Nevada Corporation May Convert to a Foreign Business Entity

Under Nevada law, a Nevada corporation may convert to a foreign business entity under an approved conversion plan. (Nev. Rev. Stat. § 92A.105.)

Nevada Revised Statutes section 92A.105 provides:

Except as limited by NRS 78.411 to 78.444, inclusive, one domestic general partnership or one domestic entity, except a domestic nonprofit corporation, may convert into a domestic entity of a different type or a foreign entity if the plan of conversion is approved pursuant to the provisions of this chapter.

The plan of conversion must be in writing and set forth the:

(a) Name of the constituent entity and the proposed name for the resulting entity;

(b) Jurisdiction of the law that governs the constituent entity;

(c) Jurisdiction of the law that will govern the resulting entity;

(d) Terms and conditions of the conversion;

(e) Manner and basis, if any, of converting the owner's interest or the interest of a partner in a general partnership of the constituent entity into owner's interests, rights of purchase and other securities in the resulting entity or cancelling such owner's interests in whole or in part; and

(f) Full text of the charter documents of the resulting entity.

The entity to be converted is considered the "constituent entity" (Nev. Rev. Stat. § 92A.015) and the entity that results from the conversion is called the "resulting entity" (Nev. Rev. Stat. § 92A.090). If the resulting entity is a foreign entity, the constituent entity delivers articles of conversion to Nevada's Secretary of State setting forth the name and jurisdiction of organization of the constituent entity and the resulting entity, that the conversion plan was adopted by the constituent entity in compliance with Nevada law, and the address of the resulting entity for service of process. (Nev. Rev. Stat. § 92A.205.)

When a conversion takes effect under Nevada law, "the constituent entity is converted into the resulting entity and is governed by and subject to the law of the jurisdiction of the resulting entity." (Nev. Rev. Stat. § 92A.250, subd. (3)(a).)

"The conversion is a continuation of the existence of the constituent entity." (Nev. Rev. Stat. § 92A.250, subd. (3)(b).) "The resulting entity has all the liabilities of the constituent entity." (Nev. Rev. Stat. § 92A.250, subd. (3)(d).) "The domestic constituent entity is not required to wind up its affairs, pay its liabilities, distribute its assets or dissolve, and the conversion is not deemed a dissolution of the domestic constituent entity." (Nev. Rev. Stat. § 92A.250, subd. (3)(h).)

Significantly, "a proceeding pending against the constituent entity may be continued as if the conversion had not occurred or the resulting entity may be substituted in the proceeding for the constituent entity." (Nev. Rev. Stat. § 92A.250, subd. (3)(e).)