articles of incorporation or bylaws.

The statute does not specify whether the non-director committee members owe the same fiduciary duties as directors.  Nor does NRS 78.138, which prescribes the fiduciary duties of directors and officers and limits their liability, expressly apply to members of committees.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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