Open Letter to Nevada State Senators to Amend NRS 21.090

Posted by: on Mon, Apr 15, 2013

Share this post

Dear Senator,

As I read NRS Chapter 78 and NRS Chapter 86, the charging-order “benefit” to LLC members and to closely held corporations with fewer than 100 shareholders are essentially the same. The difference is that the exemption statute [NRS 21.090(1)(bb)] contains a specific reference to stock described in NRS 78.746(2) and does NOT mention LLC membership interests. The 2007 Nevada Legislature also amended NRS 21.090(aa), Nevada’s Exemption Statute, to make “stock of a corporation described in subsection 2 of NRS 78.746” exempt from execution.

This means, according to some legal experts, that “an individual who files bankruptcy may now claim that his small business stock is an exempt asset.” Stephen R. Harris, Northern Nevada Business Weekly, Sept. 6, 2010. The issue has not yet been adjudicated in Nevada Bankruptcy courts, but the reference in NRS Chapter 21 to stock ownership apparently creates a benefit in bankruptcy cases that is lacking for LLC owners. Hence there is some discussion among law firms to use corporations rather than LLCs, which was certainly not the legislative intent. I believe you should attempt to amend NRS 21.090 to include a reference to LLC interests. It should not take much to add a reference to LLC membership interests under NRS 86.401.

Thanks,

Mark Albright

About the Authors: The law firm of Albright, Stoddard, Warnick & Albright is an A-V Rated Nevada-based full-service law firm having attorneys licensed in Nevada, California and Utah. Our firm’s practice includes a strong emphasis on personal injury accidents. Call us at 702-384-7111.

Note: This article, and any other information you obtain at this website, is not offered as legal advice, nor should it be relied upon as such, nor is it a solicitation for legal services. Only a licensed attorney can advise you with respect to your specific legal needs. We welcome your contacting our firm to discuss such representation. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.