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502 North Division St.,
Carson City, Nevada 89703-4103
Phone: (775) 883-3711,
Toll free: (800) 655-0538,
FAX: (775) 883-2723
Nevada is the right choice for you to incorporate - offering many advantages to other "incorporation states".
LEGAL ADVANTAGES; A COMPARISON WITH DELAWARE (continued)
Not intended to be legal advice, for discussion purposes only.
12. Dissenters’ Rights
In both jurisdictions, dissenting stockholders of a corporation engaged in certain major corporate transactions are entitled to appraisal rights. See Nev. Rev. Stat. §§ 78.3793, 92A.300 – 92A.500 inclusive; Del. Code Ann. tit. viii, § 262. Appraisal rights permit a stockholder to receive cash equal to the fair market value of the stockholder’s shares (as determined by agreement of the parties or by a court) in lieu of the consideration such stockholder would otherwise receive in any such transaction.
Under Nevada law, a stockholder is entitled to dissent from, and obtain payment for the fair value of his or her shares in the event of (i) certain acquisitions of a controlling interest in the corporation, (ii) consummation of a plan of merger, if approval by the stockholders is required and the stockholder is entitled to vote on the merger or if the domestic corporation is a subsidiary and is merged with its parent, (iii) a plan of exchange in which the corporation is a party, or (iv) any corporate action taken pursuant to a vote of the stockholders, if the articles of incorporation, bylaws or a resolution of the board of directors provides that voting or nonvoting stockholders are entitled to dissent and obtain payment for their shares. See Nev. Rev. Stat. §§ 78.3793, 92A.300 – 92A.500 inclusive.
Holders of securities listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. (the “NASD”) or held by at least 2,000 stockholders of record are generally not entitled to dissenters’ rights. Nev. Rev. Stat. §§ 78.3793, 92A.390. This exception is not, however, available if the articles of incorporation of the corporation issuing the shares state that it is not available, or if the holders of the class or series are required under the plan of merger or exchange to accept for the shares anything except cash, shares of stock as described in Nev. Rev. Stat. § 92A.390(b), or a combination thereof. Nevada law prohibits a dissenting shareholder from voting his shares or receiving certain dividends or distributions after his dissent. See Nev. Rev. Stat. § 92A.380. Under Delaware law, appraisal rights are generally available for the shares of any class or series of stock of a Delaware corporation in a merger or consolidation, provided that no appraisal rights are available for the shares of any class or series of stock that, at the record date for the meeting held to approve such transaction, were either (1) listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the NASD or (2) held of record by more than 2,000 stockholders. Del. Code Ann. tit. viii, § 262(b)(1). Even if the shares of any class or series of stock meet the requirements of subsections (1) or (2) above, appraisal rights are available for such class or series if the holders thereof receive in the merger or consolidation anything except cash, shares of stock as described in Del. Code Ann. tit. viii, § 262(b)(2), or a combination thereof.
Recent amendments to Delaware stockholders’ appraisal rights allow beneficial owners of shares to file a petition for appraisal without the need to name a nominee as a nominal plaintiff and to make it easier to withdraw from the appraisal process and accept the terms offered in the merger or consolidation. See Del. Code Ann. tit. viii, § 262(e) and (k). No appraisal rights are available to stockholders of the surviving corporation if the merger did not require their approval. Del. Code Ann. tit. viii, § 262(b)(1).
Not intended to be legal advice, for discussion purposes only.
12. Dissenters’ Rights
In both jurisdictions, dissenting stockholders of a corporation engaged in certain major corporate transactions are entitled to appraisal rights. See Nev. Rev. Stat. §§ 78.3793, 92A.300 – 92A.500 inclusive; Del. Code Ann. tit. viii, § 262. Appraisal rights permit a stockholder to receive cash equal to the fair market value of the stockholder’s shares (as determined by agreement of the parties or by a court) in lieu of the consideration such stockholder would otherwise receive in any such transaction.
Under Nevada law, a stockholder is entitled to dissent from, and obtain payment for the fair value of his or her shares in the event of (i) certain acquisitions of a controlling interest in the corporation, (ii) consummation of a plan of merger, if approval by the stockholders is required and the stockholder is entitled to vote on the merger or if the domestic corporation is a subsidiary and is merged with its parent, (iii) a plan of exchange in which the corporation is a party, or (iv) any corporate action taken pursuant to a vote of the stockholders, if the articles of incorporation, bylaws or a resolution of the board of directors provides that voting or nonvoting stockholders are entitled to dissent and obtain payment for their shares. See Nev. Rev. Stat. §§ 78.3793, 92A.300 – 92A.500 inclusive.
Holders of securities listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. (the “NASD”) or held by at least 2,000 stockholders of record are generally not entitled to dissenters’ rights. Nev. Rev. Stat. §§ 78.3793, 92A.390. This exception is not, however, available if the articles of incorporation of the corporation issuing the shares state that it is not available, or if the holders of the class or series are required under the plan of merger or exchange to accept for the shares anything except cash, shares of stock as described in Nev. Rev. Stat. § 92A.390(b), or a combination thereof. Nevada law prohibits a dissenting shareholder from voting his shares or receiving certain dividends or distributions after his dissent. See Nev. Rev. Stat. § 92A.380. Under Delaware law, appraisal rights are generally available for the shares of any class or series of stock of a Delaware corporation in a merger or consolidation, provided that no appraisal rights are available for the shares of any class or series of stock that, at the record date for the meeting held to approve such transaction, were either (1) listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the NASD or (2) held of record by more than 2,000 stockholders. Del. Code Ann. tit. viii, § 262(b)(1). Even if the shares of any class or series of stock meet the requirements of subsections (1) or (2) above, appraisal rights are available for such class or series if the holders thereof receive in the merger or consolidation anything except cash, shares of stock as described in Del. Code Ann. tit. viii, § 262(b)(2), or a combination thereof.
Recent amendments to Delaware stockholders’ appraisal rights allow beneficial owners of shares to file a petition for appraisal without the need to name a nominee as a nominal plaintiff and to make it easier to withdraw from the appraisal process and accept the terms offered in the merger or consolidation. See Del. Code Ann. tit. viii, § 262(e) and (k). No appraisal rights are available to stockholders of the surviving corporation if the merger did not require their approval. Del. Code Ann. tit. viii, § 262(b)(1).
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