21-102. Terms, defined.

(RULLCA 102) In the Nebraska Uniform Limited Liability Company Act:

(1) Certificate of organization means the certificate required by section 21-117. The term includes the certificate as amended or restated.

(2) Certificate of registration means either (a) a document prepared and issued by a regulatory body or (b) verification, by the Secretary of State, that all of those members, managers, professional employees, and agents who are required by law to do so are duly licensed or otherwise legally authorized to render the professional service for which the limited liability company is organized to do business or a service ancillary to those which the limited liability company renders, through the electronic accessing of the regulatory body's licensing records or through compacts or other certifying organizations recognized by the regulatory body.

(3) Contribution means any benefit provided by a person to a limited liability company:

(A) in order to become a member upon formation of the company and in accordance with an agreement between or among the persons that have agreed to become the initial members of the company;

(B) in order to become a member after formation of the company and in accordance with an agreement between the person and the company; or

(C) in the person's capacity as a member and in accordance with the operating agreement or an agreement between the member and the company.

(4) Debtor in bankruptcy means a person that is the subject of:

(A) an order for relief under Title 11 of the United States Code or a successor statute of general application; or

(B) a comparable order under federal, state, or foreign law governing insolvency.

(5) Designated office means:

(A) the office that a limited liability company is required to designate and maintain under section 21-113; or

(B) the principal office of a foreign limited liability company.

(6) Distribution, except as otherwise provided in subsection (g) of section 21-134, means a transfer of money or other property from a limited liability company to another person on account of a transferable interest.

(7) Effective, with respect to a record required or permitted to be delivered to the Secretary of State for filing under the Nebraska Uniform Limited Liability Company Act, means effective under subsection (c) of section 21-121.

(8) Foreign limited liability company means an unincorporated entity formed under the law of a jurisdiction other than this state and denominated by that law as a limited liability company.

(9) Limited liability company, except in the phrase foreign limited liability company, means an entity formed under the Nebraska Uniform Limited Liability Company Act.

(10) Manager means a person that under the operating agreement of a manager-managed limited liability company is responsible, alone or in concert with others, for performing the management functions stated in subsection (c) of section 21-136.

(11) Manager-managed limited liability company means a limited liability company that qualifies under subsection (a) of section 21-136.

(12) Member means a person that has become a member of a limited liability company under section 21-130 and has not dissociated under section 21-145.

(13) Member-managed limited liability company means a limited liability company that is not a manager-managed limited liability company.

(14) Operating agreement means the agreement, whether or not referred to as an operating agreement and whether oral, in a record, implied, or in any combination thereof, of all the members of a limited liability company, including a sole member. The term includes the agreement as amended or restated.

(15) Organizer means a person that acts under section 21-117 to form a limited liability company.

(16) Person means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

(17) Principal office means the principal executive office of a limited liability company or foreign limited liability company, whether or not the office is located in this state.

(18) Professional service means any personal service rendered by an attorney, a certified public accountant, a public accountant, a dentist, an osteopathic physician, a physician and surgeon, a real estate broker, an associate real estate broker, a real estate salesperson, or a veterinarian. For purposes of the act, those professions pertaining to the diagnosis, care, and treatment of humans shall be considered to be of the same profession.

(19) Record means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(20) Regulatory body means a board, commission, court, or governmental authority which is charged with licensing or regulating the rendering of a professional service in this state.

(21) Sign means, with the present intent to authenticate or adopt a record:

(A) to execute or adopt a tangible symbol; or

(B) to attach to or logically associate with the record an electronic symbol, sound, or process.

(22) State means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(23) Transfer includes an assignment, conveyance, deed, bill of sale, lease, mortgage, trust deed, security interest, encumbrance, gift, and transfer by operation of law.

(24) Transferable interest means the right, as originally associated with a person's capacity as a member, to receive distributions from a limited liability company in accordance with the operating agreement, whether or not the person remains a member or continues to own any part of the right.

(25) Transferee means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a member.

Source:Laws 2010, LB888, § 2; Laws 2024, LB628, § 1.
Effective Date: July 19, 2024

21-103. Knowledge; notice.

(RULLCA 103) (a) A person knows a fact when the person:

(1) has actual knowledge of it; or

(2) is deemed to know it under subdivision (d)(1) of this section or law other than the Nebraska Uniform Limited Liability Company Act.

(b) A person has notice of a fact when the person:

(1) has reason to know the fact from all of the facts known to the person at the time in question; or

(2) is deemed to have notice of the fact under subdivision (d)(2) of this section.

(c) A person notifies another of a fact by taking steps reasonably required to inform the other person in ordinary course, whether or not the other person knows the fact.

(d) A person that is not a member is deemed:

(1) to know of a limitation on authority to transfer real property as provided in subsection (g) of section 21-127; and

(2) to have notice of a limited liability company's:

(A) dissolution, ninety days after a statement of dissolution under subdivision (b)(1)(B) of section 21-148 becomes effective;

(B) termination, ninety days after a statement of termination under subdivision (b)(2)(E) of section 21-148 becomes effective; and

(C) merger, conversion, or domestication, ninety days after articles of merger, conversion, or domestication under sections 21-170 to 21-184 become effective.

Source:Laws 2010, LB888, § 3.

21-104. Nature, purpose and duration of limited liability company; classification for tax purposes.

(RULLCA 104) (a) A limited liability company is an entity distinct from its members.

(b) A limited liability company may have any lawful purpose, except that a limited liability company may not operate as an insurer as defined in section 44-103.

(d) A limited liability company shall be classified for state income tax purposes in the same manner as it is classified for federal income tax purposes.

Source:Laws 2010, LB888, § 4; Laws 2016, LB758, § 1.

Annotations

Because a limited liability company is an entity distinct from its members, any personal injuries suffered by a member of such a company are not personal injuries suffered by the company. Alpha Wealth Advisors v. Cook, 313 Neb. 237, 983 N.W.2d 526 (2023).

21-105. Powers.

(RULLCA 105) A limited liability company has the capacity to sue and be sued in its own name and the power to do all things necessary or convenient to carry on its activities, including the power to render a professional service within or without this state.

Source:Laws 2010, LB888, § 5.

21-106. Governing law.

(RULLCA 106) The law of this state governs:

(1) the internal affairs of a limited liability company; and

(2) the liability of a member as member and a manager as manager for the debts, obligations, or other liabilities of a limited liability company.

Source:Laws 2010, LB888, § 6.

21-107. Supplemental principles of law.

(RULLCA 107) Unless displaced by particular provisions of the Nebraska Uniform Limited Liability Company Act, the principles of law and equity supplement the act.

Source:Laws 2010, LB888, § 7.

21-108. Name.

(RULLCA 108) (a) The name of a limited liability company must contain the words limited liability company or limited company or the abbreviation L.L.C., LLC, L.C., or LC. Limited may be abbreviated as Ltd., and company may be abbreviated as Co.

(b) Unless authorized by subsection (c) of this section, the name of a limited liability company must not be the same as or deceptively similar to, in the records of the Secretary of State:

(1) the name of each person that is not an individual and that is incorporated, organized, or authorized to transact business in this state; and

(2) each name reserved under section 21-109 or other state laws allowing the reservation or registration of business names, including fictitious or assumed name statutes.

(c) A limited liability company may apply to the Secretary of State for authorization to use a name that is deceptively similar to, upon the records of the Secretary of State, one or more of the names described in subsection (b) of this section. The Secretary of State shall authorize use of the name applied for if, as to each noncomplying name:

(1) the present user, registrant, or owner of the noncomplying name consents in a signed record to the use; or

(2) the applicant delivers to the Secretary of State a certified copy of the final judgment of a court establishing the applicant's right to use in this state the name applied for.

(d) Subject to section 21-159, this section applies to a foreign limited liability company transacting business in this state which has a certificate of authority to transact business in this state or which has applied for a certificate of authority.

Source:Laws 2010, LB888, § 8.

21-109. Reservation of name.

(RULLCA 109) (a) A person may reserve the exclusive use of the name of a limited liability company, including a fictitious or assumed name for a foreign limited liability company whose name is not available, by delivering an application to the Secretary of State for filing. The application must state the name and address of the applicant and the name proposed to be reserved. If the Secretary of State finds that the name applied for is available, it must be reserved for the applicant's exclusive use for a one-hundred-twenty-day period.

(b) The owner of a name reserved for a limited liability company may transfer the reservation to another person by delivering to the Secretary of State for filing a signed notice of the transfer which states the name and address of the transferee.

Source:Laws 2010, LB888, § 9.

21-110. Operating agreement; scope, function, and limitations.

(RULLCA 110) (a) To the extent the operating agreement does not otherwise provide for a matter, the Nebraska Uniform Limited Liability Company Act governs the matter.

(b) An operating agreement may not:

(1) vary a limited liability company's capacity under section 21-105 to sue and be sued in its own name;

(2) vary the law applicable under section 21-106;

(3) vary the power of the court under section 21-120;

(4) subject to subsections (c) through (f) of this section, eliminate the duty of loyalty or the duty of care;

(5) subject to subsections (c) through (f) of this section, eliminate the contractual obligation of good faith and fair dealing under subsection (d) of section 21-138;

(6) unreasonably restrict the duties and rights stated in section 21-139;

(7) vary the power of a court to decree dissolution in the circumstances specified in subdivisions (a)(4) and (5) of section 21-147;

(8) vary the requirement to wind up a limited liability company's business as specified in subsection (a) and subdivision (b)(1)(A) of section 21-148;

(9) unreasonably restrict the right of a member to maintain an action under sections 21-164 to 21-169;

(10) except as otherwise provided in section 21-183, restrict the right to approve a merger, conversion, or domestication of a member that will have personal liability with respect to a surviving, converted, or domesticated organization; or

(11) except as otherwise provided in subsection (b) of section 21-112, restrict the rights under the act of a person other than a member or manager.

(1) restrict or eliminate the duty:

(A) as required in subdivision (b)(1) and subsection (g) of section 21-138, to account to the limited liability company and to hold as trustee for it any property, profit, or benefit derived by the member in the conduct or winding up of the company's business, from a use by the member of the company's property, or from the appropriation of a limited liability company opportunity;

(B) as required in subdivision (b)(2) and subsection (g) of section 21-138, to refrain from dealing with the company in the conduct or winding up of the company's business as or on behalf of a party having an interest adverse to the company; and

(C) as required by subdivision (b)(3) and subsection (g) of section 21-138, to refrain from competing with the company in the conduct of the company's business before the dissolution of the company;

(2) identify specific types or categories of activities that do not violate the duty of loyalty;

(3) alter the duty of care, except to authorize intentional misconduct or knowing violation of law;

(4) alter any other fiduciary duty, including eliminating particular aspects of that duty; and

(5) prescribe the standards by which to measure the performance of the contractual obligation of good faith and fair dealing under subsection (d) of section 21-138.

(d) The operating agreement may specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one or more disinterested and independent persons after full disclosure of all material facts.

(e) To the extent the operating agreement of a member-managed limited liability company expressly relieves a member of a responsibility that the member would otherwise have under the Nebraska Uniform Limited Liability Company Act and imposes the responsibility on one or more other members, the operating agreement may, to the benefit of the member that the operating agreement relieves of the responsibility, also eliminate or limit any fiduciary duty that would have pertained to the responsibility.

(f) The operating agreement may alter or eliminate the indemnification for a member or manager provided by subsection (a) of section 21-137 and may eliminate or limit a member's or manager's liability to the limited liability company and members for money damages, except for:

(1) breach of the duty of loyalty;

(2) a financial benefit received by the member or manager to which the member or manager is not entitled;

(3) a breach of a duty under section 21-135;

(4) intentional infliction of harm on the company or a member; or

(5) an intentional violation of criminal law.

(g) The court shall decide any claim under subsection (c) of this section that a term of an operating agreement is manifestly unreasonable. The court:

(1) shall make its determination as of the time the challenged term became part of the operating agreement and by considering only circumstances existing at that time; and

(2) may invalidate the term only if, in light of the purposes and activities of the limited liability company, it is readily apparent that:

(A) the objective of the term is unreasonable; or

(B) the term is an unreasonable means to achieve the provision's objective.

Source:Laws 2010, LB888, § 10.

21-111. Operating agreement; effect on limited liability company and persons becoming members; preformation agreement.

(RULLCA 111) (a) A limited liability company is bound by and may enforce the operating agreement, whether or not the company has itself manifested assent to the operating agreement.

(b) A person that becomes a member of a limited liability company is deemed to assent to the operating agreement.

(c) Two or more persons intending to become the initial members of a limited liability company may make an agreement providing that upon the formation of the company the agreement will become the operating agreement. One person intending to become the initial member of a limited liability company may assent to terms providing that upon the formation of the company the terms will become the operating agreement.

Source:Laws 2010, LB888, § 11.

21-112. Operating agreement; effect on third parties and relationship to records effective on behalf of limited liability company.

(RULLCA 112) (a) An operating agreement may specify that its amendment requires the approval of a person that is not a party to the operating agreement or the satisfaction of a condition. An amendment is ineffective if its adoption does not include the required approval or satisfy the specified condition.

(b) The obligations of a limited liability company and its members to a person in the person's capacity as a transferee or dissociated member are governed by the operating agreement. Subject only to any court order issued under subdivision (b)(2) of section 21-142 to effectuate a charging order, an amendment to the operating agreement made after a person becomes a transferee or dissociated member is effective with regard to any debt, obligation, or other liability of the limited liability company or its members to the person in the person's capacity as a transferee or dissociated member.

(c) If a record that has been delivered by a limited liability company to the Secretary of State for filing and has become effective under the Nebraska Uniform Limited Liability Company Act contains a provision that would be ineffective under subsection (b) of section 21-110 if contained in the operating agreement, the provision is likewise ineffective in the record.

(d) Subject to subsection (c) of this section, if a record that has been delivered by a limited liability company to the Secretary of State for filing and has become effective under the act conflicts with a provision of the operating agreement:

(1) the operating agreement prevails as to members, dissociated members, transferees, and managers; and

(2) the record prevails as to other persons to the extent they reasonably rely on the record.

Source:Laws 2010, LB888, § 12.

21-113. Office and agent for service of process.

(RULLCA 113) (a) A limited liability company shall designate and continuously maintain in this state:

(1) an office, which need not be a place of its activity in this state; and

(2) an agent for service of process.

(b) A foreign limited liability company that has a certificate of authority under section 21-156 shall designate and continuously maintain in this state an agent for service of process.

(c) An agent for service of process of a limited liability company or foreign limited liability company must be an individual who is a resident of this state or other person with authority to transact business in this state.

Source:Laws 2010, LB888, § 13.

21-114. Change of designated office or agent for service of process; change of address.

(RULLCA 114) (a) A limited liability company or foreign limited liability company may change its designated office, its agent for service of process, or the address of its agent for service of process by delivering to the Secretary of State for filing a statement of change containing:

(1) the name of the company;

(2) the street and mailing addresses of its current designated office;

(3) if the current designated office is to be changed, the street and mailing addresses of the new designated office;

(4) the name and street and mailing addresses and post office box number, if any, of its current agent for service of process; and

(5) if the current agent for service of process or an address of the agent is to be changed, the new information.

(b) Subject to subsection (c) of section 21-121, a statement of change is effective when filed by the Secretary of State.

(c) An agent for service of process may change the agent's street and mailing addresses and post office box number, if any, for any limited liability company or foreign limited liability company for which the agent is designated by notifying the limited liability company or foreign limited liability company in writing of the change containing the new information, and by delivering to the Secretary of State for filing a statement of change of address for an agent for service of process which complies with the requirements of subdivisions (a)(1), (4), and (5) of this section and states that the limited liability company or foreign limited liability company has been notified of the change.

Source:Laws 2010, LB888, § 14; Laws 2014, LB753, § 1.

21-115. Resignation of agent for service of process.

(RULLCA 115) (a) To resign as an agent for service of process of a limited liability company or foreign limited liability company, the agent must deliver to the Secretary of State for filing a statement of resignation containing the company name and stating that the agent is resigning.

(b) The Secretary of State shall file a statement of resignation delivered under subsection (a) of this section and mail or otherwise provide or deliver a copy to the designated office of the limited liability company or foreign limited liability company and another copy to the principal office of the company if the mailing addresses of the principal office appears in the records of the Secretary of State and is different from the mailing address of the designated office.

(1) the thirty-first day after the Secretary of State files the statement of resignation; or

(2) when a record designating a new agent for service of process is delivered to the Secretary of State for filing on behalf of the limited liability company and becomes effective.

Source:Laws 2010, LB888, § 15.

21-116. Service of process.

(RULLCA 116) (a) An agent for service of process appointed by a limited liability company or foreign limited liability company is an agent of the company for service of any process, notice, or demand required or permitted by law to be served on the company.

(b) If a limited liability company or foreign limited liability company does not appoint or maintain an agent for service of process in this state or the agent for service of process cannot with reasonable diligence be found at the agent's street address, service of any process, notice, or demand on the limited liability company or foreign limited liability company may be made by registered or certified mail, return receipt requested, to the company at its designated office.

(1) the date the limited liability company or foreign limited liability company receives the process, notice, or demand;

(2) the date shown on the return receipt, if signed on behalf of the company; or

(3) five days after the process, notice, or demand is deposited with the United States Postal Service, if correctly addressed and with sufficient postage.

(d) This section does not affect the right to serve process, notice, or demand in any other manner provided by law.

Source:Laws 2010, LB888, § 16.

21-117. Formation; certificate of organization and other filings.

(RULLCA 201) (a) One or more persons may act as organizers to form a limited liability company by signing and delivering to the Secretary of State for filing a certificate of organization and, if applicable, a current certificate of registration as provided in sections 21-185 to 21-189.

(b) A certificate of organization must state:

(1) the name of the limited liability company, which must comply with section 21-108;

(2) the street and mailing addresses of the initial designated office and the name and street and mailing addresses and post office box number, if any, of the initial agent for service of process of the company; and

(3) if the company is organized to render a professional service, the professional service its members, managers, professional employees, and agents are licensed or otherwise legally authorized to render in this state.

(c) Subject to subsection (c) of section 21-112, a certificate of organization may also contain statements as to matters other than those required by subsection (b) of this section. However, a statement in a certificate of organization is not effective as a statement of authority.

(d) The following rules apply to the filing of a certificate of organization:

(1) A limited liability company is formed when the Secretary of State has filed the certificate of organization and a certificate of registration, if applicable, and the company has at least one member, unless the certificate states a delayed effective date pursuant to subsection (c) of section 21-121.

(2) If the certificate states a delayed effective date, a limited liability company is not formed if, before the certificate takes effect, a statement of cancellation is signed and delivered to the Secretary of State for filing and the Secretary of State files the certificate.

(3) Subject to any delayed effective date and except in a proceeding by this state to dissolve a limited liability company, the filing of the certificate of organization by the Secretary of State is conclusive proof that the organizer satisfied all conditions to the formation of a limited liability company.

Source:Laws 2010, LB888, § 17.

21-118. Amendment or restatement of certificate of organization.

(RULLCA 202) (a) A certificate of organization may be amended or restated at any time.

(b) To amend its certificate of organization, a limited liability company must deliver to the Secretary of State for filing an amendment stating:

(1) the name of the company;

(2) the date of filing of its certificate of organization; and

(3) the changes the amendment makes to the certificate as most recently amended or restated.

(c) To restate its certificate of organization, a limited liability company must deliver to the Secretary of State for filing a restatement, designated as such in its heading, stating:

(1) in the heading or an introductory paragraph, the company's present name and the date of the filing of the company's initial certificate of organization;

(2) if the company's name has been changed at any time since the company's formation, each of the company's former names; and

(3) the changes the restatement makes to the certificate as most recently amended or restated.

(d) Subject to subsection (c) of section 21-112 and subsection (c) of section 21-121, an amendment to or restatement of a certificate of organization is effective when filed by the Secretary of State.

(e) If a member of a member-managed limited liability company, or a manager of a manager-managed limited liability company, knows that any information in a filed certificate of organization was inaccurate when the certificate was filed or has become inaccurate owing to changed circumstances, the member or manager shall promptly:

(1) cause the certificate to be amended; or

(2) if appropriate, deliver to the Secretary of State for filing a statement of change under section 21-114 or a statement of correction under section 21-122.

Source:Laws 2010, LB888, § 18.

21-119. Signing of records to be delivered for filing to Secretary of State.

(RULLCA 203) (a) A record delivered to the Secretary of State for filing pursuant to the Nebraska Uniform Limited Liability Company Act must be signed as follows:

(1) Except as otherwise provided in subdivisions (2) and (3) of this subsection, a record signed on behalf of a limited liability company must be signed by a person authorized by the company.

(2) A limited liability company's initial certificate of organization must be signed by at least one person acting as an organizer.

(3) A record filed on behalf of a dissolved limited liability company that has no members must be signed by the person winding up the company's activities under subsection (c) of section 21-148 or a person appointed under subsection (d) of such section to wind up those activities.

(4) A statement of cancellation under subdivision (d)(2) of section 21-117 must be signed by each organizer that signed the initial certificate of organization, but a personal representative of a deceased or incompetent organizer may sign in the place of the decedent or incompetent.

(5) A statement of denial by a person under section 21-128 must be signed by that person.

(6) Any other record must be signed by the person on whose behalf the record is delivered to the Secretary of State.

(b) Any record filed under the act may be signed by an agent.

Source:Laws 2010, LB888, § 19.

21-120. Signing and filing pursuant to judicial order.

(RULLCA 204) (a) If a person required by the Nebraska Uniform Limited Liability Company Act to sign a record or deliver a record to the Secretary of State for filing under the act does not do so, any other person that is aggrieved may petition the district court to order:

(1) the person to sign the record;

(2) the person to deliver the record to the Secretary of State for filing; or

(3) the Secretary of State to file the record unsigned.

(b) If a petitioner under subsection (a) of this section is not the limited liability company or foreign limited liability company to which the record pertains, the petitioner shall make the company a party to the action.

Source:Laws 2010, LB888, § 20.

21-121. Delivery to and filing of records by Secretary of State; effective time and date.

(RULLCA 205) (a) A record authorized or required to be delivered to the Secretary of State for filing under the Nebraska Uniform Limited Liability Company Act must be captioned to describe the record's purpose, be in a medium permitted by the Secretary of State, and be delivered to the Secretary of State. If the filing fees have been paid, unless the Secretary of State determines that a record does not comply with the filing requirements of the act, the Secretary of State shall file the record and:

(1) for a statement of denial under section 21-128, send a copy of the filed statement and a receipt for the fees to the person on whose behalf the statement was delivered for filing and to the limited liability company; and

(2) for all other records, send a copy of the filed record and a receipt for the fees to the person on whose behalf the record was filed.

(b) Upon request and payment of the requisite fee, the Secretary of State shall send to the requester a certified copy of a requested record.

(c) Except as otherwise provided in sections 21-115 and 21-122, a record delivered to the Secretary of State for filing under the act may specify an effective time and a delayed effective date. Subject to section 21-115, subdivision (d)(1) of section 21-117, and section 21-122, a record filed by the Secretary of State is effective:

(1) if the record does not specify either an effective time or a delayed effective date, on the date and at the time the record is filed as evidenced by the Secretary of State's endorsement of the date and time on the record;

(2) if the record specifies an effective time but not a delayed effective date, on the date the record is filed at the time specified in the record;

(3) if the record specifies a delayed effective date but not an effective time, at 12:01 a.m. on the earlier of:

(A) the specified date; or

(B) the ninetieth day after the record is filed; or

(4) if the record specifies an effective time and a delayed effective date, at the specified time on the earlier of:

(A) the specified date; or

(B) the ninetieth day after the record is filed.

Source:Laws 2010, LB888, § 21.

21-122. Correcting filed record.

(RULLCA 206) (a) A limited liability company or foreign limited liability company may deliver to the Secretary of State for filing a statement of correction to correct a record previously delivered by the company to the Secretary of State and filed by the Secretary of State, if at the time of filing the record contained inaccurate information or was defectively signed.

(b) A statement of correction under subsection (a) of this section may not state a delayed effective date and must:

(1) describe the record to be corrected, including its filing date, or attach a copy of the record as filed;

(2) specify the inaccurate information and the reason it is inaccurate or the manner in which the signing was defective; and

(3) correct the defective signature or inaccurate information.

(c) When filed by the Secretary of State, a statement of correction under subsection (a) of this section is effective retroactively as of the effective date of the record the statement corrects, but the statement is effective when filed:

(1) for the purposes of subsection (d) of section 21-103; and

(2) as to persons that previously relied on the uncorrected record and would be adversely affected by the retroactive effect.

Source:Laws 2010, LB888, § 22.

21-123. Liability for inaccurate information in filed record.

(RULLCA 207) (a) If a record delivered to the Secretary of State for filing under the Nebraska Uniform Limited Liability Company Act and filed by the Secretary of State contains inaccurate information, a person that suffers a loss by reliance on the information may recover damages for the loss from:

(1) a person that signed the record, or caused another to sign it on the person's behalf, and knew the information to be inaccurate at the time the record was signed; and

(2) subject to subsection (b) of this section, a member of a member-managed limited liability company or the manager of a manager-managed limited liability company, if:

(A) the record was delivered for filing on behalf of the company; and

(B) the member or manager had notice of the inaccuracy for a reasonably sufficient time before the information was relied upon so that, before the reliance, the member or manager reasonably could have:

(i) effected an amendment under section 21-118;

(ii) filed a petition under section 21-120; or

(iii) delivered to the Secretary of State for filing a statement of change under section 21-114 or a statement of correction under section 21-122.

(b) To the extent that the operating agreement of a member-managed limited liability company expressly relieves a member of responsibility for maintaining the accuracy of information contained in records delivered on behalf of the company to the Secretary of State for filing under the act and imposes that responsibility on one or more other members, the liability stated in subdivision (a)(2) of this section applies to those other members and not to the member that the operating agreement relieves of the responsibility.

(c) An individual who signs a record authorized or required to be filed under the act affirms under penalty of perjury that the information stated in the record is accurate.

Source:Laws 2010, LB888, § 23.

21-124. Certificate of existence or authorization.

(RULLCA 208) (a) The Secretary of State, upon request and payment of the requisite fee, shall furnish to any person a certificate of existence for a limited liability company if the records filed in the office of the Secretary of State show that the company has been formed under section 21-117 and the Secretary of State has not filed a statement of termination pertaining to the company. A certificate of existence must state:

(1) the company's name;

(2) that the company was duly formed under the laws of this state and the date of formation;

(3) whether all fees, taxes, and penalties due under the Nebraska Uniform Limited Liability Company Act or other law to the Secretary of State have been paid;

(4) whether the company's most recent biennial report required by section 21-125 has been filed by the Secretary of State;

(5) whether the Secretary of State has administratively dissolved the company;

(6) whether the company has delivered to the Secretary of State for filing a statement of dissolution;

(7) that a statement of termination has not been filed by the Secretary of State; and

(8) other facts of record in the office of the Secretary of State which are specified by the person requesting the certificate.

(b) The Secretary of State, upon request and payment of the requisite fee, shall furnish to any person a certificate of authorization for a foreign limited liability company if the records filed in the office of the Secretary of State show that the Secretary of State has filed a certificate of authority, has not revoked the certificate of authority, and has not filed a notice of cancellation. A certificate of authorization must state:

(1) the company's name and any alternate name adopted under subsection (a) of section 21-159 for use in this state;

(2) that the company is authorized to transact business in this state;

(3) whether all fees, taxes, and penalties due under the act or other law to the Secretary of State have been paid;

(4) whether the company's most recent biennial report required by section 21-125 has been filed by the Secretary of State;

(5) that the Secretary of State has not revoked the company's certificate of authority and has not filed a notice of cancellation; and

(6) other facts of record in the office of the Secretary of State which are specified by the person requesting the certificate.

(c) Subject to any qualification stated in the certificate, a certificate of existence or certificate of authorization issued by the Secretary of State is conclusive evidence that the limited liability company is in existence or the foreign limited liability company is authorized to transact business in this state.

Source:Laws 2010, LB888, § 24.

21-125. Biennial report.

(RULLCA 209) (a) Each odd-numbered year, a limited liability company or a foreign limited liability company authorized to transact business in this state shall deliver to the Secretary of State for filing a biennial report that states:

(1) the name of the company;

(2) the street and mailing addresses of the company's designated office and the name and street and mailing addresses and post office box number, if any, of its agent for service of process in this state;

(3) the street and mailing addresses of its principal office; and

(4) in the case of a foreign limited liability company, the state or other jurisdiction under whose law the company is formed and any alternate name adopted under subsection (a) of section 21-159.

(b) Information in a biennial report under this section must be current as of the date the report is delivered to the Secretary of State for filing.

(c) The first biennial report under this section must be delivered to the Secretary of State between January 1 and April 1 of the odd-numbered year following the calendar year in which a limited liability company was formed or a foreign limited liability company was authorized to transact business. A report must be delivered to the Secretary of State between January 1 and April 1 of each subsequent odd-numbered calendar year.

(d) If a biennial report under this section does not contain the information required in subsection (a) of this section, the Secretary of State shall promptly notify the reporting limited liability company or foreign limited liability company and return the report to it for correction. If the report is corrected to contain the information required in subsection (a) of this section and delivered to the Secretary of State within thirty days after the effective date of the notice, it is timely delivered.

(e) A correction or an amendment to the biennial report may be delivered to the Secretary of State for filing at any time.

Source:Laws 2010, LB888, § 25; Laws 2014, LB774, § 2.

21-126. No agency power of member as member.

(RULLCA 301) (a) A member is not an agent of a limited liability company solely by reason of being a member.

(b) A person's status as a member does not prevent or restrict law other than the Nebraska Uniform Limited Liability Company Act from imposing liability on a limited liability company because of the person's conduct.

Source:Laws 2010, LB888, § 26.

21-127. Statement of authority.

(RULLCA 302) (a) A limited liability company may deliver to the Secretary of State for filing a statement of authority. The statement:

(1) must include the name of the company and the street and mailing addresses of its designated office;

(2) with respect to any position that exists in or with respect to the company, may state the authority, or limitations on the authority, of all persons holding the position to:

(A) execute an instrument transferring real property held in the name of the company; or

(B) enter into other transactions on behalf of, or otherwise act for or bind, the company; and

(3) may state the authority, or limitations on the authority, of a specific person to:

(A) execute an instrument transferring real property held in the name of the company; or

(B) enter into other transactions on behalf of, or otherwise act for or bind, the company.

(b) To amend or cancel a statement of authority filed by the Secretary of State under subsection (a) of section 21-121, a limited liability company must deliver to the Secretary of State for filing an amendment or cancellation stating:

(1) the name of the company;

(2) the street and mailing addresses of the company's designated office;

(3) the caption of the statement being amended or canceled and the date the statement being affected became effective; and

(4) the contents of the amendment or a declaration that the statement being affected is canceled.

(c) A statement of authority affects only the power of a person to bind a limited liability company to persons that are not members.

(d) Subject to subsection (c) of this section and subsection (d) of section 21-103 and except as otherwise provided in subsections (f), (g), and (h) of this section, a limitation on the authority of a person or a position contained in an effective statement of authority is not by itself evidence of knowledge or notice of the limitation by any person.

(e) Subject to subsection (c) of this section, a grant of authority not pertaining to transfers of real property and contained in an effective statement of authority is conclusive in favor of a person that gives value in reliance on the grant, except to the extent that when the person gives value:

(1) the person has knowledge to the contrary;

(2) the statement has been canceled or restrictively amended under subsection (b) of this section; or

(3) a limitation on the grant is contained in another statement of authority that became effective after the statement containing the grant became effective.

(f) Subject to subsection (c) of this section, an effective statement of authority that grants authority to transfer real property held in the name of the limited liability company and that is recorded by certified copy in the office for recording transfers of the real property is conclusive in favor of a person that gives value in reliance on the grant without knowledge to the contrary, except to the extent that when the person gives value:

(1) the statement has been canceled or restrictively amended under subsection (b) of this section and a certified copy of the cancellation or restrictive amendment has been recorded in the office for recording transfers of the real property; or

(2) a limitation on the grant is contained in another statement of authority that became effective after the statement containing the grant became effective and a certified copy of the later-effective statement is recorded in the office for recording transfers of the real property.

(g) Subject to subsection (c) of this section, if a certified copy of an effective statement containing a limitation on the authority to transfer real property held in the name of a limited liability company is recorded in the office for recording transfers of that real property, all persons are deemed to know of the limitation.

(h) Subject to subsection (i) of this section, an effective statement of dissolution or termination is a cancellation of any filed statement of authority for the purposes of subsection (f) of this section and is a limitation on authority for the purposes of subsection (g) of this section.

(i) After a statement of dissolution becomes effective, a limited liability company may deliver to the Secretary of State for filing and, if appropriate, may record a statement of authority that is designated as a post-dissolution statement of authority. The statement operates as provided in subsections (f) and (g) of this section.

(j) Unless earlier canceled, an effective statement of authority is canceled by operation of law five years after the date on which the statement, or its most recent amendment, becomes effective. This cancellation operates without need for any recording under subsection (f) or (g) of this section.

(k) An effective statement of denial operates as a restrictive amendment under this section and may be recorded by certified copy for the purposes of subdivision (f)(1) of this section.

Source:Laws 2010, LB888, § 27.

21-128. Statement of denial.

(RULLCA 303) A person named in a filed statement of authority granting that person authority may deliver to the Secretary of State for filing a statement of denial that:

(1) provides the name of the limited liability company and the caption of the statement of authority to which the statement of denial pertains; and

(2) denies the grant of authority.

Source:Laws 2010, LB888, § 28.

21-129. Liability of members and managers.

(RULLCA 304) (a) The debts, obligations, or other liabilities of a limited liability company, whether arising in contract, tort, or otherwise:

(1) are solely the debts, obligations, or other liabilities of the company; and

(2) do not become the debts, obligations, or other liabilities of a member or manager solely by reason of the member acting as a member or manager acting as a manager.

(b) The mere failure of a limited liability company to observe any particular formalities relating to the exercise of its powers or management of its activities is not a ground for imposing liability on the members or managers for the debts, obligations, or other liabilities of the company.

(c) Any member, manager, or employee of a limited liability company with the duty to collect, account for, or pay over any taxes imposed upon a limited liability company or with the authority to decide whether the limited liability company will pay taxes imposed upon a limited liability company shall be personally liable for the payment of such taxes in the event of willful failure on his or her part to have a limited liability company perform such act. Such taxes shall be collected in the same manner as provided under section 77-1783.01.

Source:Laws 2010, LB888, § 29.

21-130. Becoming member.

(RULLCA 401) (a) If a limited liability company is to have only one member upon formation, the person becomes a member as agreed by that person and the organizer of the company. That person and the organizer may be, but need not be, different persons. If different, the organizer acts on behalf of the initial member.

(b) If a limited liability company is to have more than one member upon formation, those persons become members as agreed by the persons before the formation of the company. The organizer acts on behalf of the persons in forming the company and may be, but need not be, one of the persons.

(1) as provided in the operating agreement;

(2) as the result of a transaction effective under sections 21-170 to 21-184;

(3) with the consent of all the members; or

(4) if, within ninety consecutive days after the company ceases to have any members:

(A) the last person to have been a member, or the legal representative of that person, designates a person to become a member; and

(B) the designated person consents to become a member.

(d) A person may become a member without acquiring a transferable interest and without making or being obligated to make a contribution to the limited liability company.

Source:Laws 2010, LB888, § 30.

21-131. Form of contribution.

(RULLCA 402) A contribution may consist of tangible or intangible property or other benefit to a limited liability company, including money, services performed, promissory notes, other agreements to contribute money or property, and contracts for services to be performed.

Source:Laws 2010, LB888, § 31.

21-132. Liability for contributions.

(RULLCA 403) (a) A person's obligation to make a contribution to a limited liability company is not excused by the person's death, disability, or other inability to perform personally. If a person does not make a required contribution, the person or the person's estate is obligated to contribute money equal to the value of the part of the contribution which has not been made, at the option of the company.

(b) A creditor of a limited liability company which extends credit or otherwise acts in actual reliance on an obligation described in subsection (a) of this section may enforce the obligation.

Source:Laws 2010, LB888, § 32.

21-133. Sharing of and right to distributions before dissolution.

(RULLCA 404) (a) Any distributions made by a limited liability company before its dissolution and winding up must be in equal shares among members and dissociated members, except to the extent necessary to comply with any transfer effective under section 21-141 and any charging order in effect under section 21-142.

(b) A person has a right to a distribution before the dissolution and winding up of a limited liability company only if the company decides to make an interim distribution. A person's dissociation does not entitle the person to a distribution.

(c) A person does not have a right to demand or receive a distribution from a limited liability company in any form other than money. Except as otherwise provided in subsection (c) of section 21-154, a limited liability company may distribute an asset in kind if each part of the asset is fungible with each other part and each person receives a percentage of the asset equal in value to the person's share of distributions.

(d) If a member or transferee becomes entitled to receive a distribution, the member or transferee has the status of, and is entitled to all remedies available to, a creditor of the limited liability company with respect to the distribution.

Source:Laws 2010, LB888, § 33.

21-134. Limitations on distribution.

(RULLCA 405) (a) A limited liability company may not make a distribution if after the distribution:

(1) the company would not be able to pay its debts as they become due in the ordinary course of the company's activities; or

(2) the company's total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the company were to be dissolved, wound up, and terminated at the time of the distribution, to satisfy the preferential rights upon dissolution, winding up, and termination of members whose preferential rights are superior to those of persons receiving the distribution.

(b) A limited liability company may base a determination that a distribution is not prohibited under subsection (a) of this section on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable under the circumstances.

(c) Except as otherwise provided in subsection (f) of this section, the effect of a distribution under subsection (a) of this section is measured:

(1) in the case of a distribution by purchase, redemption, or other acquisition of a transferable interest in the company, as of the date money or other property is transferred or debt incurred by the company; and

(2) in all other cases, as of the date:

(A) the distribution is authorized, if the payment occurs within one hundred twenty days after that date; or

(B) the payment is made, if the payment occurs more than one hundred twenty days after the distribution is authorized.

(d) A limited liability company's indebtedness to a member incurred by reason of a distribution made in accordance with this section is at parity with the company's indebtedness to its general, unsecured creditors.

(e) A limited liability company's indebtedness, including indebtedness issued in connection with or as part of a distribution, is not a liability for purposes of subsection (a) of this section if the terms of the indebtedness provide that payment of principal and interest are made only to the extent that a distribution could be made to members under this section.

(f) If indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is made.

(g) In subsection (a) of this section, distribution does not include amounts constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of business under a bona fide retirement plan or other benefits program.

Source:Laws 2010, LB888, § 34.

21-135. Liability for improper distributions.

(RULLCA 406) (a) Except as otherwise provided in subsection (b) of this section, if a member of a member-managed limited liability company or manager of a manager-managed limited liability company consents to a distribution made in violation of section 21-134 and in consenting to the distribution fails to comply with section 21-138, the member or manager is personally liable to the company for the amount of the distribution that exceeds the amount that could have been distributed without the violation of section 21-134.

(b) To the extent the operating agreement of a member-managed limited liability company expressly relieves a member of the authority and responsibility to consent to distributions and imposes that authority and responsibility on one or more other members, the liability stated in subsection (a) of this section applies to the other members and not the member that the operating agreement relieves of authority and responsibility.

(c) A person that receives a distribution knowing that the distribution to that person was made in violation of section 21-134 is personally liable to the limited liability company but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid under section 21-134.

(d) A person against which an action is commenced because the person is liable under subsection (a) of this section may:

(1) implead any other person that is subject to liability under subsection (a) of this section and seek to compel contribution from the person; and

(2) implead any person that received a distribution in violation of subsection (c) of this section and seek to compel contribution from the person in the amount the person received in violation of subsection (c) of this section.

(e) An action under this section is barred if not commenced within two years after the distribution.

Source:Laws 2010, LB888, § 35.

21-136. Management of limited liability company.

(RULLCA 407) (a) A limited liability company is a member-managed limited liability company unless the operating agreement:

(1) expressly provides that:

(A) the company is or will be manager-managed;

(B) the company is or will be managed by managers; or

(2) includes words of similar import.

(b) In a member-managed limited liability company, the following rules apply:

(1) The management and conduct of the company are vested in the members.

(2) Each member has equal rights in the management and conduct of the company's activities.

(3) A difference arising among members as to a matter in the ordinary course of the activities of the company may be decided by a majority of the members.

(4) An act outside the ordinary course of the activities of the company may be undertaken only with the consent of all members.

(5) The operating agreement may be amended only with the consent of all members.

(1) Except as otherwise expressly provided in the Nebraska Uniform Limited Liability Company Act, any matter relating to the activities of the company is decided exclusively by the managers.

(2) Each manager has equal rights in the management and conduct of the activities of the company.

(3) A difference arising among managers as to a matter in the ordinary course of the activities of the company may be decided by a majority of the managers.

(4) The consent of all members is required to:

(A) sell, lease, exchange, or otherwise dispose of all, or substantially all, of the company's property, with or without the goodwill, outside the ordinary course of the company's activities;

(B) approve a merger, conversion, or domestication under sections 21-170 to 21-184;

(D) amend the operating agreement.

(5) A manager may be chosen at any time by the consent of a majority of the members and remains a manager until a successor has been chosen, unless the manager at an earlier time resigns, is removed, or dies, or, in the case of a manager that is not an individual, terminates. A manager may be removed at any time by the consent of a majority of the members without notice or cause.

(6) A person need not be a member to be a manager, but the dissociation of a member that is also a manager removes the person as a manager. If a person that is both a manager and a member ceases to be a manager, that cessation does not by itself dissociate the person as a member.

(7) A person's ceasing to be a manager does not discharge any debt, obligation, or other liability to the limited liability company or members which the person incurred while a manager.

(d) An action requiring the consent of members under the Nebraska Uniform Limited Liability Company Act may be taken without a meeting, and a member may appoint a proxy or other agent to consent or otherwise act for the member by signing an appointing record, personally or by the member's agent.

(e) The dissolution of a limited liability company does not affect the applicability of this section. However, a person that wrongfully causes dissolution of the company loses the right to participate in management as a member and a manager.

(f) The Nebraska Uniform Limited Liability Company Act does not entitle a member to remuneration for services performed for a member-managed limited liability company, except for reasonable compensation for services rendered in winding up the activities of the company.

Source:Laws 2010, LB888, § 36.

21-137. Indemnification and insurance.

(RULLCA 408) (a) A limited liability company shall reimburse for any payment made and indemnify for any debt, obligation, or other liability incurred by a member of a member-managed company or the manager of a manager-managed company in the course of the member's or manager's activities on behalf of the company, if, in making the payment or incurring the debt, obligation, or other liability, the member or manager complied with the duties stated in sections 21-134 and 21-138.

(b) A limited liability company may purchase and maintain insurance on behalf of a member or manager of the company against liability asserted against or incurred by the member or manager in that capacity or arising from that status even if, under subsection (f) of section 21-110, the operating agreement could not eliminate or limit the person's liability to the company for the conduct giving rise to the liability.

Source:Laws 2010, LB888, § 37.

21-138. Standards of conduct for members and managers.

(RULLCA 409) (a) A member of a member-managed limited liability company owes to the company and, subject to subsection (b) of section 21-164, the other members the fiduciary duties of loyalty and care stated in subsections (b) and (c) of this section.

(b) The duty of loyalty of a member in a member-managed limited liability company includes the duties:

(1) to account to the company and to hold as trustee for it any property, profit, or benefit derived by the member:

(A) in the conduct or winding up of the company's activities;

(B) from a use by the member of the company's property; or

(2) to refrain from dealing with the company in the conduct or winding up of the company's activities as or on behalf of a person having an interest adverse to the company; and

(3) to refrain from competing with the company in the conduct of the company's activities before the dissolution of the company.

(c) Subject to the business judgment rule, the duty of care of a member of a member-managed limited liability company in the conduct and winding up of the company's activities is to act with the care that a person in a like position would reasonably exercise under similar circumstances and in a manner the member reasonably believes to be in the best interests of the company. In discharging this duty, a member may rely in good faith upon opinions, reports, statements, or other information provided by another person that the member reasonably believes is a competent and reliable source for the information.

(d) A member in a member-managed limited liability company or a manager-managed limited liability company shall discharge the duties under the Nebraska Uniform Limited Liability Company Act or under the operating agreement and exercise any rights consistently with the contractual obligation of good faith and fair dealing.

(e) It is a defense to a claim under subdivision (b)(2) of this section and any comparable claim in equity or at common law that the transaction was fair to the limited liability company.

(f) All of the members of a member-managed limited liability company or a manager-managed limited liability company may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty.

(g) In a manager-managed limited liability company, the following rules apply:

(1) Subsections (a), (b), (c), and (e) of this section apply to the manager or managers and not the members.

(2) The duty stated under subdivision (b)(3) of this section continues until winding up is completed.

(3) Subsection (d) of this section applies to the members and managers.

(4) Subsection (f) of this section applies only to the members.

(5) A member does not have any fiduciary duty to the company or to any other member solely by reason of being a member.

Source:Laws 2010, LB888, § 38.

21-139. Right of members, managers, and dissociated members to information.

(RULLCA 410) (a) In a member-managed limited liability company, the following rules apply:

(1) On reasonable notice, a member may inspect and copy during regular business hours, at a reasonable location specified by the company, any record maintained by the company regarding the company's activities, financial condition, and other circumstances, to the extent the information is material to the member's rights and duties under the operating agreement or the Nebraska Uniform Limited Liability Company Act.

(2) The company shall furnish to each member:

(A) without demand, any information concerning the company's activities, financial condition, and other circumstances which the company knows and is material to the proper exercise of the member's rights and duties under the operating agreement or the act, except to the extent the company can establish that it reasonably believes the member already knows the information; and

(B) on demand, any other information concerning the company's activities, financial condition, and other circumstances, except to the extent the demand or information demanded is unreasonable or otherwise improper under the circumstances.

(3) The duty to furnish information under subdivision (a)(2) of this section also applies to each member to the extent the member knows any of the information described in such subdivision.

(b) In a manager-managed limited liability company, the following rules apply:

(1) The informational rights stated in subsection (a) of this section and the duty stated in subdivision (a)(3) of this section apply to the managers and not the members.

(2) During regular business hours and at a reasonable location specified by the company, a member may obtain from the company and inspect and copy full information regarding the activities, financial condition, and other circumstances of the company as is just and reasonable if:

(A) the member seeks the information for a purpose material to the member's interest as a member;

(B) the member makes a demand in a record received by the company, describing with reasonable particularity the information sought and the purpose for seeking the information; and

(3) Within ten days after receiving a demand pursuant to subdivision (b)(2)(B) of this section, the company shall in a record inform the member that made the demand:

(A) of the information that the company will provide in response to the demand and when and where the company will provide the information; and

(B) if the company declines to provide any demanded information, the company's reasons for declining.

(c) On ten days' demand made in a record received by a limited liability company, a dissociated member may have access to information to which the person was entitled while a member if the information pertains to the period during which the person was a member, the person seeks the information in good faith, and the person satisfies the requirements imposed on a member by subdivision (b)(2) of this section. The company shall respond to a demand made pursuant to this subsection in the manner provided in subdivision (b)(3) of this section.

(d) A limited liability company may charge a person that makes a demand under this section the reasonable costs of copying, limited to the costs of labor and material.

(e) A member or dissociated member may exercise rights under this section through an agent or, in the case of an individual under legal disability, a legal representative. Any restriction or condition imposed by the operating agreement or under subsection (g) of this section applies both to the agent or legal representative and the member or dissociated member.

(f) The rights under this section do not extend to a person as transferee.

(g) In addition to any restriction or condition stated in its operating agreement, a limited liability company, as a matter within the ordinary course of its activities, may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient. In a dispute concerning the reasonableness of a restriction under this subsection, the company has the burden of proving reasonableness.

Source:Laws 2010, LB888, § 39.

21-140. Nature of transferable interest.

(RULLCA 501) A transferable interest is personal property.

Source:Laws 2010, LB888, § 40.

21-141. Transfer of transferable interest.

(RULLCA 502) (a) A transfer, in whole or in part, of a transferable interest:

(1) is permissible;

(2) does not by itself cause a member's dissociation or a dissolution and winding up of the limited liability company's activities; and

(3) subject to section 21-143, does not entitle the transferee to:

(A) participate in the management or conduct of the company's activities; or

(B) except as otherwise provided in subsection (c) of this section, have access to records or other information concerning the company's activities.

(b) A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled.

(c) In a dissolution and winding up of a limited liability company, a transferee is entitled to an account of the company's transactions only from the date of dissolution.

(d) A transferable interest may be evidenced by a certificate of the interest issued by the limited liability company in a record, and, subject to this section, the interest represented by the certificate may be transferred by a transfer of the certificate.

(e) A limited liability company need not give effect to a transferee's rights under this section until the company has notice of the transfer.

(f) A transfer of a transferable interest in violation of a restriction on transfer contained in the operating agreement is ineffective as to a person having notice of the restriction at the time of transfer.

(g) Except as otherwise provided in subdivision (4)(B) of section 21-145, when a member transfers a transferable interest, the transferor retains the rights of a member other than the interest in distributions transferred and retains all duties and obligations of a member.

(h) When a member transfers a transferable interest to a person that becomes a member with respect to the transferred interest, the transferee is liable for the member's obligations under section 21-132 and subsection (c) of section 21-135 known to the transferee when the transferee becomes a member.

Source:Laws 2010, LB888, § 41.

21-142. Charging order.

(RULLCA 503) (a) On application by a judgment creditor of a member or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. A charging order constitutes a lien on a judgment debtor's transferable interest and requires the limited liability company to pay over to the person to which the charging order was issued any distribution that would otherwise be paid to the judgment debtor.

(b) To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under subsection (a) of this section, the court may:

(1) appoint a receiver of the distributions subject to the charging order, with the power to make all inquiries the judgment debtor might have made; and

(2) make all other orders necessary to give effect to the charging order.

(c) Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may foreclose the lien and order the sale of the transferable interest. The purchaser at the foreclosure sale only obtains the transferable interest, does not thereby become a member, and is subject to section 21-141.

(d) At any time before completion of the foreclosure sale under subsection (c) of this section, the member or transferee whose transferable interest is subject to a charging order under subsection (a) of this section may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.

(e) At any time before completion of the foreclosure sale under subsection (c) of this section, a limited liability company or one or more members whose transferable interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order.

(f) The Nebraska Uniform Limited Liability Company Act does not deprive any member or transferee of the benefit of any exemption laws applicable to the member's or transferee's transferable interest.

(g) This section provides the exclusive remedy by which a person seeking to enforce a judgment against a member or transferee may, in the capacity of judgment creditor, satisfy the judgment from the judgment debtor's transferable interest.

Source:Laws 2010, LB888, § 42.

21-143. Power of personal representative of deceased member.

(RULLCA 504) If a member dies, the deceased member's personal representative or other legal representative may exercise the rights of a transferee provided in subsection (c) of section 21-141 and, for the purposes of settling the estate, the rights of a current member under section 21-139.

Source:Laws 2010, LB888, § 43.

21-144. Member's power to dissociate; wrongful dissociation.

(RULLCA 601) (a) A person has the power to dissociate as a member at any time, rightfully or wrongfully, by withdrawing as a member by express will under subdivision (1) of section 21-145.

(b) A person's dissociation from a limited liability company is wrongful only if the dissociation:

(1) is in breach of an express provision of the operating agreement; or

(2) occurs before the termination of the company and:

(A) the person withdraws as a member by express will;

(B) the person is expelled as a member by judicial order under subdivision (5) of section 21-145;

(D) in the case of a person that is not a trust other than a business trust, an estate, or an individual, the person is expelled or otherwise dissociated as a member because it willfully dissolved or terminated.

(c) A person that wrongfully dissociates as a member is liable to the limited liability company and, subject to section 21-164, to the other members for damages caused by the dissociation. The liability is in addition to any other debt, obligation, or other liability of the member to the company or the other members.

Source:Laws 2010, LB888, § 44.

21-145. Events causing dissociation.

(RULLCA 602) A person is dissociated as a member from a limited liability company when:

(1) the company has notice of the person's express will to withdraw as a member, but, if the person specified a withdrawal date later than the date the company had notice, on that later date;

(2) an event stated in the operating agreement as causing the person's dissociation occurs;

(3) the person is expelled as a member pursuant to the operating agreement;

(4) the person is expelled as a member by the unanimous consent of the other members if:

(A) it is unlawful to carry on the company's activities with the person as a member;

(B) there has been a transfer of all of the person's transferable interest in the company, other than:

(i) a transfer for security purposes; or

(ii) a charging order in effect under section 21-142 which has not been foreclosed;

(C) the person is a corporation and, within ninety days after the company notifies the person that it will be expelled as a member because the person has filed a certificate of dissolution or the equivalent, its charter has been revoked, or its right to conduct business has been suspended by the jurisdiction of its incorporation, the certificate of dissolution has not been revoked or its charter or right to conduct business has not been reinstated; or

(D) the person is a limited liability company or partnership that has been dissolved and whose business is being wound up;

(5) on application by the company, the person is expelled as a member by judicial order because the person:

(A) has engaged, or is engaging, in wrongful conduct that has adversely and materially affected, or will adversely and materially affect, the company's activities;

(B) has willfully or persistently committed, or is willfully and persistently committing, a material breach of the operating agreement or the person's duties or obligations under section 21-138; or

(C) has engaged in, or is engaging in, conduct relating to the company's activities which makes it not reasonably practicable to carry on the activities with the person as a member;

(6) in the case of a person who is an individual:

(A) the person dies; or

(B) in a member-managed limited liability company:

(i) a guardian or general conservator for the person is appointed; or

(ii) there is a judicial order that the person has otherwise become incapable of performing the person's duties as a member under the Nebraska Uniform Limited Liability Company Act or the operating agreement;

(7) in a member-managed limited liability company, the person:

(A) becomes a debtor in bankruptcy;

(B) executes an assignment for the benefit of creditors; or

(C) seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the person or of all or substantially all of the person's property;

(8) in the case of a person that is a trust or is acting as a member by virtue of being a trustee of a trust, the trust's entire transferable interest in the company is distributed;

(9) in the case of a person that is an estate or is acting as a member by virtue of being a personal representative of an estate, the estate's entire transferable interest in the company is distributed;

(10) in the case of a member that is not an individual, partnership, limited liability company, corporation, trust, or estate, the termination of the member;

(11) the company participates in a merger under sections 21-170 to 21-184, if:

(A) the company is not the surviving entity; or

(B) otherwise as a result of the merger, the person ceases to be a member;

(12) the company participates in a conversion under sections 21-170 to 21-184;

(13) the company participates in a domestication under sections 21-170 to 21-184, if, as a result of the domestication, the person ceases to be a member; or

(14) the company terminates.

Source:Laws 2010, LB888, § 45.

21-146. Effect of person's dissociation as member.

(RULLCA 603) (a) When a person is dissociated as a member of a limited liability company:

(1) the person's right to participate as a member in the management and conduct of the company's activities terminates;

(2) if the company is member-managed, the person's fiduciary duties as a member end with regard to matters arising and events occurring after the person's dissociation; and

(3) subject to section 21-143 and sections 21-170 to 21-184, any transferable interest owned by the person immediately before dissociation in the person's capacity as a member is owned by the person solely as a transferee.

(b) A person's dissociation as a member of a limited liability company does not of itself discharge the person from any debt, obligation, or other liability to the company or the other members which the person incurred while a member.

Source:Laws 2010, LB888, § 46.

21-147. Events causing dissolution; rescission; procedure.

(RULLCA 701) (a) A limited liability company is dissolved, and its activities must be wound up, upon the occurrence of any of the following:

(1) an event or circumstance that the operating agreement states causes dissolution;

(2) the consent of all the members;

(3) the passage of ninety consecutive days during which the company has no members;

(4) on application by a member, the entry by the district court of an order dissolving the company on the grounds that:

(A) the conduct of all or substantially all of the company's activities is unlawful; or

(B) it is not reasonably practicable to carry on the company's activities in conformity with the certificate of organization and the operating agreement; or

(5) on application by a member, the entry by the district court of an order dissolving the company on the grounds that the managers or those members in control of the company:

(A) have acted, are acting, or will act in a manner that is illegal or fraudulent; or

(B) have acted or are acting in a manner that is oppressive and was, is, or will be directly harmful to the applicant.

(b) In a proceeding brought under subdivision (a)(5) of this section, the court may order a remedy other than dissolution.

(c) A limited liability company may rescind its dissolution, unless a statement of termination applicable to the company has become effective, the district court has entered an order under subdivision (a)(4) of this section dissolving the company, or the Secretary of State has administratively dissolved the company under section 21-151.

(d) Rescinding dissolution under this section requires:

(1) the consent of all the members; and

(2) if the limited liability company has delivered to the Secretary of State for filing a statement of dissolution under section 21-148 and:

(A) the statement has not become effective, delivery to the Secretary of State for filing of a statement of withdrawal under section 21-121 applicable to the statement of dissolution; or

(B) if the statement of dissolution has become effective, delivery to the Secretary of State for filing of a statement of rescission stating the name of the company and that dissolution has been rescinded under this section.

(e) If a limited liability company rescinds its dissolution:

(1) the company resumes carrying on its activities and affairs as if dissolution had never occurred;

(2) subject to subdivision (e)(3) of this section, any liability incurred by the company after the dissolution and before the rescission has become effective is determined as if dissolution had never occurred; and

(3) the rights of a third party arising out of conduct in reliance on the dissolution before the third party knew or had notice of the rescission may not be adversely affected.

Source:Laws 2010, LB888, § 47; Laws 2019, LB78, § 1.

21-148. Winding up.

(RULLCA 702) (a) A dissolved limited liability company shall wind up its activities, and the company continues after dissolution only for the purpose of winding up.

(b) In winding up its activities, a limited liability company:

(1) shall:

(A) discharge the company's debts, obligations, or other liabilities, settle and close the company's activities, and marshal and distribute the assets of the company; and

(B) deliver to the Secretary of State for filing a statement of dissolution stating the name of the company and that the company is dissolved; and

(2) may:

(A) preserve the company activities and property as a going concern for a reasonable time;

(B) prosecute and defend actions and proceedings, whether civil, criminal, or administrative;

(D) settle disputes by mediation or arbitration;

(E) deliver to the Secretary of State for filing a statement of termination stating the name of the company and that the company is terminated; and

(F) perform other acts necessary or appropriate to the winding up.

(c) If a dissolved limited liability company has no members, the legal representative of the last person to have been a member may wind up the activities of the company. If the person does so, the person has the powers of a sole manager under subsection (c) of section 21-136 and is deemed to be a manager for the purposes of subdivision (a)(2) of section 21-129.

(d) If the legal representative under subsection (c) of this section declines or fails to wind up the company's activities, a person may be appointed to do so by the consent of transferees owning a majority of the rights to receive distributions as transferees at the time the consent is to be effective. A person appointed under this subsection:

(1) has the powers of a sole manager under subsection (c) of section 21-136 and is deemed to be a manager for the purposes of subdivision (a)(2) of section 21-129; and

(2) shall promptly deliver to the Secretary of State for filing an amendment to the company's certificate of organization to:

(A) state that the company has no members;

(B) state that the person has been appointed pursuant to this subsection to wind up the company; and

(e) The district court may order judicial supervision of the winding up of a dissolved limited liability company, including the appointment of a person to wind up the company's activities:

(1) on application of a member, if the applicant establishes good cause;

(2) on the application of a transferee, if:

(A) the company does not have any members;

(B) the legal representative of the last person to have been a member declines or fails to wind up the company's activities; and

(C) within a reasonable time following the dissolution a person has not been appointed pursuant to subsection (d) of this section; or

(3) in connection with a proceeding under subdivision (a)(4) or (5) of section 21-147.

Source:Laws 2010, LB888, § 48.

Annotations

The judicial supervision of the winding up of a limited liability company is a multifaceted special proceeding, and an order that ends a discrete phase of the proceeding affects a substantial right because it finally resolves the issues raised in that phase. Schreiber Bros. Hog Co. v. Schreiber, 312 Neb. 707, 980 N.W.2d 890 (2022).

As a result of this section, no action can be maintained by or against a limited liability company after it has completed the winding up of its activities. Midwest Renewable Energy v. American Engr. Testing, 296 Neb. 73, 894 N.W.2d 221 (2017).

This section is, in part, a survival statute for limited liability companies that extends companies' ability to sue and be sued as part of the winding-up powers. Midwest Renewable Energy v. American Engr. Testing, 296 Neb. 73, 894 N.W.2d 221 (2017).

21-149. Known claims against dissolved limited liability company.

(RULLCA 703) (a) Except as otherwise provided in subsection (d) of this section, a dissolved limited liability company may give notice of a known claim under subsection (b) of this section, which has the effect as provided in subsection (c) of this section.

(b) A dissolved limited liability company may in a record notify its known claimants of the dissolution. The notice must:

(1) specify the information required to be included in a claim;

(2) provide a mailing address to which the claim is to be sent;

(3) state the deadline for receipt of the claim, which may not be less than one hundred twenty days after the date the notice is received by the claimant; and

(4) state that the claim will be barred if not received by the deadline.

(c) A claim against a dissolved limited liability company is barred if the requirements of subsection (b) of this section are met and:

(1) the claim is not received by the specified deadline; or

(2) if the claim is timely received but rejected by the company:

(A) the company causes the claimant to receive a notice in a record stating that the claim is rejected and will be barred unless the claimant commences an action against the company to enforce the claim within ninety days after the claimant receives the notice; and

(B) the claimant does not commence the required action within the ninety days.

(d) This section does not apply to a claim based on an event occurring after the effective date of dissolution or a liability that on that date is contingent.

Source:Laws 2010, LB888, § 49.

21-150. Other claims against dissolved limited liability company.

(RULLCA 704) (a) A dissolved limited liability company shall publish notice of its dissolution and request persons having claims against the company to present them in accordance with the notice.

(b) The notice required by subsection (a) of this section must:

(1) be published three successive weeks in some legal newspaper of general circulation in the county in this state in which the dissolved limited liability company's principal office is located or, if it has none in this state, in the county in which the company's designated office is or was last located;

(2) describe the information required to be contained in a claim and provide a mailing address to which the claim is to be sent; and

(3) state that a claim against the company is barred unless an action to enforce the claim is commenced within five years after the publication date of the third required notice.

(c) If a dissolved limited liability company publishes a notice in accordance with subsection (b) of this section, unless the claimant commences an action to enforce the claim against the company within five years after the publication date of the third required notice, the claim of each of the following claimants is barred:

(1) a claimant that did not receive notice in a record under section 21-149;

(2) a claimant whose claim was timely sent to the company but not acted on; and

(3) a claimant whose claim is contingent at, or based on an event occurring after, the effective date of dissolution.

(d) A claim not barred under this section may be enforced:

(1) against a dissolved limited liability company, to the extent of its undistributed assets; and

(2) if assets of the company have been distributed after dissolution, against a member or transferee to the extent of that person's proportionate share of the claim or of the assets distributed to the member or transferee after dissolution, whichever is less, but a person's total liability for all claims under this subdivision does not exceed the total amount of assets distributed to the person after dissolution.

Source:Laws 2010, LB888, § 50.

21-151. Administrative dissolution.

(RULLCA 705) (a) The Secretary of State may dissolve a limited liability company administratively if the company does not:

(1) pay, within sixty days after the due date, any fee, tax, or penalty due to the Secretary of State under the Nebraska Uniform Limited Liability Company Act or law other than the act; or

(2) deliver, within sixty days after the due date, its biennial report to the Secretary of State.

(b) If the Secretary of State determines that a ground exists for administratively dissolving a limited liability company, the Secretary of State shall file a record of the determination and serve the company with a copy of the filed record.

(c) If within sixty days after service of the copy pursuant to subsection (b) of this section a limited liability company does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist, the Secretary of State shall dissolve the company administratively by preparing, signing, and filing a declaration of dissolution that states the grounds for dissolution. The Secretary of State shall serve the company with a copy of the filed declaration.

(d) A limited liability company that has been administratively dissolved continues in existence but, subject to section 21-152, may carry on only activities necessary to wind up its activities and liquidate its assets under sections 21-148 and 21-154 and to notify claimants under sections 21-149 and 21-150.

(e) The administrative dissolution of a limited liability company does not terminate the authority of its agent for service of process.

Source:Laws 2010, LB888, § 51.

21-152. Reinstatement following administrative dissolution.

(RULLCA 706) (a) A limited liability company that has been administratively dissolved may apply to the Secretary of State for reinstatement within five years after the effective date of its dissolution. The application must be delivered to the Secretary of State for filing and state:

(1) the name of the company and the effective date of its dissolution;

(2) that the grounds for dissolution did not exist or have been eliminated; and

(3) that the company's name satisfies the requirements of section 21-108.

(b) If the Secretary of State determines that an application under subsection (a) of this section contains the required information and that the information is correct, the Secretary of State shall prepare a declaration of reinstatement that states this determination, sign and file the original of the declaration of reinstatement, and serve the limited liability company with a copy.

(c) A limited liability company that has been administratively dissolved for more than five years may apply to the Secretary of State for late reinstatement. The application must be delivered to the Secretary of State for filing, along with the fee set forth in section 21-192, and state:

(1) The name of the company and the effective date of its dissolution;

(2) That the grounds for dissolution did not exist or have been eliminated;

(3) That the company's name satisfies the requirements of section 21-108;

(4) That a legitimate reason exists for reinstatement and what such legitimate reason is; and

(5) That such reinstatement does not constitute fraud on the public.

(d) If the Secretary of State determines that an application under subsection (c) of this section contains the required information and that the information is correct, the Secretary of State shall prepare a declaration of reinstatement that states this determination, sign and file the original of the declaration of reinstatement, and serve the limited liability company with a copy.

(e) When a reinstatement becomes effective, it relates back to and takes effect as of the effective date of the administrative dissolution and the limited liability company may resume its activities as if the dissolution had not occurred.

Source:Laws 2010, LB888, § 52; Laws 2012, LB854, § 1; Laws 2015, LB279, § 1.

21-153. Appeal from rejection of reinstatement.

(RULLCA 707) (a) If the Secretary of State rejects a limited liability company's application for reinstatement following administrative dissolution, the Secretary of State shall prepare, sign, and file a notice that explains the reason for rejection and serve the company with a copy of the notice.

(b) Within thirty days after service of a notice of rejection of reinstatement under subsection (a) of this section, a limited liability company may appeal from the rejection by petitioning the district court of Lancaster County to set aside the dissolution. The petition must be served on the Secretary of State and contain a copy of the Secretary of State's declaration of dissolution, the company's application for reinstatement, and the Secretary of State's notice of rejection.

(c) The court may order the Secretary of State to reinstate a dissolved limited liability company or take other action the court considers appropriate.

Source:Laws 2010, LB888, § 53.

21-154. Distribution of assets in winding up limited liability company's activities.

(RULLCA 708) (a) In winding up its activities, a limited liability company must apply its assets to discharge its obligations to creditors, including members that are creditors.

(b) After a limited liability company complies with subsection (a) of this section, any surplus must be distributed in the manner set forth in the operating agreement or, if not so set forth, in the following order, subject, in any case, to any charging order in effect under section 21-142:

(1) to each person owning a transferable interest that reflects contributions made by a member and not previously returned, an amount equal to the value of the unreturned contributions; and

(2) in equal shares among members and dissociated members, except to the extent necessary to comply with any transfer effective under section 21-141.

(c) If a limited liability company does not have sufficient surplus to comply with subdivision (b)(1) of this section, any surplus must be distributed among the owners of transferable interests in proportion to the value of their respective unreturned contributions.

(d) All distributions made under subsections (b) and (c) of this section must be paid in money.

Source:Laws 2010, LB888, § 54.

21-155. Governing law.

(RULLCA 801) (a) The law of the state or other jurisdiction under which a foreign limited liability company is formed governs:

(1) the internal affairs of the company; and

(2) the liability of a member as member and a manager as manager for the debts, obligations, or other liabilities of the company.

(b) A foreign limited liability company may not transact business in this state until it qualifies with the Secretary of State as provided in sections 21-156 and 21-158. A foreign limited liability company may not be denied a certificate of authority by reason of any difference between the law of the jurisdiction under which the company is formed and the law of this state.

(c) A certificate of authority does not authorize a foreign limited liability company to engage in any business or exercise any power that a limited liability company may not engage in or exercise in this state.

Source:Laws 2010, LB888, § 55.

Annotations

This section codifies the internal affairs doctrine, as discussed in the Restatement (Second) of Conflict of Laws section 302 (1971). Midwest Renewable Energy v. American Engr. Testing, 296 Neb. 73, 894 N.W.2d 221 (2017).

Under this section, the internal affairs doctrine requires that the law of a fully dissolved foreign limited liability corporation's state of incorporation govern its amenability. Midwest Renewable Energy v. American Engr. Testing, 296 Neb. 73, 894 N.W.2d 221 (2017).

While this section references the Uniform Limited Liability Company Act, it was, instead, patterned after the Revised Uniform Limited Liability Company Act, and it incorporates the revised act's comments explaining the section. Midwest Renewable Energy v. American Engr. Testing, 296 Neb. 73, 894 N.W.2d 221 (2017).

21-156. Application for certificate of authority.

(RULLCA 802) (a) A foreign limited liability company must apply for a certificate of authority to transact business in this state by delivering an application and, if applicable, a current certificate of registration as provided in sections 21-185 to 21-189 and fees to the Secretary of State for filing. The application must state:

(1) the name of the company and, if the name does not comply with section 21-108, an alternate name adopted pursuant to subsection (a) of section 21-159;

(2) the name of the state or other jurisdiction under whose law the company is formed;

(3) the street and mailing addresses of the company's principal office and, if the law of the jurisdiction under which the company is formed requires the company to maintain an office in that jurisdiction, the street and mailing addresses of the required office; and

(4) the name and street and mailing addresses and post office box number, if any, of the company's initial agent for service of process in this state.

(b) A foreign limited liability company shall deliver with a completed application under subsection (a) of this section a certificate of existence or a record of similar import signed by the Secretary of State or other official having custody of the company's publicly filed records in the state or other jurisdiction under whose law the company is formed.

Source:Laws 2010, LB888, § 56.

21-157. Activities not constituting transacting business.

(RULLCA 803) (a) Activities of a foreign limited liability company which do not constitute transacting business in this state within the meaning of sections 21-155 to 21-163 include:

(1) maintaining, defending, or settling an action or proceeding;

(2) carrying on any activity concerning its internal affairs, including holding meetings of its members or managers;

(3) maintaining accounts in financial institutions;

(4) maintaining offices or agencies for the transfer, exchange, and registration of the company's own securities or maintaining trustees or depositories with respect to those securities;

(5) selling through independent contractors;

(6) soliciting or obtaining orders, whether by mail or electronic means or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;

(7) creating or acquiring indebtedness, mortgages, or security interests in real or personal property;

(8) securing or collecting debts or enforcing mortgages or other security interests in property securing the debts and holding, protecting, or maintaining property so acquired;

(9) conducting an isolated transaction that is completed within thirty days and is not in the course of similar transactions; and

(10) transacting business in interstate commerce.

(b) For purposes of sections 21-155 to 21-163, the ownership in this state of income-producing real property or tangible personal property, other than property excluded under subsection (a) of this section, constitutes transacting business in this state.

(c) This section does not apply in determining the contacts or activities that may subject a foreign limited liability company to service of process, taxation, or regulation under law of this state other than the Nebraska Uniform Limited Liability Company Act.

Source:Laws 2010, LB888, § 57.

21-158. Filing of certificate of authority.

(RULLCA 804) Unless the Secretary of State determines that an application for a certificate of authority does not comply with the filing requirements of the Nebraska Uniform Limited Liability Company Act, the Secretary of State, upon payment of all filing fees, shall file the application of a foreign limited liability company, prepare, sign, and file a certificate of authority to transact business in this state, and send a copy of the filed certificate, together with a receipt for the fees, to the company or its representative.

Source:Laws 2010, LB888, § 58.

21-159. Noncomplying name of foreign limited liability company.

(RULLCA 805) (a) A foreign limited liability company whose name does not comply with section 21-108 may not obtain a certificate of authority until it adopts, for the purpose of transacting business in this state, an alternate name that complies with section 21-108. A foreign limited liability company that adopts an alternate name under this subsection and obtains a certificate of authority with the alternate name need not comply with any fictitious or assumed name statute. After obtaining a certificate of authority with an alternate name, a foreign limited liability company shall transact business in this state under the alternate name unless the company is authorized under any fictitious or assumed name statute to transact business in this state under another name.

(b) If a foreign limited liability company authorized to transact business in this state changes its name to one that does not comply with section 21-108, it may not thereafter transact business in this state until it complies with subsection (a) of this section and obtains an amended certificate of authority.

Source:Laws 2010, LB888, § 59.

21-160. Revocation of certificate of authority.

(RULLCA 806) (a) A certificate of authority of a foreign limited liability company to transact business in this state may be revoked by the Secretary of State in the manner provided in subsections (b) and (c) of this section if the company does not:

(1) pay, within sixty days after the due date, any fee, tax, or penalty due to the Secretary of State under the Nebraska Uniform Limited Liability Company Act or law other than the act;

(2) deliver, within sixty days after the due date, its biennial report required under section 21-125;

(3) appoint and maintain an agent for service of process as required by subsection (b) of section 21-113; or

(4) deliver for filing a statement of a change under section 21-114 within thirty days after a change has occurred in the name or address of the agent.

(b) To revoke a certificate of authority of a foreign limited liability company, the Secretary of State must prepare, sign, and file a notice of revocation and send a copy to the company's agent for service of process in this state, or if the company does not appoint and maintain a proper agent in this state, to the company's designated office. The notice must state:

(1) the revocation's effective date, which must be at least sixty days after the date the Secretary of State sends the copy; and

(2) the grounds for revocation under subsection (a) of this section.

(c) The authority of a foreign limited liability company to transact business in this state ceases on the effective date of the notice of revocation unless before that date the company cures each ground for revocation stated in the notice filed under subsection (b) of this section. If the company cures each ground, the Secretary of State shall file a record so stating.

Source:Laws 2010, LB888, § 60.

21-161. Cancellation of certificate of authority.

(RULLCA 807) To cancel its certificate of authority to transact business in this state, a foreign limited liability company must deliver to the Secretary of State for filing a notice of cancellation stating the name of the company and that the company desires to cancel its certificate of authority. The certificate is canceled when the notice becomes effective.

Source:Laws 2010, LB888, § 61.

21-162. Effect of failure to have certificate of authority.

(RULLCA 808) (a) A foreign limited liability company transacting business in this state may not maintain an action or proceeding in this state unless it has a certificate of authority to transact business in this state.

(b) The failure of a foreign limited liability company to have a certificate of authority to transact business in this state does not impair the validity of a contract or act of the company or prevent the company from defending an action or proceeding in this state.

(c) A member or manager of a foreign limited liability company is not liable for the debts, obligations, or other liabilities of the company solely because the company transacted business in this state without a certificate of authority.

Source:Laws 2010, LB888, § 62.

21-163. Action by Attorney General.

(RULLCA 809) The Attorney General may maintain an action to enjoin a foreign limited liability company from transacting business in this state in violation of sections 21-155 to 21-163.

Source:Laws 2010, LB888, § 63.

21-164. Direct action by member.

(RULLCA 901) (a) Subject to subsection (b) of this section, a member may maintain a direct action against another member, a manager, or the limited liability company to enforce the member's rights and otherwise protect the member's interests, including rights and interests under the operating agreement or the Nebraska Uniform Limited Liability Company Act or arising independently of the membership relationship.

(b) A member maintaining a direct action under this section must plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited liability company.

Source:Laws 2010, LB888, § 64.

Annotations

A member of a limited liability company may file a direct action against only the limited liability company itself, its manager, or another member. Klingelhoefer v. Parker, Grossart, 20 Neb. App. 825, 834 N.W.2d 249 (2013).

21-165. Derivative action.

(RULLCA 902) A member may maintain a derivative action to enforce a right of a limited liability company if:

(1) the member first makes a demand on the other members in a member-managed limited liability company, or the managers of a manager-managed limited liability company, requesting that they cause the company to bring an action to enforce the right, and the managers or other members do not bring the action within a reasonable time; or

(2) a demand under subdivision (1) of this section would be futile.

Source:Laws 2010, LB888, § 65.

Annotations

This section allows for a derivative action if the member of a limited liability company makes a demand upon the manager of the limited liability company to institute the action unless such demand would be futile. Klingelhoefer v. Parker, Grossart, 20 Neb. App. 825, 834 N.W.2d 249 (2013).

21-166. Proper plaintiff.

(RULLCA 903) (a) Except as otherwise provided in subsection (b) of this section, a derivative action under section 21-165 may be maintained only by a person that is a member at the time the action is commenced and remains a member while the action continues.

(b) If the sole plaintiff in a derivative action dies while the action is pending, the court may permit another member of the limited liability company to be substituted as plaintiff.

Source:Laws 2010, LB888, § 66.

21-167. Complaint.

(RULLCA 904) In a derivative action under section 21-165, the complaint must state with particularity:

(1) the date and content of the plaintiff's demand and the response to the demand by the managers or other members; or

(2) if a demand has not been made, the reasons a demand under subdivision (1) of section 21-165 would be futile.

Source:Laws 2010, LB888, § 67.

Annotations

A member bringing a derivative action must set forth in the complaint what actions were taken to comply with section 21-165. Klingelhoefer v. Parker, Grossart, 20 Neb. App. 825, 834 N.W.2d 249 (2013).

21-168. Special litigation committee.

(RULLCA 905) (a) If a limited liability company is named as or made a party in a derivative proceeding, the company may appoint a special litigation committee to investigate the claims asserted in the proceeding and determine whether pursuing the action is in the best interests of the company. If the company appoints a special litigation committee, on motion by the committee made in the name of the company, except for good cause shown, the court shall stay discovery for the time reasonably necessary to permit the committee to make its investigation. This subsection does not prevent the court from enforcing a person's right to information under section 21-139 or, for good cause shown, granting extraordinary relief in the form of a temporary restraining order or preliminary injunction.

(b) A special litigation committee may be composed of one or more disinterested and independent individuals, who may be members.

(1) in a member-managed limited liability company:

(A) by the consent of a majority of the members not named as defendants or plaintiffs in the proceeding; and

(B) if all members are named as defendants or plaintiffs in the proceeding, by a majority of the members named as defendants; or

(2) in a manager-managed limited liability company:

(A) by a majority of the managers not named as defendants or plaintiffs in the proceeding; and

(B) if all managers are named as defendants or plaintiffs in the proceeding, by a majority of the managers named as defendants.

(d) After appropriate investigation, a special litigation committee may determine that it is in the best interests of the limited liability company that the proceeding:

(1) continue under the control of the plaintiff;

(2) continue under the control of the committee;

(3) be settled on terms approved by the committee; or

(4) be dismissed.

(e) After making a determination under subsection (d) of this section, a special litigation committee shall file with the court a statement of its determination and its report supporting its determination, giving notice to the plaintiff. The court shall determine whether the members of the committee were disinterested and independent and whether the committee conducted its investigation and made its recommendation in good faith, independently, and with reasonable care, with the committee having the burden of proof. If the court finds that the members of the committee were disinterested and independent and that the committee acted in good faith, independently, and with reasonable care, the court shall enforce the determination of the committee. Otherwise, the court shall dissolve the stay of discovery entered under subsection (a) of this section and allow the action to proceed under the direction of the plaintiff.

Source:Laws 2010, LB888, § 68.

Annotations

Derivative actions brought pursuant to the Nebraska Uniform Limited Liability Company Act are not special proceedings, and any proceedings under this section are merely a step in the underlying derivative action. Tegra Corp. v. Boeshart, 311 Neb. 783, 976 N.W.2d 165 (2022).

21-169. Proceeds and expenses.

(RULLCA 906) (a) Except as otherwise provided in subsection (b) of this section:

(1) any proceeds or other benefits of a derivative action under section 21-165, whether by judgment, compromise, or settlement, belong to the limited liability company and not to the plaintiff; and

(2) if the plaintiff receives any proceeds, the plaintiff shall remit them immediately to the company.

(b) If a derivative action under section 21-165 is successful in whole or in part, the court may award the plaintiff reasonable expenses, including reasonable attorney's fees and costs, from the recovery of the limited liability company.

Source:Laws 2010, LB888, § 69.

21-170. Terms, defined.

(RULLCA 1001) In sections 21-170 to 21-184:

(1) Constituent limited liability company means a constituent organization that is a limited liability company.

(2) Constituent organization means an organization that is party to a merger.

(3) Converted organization means the organization into which a converting organization converts pursuant to sections 21-175 to 21-178.

(4) Converting limited liability company means a converting organization that is a limited liability company.

(5) Converting organization means an organization that converts into another organization pursuant to section 21-175.

(6) Domesticated company means the company that exists after a domesticating foreign limited liability company or limited liability company effects a domestication pursuant to sections 21-179 to 21-182.

(7) Domesticating company means the company that effects a domestication pursuant to sections 21-179 to 21-182.

(8) Governing statute means the statute that governs an organization's internal affairs.

(9) Organization means a general partnership, including a limited liability partnership, limited partnership, including a limited liability limited partnership, limited liability company, business trust, corporation, or any other person having a governing statute. The term includes a domestic or foreign organization.

(10) Organizational documents means:

(A) for a domestic or foreign general partnership, its partnership agreement;

(B) for a limited partnership or foreign limited partnership, its certificate of limited partnership and partnership agreement;

(C) for a domestic or foreign limited liability company, its certificate or articles of organization and operating agreement, or comparable records as provided in its governing statute;

(D) for a business trust, its agreement of trust and declaration of trust;

(E) for a domestic or foreign corporation for profit, its articles of incorporation, bylaws, and other agreements among its shareholders which are authorized by its governing statute, or comparable records as provided in its governing statute; and

(F) for any other organization, the basic records that create the organization and determine its internal governance and the relations among the persons that own it, have an interest in it, or are members of it.

(11) Personal liability means liability for a debt, obligation, or other liability of an organization which is imposed on a person that co-owns, has an interest in, or is a member of the organization:

(A) by the governing statute solely by reason of the person co-owning, having an interest in, or being a member of the organization; or

(B) by the organization's organizational documents under a provision of the governing statute authorizing those documents to make one or more specified persons liable for all or specified debts, obligations, or other liabilities of the organization solely by reason of the person or persons co-owning, having an interest in, or being a member of the organization.

(12) Surviving organization means an organization into which one or more other organizations are merged whether the organization preexisted the merger or was created by the merger.

Source:Laws 2010, LB888, § 70.

21-171. Merger.

(RULLCA 1002) (a) A limited liability company may merge with one or more other constituent organizations pursuant to this section, sections 21-172 to 21-174, and a plan of merger, if:

(1) the governing statute of each of the other organizations authorizes the merger;

(2) the merger is not prohibited by the law of a jurisdiction that enacted any of the governing statutes; and

(3) each of the other organizations complies with its governing statute in effecting the merger.

(b) A plan of merger must be in a record and must include:

(1) the name and form of each constituent organization;

(2) the name and form of the surviving organization and, if the surviving organization is to be created by the merger, a statement to that effect;

(3) the terms and conditions of the merger, including the manner and basis for converting the interests in each constituent organization into any combination of money, interests in the surviving organization, and other consideration;

(4) if the surviving organization is to be created by the merger, the surviving organization's organizational documents that are proposed to be in a record; and

(5) if the surviving organization is not to be created by the merger, any amendments to be made by the merger to the surviving organization's organizational documents that are, or are proposed to be, in a record.

Source:Laws 2010, LB888, § 71.

21-172. Action on plan of merger by constituent limited liability company.

(RULLCA 1003) (a) Subject to section 21-183, a plan of merger must be consented to by all the members of a constituent limited liability company.

(b) Subject to section 21-183 and any contractual rights, after a merger is approved, and at any time before articles of merger are delivered to the Secretary of State for filing under section 21-173, a constituent limited liability company may amend the plan or abandon the merger:

(1) as provided in the plan; or

(2) except as otherwise prohibited in the plan, with the same consent as was required to approve the plan.

Source:Laws 2010, LB888, § 72.

21-173. Filings required for merger; effective date.

(RULLCA 1004) (a) After each constituent organization has approved a merger, articles of merger must be signed on behalf of:

(1) each constituent limited liability company, as provided in subsection (a) of section 21-119; and

(2) each other constituent organization, as provided in its governing statute.

(b) Articles of merger under this section must include:

(1) the name and form of each constituent organization and the jurisdiction of its governing statute;

(2) the name and form of the surviving organization, the jurisdiction of its governing statute, and, if the surviving organization is created by the merger, a statement to that effect;

(3) the date the merger is effective under the governing statute of the surviving organization;

(4) if the surviving organization is to be created by the merger:

(A) if it will be a limited liability company, the company's certificate of organization; or

(B) if it will be an organization other than a limited liability company, the organizational document that creates the organization that is in a public record;

(5) if the surviving organization preexists the merger, any amendments provided for in the plan of merger for the organizational document that created the organization that are in a public record;

(6) a statement as to each constituent organization that the merger was approved as required by the organization's governing statute; and

(7) any additional information required by the governing statute of any constituent organization.

(c) Each constituent limited liability company shall deliver the articles of merger for filing in the office of the Secretary of State.

(d) A merger becomes effective under sections 21-170 to 21-184:

(1) if the surviving organization is a limited liability company, upon the later of:

(A) compliance with subsection (c) of this section; or

(B) subject to subsection (c) of section 21-121, as specified in the articles of merger; or

(2) if the surviving organization is not a limited liability company, as provided by the governing statute of the surviving organization.

Source:Laws 2010, LB888, § 73.

21-174. Effect of merger.

(RULLCA 1005) (a) When a merger becomes effective:

(1) the surviving organization continues or comes into existence;

(2) each constituent organization that merges into the surviving organization ceases to exist as a separate entity;

(3) all property owned by each constituent organization that ceases to exist vests in the surviving organization;

(4) all debts, obligations, or other liabilities of each constituent organization that ceases to exist continue as debts, obligations, or other liabilities of the surviving organization;

(5) an action or proceeding pending by or against any constituent organization that ceases to exist may be continued as if the merger had not occurred;

(6) except as prohibited by other law, all of the rights, privileges, immunities, powers, and purposes of each constituent organization that ceases to exist vest in the surviving organization;

(7) except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger take effect; and

(8) except as otherwise agreed, if a constituent limited liability company ceases to exist, the merger does not dissolve the limited liability company for the purposes of sections 21-147 to 21-154;

(9) if the surviving organization is created by the merger:

(A) if it is a limited liability company, the certificate of organization becomes effective; or

(B) if it is an organization other than a limited liability company, the organizational document that creates the organization becomes effective; and

(10) if the surviving organization preexisted the merger, any amendments provided for in the articles of merger for the organizational document that created the organization become effective.

(b) A surviving organization that is a foreign organization consents to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability owed by a constituent organization, if before the merger the constituent organization was subject to suit in this state on the debt, obligation, or other liability.

Source:Laws 2010, LB888, § 74.

21-175. Conversion.

(RULLCA 1006) (a) An organization other than a limited liability company or a foreign limited liability company may convert to a limited liability company, and a limited liability company may convert to an organization other than a foreign limited liability company pursuant to this section, sections 21-176 to 21-178, and a plan of conversion, if:

(1) the other organization's governing statute authorizes the conversion;

(2) the conversion is not prohibited by the law of the jurisdiction that enacted the other organization's governing statute; and

(3) the other organization complies with its governing statute in effecting the conversion.

(b) A plan of conversion must be in a record and must include:

(1) the name and form of the organization before conversion;

(2) the name and form of the organization after conversion;

(3) the terms and conditions of the conversion, including the manner and basis for converting interests in the converting organization into any combination of money, interests in the converted organization, and other consideration; and

(4) the organizational documents of the converted organization that are, or are proposed to be, in a record.

Source:Laws 2010, LB888, § 75.

21-176. Action on plan of conversion by converting limited liability company.

(RULLCA 1007) (a) Subject to section 21-183, a plan of conversion must be consented to by all the members of a converting limited liability company.

(b) Subject to section 21-183 and any contractual rights, after a conversion is approved, and at any time before articles of conversion are delivered to the Secretary of State for filing under section 21-177, a converting limited liability company may amend the plan or abandon the conversion:

(1) as provided in the plan; or

(2) except as otherwise prohibited in the plan, by the same consent as was required to approve the plan.

Source:Laws 2010, LB888, § 76.

21-177. Filings required for conversion; effective date.

(RULLCA 1008) (a) After a plan of conversion is approved:

(1) a converting limited liability company shall deliver to the Secretary of State for filing articles of conversion, which must be signed as provided in subsection (a) of section 21-119 and must include:

(A) a statement that the limited liability company has been converted into another organization;

(B) the name and form of the organization and the jurisdiction of its governing statute;

(D) a statement that the conversion was approved as required by the Nebraska Uniform Limited Liability Company Act; and

(E) a statement that the conversion was approved as required by the governing statute of the converted organization; and

(2) if the converting organization is not a converting limited liability company, the converting organization shall deliver to the Secretary of State for filing a certificate of organization, which must include, in addition to the information required by subsection (b) of section 21-117:

(A) a statement that the converted organization was converted from another organization;

(B) the name and form of that converting organization and the jurisdiction of its governing statute; and

(C) a statement that the conversion was approved in a manner that complied with the converting organization's governing statute.

(b) A conversion becomes effective:

(1) if the converted organization is a limited liability company, when the certificate of organization takes effect; and

(2) if the converted organization is not a limited liability company, as provided by the governing statute of the converted organization.

Source:Laws 2010, LB888, § 77.

21-178. Effect of conversion.

(RULLCA 1009) (a) An organization that has been converted pursuant to sections 21-170 to 21-184 is for all purposes the same entity that existed before the conversion.

(b) When a conversion takes effect:

(1) all property owned by the converting organization remains vested in the converted organization;

(2) all debts, obligations, or other liabilities of the converting organization continue as debts, obligations, or other liabilities of the converted organization;

(3) an action or proceeding pending by or against the converting organization may be continued as if the conversion had not occurred;

(4) except as prohibited by law other than the Nebraska Uniform Limited Liability Company Act, all of the rights, privileges, immunities, powers, and purposes of the converting organization remain vested in the converted organization;

(5) except as otherwise provided in the plan of conversion, the terms and conditions of the plan of conversion take effect; and

(6) except as otherwise agreed, the conversion does not dissolve a converting limited liability company for the purposes of sections 21-147 to 21-154.

(c) A converted organization that is a foreign organization consents to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability for which the converting limited liability company is liable if, before the conversion, the converting limited liability company was subject to suit in this state on the debt, obligation, or other liability.

Source:Laws 2010, LB888, § 78.

21-179. Domestication.

(RULLCA 1010) (a) A foreign limited liability company may become a limited liability company pursuant to this section, sections 21-180 to 21-182, and a plan of domestication, if:

(1) the foreign limited liability company's governing statute authorizes the domestication;

(2) the domestication is not prohibited by the law of the jurisdiction that enacted the governing statute; and

(3) the foreign limited liability company complies with its governing statute in effecting the domestication.

(b) A limited liability company may become a foreign limited liability company pursuant to this section, sections 21-180 to 21-182, and a plan of domestication, if:

(1) the foreign limited liability company's governing statute authorizes the domestication;

(2) the domestication is not prohibited by the law of the jurisdiction that enacted the governing statute; and

(3) the foreign limited liability company complies with its governing statute in effecting the domestication.

(1) the name of the domesticating company before domestication and the jurisdiction of its governing statute;

(2) the name of the domesticated company after domestication and the jurisdiction of its governing statute;

(3) the terms and conditions of the domestication, including the manner and basis for converting interests in the domesticating company into any combination of money, interests in the domesticated company, and other consideration; and

(4) the organizational documents of the domesticated company that are, or are proposed to be, in a record.

Source:Laws 2010, LB888, § 79.

21-180. Action on plan of domestication by domesticating limited liability company.

(RULLCA 1011) (a) A plan of domestication must be consented to:

(1) by all the members, subject to section 21-183, if the domesticating company is a limited liability company; and

(2) as provided in the domesticating company's governing statute, if the company is a foreign limited liability company.

(b) Subject to any contractual rights, after a domestication is approved, and at any time before articles of domestication are delivered to the Secretary of State for filing under section 21-181, a domesticating limited liability company may amend the plan or abandon the domestication:

(1) as provided in the plan; or

(2) except as otherwise prohibited in the plan, by the same consent as was required to approve the plan.

Source:Laws 2010, LB888, § 80.

21-181. Filings required for domestication; effective date.

(RULLCA 1012) (a) After a plan of domestication is approved, a domesticating company shall deliver to the Secretary of State for filing articles of domestication, which must include:

(1) a statement, as the case may be, that the company has been domesticated from or into another jurisdiction;

(2) the name of the domesticating company and the jurisdiction of its governing statute;

(3) the name of the domesticated company and the jurisdiction of its governing statute;

(4) the date the domestication is effective under the governing statute of the domesticated company;

(5) if the domesticating company was a limited liability company, a statement that the domestication was approved as required by the Nebraska Uniform Limited Liability Company Act; and

(6) if the domesticating company was a foreign limited liability company, a statement that the domestication was approved as required by the governing statute of the other jurisdiction.

(b) A domestication becomes effective:

(1) when the certificate of organization takes effect, if the domesticated company is a limited liability company; and

(2) according to the governing statute of the domesticated company, if the domesticated organization is a foreign limited liability company.

Source:Laws 2010, LB888, § 81.

21-182. Effect of domestication.

(RULLCA 1013) (a) When a domestication takes effect:

(1) the domesticated company is for all purposes the company that existed before the domestication;

(2) all property owned by the domesticating company remains vested in the domesticated company;

(3) all debts, obligations, or other liabilities of the domesticating company continue as debts, obligations, or other liabilities of the domesticated company;

(4) an action or proceeding pending by or against a domesticating company may be continued as if the domestication had not occurred;

(5) except as prohibited by other law, all of the rights, privileges, immunities, powers, and purposes of the domesticating company remain vested in the domesticated company;

(6) except as otherwise provided in the plan of domestication, the terms and conditions of the plan of domestication take effect; and

(7) except as otherwise agreed, the domestication does not dissolve a domesticating limited liability company for the purposes of sections 21-147 to 21-154.

(b) A domesticated company that is a foreign limited liability company consents to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability owed by the domesticating company, if, before the domestication, the domesticating company was subject to suit in this state on the debt, obligation, or other liability.

(c) If a limited liability company has adopted and approved a plan of domestication under section 21-179 providing for the company to be domesticated in a foreign jurisdiction, a statement surrendering the company's certificate of organization must be delivered to the Secretary of State for filing setting forth:

(1) the name of the company;

(2) a statement that the certificate of organization is being surrendered in connection with the domestication of the company in a foreign jurisdiction;

(3) a statement that the domestication was approved as required by the Nebraska Uniform Limited Liability Company Act; and

(4) the jurisdiction of formation of the domesticated foreign limited liability company.

Source:Laws 2010, LB888, § 82.

21-183. Restrictions on approval of mergers, conversions, and domestications.

(RULLCA 1014) (a) If a member of a constituent, converting, or domesticating limited liability company will have personal liability with respect to a surviving, converted, or domesticated organization, approval or amendment of a plan of merger, conversion, or domestication are ineffective without the consent of the member, unless:

(1) the company's operating agreement provides for approval of a merger, conversion, or domestication with the consent of fewer than all the members; and

(2) the member has consented to the provision of the operating agreement.

(b) A member does not give the consent required by subsection (a) of this section merely by consenting to a provision of the operating agreement that permits the operating agreement to be amended with the consent of fewer than all the members.

Source:Laws 2010, LB888, § 83.

21-184. Sections not exclusive.

(RULLCA 1015) Sections 21-170 to 21-184 do not preclude an entity from being merged, converted, or domesticated under law other than the Nebraska Uniform Limited Liability Company Act.

Source:Laws 2010, LB888, § 84.

21-185. Professional service; filing required; certificate of registration; contents.

(1) Each member, manager, professional employee, or agent of a limited liability company who renders a professional service shall hold a valid license or otherwise be duly authorized to render that professional service under the law of this state if such member, manager, professional employee, or agent renders a professional service within this state or under the law of the state or other jurisdiction in which such person renders the professional service.

(2) Before rendering a professional service, a limited liability company shall (a)(i) deliver to the Secretary of State for filing a certificate of registration issued to the limited liability company by the regulatory body of the particular profession for which the limited liability company is organized to do business, which certificate sets forth the name and address of every member, manager, professional employee, and agent of the limited liability company who is required by law to be licensed or otherwise authorized to render the professional service for which the limited liability company is organized to do business or a service ancillary to those which the limited liability company renders as of the last day of the month preceding the date of delivery of the certificate, and (ii) certify that all of those members, managers, professional employees, and agents of the limited liability company who are required by law to do so are duly licensed or otherwise authorized to render the professional service for which the limited liability company is organized to do business or a service ancillary to those which the limited liability company renders or (b) comply with and qualify under the procedures set forth in subsection (2) of section 21-186.

(3) The registration certificate requirements of this section and sections 21-186 to 21-188 shall apply to both limited liability companies and foreign limited liability companies.

(4) Any limited liability company that, prior to July 19, 2024, has a certificate of registration pursuant to subsection (1) or (2) of section 21-186 may continue to render professional service if the certificate of registration is maintained continuously on and after July 19, 2024.

Source:Laws 2010, LB888, § 85; Laws 2024, LB628, § 2.
Effective Date: July 19, 2024

21-186. Certificate of registration; application; contents; display; electronic records; use; license verification; Secretary of State; duties.

(1)(a) An application for issuance of a certificate of registration shall be made by the limited liability company to the regulatory body in writing and shall contain the names of all of those members, managers, professional employees, and agents of the limited liability company who are required by law to be licensed or otherwise authorized to render the professional service for which the limited liability company is organized to do business or a service ancillary to those which the limited liability company renders, the street address at which the applicant proposes to render a professional service, and such other information as may be required by the regulatory body. If it appears to the regulatory body that each member, manager, professional employee, and agent of the applicant required by law to be licensed is licensed or otherwise authorized to practice the profession for which the applicant is organized to do business and that each member, manager, professional employee, or agent required by law to be licensed or otherwise authorized to practice the profession for which the applicant is organized to do business is not otherwise disqualified from rendering the professional service of the applicant, such regulatory body shall issue a certificate in duplicate upon a form bearing its date of issuance and prescribed by such regulatory body certifying that the proposed or existing limited liability company complies with the provisions of the Nebraska Uniform Limited Liability Company Act and of the applicable rules and regulations of the regulatory body. Each applicant for such certificate shall pay the regulatory body a fee of twenty-five dollars for the issuance of the certificate.

(b) One copy of a certificate of registration issued pursuant to this subsection shall be prominently displayed to public view upon the premises of the principal place of business of the limited liability company, and, except as provided in subsection (2) of this section, one copy shall be delivered for filing to the Secretary of State who shall charge a fee as specified in section 21-192 for filing the same. The certificate shall be delivered to the Secretary of State for filing with the certificate of organization. A certificate of registration bearing an issuance date more than twelve months old shall not be eligible for filing by the Secretary of State.

(2) When licensing records of regulatory bodies are electronically accessible to the Secretary of State, the regulatory body, in conjunction with the Secretary of State, shall develop an automated process to allow the Secretary of State to electronically access and verify the records. The access of the records shall be made in lieu of a certificate of registration being prepared and issued by the regulatory body for delivery to the Secretary of State for filing. The limited liability company shall deliver to the Secretary of State for filing an application setting forth the names of all of those members, managers, professional employees, and agents of such limited liability company who are required by law to be licensed or otherwise authorized to render the professional service for which the limited liability company is organized to do business, or a service ancillary to those which the limited liability company renders, as of the last day of the month preceding the date of application and shall deliver to the Secretary of State for filing an annual update thereafter. The application shall be completed on a form prescribed by the Secretary of State and shall contain such other information as the Secretary of State may require. The application shall be accompanied by a license verification fee as specified in section 21-192.

The Secretary of State shall verify that all of those members, managers, professional employees, and agents who are required by law to do so are duly licensed or otherwise legally authorized to render the professional service for which the applicant is organized to do business or a service ancillary to those which the limited liability company renders through electronic accessing of the regulatory body's records or through compacts or other certifying organizations recognized by the regulatory body. If any member, manager, professional employee, or agent who is required by law to be licensed or otherwise authorized to render the professional service for which the limited liability company is organized to do business, or a service ancillary to those which the limited liability company renders, is not licensed or otherwise legally authorized to render the professional service for which the limited liability company is organized to do business or a service ancillary to those which the limited liability company renders, the limited liability company shall be suspended. The suspension shall remain in effect and a biennial report shall not be delivered to the Secretary of State for filing or filed by the Secretary of State until the limited liability company attests in writing that all of those members, managers, professional employees, or agents who are required by law to be licensed or otherwise authorized to render the professional service for which the limited liability company is organized to do business, or a service ancillary to those which the limited liability company renders, are duly licensed or otherwise legally authorized to render the professional service for which the limited liability company is organized to do business or a service ancillary to those which the limited liability company renders and that information is verified by the Secretary of State or all unlicensed or unauthorized members, managers, professional employees, or agents are no longer members, managers, professional employees, or agents of the limited liability company.

Source:Laws 2010, LB888, § 86; Laws 2020, LB910, § 3; Laws 2024, LB628, § 3.
Effective Date: July 19, 2024

21-187. Certificate of registration; expiration; annual application.

Each certificate of registration issued to a limited liability company pursuant to section 21-186 shall expire by its own terms one year from the date of issuance and may not be renewed. Each limited liability company shall annually apply (1) to its regulatory body for a certificate in the manner provided in subsection (1) of section 21-186 or (2) to the Secretary of State pursuant to subsection (2) of section 21-186 if the records of the regulatory body are electronically accessible to the Secretary of State. A certificate or application shall be delivered annually to the Secretary of State for filing within thirty days before the expiration date of the last certificate or application on file in the office of the Secretary of State or the limited liability company shall be suspended. Certificates shall not be transferable or assignable.

Source:Laws 2010, LB888, § 87.

21-188. Certificate of registration; suspension or revocation; procedure; notice.

A regulatory body may, upon a form prescribed by it, suspend or revoke any certificate of registration issued to any limited liability company pursuant to subsection (1) of section 21-186 upon the suspension or revocation of the license or other authorization to render a professional service by any member, manager, professional employee, or agent of the limited liability company who is required by law to be licensed or otherwise authorized to render the professional service for which the limited liability company is organized to do business or a service ancillary to those which the limited liability company renders. Notice of such suspension or revocation shall be provided to the limited liability company affected by sending by certified or registered mail a certified copy of such suspension or revocation to the limited liability company at its principal place of business set forth in the certificate so suspended or revoked. At the same time, the regulatory body shall forward by regular mail a certified copy of such suspension or revocation to the Secretary of State who shall remove the suspended or revoked registration certificate from his or her files and deliver it to the regulatory body.

Source:Laws 2010, LB888, § 88; Laws 2024, LB628, § 4.
Effective Date: July 19, 2024

21-189. Authority and duty of regulatory body licensing professionals.

Nothing in the Nebraska Uniform Limited Liability Company Act is intended to restrict or limit in any manner the authority and duty of any regulatory body licensing professionals within the state to license such persons rendering a professional service or to regulate the practice of any profession that is within the jurisdiction of the regulatory body licensing such professionals within the state notwithstanding that the person is a member, manager, professional employee, or agent of a limited liability company and rendering a professional service or engaging in the practice of the profession through a limited liability company.

Source:Laws 2010, LB888, § 89.

21-190. Professional service; limitation.

(1) A limited liability company which renders a professional service shall render only one type of professional service and such services as may be ancillary thereto and shall not render any other type of professional service or engage in any other profession. No limited liability company may render a professional service except through its members, managers, professional employees, and agents who are duly licensed or otherwise legally authorized to render such professional service within this state.

(2) This section shall not be interpreted to include in the term professional employee, as used in the Nebraska Uniform Limited Liability Company Act, clerks, secretaries, bookkeepers, technicians, and other assistants who are not usually and ordinarily considered by custom and practice to be rendering a professional service to the public for which a license or other legal authorization is required.

Source:Laws 2010, LB888, § 90.

21-191. Applicability to attorneys at law.

The provisions of the Nebraska Uniform Limited Liability Company Act shall be applicable to attorneys at law only to the extent and under such terms and conditions as the Supreme Court determines to be necessary and appropriate. Certificates of organization of limited liability companies organized to practice law shall contain such provisions as may be appropriate to comply with applicable rules of the court.

Source:Laws 2010, LB888, § 91.

21-192. Fees.

(1) The filing fee for all filings under the Nebraska Uniform Limited Liability Company Act, including amendments and name reservation, shall be thirty dollars if the filing is submitted in writing and twenty-five dollars if the filing is submitted electronically pursuant to section 84-511, except that:

(a) The filing fee for filing a certificate of organization under section 21-117 and for filing an application for a certificate of authority to transact business in this state as a foreign limited liability company under section 21-156 shall be one hundred ten dollars if the filing is submitted in writing and one hundred dollars if the filing is submitted electronically pursuant to section 84-511, and ten dollars for a certificate; and

(b) The filing fee for filing a protected-series designation under section 21-509 or a statement of designation under section 21-532 shall be one hundred ten dollars if the filing is submitted in writing and one hundred dollars if the filing is submitted electronically pursuant to section 84-511, for each protected series stated, and ten dollars for a certificate and the filing fee for an application for a certificate of authority to do business in this state as a foreign protected series under section 21-537 shall be one hundred ten dollars if the filing is submitted in writing and one hundred dollars if the filing is submitted electronically pursuant to section 84-511, and ten dollars for a certificate.

(2) The filing fee for filing a statement of change of address for an agent for service of process under section 21-114 shall be thirty dollars if the filing is submitted in writing and twenty-five dollars if the filing is submitted electronically pursuant to section 84-511 for each limited liability company or foreign limited liability company for which the agent is designated.

(3) The filing fee for filing a statement of designation change under section 21-509 or 21-510 shall be thirty dollars if the filing is submitted in writing and twenty-five dollars if the filing is submitted electronically pursuant to section 84-511 for each protected series designation changed by the filing.

(4) The filing fee for the filing of a biennial report under section 21-514 shall be thirty dollars if the filing is submitted in writing and twenty-five dollars if the filing is submitted electronically pursuant to section 84-511 for the series limited liability company and thirty dollars if the filing is submitted in writing and twenty-five dollars if the filing is submitted electronically pursuant to section 84-511 for each of the series limited liability company's protected series.

(5) The fee for an application for reinstatement more than five years after the effective date of an administrative dissolution shall be five hundred dollars.

(6) The fee for filing a certificate of registration pursuant to section 21-186 shall be thirty dollars if the certificate is submitted in writing and twenty-five dollars if the certificate is submitted electronically pursuant to section 84-511. In lieu of filing such certificate, the fee for application for electronic access to records pursuant to section 21-186 is fifty-five dollars if submitted in writing or fifty dollars if submitted electronically pursuant to section 84-511.

(7) A fee of one dollar per page plus ten dollars per certificate shall be paid for a certified copy of any document on file under the act.

(8) The fees for filings under the act shall be paid to the Secretary of State. The Secretary of State shall remit the fees to the State Treasurer. The State Treasurer shall credit sixty percent of the fees to the General Fund and forty percent of the fees to the Secretary of State Cash Fund.

Source:Laws 2010, LB888, § 92; Laws 2014, LB753, § 2; Laws 2015, LB279, § 2; Laws 2019, LB78, § 2; Laws 2020, LB910, § 4; Laws 2021, LB253, § 1.

21-193. Notice; publication required; filing.

(1) Notice of organization, amendment of the certificate of organization, merger, conversion, or domestication must be published three successive weeks in some legal newspaper of general circulation near the designated office of the limited liability company. A notice of organization must show the information required by subsection (b) of section 21-117 to be stated in the certificate of organization. A brief resume of any amendment of the certificate of organization or of any merger, conversion, or domestication of the limited liability company shall be published in the same manner and for the same period of time as notice of organization is required to be published.

(2) Whenever any limited liability company is voluntarily dissolved, notice of the dissolution shall be published as required by section 21-150.

(3) Proof of publication of any of the notices shall be filed in the office of the Secretary of State. In the event any notice described in subsection (1) of this section and required to be given pursuant to this section is not given, but is subsequently published for the required time, and proof of the publication thereof is filed in the office of the Secretary of State, the acts of the limited liability company prior to, as well as after, such publication shall be valid.

Source:Laws 2010, LB888, § 93; Laws 2012, LB942, § 1.

21-194. Uniformity of application and construction.

(RULLCA 1101) In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

Source:Laws 2010, LB888, § 94.

21-195. Relation to Electronic Signatures in Global and National Commerce Act.

(RULLCA 1102) The Nebraska Uniform Limited Liability Company Act modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. 7001 et seq., but does not modify, limit, or supersede section 101(c) of that act, 15 U.S.C. 7001(c), or authorize electronic delivery of any of the notices described in section 103(b) of that act, 15 U.S.C. 7003(b).

Source:Laws 2010, LB888, § 95.

21-196. Effect on certain actions, proceedings, and rights.

(RULLCA 1103) The Nebraska Uniform Limited Liability Company Act does not affect an action commenced, proceeding brought, or right accrued before January 1, 2011.

Source:Laws 2010, LB888, § 96.

21-197. Application to existing relationships.

(RULLCA 1104) (a) Before January 1, 2013, the Nebraska Uniform Limited Liability Company Act governs only:

(1) a limited liability company formed on or after January 1, 2011; and

(2) except as otherwise provided in subsection (c) of this section, a limited liability company formed before January 1, 2011, which elects, in the manner provided in its operating agreement or by law for amending the operating agreement, to be subject to the act and which delivers to the Secretary of State for filing a statement of election to be subject to the act pursuant to this subdivision.

(b) Except as otherwise provided in subsection (c) of this section, on and after January 1, 2013, the act governs all limited liability companies.

(1) the company's articles of organization are deemed to be the company's certificate of organization; and

(2) for the purposes of applying subdivision (11) of section 21-102 and subject to subsection (d) of section 21-112, language in the company's articles of organization designating the company's management structure operates as if that language were in the operating agreement.

Source:Laws 2010, LB888, § 97.

21-201. Short title.

(MBCA 1.01) Sections 21-201 to 21-2,232 shall be known and may be cited as the Nebraska Model Business Corporation Act.

Source:Laws 2014, LB749, § 1; Laws 2016, LB794, § 1; Laws 2017, LB35, § 1; Laws 2020, LB808, § 2.

21-202. Reservation of power to amend or repeal.

(MBCA 1.02) The Legislature has power to amend or repeal all or part of the Nebraska Model Business Corporation Act at any time and all domestic and foreign corporations subject to the act are governed by the amendment or repeal.

Source:Laws 2014, LB749, § 2.

21-203. Requirements for documents; extrinsic facts.

(MBCA 1.20) (a) A document must satisfy the requirements of this section, and of any other section that adds to or varies these requirements, to be entitled to filing by the Secretary of State.

(b) The Nebraska Model Business Corporation Act must require or permit filing the document in the office of the Secretary of State.

(d) The document must be typewritten or printed or, if electronically transmitted, it must be in a format that can be retrieved or reproduced in typewritten or printed form.

(e) The document must be in the English language. A corporate name need not be in English if written in English letters or Arabic or Roman numerals, and the certificate of existence required of foreign corporations need not be in English if accompanied by a reasonably authenticated English translation.

(f) The document must be signed:

(1) By the chairperson of the board of directors of a domestic or foreign corporation, by its president, or by another of its officers;

(2) If directors have not been selected or the corporation has not been formed, by an incorporator; or

(3) If the corporation is in the hands of a receiver, trustee, or other court-appointed fiduciary, by that fiduciary.

(g) The person executing the document shall sign it and state beneath or opposite the person's signature the person's name and the capacity in which the document is signed. The document may but need not contain a corporate seal, attestation, acknowledgment, or verification.

(h) If the Secretary of State has prescribed a mandatory form for the document under section 21-204, the document must be in or on the prescribed form.

(i) The document must be delivered to the office of the Secretary of State for filing. Delivery may be made by electronic transmission if and to the extent permitted by the Secretary of State. If it is filed in typewritten or printed form and not transmitted electronically, the Secretary of State may require one exact or conformed copy to be delivered with the document, except as provided in sections 21-235 and 21-2,211.

(j) When the document is delivered to the office of the Secretary of State for filing, the correct filing fee, and any tax, license fee, or penalty required to be paid therewith by the Nebraska Model Business Corporation Act or other law must be paid or provision for payment made in a manner permitted by the Secretary of State.

(k) Whenever a provision of the Nebraska Model Business Corporation Act permits any of the terms of a plan or a filed document to be dependent on facts objectively ascertainable outside the plan or filed document, the following provisions apply:

(1) The manner in which the facts will operate upon the terms of the plan or filed document shall be set forth in the plan or filed document;

(2) The facts may include, but are not limited to:

(i) Any of the following that is available in a nationally recognized news or information medium either in print or electronically: Statistical or market indices, market prices of any security or group of securities, interest rates, currency exchange rates, or similar economic or financial data;

(ii) A determination or action by any person or body, including the corporation or any other party to a plan or filed document; or

(iii) The terms of, or actions taken under, an agreement to which the corporation is a party, or any other agreement or document;

(3) As used in this subsection (k):

(i) Filed document means a document filed with the Secretary of State under any provision of the act except sections 21-2,203 to 21-2,220 or section 21-2,228; and

(ii) Plan means a plan of domestication, nonprofit conversion, entity conversion, merger, or share exchange;

(4) The following provisions of a plan or filed document may not be made dependent on facts outside the plan or filed document:

(i) The name and address of any person required in a filed document;

(ii) The registered office of any entity required in a filed document;

(iii) The registered agent of any entity required in a filed document;

(iv) The number of authorized shares and designation of each class or series of shares;

(v) The effective date of a filed document; or

(vi) Any required statement in a filed document of the date on which the underlying transaction was approved or the manner in which that approval was given; and

(5) If a provision of a filed document is made dependent on a fact ascertainable outside of the filed document, and that fact is not ascertainable by reference to a source described in subdivision (k)(2)(i) of this section or a document that is a matter of public record, or the affected shareholders have not received notice of the fact from the corporation, then the corporation shall file with the Secretary of State articles of amendment setting forth the fact promptly after the time when the fact referred to is first ascertainable or thereafter changes. Articles of amendment under this subdivision (k)(5) of this section are deemed to be authorized by the authorization of the original filed document or plan to which they relate and may be filed by the corporation without further action by the board of directors or the shareholders.

Source:Laws 2014, LB749, § 3.

21-204. Forms.

(MBCA 1.21) (a) The Secretary of State may prescribe and furnish on request forms for (1) an application for a certificate of existence, (2) a foreign corporation's application for a certificate of authority to transact business in this state, and (3) a foreign corporation's application for a certificate of withdrawal. If the Secretary of State so requires, use of these forms is mandatory.

(b) The Secretary of State may prescribe and furnish on request forms for other documents required or permitted to be filed by the Nebraska Model Business Corporation Act but their use is not mandatory.

Source:Laws 2014, LB749, § 4.

21-205. Filing, service, and copying fees.

(MBCA 1.22) (a) The Secretary of State shall collect the following fees when the documents described in this subsection are delivered to the Secretary of State for filing:

(1) Articles of incorporation, articles of domestication, or articles of domestication and conversion:

(i) If the filing is submitted in writing, the fee shall be $110; and

(ii) If the filing is submitted electronically pursuant to section 84-511, the fee shall be $100;

(2) Articles of incorporation or articles of domestication if filed by an insurer holding a certificate of authority issued by the Director of Insurance, the fee shall be $300;

(3) Agent's statement of change of registered office for each affected corporation...$30 not to exceed a total of...$1,000;

(4) Agent's statement of resignation...No fee;

(5) Certificate of administrative dissolution...No fee;

(6) Application for reinstatement more than five years after the effective date of an administrative dissolution or administrative revocation...$500;

(7) Certificate of reinstatement...No fee;

(8) Certificate of judicial dissolution...No fee;

(9) Application for certificate of authority:

(i) If the filing is submitted in writing, the fee shall be $110; and

(ii) If the filing is submitted electronically pursuant to section 84-511, the fee shall be $100;

(10) Certificate of revocation of authority to transact business...No fee;

(11)(i) Professional certificate submitted pursuant to section 21-2216:

(A) If the professional certificate is submitted, the fee shall be $30; and

(B) If electronic verification is submitted in lieu of the professional certificate, the fee shall be $55; and

(ii) Such professional certificate submitted pursuant to section 84-511:

(A) If the professional certificate is submitted, the fee shall be $25; and

(B) If electronic verification is submitted in lieu of the professional certificate, the fee shall be $50; and

(12) Any other document required or permitted to be filed by the Nebraska Model Business Corporation Act:

(i) If the filing is submitted in writing, the fee shall be $30; and

(ii) If the filing is submitted electronically pursuant to section 84-511, the fee shall be $25;

(b) The Secretary of State shall collect the following fees for copying and certifying the copy of any filed document relating to a domestic or foreign corporation:

(1) One dollar per page for copying; and

(2) Ten dollars for the certificate.

(c) All fees set forth in this section shall be collected by the Secretary of State and remitted to the State Treasurer and credited sixty percent to the General Fund and forty percent to the Secretary of State Cash Fund.

Source:Laws 2014, LB749, § 5; Laws 2015, LB279, § 3; Laws 2020, LB910, § 5.

21-206. Effective time and date of document.

(MBCA 1.23) (a) Except as provided in subsection (b) of this section and subsection (c) of section 21-207, a document accepted for filing is effective:

(1) At the date and time of filing, as evidenced by such means as the Secretary of State may use for the purpose of recording the date and time of filing; or

(2) At the time specified in the document as its effective time on the date it is filed.

(b) A document may specify a delayed effective time and date, and if it does so the document becomes effective at the time and date specified. If a delayed effective date but no time is specified, the document is effective at the close of business on that date. A delayed effective date for a document may not be later than the ninetieth day after the date it is filed.

Source:Laws 2014, LB749, § 6.

21-207. Correcting filed document.

(MBCA 1.24) (a) A domestic or foreign corporation may correct a document filed with the Secretary of State if (1) the document contains an inaccuracy, or (2) the document was defectively signed, attested, sealed, verified, or acknowledged, or (3) the electronic transmission was defective.

(b) A document is corrected:

(1) By preparing articles of correction that:

(i) Describe the document, including its filing date, or attach a copy of it to the articles;

(ii) Specify the inaccuracy or defect to be corrected; and

(iii) Correct the inaccuracy or defect; and

(2) By delivering the articles to the Secretary of State for filing.

(c) Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed.

Source:Laws 2014, LB749, § 7.

21-208. Filing duty of Secretary of State.

(MBCA 1.25) (a) If a document delivered to the office of the Secretary of State for filing satisfies the requirements of section 21-203, the Secretary of State shall file it.

(b) The Secretary of State files a document by recording it as filed on the date and at the time of receipt. After filing a document, except as provided in sections 21-235 and 21-2,211, the Secretary of State shall deliver to the domestic or foreign corporation or its representative a copy of the document with an acknowledgment of the date and time of filing.

(c) If the Secretary of State refuses to file a document, it shall be returned to the domestic or foreign corporation or its representative within five days after the document was delivered, together with a brief, written explanation of the reason for refusal.

(d) The Secretary of State's duty to file documents under this section is ministerial. The Secretary of State's filing or refusing to file a document does not:

(1) Affect the validity or invalidity of the document in whole or part;

(2) Relate to the correctness or incorrectness of information contained in the document; or

(3) Create a presumption that the document is valid or invalid or that information contained in the document is correct or incorrect.

Source:Laws 2014, LB749, § 8.

21-209. Appeal from Secretary of State's refusal to file document.

(MBCA 1.26) (a) If the Secretary of State refuses to file a document delivered for filing, the domestic or foreign corporation may appeal the refusal within thirty days after the return of the document to the district court of Lancaster County. The appeal is commenced by petitioning the court to compel filing the document and by attaching to the petition the document and the Secretary of State's explanation of his or her refusal to file.

(b) The court may summarily order the Secretary of State to file the document or take other action the court considers appropriate.

Source:Laws 2014, LB749, § 9.

21-210. Evidentiary effect of copy of filed document.

(MBCA 1.27) A certificate from the Secretary of State delivered with a copy of a document filed by the Secretary of State, is conclusive evidence that the original document is on file with the Secretary of State.

Source:Laws 2014, LB749, § 10.

21-211. Certificate of existence.

(MBCA 1.28) (a) Anyone may apply to the Secretary of State to furnish a certificate of existence for a domestic corporation or a certificate of authorization for a foreign corporation.

(b) A certificate of existence or authorization sets forth:

(1) The domestic corporation's corporate name or the foreign corporation's corporate name used in this state;

(2) That:

(i) The domestic corporation is duly incorporated under the law of this state, the date of its incorporation, and the period of its duration if less than perpetual; or

(ii) That the foreign corporation is authorized to transact business in this state;

(3) That all fees, taxes, and penalties owed to this state have been paid, if:

(i) Payment is reflected in the records of the Secretary of State; and

(ii) Nonpayment affects the existence or authorization of the domestic or foreign corporation;

(4) That its most recent biennial report required by section 21-2,228 has been filed with the Secretary of State;

(5) That articles of dissolution have not been filed; and

(6) Other facts of record in the office of the Secretary of State that may be requested by the applicant.

(c) Subject to any qualification stated in the certificate, a certificate of existence or authorization issued by the Secretary of State may be relied upon as conclusive evidence that the domestic or foreign corporation is in existence or is authorized to transact business in this state.

Source:Laws 2014, LB749, § 11.

21-212. Penalty for signing false document.

(MBCA 1.29) (a) A person commits an offense by signing a document that the person knows is false in any material respect with intent that the document be delivered to the Secretary of State for filing.

(b) An offense under this section is a Class I misdemeanor.

Source:Laws 2014, LB749, § 12.

21-213. Powers.

(MBCA 1.30) The Secretary of State has the power reasonably necessary to perform the duties required of the Secretary of State by the Nebraska Model Business Corporation Act.

Source:Laws 2014, LB749, § 13.

21-214. Act definitions.

(MBCA 1.40) In the Nebraska Model Business Corporation Act:

(1) Articles of incorporation means the original articles of incorporation, all amendments thereof, and any other documents permitted or required to be filed by a domestic business corporation with the Secretary of State under any provision of the act except section 21-2,228. If an amendment of the articles or any other document filed under the act restates the articles in their entirety, thenceforth the articles shall not include any prior documents.

(2) Authorized shares means the shares of all classes a domestic or foreign corporation is authorized to issue.

(3) Beneficial shareholder means a person who owns the beneficial interest in shares, which may be a record shareholder or a person on whose behalf shares are registered in the name of an intermediary or nominee.

(4) Conspicuous means so written, displayed, or presented that a reasonable person against whom the writing is to operate should have noticed it. For example, text in italics, boldface, contrasting color, capitals, or underlined, is conspicuous.

(5) Corporation, domestic corporation, or domestic business corporation means a corporation for profit, which is not a foreign corporation, incorporated under or subject to the provisions of the act.

(6) Deliver or delivery means any method of delivery used in conventional commercial practice, including delivery by hand, mail, commercial delivery, and, if authorized in accordance with section 21-215, by electronic transmission.

(7) Distribution means a direct or indirect transfer of money or other property, except its own shares, or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. A distribution may be in the form of a declaration or payment of a dividend; a purchase, redemption, or other acquisition of shares; a distribution of indebtedness; or otherwise.

(8) Document means (i) any tangible medium on which information is inscribed, and includes any writing or written instrument, or (ii) an electronic record.

(9) Domestic unincorporated entity means an unincorporated entity whose internal affairs are governed by the laws of this state.

(10) Effective date of notice is defined in section 21-215.

(11) Electronic means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

(12) Electronic record means information that is stored in an electronic or other medium and is retrievable in paper form through an automated process used in conventional commercial practice, unless otherwise authorized in accordance with subsection (k) of section 21-215.

(13) Electronic transmission or electronically transmitted means any form or process of communication not directly involving the physical transfer of paper or another tangible medium, which (i) is suitable for the retention, retrieval, and reproduction of information by the recipient and (ii) is retrievable in paper form by the recipient through an automated process used in conventional commercial practice, unless otherwise authorized in accordance with subsection (k) of section 21-215.

(14) Eligible entity means a domestic or foreign unincorporated entity or a domestic or foreign nonprofit corporation.

(15) Eligible interests means interests or memberships.

(16) Employee includes an officer but not a director. A director may accept duties that make the director also an employee.

(17) Entity includes domestic and foreign business corporation; domestic and foreign nonprofit corporation; limited liability company; estate; trust; domestic and foreign unincorporated entity; and state, United States, and foreign government.

(18) The phrase facts objectively ascertainable outside of a filed document or plan is defined in subsection (k) of section 21-203.

(19) Expenses means reasonable expenses of any kind that are incurred in connection with a matter.

(20) Filing entity means an unincorporated entity that is of a type that is created by filing a public organic document.

(21) Foreign corporation means a corporation incorporated under a law other than the law of this state which would be a business corporation if incorporated under the laws of this state.

(22) Foreign nonprofit corporation means a corporation incorporated under a law other than the law of this state which would be a nonprofit corporation if incorporated under the laws of this state.

(23) Foreign unincorporated entity means an unincorporated entity whose internal affairs are governed by an organic law of a jurisdiction other than this state.

(24) Governmental subdivision includes authority, county, district, and municipality.

(25) Includes denotes a partial definition.

(26) Individual means a natural person.

(27) Interest means either or both of the following rights under the organic law of an unincorporated entity:

(i) The right to receive distributions from the entity either in the ordinary course or upon liquidation; or

(ii) The right to receive notice or vote on issues involving its internal affairs, other than as an agent, assignee, proxy, or person responsible for managing its business and affairs.

(28) Interest holder means a person who holds of record an interest.

(29) Means denotes an exhaustive definition.

(30) Membership means the rights of a member in a domestic or foreign nonprofit corporation.

(31) Nonfiling entity means an unincorporated entity that is of a type that is not created by filing a public organic document.

(32) Nonprofit corporation or domestic nonprofit corporation means a corporation incorporated under the laws of this state and subject to the provisions of the Nebraska Nonprofit Corporation Act.

(33) Notice is defined in section 21-215.

(34) Organic document means a public organic document or a private organic document.

(35) Organic law means the statute governing the internal affairs of a domestic or foreign business or nonprofit corporation or unincorporated entity.

(36) Owner liability means personal liability for a debt, obligation, or liability of a domestic or foreign business or nonprofit corporation or unincorporated entity that is imposed on a person:

(i) Solely by reason of the person's status as a shareholder, member, or interest holder; or

(ii) By the articles of incorporation, bylaws, or an organic document under a provision of the organic law of an entity authorizing the articles of incorporation, bylaws, or an organic document to make one or more specified shareholders, members, or interest holders liable in their capacity as shareholders, members, or interest holders for all or specified debts, obligations, or liabilities of the entity.

(37) Person includes an individual and an entity.

(38) Principal office means the office, in or out of this state, so designated in the biennial report where the principal executive offices of a domestic or foreign corporation are located.

(39) Private organic document means any document, other than the public organic document, if any, that determines the internal governance of an unincorporated entity. Where a private organic document has been amended or restated, the term means the private organic document as last amended or restated.

(40) Public organic document means the document, if any, that is filed of public record to create an unincorporated entity. Where a public organic document has been amended or restated, the term means the public organic document as last amended or restated.

(41) Proceeding includes civil suit and criminal, administrative, and investigatory action.

(42) Public corporation means a corporation that has shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national securities association.

(43) Qualified director is defined in section 21-217.

(44) Record date means the date established under sections 21-237 to 21-252 or 21-253 to 21-283 on which a corporation determines the identity of its shareholders and their shareholdings for purposes of the Nebraska Model Business Corporation Act. The determinations shall be made as of the close of business on the record date unless another time for doing so is specified when the record date is fixed.

(45) Record shareholder means (i) the person in whose name shares are registered in the records of the corporation or (ii) the person identified as the beneficial owner of shares in a beneficial ownership certificate pursuant to section 21-265 on file with the corporation to the extent of the rights granted by such certificate.

(46) Secretary means the corporate officer to whom the board of directors has delegated responsibility under subsection (c) of section 21-2,105 for custody of the minutes of the meetings of the board of directors and of the shareholders and for authenticating records of the corporation.

(47) Shareholder means, unless varied for purposes of a specific provision, a record shareholder.

(48) Shares means the units into which the proprietary interests in a corporation are divided.

(49) Sign or signature means, with present intent to authenticate or adopt a document:

(i) To execute or adopt a tangible symbol to a document, and includes any manual, facsimile, or conformed signature; or

(ii) To attach to or logically associate with an electronic transmission an electronic sound, symbol, or process, and includes an electronic signature in an electronic transmission.

(50) State, when referring to a part of the United States, includes a state and commonwealth, and their agencies and governmental subdivisions, and a territory and insular possession, and their agencies and governmental subdivisions, of the United States.

(51) Subscriber means a person who subscribes for shares in a corporation, whether before or after incorporation.

(52) Unincorporated entity means an organization or artificial legal person that either has a separate legal existence or has the power to acquire an estate in real property in its own name and that is not any of the following: A domestic or foreign business or nonprofit corporation, an estate, a trust, a state, the United States, or a foreign government. The term includes a general partnership, limited liability company, limited partnership, business trust, joint-stock association, and unincorporated nonprofit association.

(53) United States includes district, authority, bureau, commission, department, and any other agency of the United States.

(54) Voting group means all shares of one or more classes or series that under the articles of incorporation or the act are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. All shares entitled by the articles of incorporation or the act to vote generally on the matter are for that purpose a single voting group.

(55) Voting power means the current power to vote in the election of directors.

(56) Voting trust beneficial owner means an owner of a beneficial interest in shares of the corporation held in a voting trust established pursuant to subsection (a) of section 21-272. Unrestricted voting trust beneficial owner means, with respect to any shareholder rights, a voting trust beneficial owner whose entitlement to exercise the shareholder right in question is not inconsistent with the voting trust agreement.

(57) Writing or written means any information in the form of a document.

Source:Laws 2014, LB749, § 14; Laws 2016, LB794, § 2; Laws 2017, LB35, § 2.

Cross References

Nebraska Nonprofit Corporation Act, see section 21-1901.

21-215. Notices and other communications.

(MBCA 1.41) (a) Notice under the Nebraska Model Business Corporation Act must be in writing unless oral notice is reasonable in the circumstances. Unless otherwise agreed between the sender and the recipient, words in a notice or other communication under the act must be in English.

(b) A notice or other communication may be given or sent by any method of delivery, except that electronic transmissions must be in accordance with this section. If these methods of delivery are impractical, a notice or other communication may be communicated by a newspaper of general circulation in the area where published, or by radio, television, or other form of public broadcast communication.

(c) Written notice by a domestic or foreign corporation to its shareholder, if in a comprehensible form, is effective (1) when mailed, if mailed postage prepaid and correctly addressed to the shareholder's address shown in the corporation's current record of shareholders, or (2) when electronically transmitted to the shareholder in a manner authorized by the shareholder. Notice by a public corporation to its shareholder is effective if the notice is addressed to the shareholder or group of shareholders in a manner permitted by rules and regulations adopted and promulgated under the federal Securities Exchange Act of 1934, as amended, 15 U.S.C. 78a et seq., if the public corporation has first received affirmative written consent or implied consent required under such rules and regulations.

(d) Notice or other communication to a domestic or foreign corporation authorized to transact business in this state may be delivered to its registered agent at its registered office or to the secretary of the corporation at its principal office shown in its most recent biennial report or, in the case of a foreign corporation that has not yet delivered a biennial report, in its application for a certificate of authority.

(e) Notice or other communications may be delivered by electronic transmission if consented to by the recipient or if authorized by subsection (l) of this section.

(f) Any consent under subsection (e) of this section may be revoked by the person who consented by written or electronic notice to the person to whom the consent was delivered. Any such consent is deemed revoked if (1) the corporation is unable to deliver two consecutive electronic transmissions given by the corporation in accordance with such consent and (2) such inability becomes known to the secretary or an assistant secretary of the corporation or to the transfer agent, or other person responsible for the giving of notice or other communications, except that the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

(g) Unless otherwise agreed between the sender and the recipient, an electronic transmission is received when:

(1) It enters an information processing system that the recipient has designated or uses for the purposes of receiving electronic transmissions or information of the type sent and from which the recipient is able to retrieve the electronic transmission; and

(2) It is in a form capable of being processed by that system.

(h) Receipt of an electronic acknowledgment from an information processing system described in subdivision (g)(1) of this section establishes that an electronic transmission was received but, by itself, does not establish that the content sent corresponds to the content received.

(i) An electronic transmission is received under this section even if no individual is aware of its receipt.

(j) Notice or other communication, if in a comprehensible form or manner, is effective at the earliest of the following:

(1) If in a physical form, the earliest of when it is actually received or when it is left at:

(i) A shareholder's address shown on the corporation's record of shareholders maintained by the corporation under subsection (c) of section 21-2,221;

(ii) A director's residence or usual place of business; or

(iii) The corporation's principal place of business;

(2) If mailed postage prepaid and correctly addressed to a shareholder, upon deposit in the United States mail;

(3) If mailed by United States mail postage prepaid and correctly addressed to a recipient other than a shareholder, the earliest of when it is actually received, or:

(i) If sent by registered or certified mail, return receipt requested, the date shown on the return receipt signed by or on behalf of the addressee; or

(ii) Five days after it is deposited in the United States mail;

(4) If an electronic transmission, when it is received as provided in subsection (g) of this section; and

(5) If oral, when communicated.

(k) A notice or other communication may be in the form of an electronic transmission that cannot be directly reproduced in paper form by the recipient through an automated process used in conventional commercial practice only if (1) the electronic transmission is otherwise retrievable in perceivable form and (2) the sender and the recipient have consented in writing to the use of such form of electronic transmission.

(l) If the Nebraska Model Business Corporation Act prescribes requirements for notices or other communications in particular circumstances, those requirements govern. If articles of incorporation or bylaws prescribe requirements for notices or other communications, not inconsistent with this section or other provisions of the act, those requirements govern. The articles of incorporation or bylaws may authorize or require delivery of notices of meetings of directors by electronic transmission.

Source:Laws 2014, LB749, § 15.

21-216. Number of shareholders.

(MBCA 1.42) (a) For purposes of the Nebraska Model Business Corporation Act, the following identified as a shareholder in a corporation's current record of shareholders constitutes one shareholder:

(1) Three or fewer co-owners;

(2) A corporation, partnership, limited liability company, trust, estate, or other entity; or

(3) The trustees, guardians, custodians, or other fiduciaries of a single trust, estate, or account.

(b) For purposes of the act, shareholdings registered in substantially similar names constitute one shareholder if it is reasonable to believe that the names represent the same person.

Source:Laws 2014, LB749, § 16; Laws 2016, LB794, § 3.

21-217. Qualified director.

(MBCA 1.43) (a) A qualified director is a director who, at the time action is to be taken under:

(1) Section 21-279, does not have (i) a material interest in the outcome of the proceeding or (ii) a material relationship with a person who has such an interest;

(2) Section 21-2,113 or 21-2,115, (i) is not a party to the proceeding, (ii) is not a director as to whom a transaction is a director's conflicting interest transaction or who sought a disclaimer of the corporation's interest in a business opportunity under section 21-2,124, which transaction or disclaimer is challenged in the proceeding, and (iii) does not have a material relationship with a director described in either subdivision (a)(2)(i) or (ii) of this section;

(3) Section 21-2,122, is not a director (i) as to whom the transaction is a director's conflicting interest transaction or (ii) who has a material relationship with another director as to whom the transaction is a director's conflicting interest transaction;

(4) Section 21-2,124, would be a qualified director under subdivision (a)(3) of this section if the business opportunity were a director's conflicting interest transaction; or

(5) Subdivision (b)(6) of section 21-220, is not a director (i) to whom the limitation or elimination of the duty of an officer to offer potential business opportunities to the corporation would apply or (ii) who has a material relationship with another officer to whom the limitation or elimination would apply.

(b) For purposes of this section:

(1) Material relationship means a familial, financial, professional, employment, or other relationship that would reasonably be expected to impair the objectivity of the director's judgment when participating in the action to be taken; and

(2) Material interest means an actual or potential benefit or detriment, other than one which would devolve on the corporation or the shareholders generally, that would reasonably be expected to impair the objectivity of the director's judgment when participating in the action to be taken.

(c) The presence of one or more of the following circumstances shall not automatically prevent a director from being a qualified director:

(1) Nomination or election of the director to the current board by any director who is not a qualified director with respect to the matter or by any person that has a material relationship with that director, acting alone or participating with others;

(2) Service as a director of another corporation of which a director who is not a qualified director with respect to the matter, or any individual who has a material relationship with that director, is or was also a director; or

(3) With respect to action to be taken under section 21-279, status as a named defendant, as a director against whom action is demanded, or as a director who approved the conduct being challenged.

Source:Laws 2014, LB749, § 17; Laws 2017, LB35, § 3.

21-218. Householding.

(MBCA 1.44) (a) A corporation has delivered written notice or any other report or statement under the Nebraska Model Business Corporation Act, the articles of incorporation, or the bylaws to all shareholders who share a common address if:

(1) The corporation delivers one copy of the notice, report, or statement to the common address;

(2) The corporation addresses the notice, report, or statement to those shareholders as a group, to each of those shareholders individually, or to the shareholders in a form to which each of those shareholders has consented; and

(3) Each of those shareholders consents to delivery of a single copy of such notice, report, or statement to the shareholders' common address. Any such consent shall be revocable by any of such shareholders who deliver written notice of revocation to the corporation. If such written notice of revocation is delivered, the corporation shall begin providing individual notices, reports, or other statements to the revoking shareholder no later than thirty days after delivery of the written notice of revocation.

(b) Any shareholder who fails to object by written notice to the corporation, within sixty days of written notice by the corporation of its intention to send single copies of notices, reports, or statements to shareholders who share a common address as permitted by subsection (a) of this section, shall be deemed to have consented to receiving such single copy at the common address.

Source:Laws 2014, LB749, § 18.

21-218.01. Definitions.

(MBCA 1.45) In sections 21-218.01 to 21-218.08:

(1) Corporate action means any action taken by or on behalf of the corporation, including any action taken by the incorporator, the board of directors, a committee of the board of directors, an officer or agent of the corporation, or the shareholders.

(2) Date of the defective corporate action means the date, or the approximate date, if the exact date is unknown, the defective corporate action was purported to have been taken.

(3) Defective corporate action means (i) any corporate action purportedly taken that is, and at the time such corporate action was purportedly taken would have been, within the power of the corporation, but is void or voidable due to a failure of authorization, and (ii) an overissue.

(4) Failure of authorization means the failure to authorize, approve, or otherwise effect a corporate action in compliance with the provisions of the Nebraska Model Business Corporation Act, the articles of incorporation or bylaws, a corporate resolution or any plan or agreement to which the corporation is a party, if and to the extent such failure would render such corporate action void or voidable.

(5) Overissue means the purported issuance of:

(i) Shares of a class or series in excess of the number of shares of a class or series the corporation has the power to issue under section 21-237 at the time of such issuance; or

(ii) Shares of any class or series that is not then authorized for issuance by the articles of incorporation.

(6) Putative shares means the shares of any class or series, including shares issued upon exercise of rights, options, warrants, or other securities convertible into shares of the corporation, or interests with respect to such shares, that were created or issued as a result of a defective corporate action, that (i) but for any failure of authorization would constitute valid shares, or (ii) cannot be determined by the board of directors to be valid shares.

(7) Valid shares means the shares of any class or series that have been duly authorized and validly issued in accordance with the act, including as a result of ratification or validation under sections 21-218.01 to 21-218.08.

(8) Validation effective time with respect to any defective corporate action ratified under sections 21-218.01 to 21-218.08 means the later of:

(i) The time at which the ratification of the defective corporate action is approved by the shareholders, or if approval of shareholders is not required, the time at which the notice required by section 21-218.05 becomes effective in accordance with section 21-215; and

(ii) The time at which any articles of validation filed in accordance with section 21-218.07 become effective.

The validation effective time shall not be affected by the filing or pendency of a judicial proceeding under section 21-218.08 or otherwise, unless otherwise ordered by the court.

Source:Laws 2020, LB808, § 3.

21-218.02. Defective corporate actions.

(MBCA 1.46) (a) A defective corporate action shall not be void or voidable if ratified in accordance with section 21-218.03 or validated in accordance with section 21-218.08.

(b) Ratification under section 21-218.03 or validation under section 21-218.08 shall not be deemed to be the exclusive means of ratifying or validating any defective corporate action, and the absence or failure of ratification in accordance with sections 21-218.01 to 21-218.08 shall not, of itself, affect the validity or effectiveness of any corporate action properly ratified under common law or otherwise, nor shall it create a presumption that any such corporate action is or was a defective corporate action or void or voidable.

(c) In the case of an overissue, putative shares shall be valid shares effective as of the date originally issued or purportedly issued upon:

(1) The effectiveness under sections 21-218.01 to 21-218.08 and under sections 21-2,150 to 21-2,160 of an amendment to the articles of incorporation authorizing, designating, or creating such shares; or

(2) The effectiveness of any other corporate action under sections 21-218.01 to 21-218.08 ratifying the authorization, designation, or creation of such shares.

Source:Laws 2020, LB808, § 4.

21-218.03. Ratification of defective corporate actions.

(MBCA 1.47) (a) To ratify a defective corporate action under this section, other than the ratification of an election of the initial board of directors under subsection (b) of this section, the board of directors shall take action ratifying the action in accordance with section 21-218.04, stating:

(1) The defective corporate action to be ratified and, if the defective corporate action involved the issuance of putative shares, the number and type of putative shares purportedly issued;

(2) The date of the defective corporate action;

(3) The nature of the failure of authorization with respect to the defective corporate action to be ratified; and

(4) That the board of directors approves the ratification of the defective corporate action.

(b) In the event that a defective corporate action to be ratified relates to the election of the initial board of directors of the corporation under subdivision (a)(2) of section 21-223, a majority of the persons who, at the time of the ratification, are exercising the powers of directors may take an action stating:

(1) The name of the person or persons who first took action in the name of the corporation as the initial board of directors of the corporation;

(2) The earlier of the date on which such persons first took such action or were purported to have been elected as the initial board of directors; and

(3) That the ratification of the election of such person or persons as the initial board of directors is approved.

(c) If any provision of the Nebraska Model Business Corporation Act, the articles of incorporation or bylaws, any corporate resolution, or any plan or agreement to which the corporation is a party in effect at the time action under subsection (a) of this section is taken requires shareholder approval or would have required shareholder approval at the date of the occurrence of the defective corporate action, the ratification of the defective corporate action approved in the action taken by the directors under subsection (a) of this section shall be submitted to the shareholders for approval in accordance with section 21-218.04.

(d) Unless otherwise provided in the action taken by the board of directors under subsection (a) of this section, after the action by the board of directors has been taken and, if required, approved by the shareholders, the board of directors may abandon the ratification at any time before the validation effective time without further action of the shareholders.

Source:Laws 2020, LB808, § 5.

21-218.04. Action on ratification.

(MBCA 1.48) (a) The quorum and voting requirements applicable to a ratifying action by the board of directors under subsection (a) of section 21-218.03 shall be the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time such ratifying action is taken.

(b) If the ratification of the defective corporate action requires approval by the shareholders under subsection (c) of section 21-218.03, and if the approval is to be given at a meeting, the corporation shall notify each holder of valid and putative shares, regardless of whether entitled to vote, as of the record date for notice of the meeting and as of the date of the occurrence of defective corporate action, provided that notice shall not be required to be given to holders of valid or putative shares whose identities or addresses for notice cannot be determined from the records of the corporation. The notice must state that the purpose, or one of the purposes, of the meeting, is to consider ratification of a defective corporate action and must be accompanied by (i) either a copy of the action taken by the board of directors in accordance with subsection (c) of section 21-218.03 or the information required by subdivisions (a)(1) through (4) of section 21-218.03, and (ii) a statement that any claim that the ratification of such defective corporate action and any putative shares issued as a result of such defective corporate action should not be effective, or should be effective only on certain conditions, must be brought within one hundred twenty days from the applicable validation effective time.

(c) Except as provided in subsection (d) of this section with respect to the voting requirements to ratify the election of a director, the quorum and voting requirements applicable to the approval by the shareholders required by subsection (c) of section 21-218.03 shall be the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time of such shareholder approval.

(d) The approval by shareholders to ratify the election of a director requires that the votes cast within the voting group favoring such ratification exceed the votes cast opposing such ratification of the election at a meeting at which a quorum is present.

(e) Putative shares on the record date for determining the shareholders entitled to vote on any matter submitted to shareholders under subsection (c) of section 21-218.03, and without giving effect to any ratification of putative shares that becomes effective as a result of such vote, shall neither be entitled to vote nor counted for quorum purposes in any vote to approve the ratification of any defective corporate action.

(f) If the approval under this section of putative shares would result in an overissue, in addition to the approval required by section 21-218.03, approval of an amendment to the articles of incorporation under sections 21-2,150 to 21-2,160 to increase the number of shares of an authorized class or series or to authorize the creation of a class or series of shares so there would be no overissue shall also be required.

Source:Laws 2020, LB808, § 6.

21-218.05. Notice requirements.

(MBCA 1.49) (a) Unless shareholder approval is required under subsection (c) of section 21-218.03, prompt notice of an action taken under section 21-218.03 shall be given to each holder of valid and putative shares, regardless of whether entitled to vote, as of (i) the date of such action by the board of directors and (ii) the date of the defective corporate action ratified, provided that notice shall not be required to be given to holders of valid and putative shares whose identities or addresses for notice cannot be determined from the records of the corporation.

(b) The notice must contain (i) either a copy of the action taken by the board of directors in accordance with subsection (a) or (b) of section 21-218.03 or the information required by subdivisions (a)(1) through (4) or (b)(1) through (3) of section 21-218.03, as applicable, and (ii) a statement that any claim that the ratification of the defective corporate action and any putative shares issued as a result of such defective corporate action should not be effective, or should be effective only on certain conditions, must be brought within one hundred twenty days from the applicable validation effective time.

(c) No notice under this section is required with respect to any action required to be submitted to shareholders for approval under subsection (c) of section 21-218.03 if notice is given in accordance with subsection (b) of section 21-218.04.

(d) A notice required by this section may be given in any manner permitted by section 21-215 and, for any corporation subject to the reporting requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, may be given by means of a filing or furnishing of such notice with the United States Securities and Exchange Commission.

Source:Laws 2020, LB808, § 7.

21-218.06. Effect of ratification.

(MBCA 1.50) From and after the validation effective time, and without regard to the one-hundred-twenty-day period during which a claim may be brought under section 21-218.08:

(a) Each defective corporate action ratified in accordance with section 21-218.03 shall not be void or voidable as a result of the failure of authorization identified in the action taken under subsection (a) or (b) of section 21-218.03 and shall be deemed a valid corporate action effective as of the date of the defective corporate action;

(b) The issuance of each putative share or fraction of a putative share purportedly issued pursuant to a defective corporate action identified in the action taken under section 21-218.03 shall not be void or voidable, and each such putative share or fraction of a putative share shall be deemed to be an identical share or fraction of a valid share as of the time it was purportedly issued; and

(c) Any corporate action taken subsequent to the defective corporate action ratified in accordance with sections 21-218.01 to 21-218.08 in reliance on such defective corporate action having been validly effected and any subsequent defective corporate action resulting directly or indirectly from such original defective corporate action shall be valid as of the time taken.

Source:Laws 2020, LB808, § 8.

21-218.07. Filings.

(MBCA 1.51) (a) If the defective corporate action ratified under sections 21-218.01 to 21-218.08 would have required under any other section of the Nebraska Model Business Corporation Act a filing in accordance with the act, then, regardless of whether a filing was previously made in respect of such defective corporate action and in lieu of a filing otherwise required by the act, the corporation shall file articles of validation in accordance with this section, and such articles of validation shall serve to amend or substitute for any other filing with respect to such defective corporate action required by the act.

(b) The articles of validation must set forth:

(1) The defective corporate action that is the subject of the articles of validation, including, in the case of any defective corporate action involving the issuance of putative shares, the number and type of putative shares issued and the date or dates upon which such putative shares were purported to have been issued;

(2) The date of the defective corporate action;

(3) The nature of the failure of authorization in respect of the defective corporate action;

(4) A statement that the defective corporate action was ratified in accordance with section 21-218.03, including the date on which the board of directors ratified such defective corporate action and the date, if any, on which the shareholders approved the ratification of such defective corporate action; and

(5) The information required by subsection (c) of this section.

(1) If a filing was previously made in respect of the defective corporate action and no changes to such filing are required to give effect to the ratification of such defective corporate action in accordance with section 21-218.03, the articles of validation must set forth (i) the name, title, and filing date of the filing previously made and any articles of correction to that filing and (ii) a statement that a copy of the filing previously made, together with any articles of correction to that filing, is attached as an exhibit to the articles of validation;

(2) If a filing was previously made in respect of the defective corporate action and such filing requires any change to give effect to the ratification of such defective corporate action in accordance with section 21-218.03, the articles of validation must set forth (i) the name, title, and filing date of the filing previously made and any articles of correction to that filing and (ii) a statement that a filing containing all of the information required to be included under the applicable section or sections of the act to give effect to such defective corporate action is attached as an exhibit to the articles of validation, and (iii) the date and time that such filing is deemed to have become effective; or

(3) If a filing was not previously made in respect of the defective corporate action and the defective corporate action ratified under section 21-218.03 would have required a filing under any other section of the act, the articles of validation must set forth (i) a statement that a filing containing all of the information required to be included under the applicable section or sections of the act to give effect to such defective corporate action is attached as an exhibit to the articles of validation, and (ii) the date and time that such filing is deemed to have become effective.

Source:Laws 2020, LB808, § 9.

21-218.08. Judicial proceedings regarding validity of corporate actions.

(MBCA 1.52) (a) Upon application by the corporation, any successor entity to the corporation, a director of the corporation, any shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner of the corporation, including any such shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner as of the date of the defective corporate action ratified under section 21-218.03, or any other person claiming to be substantially and adversely affected by a ratification under section 21-218.03, the court may:

(1) Determine the validity and effectiveness of any corporate action or defective corporate action;

(2) Determine the validity and effectiveness of any ratification under section 21-218.03;

(3) Determine the validity of any putative shares; and

(4) Modify or waive any of the procedures specified in section 21-218.03 or 21-218.04 to ratify a defective corporate action.

(b) In connection with an action under this section, the court may make such findings or orders, and take into account any factors or considerations, regarding such matters as it deems proper under the circumstances.

(c) Service of process of the application under subsection (a) of this section on the corporation may be made in any manner provided by statute of this state or by rule of the applicable court for service on the corporation, and no other party need be joined in order for the court to adjudicate the matter. In an action filed by the corporation, the court may require notice of the action be provided to other persons specified by the court and permit such other persons to intervene in the action.

(d) Notwithstanding any other provision of this section or otherwise under applicable law, any action asserting that the ratification of any defective corporate action and any putative shares issued as a result of such defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought within one hundred twenty days of the validation effective time.

Source:Laws 2020, LB808, § 10.

21-219. Incorporators.

(MBCA 2.01) One or more persons may act as the incorporator or incorporators of a corporation by delivering articles of incorporation to the Secretary of State for filing.

Source:Laws 2014, LB749, § 19.

21-220. Articles of incorporation.

(MBCA 2.02) (a) The articles of incorporation must set forth:

(1) A corporate name for the corporation that satisfies the requirements of section 21-230;

(2) The number of shares the corporation is authorized to issue and, if such shares are to consist of one class only, the par value of each of such shares or, if such shares are to be divided into classes, the number of shares of each class and a statement of the par value of the shares of each such class;

(3) The street address of the corporation's initial registered office and the name of its initial registered agent at that office. A post office box number may be provided in addition to the street address;

(4) The name and address of each incorporator; and

(5) Any provision limiting or eliminating the requirement to hold an annual meeting of the shareholders if the corporation is registered or intends to register as an investment company under the federal Investment Company Act of 1940, as amended, 15 U.S.C. 80a-1 et seq. The provision is not effective if such corporation does not become or ceases to be so registered.

(b) The articles of incorporation may set forth:

(1) The names and addresses of the individuals who are to serve as the initial directors;

(2) Provisions not inconsistent with law regarding:

(i) The purpose or purposes for which the corporation is organized;

(ii) Managing the business and regulating the affairs of the corporation;

(iii) Defining, limiting, and regulating the powers of the corporation, its board of directors, and shareholders;

(iv) A par value for authorized shares or classes of shares; or

(v) The imposition of personal liability on shareholders for the debts of the corporation to a specified extent and upon specified conditions;

(3) Any provision that under the Nebraska Model Business Corporation Act is required or permitted to be set forth in the bylaws;

(4) A provision eliminating or limiting the liability of a director to the corporation or its shareholders for money damages for any action taken, or any failure to take any action, as a director, except liability for (i) the amount of a financial benefit received by a director to which the director is not entitled, (ii) an intentional infliction of harm on the corporation or the shareholders, (iii) a violation of section 21-2,104, or (iv) an intentional violation of criminal law;

(5) A provision permitting or making obligatory indemnification of a director for liability, as defined in subdivision (3) of section 21-2,110, to any person for any action taken, or any failure to take any action, as a director, except liability for (i) receipt of a financial benefit to which the director is not entitled, (ii) an intentional infliction of harm on the corporation or its shareholders, (iii) a violation of section 21-2,104, or (iv) an intentional violation of criminal law; and

(6) A provision limiting or eliminating any duty of a director or any other person to offer the corporation the right to have or participate in any, or one or more classes or categories of, business opportunities, prior to the pursuit or taking of the opportunity by the director or other person. Any application of such a provision to an officer or a related person of that officer (i) also requires a determination by the board of directors by action of qualified directors taken in compliance with the same procedures as are set forth in section 21-2,122 subsequent to the effective date of the provision applying the provision to a particular officer or any related person of that officer, and (ii) may be limited by the authorizing action of the board.

(c) The articles of incorporation need not set forth any of the corporate powers enumerated in the Nebraska Model Business Corporation Act.

(d) Provisions of the articles of incorporation may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with subsection (k) of section 21-203.

(e) As used in this section, related person has the meaning specified in section 21-2,120.

Source:Laws 2014, LB749, § 20; Laws 2017, LB35, § 4.

21-221. Incorporation.

(MBCA 2.03) (a) Unless a delayed effective date is specified, the corporate existence begins when the articles of incorporation are filed.

(b) The Secretary of State's filing of the articles of incorporation is conclusive proof that the incorporators satisfied all conditions precedent to incorporation except in a proceeding by the state to cancel or revoke the incorporation or involuntarily dissolve the corporation.

Source:Laws 2014, LB749, § 21.

21-222. Liability for preincorporation transactions.

(MBCA 2.04) All persons purporting to act as or on behalf of a corporation, knowing there was no incorporation under the Nebraska Model Business Corporation Act, are jointly and severally liable for all liabilities created while so acting.

Source:Laws 2014, LB749, § 22.

21-223. Organization of corporation.

(MBCA 2.05) (a) After incorporation:

(1) If initial directors are named in the articles of incorporation, the initial directors shall hold an organizational meeting, at the call of a majority of the directors, to complete the organization of the corporation by appointing officers, adopting bylaws, and carrying on any other business brought before the meeting; or

(2) If initial directors are not named in the articles, the incorporator or incorporators shall hold an organizational meeting at the call of a majority of the incorporators:

(i) To elect directors and complete the organization of the corporation; or

(ii) To elect a board of directors who shall complete the organization of the corporation.

(b) Action required or permitted by the Nebraska Model Business Corporation Act to be taken by incorporators at an organizational meeting may be taken without a meeting if the action taken is evidenced by one or more written consents describing the action taken and signed by each incorporator.

Source:Laws 2014, LB749, § 23.

21-224. Bylaws.

(MBCA 2.06) (a) The incorporators or board of directors of a corporation shall adopt initial bylaws for the corporation.

(b) The bylaws of a corporation may contain any provision that is not inconsistent with law or the articles of incorporation.

(1) A requirement that if the corporation solicits proxies or consents with respect to an election of directors, the corporation include in its proxy statement and any form of its proxy or consent, to the extent and subject to such procedures or conditions as are provided in the bylaws, one or more individuals nominated by a shareholder in addition to individuals nominated by the board of directors; and

(2) A requirement that the corporation reimburse the expenses incurred by a shareholder in soliciting proxies or consents in connection with an election of directors, to the extent and subject to such procedures and conditions as are provided in the bylaws, except that no bylaw so adopted shall apply to elections for which any record date precedes its adoption.

(d) Notwithstanding subdivision (b)(2) of section 21-2,159, the shareholders in amending, repealing, or adopting a bylaw described in subsection (c) of this section may not limit the authority of the board of directors to amend or repeal any condition or procedure set forth in or to add any procedure or condition to such a bylaw in order to provide for a reasonable, practicable, and orderly process.

Source:Laws 2014, LB749, § 24.

21-225. Emergency bylaws.

(MBCA 2.07) (a) Unless the articles of incorporation provide otherwise, the board of directors of a corporation may adopt bylaws to be effective only in an emergency defined in subsection (d) of this section. The emergency bylaws, which are subject to amendment or repeal by the shareholders, may make all provisions necessary for managing the corporation during the emergency, including:

(1) Procedures for calling a meeting of the board of directors;

(2) Quorum requirements for the meeting; and

(3) Designation of additional or substitute directors.

(b) All provisions of the regular bylaws consistent with the emergency bylaws remain effective during the emergency. The emergency bylaws are not effective after the emergency ends.

(1) Binds the corporation; and

(2) May not be used to impose liability on a corporate director, officer, employee, or agent.

(d) An emergency exists for purposes of this section if a quorum of the corporation's directors cannot readily be assembled because of some catastrophic event.

Source:Laws 2014, LB749, § 25.

21-226. Purposes.

(MBCA 3.01) (a) Every corporation incorporated under the Nebraska Model Business Corporation Act has the purpose of engaging in any lawful business unless a more limited purpose is set forth in the articles of incorporation.

(b) A corporation engaging in a business that is subject to regulation under another statute of this state may incorporate under the Nebraska Model Business Corporation Act only if permitted by, and subject to all limitations of, the other statute.

(c) Corporations shall not be organized under the act to perform any professional services as specified in section 21-2202 except for professional services rendered by a designated broker as defined in section 81-885.01.

(d) A designated broker as defined in section 81-885.01 may be organized as a corporation under the Nebraska Model Business Corporation Act.

Source:Laws 2014, LB749, § 26.

21-227. General powers.

(MBCA 3.02) Unless its articles of incorporation provide otherwise, every corporation has perpetual duration and succession in its corporate name and has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, including without limitation power:

(1) To sue and be sued, complain, and defend in its corporate name;

(2) To have a corporate seal, which may be altered at will, and to use it, or a facsimile of it, by impressing or affixing it or in any other manner reproducing it;

(3) To make and amend bylaws, not inconsistent with its articles of incorporation or with the laws of this state, for managing the business and regulating the affairs of the corporation;

(4) To purchase, receive, lease, or otherwise acquire and own, hold, improve, use, and otherwise deal with real or personal property or any legal or equitable interest in property, wherever located;

(5) To sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property. A corporation may transfer any interest in real estate by instrument, with or without a corporate seal, signed by the president, a vice president, or the presiding officer of the board of directors of the corporation. Such instrument, when acknowledged by such officer to be an act of the corporation, is presumed to be valid and may be recorded in the proper office of the county in which the real estate is located in the same manner as other such instruments;

(6) To purchase, receive, subscribe for, or otherwise acquire; own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of; and deal in and with shares or other interests in, or obligations of, any other entity;

(7) To make contracts and guarantees, incur liabilities, borrow money, issue its notes, bonds, and other obligations, which may be convertible into or include the option to purchase other securities of the corporation, and secure any of its obligations by mortgage or pledge of any of its property, franchises, or income;

(8) To lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment;

(9) To be a promoter, partner, member, associate, or manager of any limited liability company, partnership, joint venture, trust, or other entity;

(10) To conduct its business, locate offices, and exercise the powers granted by the Nebraska Model Business Corporation Act within or without this state;

(11) To elect directors and appoint officers, employees, and agents of the corporation, define their duties, fix their compensation, and lend them money and credit;

(12) To pay pensions and establish pension plans, pension trusts, profit-sharing plans, share bonus plans, share option plans, and benefit or incentive plans for any or all of its current or former directors, officers, employees, and agents;

(13) To make donations for the public welfare or for charitable, scientific, or educational purposes;

(14) To transact any lawful business that will aid governmental policy; and

(15) To make payments or donations, or do any other act, not inconsistent with law, that furthers the business and affairs of the corporation.

Source:Laws 2014, LB749, § 27; Laws 2016, LB794, § 4.

21-228. Emergency powers.

(MBCA 3.03) (a) In anticipation of or during an emergency defined in subsection (d) of this section, the board of directors of a corporation may:

(1) Modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent; and

(2) Relocate the principal office, designate alternative principal offices or regional offices, or authorize the officers to do so.

(b) During an emergency defined in subsection (d) of this section, unless emergency bylaws provide otherwise:

(1) Notice of a meeting of the board of directors need be given only to those directors whom it is practicable to reach and may be given in any practicable manner, including by publication and radio; and

(2) One or more officers of the corporation present at a meeting of the board of directors may be deemed to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum.

(c) Corporate action taken in good faith during an emergency under this section to further the ordinary business affairs of the corporation:

(1) Binds the corporation; and

(2) May not be used to impose liability on a corporate director, officer, employee, or agent.

(d) An emergency exists for purposes of this section if a quorum of the corporation's directors cannot readily be assembled because of some catastrophic event.

Source:Laws 2014, LB749, § 28.

21-229. Ultra vires.

(MBCA 3.04) (a) Except as provided in subsection (b) of this section, the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.

(b) A corporation's power to act may be challenged:

(1) In a proceeding by a shareholder against the corporation to enjoin the act;

(2) In a proceeding by the corporation, directly, derivatively, or through a receiver, trustee, or other legal representative, against an incumbent or former director, officer, employee, or agent of the corporation; or

(3) In a proceeding by the Attorney General under section 21-2,197.

(c) In a shareholder's proceeding under subdivision (b)(1) of this section to enjoin an unauthorized corporate act, the court may enjoin or set aside the act, if equitable and if all affected persons are parties to the proceeding, and may award damages for loss, other than anticipated profits, suffered by the corporation or another party because of enjoining the unauthorized act.

(d) Venue for a proceeding under subdivision (b)(1) or (b)(2) of this section lies in the district court of the county where the corporation's principal office, or, if none in this state, its registered office, is located.

Source:Laws 2014, LB749, § 29.

21-230. Corporate name.

(MBCA 4.01) (a) A corporate name:

(1) Must contain the word corporation, incorporated, company, or limited, or the abbreviation corp., inc., co., or ltd., or words or abbreviations of like import in another language, except that a corporation organized to conduct a banking business under the Nebraska Banking Act may use a name which includes the word bank without using any such words or abbreviations; and

(2) May not contain language stating or implying that the corporation is organized for a purpose other than that permitted by section 21-226 and its articles of incorporation.

(b) Except as authorized by subsections (c) and (d) of this section, a corporate name must not be the same as or deceptively similar to, upon the records of the Secretary of State:

(1) The corporate name of a corporation incorporated or authorized to transact business in this state;

(2) A corporate name reserved or registered under section 21-231 or 21-232;

(3) The fictitious name adopted by a foreign corporation authorized to transact business in this state because its real name is unavailable;

(4) The corporate name of a not-for-profit corporation incorporated or authorized to transact business in this state;

(5) A trade name registered in this state pursuant to sections 87-208 to 87-219.01; and

(6) Any other business entity name registered or filed with the Secretary of State pursuant to the law of this state.

(c) A corporation may apply to the Secretary of State for authorization to use a name that is deceptively similar to, upon the records of the Secretary of State, one or more of the names described in subsection (b) of this section. The Secretary of State shall authorize use of the name applied for if:

(1) The other corporation or business entity consents to the use in writing; or

(2) The applicant delivers to the Secretary of State a certified copy of the final judgment of a court of competent jurisdiction establishing the applicant's right to use the name applied for in this state.

(d) A corporation may use the name, including the fictitious name, of another domestic or foreign corporation or business entity that is used in this state if the other corporation or business entity is incorporated or authorized to transact business in this state and the proposed user corporation:

(1) Has merged with the other corporation or business entity;

(2) Has been formed by reorganization of the other corporation or business entity; or

(3) Has acquired all or substantially all of the assets, including the corporate name, of the other corporation or business entity.

(e) The Nebraska Model Business Corporation Act does not control the use of fictitious names.

Source:Laws 2014, LB749, § 30.

Cross References

Nebraska Banking Act, see section 8-101.02.

21-231. Reserved name.

(MBCA 4.02) (a) A person may reserve the exclusive use of a corporate name, including a fictitious name for a foreign corporation whose corporate name is not available, by delivering an application to the Secretary of State for filing. The application must set forth the name and address of the applicant and the name proposed to be reserved. If the Secretary of State finds that the corporate name applied for is available, the Secretary of State shall reserve the name for the applicant's exclusive use for a nonrenewable one-hundred-twenty-day period.

(b) The owner of a reserved corporate name may transfer the reservation to another person by delivering to the Secretary of State a signed notice of the transfer that states the name and address of the transferee.

Source:Laws 2014, LB749, § 31.

21-232. Registered name.

(MBCA 4.03) (a) A foreign corporation may register its corporate name, or its corporate name with any addition required by section 21-2,208, if the name is not the same as or deceptively similar to, upon the records of the Secretary of State, the corporate names that are not available under subsection (b) of section 21-230.

(b) A foreign corporation registers its corporate name, or its corporate name with any addition required by section 21-2,208, by delivering to the Secretary of State for filing an application:

(1) Setting forth its corporate name, or its corporate name with any addition required by section 21-2,208, the state or country and date of its incorporation, and a brief description of the nature of the business in which it is engaged; and

(2) Accompanied by a certificate of existence, or a document of similar import, from the state or country of incorporation. Such certificate or document shall not bear a date of more than sixty days prior to the date the application is delivered.

(d) A foreign corporation whose registration is effective may renew it for successive years by delivering to the Secretary of State for filing a renewal application, which complies with the requirements of subsection (b) of this section, between October 1 and December 31 of the preceding year. The renewal application when filed renews the registration for the following calendar year.

(e) A foreign corporation whose registration is effective may thereafter qualify as a foreign corporation under the registered name or consent in writing to the use of that name by a corporation thereafter incorporated under the Nebraska Model Business Corporation Act or by another foreign corporation thereafter authorized to transact business in this state. The registration terminates when the domestic corporation is incorporated or the foreign corporation qualifies or consents to the qualification of another foreign corporation under the registered name.

Source:Laws 2014, LB749, § 32.

21-233. Registered office and registered agent.

(MBCA 5.01) Each corporation must continuously maintain in this state:

(1) A registered office that may be the same as any of its places of business; and

(2) A registered agent, who may be:

(i) An individual who resides in this state and whose business office is identical with the registered office; or

(ii) A domestic or foreign corporation or other eligible entity whose business office is identical with the registered office and, in the case of a foreign corporation or foreign eligible entity, is authorized to transact business in the state.

Source:Laws 2014, LB749, § 33.

21-234. Change of registered office or registered agent.

(MBCA 5.02) (a) A corporation may change its registered office or registered agent by delivering to the Secretary of State for filing a statement of change that sets forth:

(1) The name of the corporation;

(2) The street address of its current registered office;

(3) If the current registered office is to be changed, the street address of the new registered office;

(4) The name and street address of its current registered agent. A post office box number may be provided in addition to the street address;

(5) If the current registered agent is to be changed, the name of the new registered agent and the new agent's written consent, either on the statement or attached to it, to the appointment; and

(6) That after the change or changes are made, the street addresses of its registered office and the business office of its registered agent will be identical.

(b) If the street address or post office box number of a registered agent's business office changes, the agent may change the street address or, if one exists, the post office box number, of the registered office of any corporation for which the agent is the registered agent by delivering a signed written notice of the change to the corporation and signing, either manually or in facsimile, and delivering to the Secretary of State for filing a signed statement that complies with the requirements of subsection (a) of this section and recites that the corporation has been notified of the change.

Source:Laws 2014, LB749, § 34.

21-235. Resignation of registered agent.

(MBCA 5.03) (a) A registered agent may resign the agent's appointment by signing and delivering to the Secretary of State for filing the signed original and two exact or conformed copies of a statement of resignation. The statement may include a statement that the registered office is also discontinued.

(b) After filing the statement the Secretary of State shall mail one copy to the registered office, if not discontinued, and the other copy to the corporation at its principal office.

(c) The agency appointment is terminated, and the registered office discontinued if so provided, on the thirty-first day after the date on which the statement was filed.

Source:Laws 2014, LB749, § 35.

21-236. Service on corporation.

(MBCA 5.04) (a) A corporation's registered agent is the corporation's agent for service of process, notice, or demand required or permitted by law to be served on the corporation.

(b) If a corporation has no registered agent, or the agent cannot with reasonable diligence be served, the corporation may be served by registered or certified mail, return receipt requested, addressed to the secretary of the corporation at its principal office. Service is perfected under this subsection at the earliest of:

(1) The date the corporation receives the mail;

(2) The date shown on the return receipt, if signed on behalf of the corporation; or

(3) Five days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed.

Source:Laws 2014, LB749, § 36.

21-237. Authorized shares.

(MBCA 6.01) (a) The articles of incorporation must set forth any classes of shares and series of shares within a class, and the number of shares of each class and series, that the corporation is authorized to issue. If more than one class or series of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class or series and must describe, prior to the issuance of shares of a class or series, the terms, including the preferences, rights, and limitations, of that class or series. Except to the extent varied as permitted by this section, all shares of a class or series must have terms, including preferences, rights, and limitations that are identical with those of other shares of the same class or series.

(b) The articles of incorporation must authorize:

(1) One or more classes or series of shares that together have unlimited voting rights; and

(2) One or more classes or series of shares, which may be the same class or classes as those with voting rights, that together are entitled to receive the net assets of the corporation upon dissolution.

(1) Have special, conditional, or limited voting rights, or no right to vote, except to the extent otherwise provided by the Nebraska Model Business Corporation Act;

(2) Are redeemable or convertible as specified in the articles of incorporation:

(i) At the option of the corporation, the shareholder, or another person or upon the occurrence of a specified event;

(ii) For cash, indebtedness, securities, or other property; and

(iii) At prices and in amounts specified or determined in accordance with a formula;

(3) Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative, or partially cumulative; or

(4) Have preference over any other class or series of shares with respect to distributions, including distributions upon the dissolution of the corporation.

(d) Terms of shares may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with subsection (k) of section 21-203.

(e) Any of the terms of shares may vary among holders of the same class or series so long as such variations are expressly set forth in the articles of incorporation.

(f) The description of the preferences, rights, and limitations of classes or series of shares in subsection (c) of this section is not exhaustive.

Source:Laws 2014, LB749, § 37.

21-238. Terms of class or series determined by board of directors.

(MBCA 6.02) (a) If the articles of incorporation so provide, the board of directors is authorized, without shareholder approval, to:

(1) Classify any unissued shares into one or more classes or into one or more series within a class;

(2) Reclassify any unissued shares of any class into one or more classes or into one or more series within one or more classes; or

(3) Reclassify any unissued shares of any series of any class into one or more classes or into one or more series within a class.

(b) If the board of directors acts pursuant to subsection (a) of this section, it must determine the terms, including the preferences, rights, and limitations, to the same extent permitted under section 21-237, of:

(1) Any class of shares before the issuance of any shares of that class; or

(2) Any series within a class before the issuance of any shares of that series.

(c) Before issuing any shares of a class or series created under this section, the corporation must deliver to the Secretary of State for filing articles of amendment setting forth the terms determined under subsection (a) of this section.

Source:Laws 2014, LB749, § 38.

21-239. Issued and outstanding shares.

(MBCA 6.03) (a) A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted, or canceled.

(b) The reacquisition, redemption, or conversion of outstanding shares is subject to the limitations of subsection (c) of this section and to section 21-252.

(c) At all times that shares of the corporation are outstanding, one or more shares that together have unlimited voting rights and one or more shares that together are entitled to receive the net assets of the corporation upon dissolution must be outstanding.

Source:Laws 2014, LB749, § 39.

21-240. Fractional shares.

(MBCA 6.04) (a) A corporation may:

(1) Issue fractions of a share or pay in money the value of fractions of a share;

(2) Arrange for disposition of fractional shares by the shareholders; and

(3) Issue scrip in registered or bearer form entitling the holder to receive a full share upon surrendering enough scrip to equal a full share.

(b) Each certificate representing scrip must be conspicuously labeled scrip and must contain the information required by subsection (b) of section 21-246.

(c) The holder of a fractional share is entitled to exercise the rights of a shareholder, including the right to vote, to receive dividends, and to participate in the assets of the corporation upon liquidation. The holder of scrip is not entitled to any of these rights unless the scrip provides for them.

(d) The board of directors may authorize the issuance of scrip subject to any condition considered desirable, including:

(1) That the scrip will become void if not exchanged for full shares before a specified date; and

(2) That the shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders.

Source:Laws 2014, LB749, § 40.

21-241. Subscription for shares before incorporation.

(MBCA 6.20) (a) A subscription for shares entered into before incorporation is irrevocable for six months unless the subscription agreement provides a longer or shorter period or all the subscribers agree to revocation.

(b) The board of directors may determine the payment terms of subscription for shares that were entered into before incorporation, unless the subscription agreement specifies them. A call for payment by the board of directors must be uniform so far as practicable as to all shares of the same class or series, unless the subscription agreement specifies otherwise.

(c) Shares issued pursuant to subscriptions entered into before incorporation are fully paid and nonassessable when the corporation receives the consideration specified in the subscription agreement.

(d) If a subscriber defaults in payment of money or property under a subscription agreement entered into before incorporation, the corporation may collect the amount owed as any other debt. Alternatively, unless the subscription agreement provides otherwise, the corporation may rescind the agreement and may sell the shares if the debt remains unpaid for more than twenty days after the corporation sends written demand for payment to the subscriber.

(e) A subscription agreement entered into after incorporation is a contract between the subscriber and the corporation subject to section 21-242.

Source:Laws 2014, LB749, § 41.

21-242. Issuance of shares.

(MBCA 6.21) (a) The powers granted in this section to the board of directors may be reserved to the shareholders by the articles of incorporation.

(b) The board of directors may authorize shares to be issued for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts for services to be performed, or other securities of the corporation.

(c) Before the corporation issues shares, the board of directors must determine that the consideration received or to be received for shares to be issued is adequate. That determination by the board of directors is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid, and nonassessable.

(d) When the corporation receives the consideration for which the board of directors authorized the issuance of shares, the shares issued therefor are fully paid and nonassessable.

(e) The corporation may place in escrow shares issued for a contract for future services or benefits or a promissory note, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price until the services are performed, the note is paid, or the benefits received. If the services are not performed, the note is not paid, or the benefits are not received, the shares escrowed or restricted and the distributions credited may be canceled in whole or part.

(f)(1) An issuance of shares or other securities convertible into or rights exercisable for shares, in a transaction or a series of integrated transactions, requires approval of the shareholders at a meeting at which a quorum consisting of at least a majority of the votes entitled to be cast on the matter exists if:

(i) The shares, other securities, or rights are issued for consideration other than cash or cash equivalents; and

(ii) The voting power of shares that are issued and issuable as a result of the transaction or series of integrated transactions will comprise more than twenty percent of the voting power of the shares of the corporation that were outstanding immediately before the transaction.

(2) In this subsection:

(i) For purposes of determining the voting power of shares issued and issuable as a result of a transaction or series of integrated transactions, the voting power of shares shall be the greater of (A) the voting power of the shares to be issued or (B) the voting power of the shares that would be outstanding after giving effect to the conversion of convertible shares and other securities and the exercise of rights to be issued; and

(ii) A series of transactions is integrated if consummation of one transaction is made contingent on consummation of one or more of the other transactions.

Source:Laws 2014, LB749, § 42.

21-243. Liability of shareholders.

(MBCA 6.22) (a) A purchaser from a corporation of its own shares is not liable to the corporation or its creditors with respect to the shares except to pay the consideration for which the shares were authorized to be issued under section 21-242 or specified in the subscription agreement under section 21-241.

(b) Unless otherwise provided in the articles of incorporation, a shareholder of a corporation is not personally liable for the acts or debts of the corporation, except that he or she may become personally liable by reason of his or her own acts or conduct.

Source:Laws 2014, LB749, § 43.

21-244. Share dividends.

(MBCA 6.23) (a) Unless the articles of incorporation provide otherwise, shares may be issued pro rata and without consideration to the corporation's shareholders or to the shareholders of one or more classes or series. An issuance of shares under this subsection is a share dividend.

(b) Shares of one class or series may not be issued as a share dividend in respect of shares of another class or series unless (1) the articles of incorporation so authorize, (2) a majority of the votes entitled to be cast by the class or series to be issued approve the issue, or (3) there are no outstanding shares of the class or series to be issued.

(c) If the board of directors does not fix the record date for determining shareholders entitled to a share dividend, it is the date the board of directors authorizes the share dividend.

Source:Laws 2014, LB749, § 44.

21-245. Share options and other awards.

(MBCA 6.24) (a) A corporation may issue rights, options, or warrants for the purchase of shares or other securities of the corporation. The board of directors shall determine (1) the terms upon which the rights, options, or warrants are issued and (2) the terms, including the consideration for which the shares or other securities are to be issued. The authorization by the board of directors for the corporation to issue such rights, options, or warrants constitutes authorization of the issuance of the shares or other securities for which the rights, options, or warrants are exercisable.

(b) The terms and conditions of such rights, options, or warrants, including those outstanding on January 1, 2017, may include, without limitation, restrictions or conditions that:

(1) Preclude or limit the exercise, transfer, or receipt of such rights, options, or warrants by any person or persons owning or offering to acquire a specified number or percentage of the outstanding shares or other securities of the corporation or by any transferee or transferees of any such person or persons; or

(2) Invalidate or void such rights, options, or warrants held by any such person or persons or any such transferee or transferees.

(c) The board of directors may authorize one or more officers to (1) designate the recipients of rights, options, warrants, or other equity compensation awards that involve the issuance of shares and (2) determine, within an amount and subject to any other limitations established by the board and, if applicable, the stockholders, the number of such rights, options, warrants, or other equity compensation awards and the terms thereof to be received by the recipients, except that an officer may not use such authority to designate himself or herself or any other persons as the board of directors may specify as a recipient of such rights, options, warrants, or other equity compensation awards.

Source:Laws 2014, LB749, § 45; Laws 2015, LB157, § 1.

21-246. Form and content of certificates.

(MBCA 6.25) (a) Shares may but need not be represented by certificates. Unless the Nebraska Model Business Corporation Act or another statute expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates.

(b) At a minimum each share certificate must state on its face:

(1) The name of the issuing corporation and that it is organized under the law of this state;

(2) The name of the person to whom issued; and

(3) The number and class of shares and the designation of the series, if any, the certificate represents.

(c) If the issuing corporation is authorized to issue different classes of shares or different series within a class, the designations, relative rights, preferences, and limitations applicable to each class and the variations in rights, preferences, and limitations determined for each series, and the authority of the board of directors to determine variations for future series, must be summarized on the front or back of each certificate. Alternatively, each certificate may state conspicuously on its front or back that the corporation will furnish the shareholder this information on request in writing and without charge.

(d) Each share certificate (1) must be signed, either manually or in facsimile, by two officers designated in the bylaws or by the board of directors and (2) may bear the corporate seal or its facsimile.

(e) If the person who signed, either manually or in facsimile, a share certificate no longer holds office when the certificate is issued, the certificate is nevertheless valid.

Source:Laws 2014, LB749, § 46.

21-247. Shares without certificates.

(MBCA 6.26) (a) Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a corporation may authorize the issue of some or all of the shares of any or all of its classes or series without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation.

(b) Within a reasonable time after the issue or transfer of shares without certificates, the corporation shall send the shareholder a written statement of the information required on certificates by subsections (b) and (c) of section 21-246, and, if applicable, section 21-248.

Source:Laws 2014, LB749, § 47.

21-248. Restriction on transfer of shares and other securities.

(MBCA 6.27) (a) The articles of incorporation, bylaws, an agreement among shareholders, or an agreement between shareholders and the corporation may impose restrictions on the transfer or registration of transfer of shares of the corporation. A restriction does not affect shares issued before the restriction was adopted unless the holders of the shares are parties to the restriction agreement or voted in favor of the restriction.

(b) A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transferee of the holder if the restriction is authorized by this section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by subsection (b) of section 21-247. Unless so noted or contained, a restriction is not enforceable against a person without knowledge of the restriction.

(1) To maintain the corporation's status when it is dependent on the number or identity of its shareholders;

(2) To preserve exemptions under federal or state securities law or under the Internal Revenue Code; or

(3) For any other reasonable purpose.

(d) A restriction on the transfer or registration of transfer of shares may:

(1) Obligate the shareholder first to offer the corporation or other persons, separately, consecutively, or simultaneously, an opportunity to acquire the restricted shares;

(2) Obligate the corporation or other persons, separately, consecutively, or simultaneously, to acquire the restricted shares;

(3) Require the corporation, the holders of any class of its shares, or another person to approve the transfer of the restricted shares, if the requirement is not manifestly unreasonable; or

(4) Prohibit the transfer of the restricted shares to designated persons or classes of persons, if the prohibition is not manifestly unreasonable.

(e) For purposes of this section, shares includes a security convertible into or carrying a right to subscribe for or acquire shares.

Source:Laws 2014, LB749, § 48.

21-249. Expense of issue.

(MBCA 6.28) A corporation may pay the expenses of selling or underwriting its shares and of organizing or reorganizing the corporation from the consideration received for shares.

Source:Laws 2014, LB749, § 49.

21-250. Shareholders' preemptive rights.

(MBCA 6.30) (a) The shareholders of a corporation do not have a preemptive right to acquire the corporation's unissued shares except to the extent the articles of incorporation so provide. The shareholders of a corporation organized prior to January 1, 1996, shall continue to have a preemptive right to acquire the corporation's unissued shares in the manner provided in this section if the articles of incorporation of the corporation did not on or after January 1, 1996, expressly eliminate such preemptive rights to its shareholders.

(b) A statement included in the articles of incorporation that the corporation elects to have preemptive rights, or words of similar import, means that the following principles apply except to the extent the articles of incorporation expressly provide otherwise:

(1) The shareholders of the corporation have a preemptive right, granted on uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the right, to acquire proportional amounts of the corporation's unissued shares upon the decision of the board of directors to issue them;

(2) A shareholder may waive his or her preemptive right. A waiver evidenced by a writing is irrevocable even though it is not supported by consideration;

(3) There is no preemptive right with respect to:

(i) Shares issued as compensation to directors, officers, agents, or employees of the corporation, its subsidiaries or affiliates;

(ii) Shares issued to satisfy conversion or option rights created to provide compensation to directors, officers, agents, or employees of the corporation, its subsidiaries or affiliates;

(iii) Shares authorized in articles of incorporation that are issued within six months from the effective date of incorporation; and

(iv) Shares sold otherwise than for money;

(4) Holders of shares of any class without general voting rights but with preferential rights to distributions or assets have no preemptive rights with respect to shares of any class;

(5) Holders of shares of any class with general voting rights but without preferential rights to distributions or assets have no preemptive rights with respect to shares of any class with preferential rights to distributions or assets unless the shares with preferential rights are convertible into or carry a right to subscribe for or acquire shares without preferential rights; and

(6) Shares subject to preemptive rights that are not acquired by shareholders may be issued to any person for a period of one year after being offered to shareholders at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights. An offer at a lower consideration or after the expiration of one year is subject to the shareholders' preemptive rights.

(c) For purposes of this section, shares includes a security convertible into or carrying a right to subscribe for or acquire shares.

Source:Laws 2014, LB749, § 50; Laws 2016, LB794, § 5.

21-251. Corporation's acquisition of its own shares.

(MBCA 6.31) (a) A corporation may acquire its own shares, and shares so acquired constitute authorized but unissued shares.

(b) If the articles of incorporation prohibit the reissue of the acquired shares, the number of authorized shares is reduced by the number of shares acquired.

Source:Laws 2014, LB749, § 51.

21-252. Distributions to shareholders.

(MBCA 6.40) (a) A board of directors may authorize and the corporation may make distributions to its shareholders subject to restriction by the articles of incorporation and the limitation in subsection (c) of this section.

(b) If the board of directors does not fix the record date for determining shareholders entitled to a distribution, other than one involving a purchase, redemption, or other acquisition of the corporation's shares, it is the date the board of directors authorizes the distribution.

(1) The corporation would not be able to pay its debts as they become due in the usual course of business; or

(2) The corporation's total assets would be less than the sum of its total liabilities plus, unless the articles of incorporation permit otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.

(d) The board of directors may base a determination that a distribution is not prohibited under subsection (c) of this section either on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.

(e) Except as provided in subsection (g) of this section, the effect of a distribution under subsection (c) of this section is measured:

(1) In the case of distribution by purchase, redemption, or other acquisition of the corporation's shares, as of the earlier of (i) the date money or other property is transferred or debt incurred by the corporation or (ii) the date the shareholder ceases to be a shareholder with respect to the acquired shares;

(2) In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and

(3) In all other cases, as of (i) the date the distribution is authorized if the payment occurs within one hundred twenty days after the date of authorization or (ii) the date the payment is made if it occurs more than one hundred twenty days after the date of authorization.

(f) A corporation's indebtedness to a shareholder incurred by reason of a distribution made in accordance with this section is at parity with the corporation's indebtedness to its general, unsecured creditors except to the extent subordinated by agreement.

(g) Indebtedness of a corporation, including indebtedness issued as a distribution, is not considered a liability for purposes of determinations under subsection (c) of this section if its terms provide that payment of principal and interest are made only if and to the extent that payment of a distribution to shareholders could then be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is actually made.

(h) This section shall not apply to distributions in liquidation under sections 21-2,184 to 21-2,202.

Source:Laws 2014, LB749, § 52.

21-253. Annual meeting.

(MBCA 7.01) (a) Unless directors are elected by written consent in lieu of an annual meeting as permitted by section 21-256, a corporation shall hold a meeting of shareholders annually at a time stated in or fixed in accordance with the bylaws.

(b) Annual shareholders' meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated in or fixed in accordance with the bylaws, annual meetings shall be held at the corporation's principal office.

(c) The failure to hold an annual meeting at the time stated in or fixed in accordance with a corporation's bylaws does not affect the validity of any corporate action.

(d) Notwithstanding the provisions of this section, a corporation registered as an investment company under the federal Investment Company Act of 1940, as amended, 15 U.S.C. 80a-1 et seq., which, pursuant to section 21-220, has included in its articles of incorporation a provision limiting or eliminating the requirement to hold an annual meeting of the shareholders, is not required to hold an annual meeting of the shareholders except as provided in such articles of incorporation or as otherwise required by such act and the rules and regulations adopted and promulgated under such act.

Source:Laws 2014, LB749, § 53; Laws 2016, LB794, § 6.

21-254. Special meeting.

(MBCA 7.02) (a) A corporation shall hold a special meeting of shareholders:

(1) On call of its board of directors or the person or persons authorized to do so by the articles of incorporation or bylaws; or

(2) If shareholders holding at least ten percent of all the votes entitled to be cast on an issue proposed to be considered at the proposed special meeting sign, date, and deliver to the corporation one or more written demands for the meeting describing the purpose or purposes for which it is to be held, except that the articles of incorporation may fix a lower percentage or a higher percentage not exceeding twenty-five percent of all the votes entitled to be cast on any issue proposed to be considered. Unless otherwise provided in the articles of incorporation, a written demand for a special meeting may be revoked by a writing to that effect received by the corporation prior to the receipt by the corporation of demands sufficient in number to require the holding of a special meeting.

(b) If not otherwise fixed under section 21-255 or 21-259, the record date for determining shareholders entitled to demand a special meeting is the date the first shareholder signs the demand.

(c) Special shareholders' meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated or fixed in accordance with the bylaws, special meetings shall be held at the corporation's principal office.

(d) Only business within the purpose or purposes described in the meeting notice required by subsection (c) of section 21-257 may be conducted at a special shareholders' meeting.

Source:Laws 2014, LB749, § 54; Laws 2017, LB35, § 5.

21-255. Court-ordered meeting.

(MBCA 7.03) (a) The district court of the county where a corporation's principal office, or, if none in this state, its registered office, is located may summarily order a meeting to be held:

(1) On application of any shareholder of the corporation, if an annual meeting was not held or action by written consent in lieu thereof did not become effective within the earlier of six months after the end of the corporation's fiscal year or fifteen months after its last annual meeting; or

(2) On application of a shareholder who signed a demand for a special meeting valid under section 21-254, if:

(i) Notice of the special meeting was not given within thirty days after the date the demand was delivered to the corporation's secretary; or

(ii) The special meeting was not held in accordance with the notice.

(b) The court may fix the time and place of the meeting, determine the shares entitled to participate in the meeting, specify a record date or dates for determining shareholders entitled to notice of and to vote at the meeting, prescribe the form and content of the meeting notice, fix the quorum required for specific matters to be considered at the meeting or direct that the votes represented at the meeting constitute a quorum for action on those matters, and enter other orders necessary to accomplish the purpose or purposes of the meeting.

(c) For purposes of subdivision (a)(1) of this section, shareholder means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner.

Source:Laws 2014, LB749, § 55; Laws 2017, LB35, § 6.

21-256. Action without meeting.

(MBCA 7.04) (a) Action required or permitted by the Nebraska Model Business Corporation Act to be taken at a shareholders' meeting may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action. The action must be evidenced by one or more written consents bearing the date of signature and describing the action taken, signed by all the shareholders entitled to vote on the action and delivered to the corporation for inclusion in the minutes or filing with the corporation records.

(b) The articles of incorporation may provide that any action required or permitted by the Nebraska Model Business Corporation Act to be taken at a shareholders' meeting may be taken without a meeting, and without prior notice, if consents in writing setting forth the action so taken are signed by the holders of outstanding shares having not less than the minimum number of votes that would be required to authorize or take the action at a meeting at which all shares entitled to vote on the action were present and voted; provided that the use of written consent to elect directors must be unanimous. The written consent shall bear the date of signature of the shareholder who signs the consent and be delivered to the corporation for inclusion in the minutes or filing with the corporation records.

(c) If not otherwise fixed under section 21-259 and if prior board action is not required respecting the action to be taken without a meeting, the record date for determining the shareholders entitled to take action without a meeting shall be the first date on which a signed written consent is delivered to the corporation. If not otherwise fixed under section 21-259 and if prior board action is required respecting the action to be taken without a meeting, the record date shall be the close of business on the day the resolution of the board taking such prior action is adopted. No written consent shall be effective to take the corporate action referred to therein unless, within sixty days of the earliest date on which a consent delivered to the corporation as required by this section was signed, written consents signed by sufficient shareholders to take the action have been delivered to the corporation. A written consent may be revoked by a writing to that effect delivered to the corporation before unrevoked written consents sufficient in number to take the corporate action are delivered to the corporation.

(d) A consent signed pursuant to the provisions of this section has the effect of a vote taken at a meeting and may be described as such in any document. Unless the articles of incorporation, bylaws, or a resolution of the board of directors provides for a reasonable delay to permit tabulation of written consents, the action taken by written consent shall be effective when written consents signed by sufficient shareholders to take the action are delivered to the corporation.

(e) If the Nebraska Model Business Corporation Act requires that notice of a proposed action be given to nonvoting shareholders and the action is to be taken by written consent of the voting shareholders, the corporation must give its nonvoting shareholders written notice of the action not more than ten days after (1) written consents sufficient to take the action have been delivered to the corporation or (2) such later date that tabulation of consents is completed pursuant to an authorization under subsection (d) of this section. The notice must reasonably describe the action taken and contain or be accompanied by the same material that, under any provision of the act, would have been required to be sent to nonvoting shareholders in a notice of a meeting at which the proposed action would have been submitted to the shareholders for action.

(f) If action is taken by less than unanimous written consent of the voting shareholders, the corporation must give its nonconsenting voting shareholders written notice of the action not more than ten days after (1) written consents sufficient to take the action have been delivered to the corporation or (2) such later date that tabulation of consents is completed pursuant to an authorization under subsection (d) of this section. The notice must reasonably describe the action taken and contain or be accompanied by the same material that, under any provision of the Nebraska Model Business Corporation Act, would have been required to be sent to voting shareholders in a notice of a meeting at which the action would have been submitted to the shareholders for action.

(g) The notice requirements in subsections (e) and (f) of this section shall not delay the effectiveness of actions taken by written consent, and a failure to comply with such notice requirements shall not invalidate actions taken by written consent, except that this subsection shall not be deemed to limit judicial power to fashion any appropriate remedy in favor of a shareholder adversely affected by a failure to give such notice within the required time period.

Source:Laws 2014, LB749, § 56; Laws 2016, LB794, § 7.

21-257. Notice of meeting.

(MBCA 7.05) (a) A corporation shall notify shareholders of the date, time, and place of each annual and special shareholders' meeting no fewer than ten nor more than sixty days before the meeting date. If the board of directors has authorized participation by means of remote communication pursuant to section 21-261 for any class or series of shareholders, the notice to such class or series of shareholders shall describe the means of remote communication to be used. The notice shall include the record date for determining the shareholders entitled to vote at the meeting, if such date is different than the record date for determining shareholders entitled to notice of the meeting. Unless the Nebraska Model Business Corporation Act or the articles of incorporation require otherwise, the corporation is required to give notice only to shareholders entitled to vote at the meeting as of the record date for determining the shareholders entitled to notice of the meeting.

(b) Unless the Nebraska Model Business Corporation Act or the articles of incorporation require otherwise, notice of an annual meeting need not include a description of the purpose or purposes for which the meeting is called.

(d) If not otherwise fixed under section 21-255 or 21-259, the record date for determining shareholders entitled to notice of and to vote at an annual or special shareholders' meeting is the day before the first notice is delivered to shareholders.

(e) Unless the bylaws require otherwise, if an annual or special shareholders' meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time, or place if the new date, time, or place is announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed under section 21-259, however, notice of the adjourned meeting must be given under this section to shareholders entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.

Source:Laws 2014, LB749, § 57.

21-258. Waiver of notice.

(MBCA 7.06) (a) A shareholder may waive any notice required by the Nebraska Model Business Corporation Act, the articles of incorporation, or bylaws before or after the date and time stated in the notice. The waiver must be in writing, be signed by the shareholder entitled to the notice, and be delivered to the corporation for inclusion in the minutes or filing with the corporate records.

(b) A shareholder's attendance at a meeting:

(1) Waives objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and

(2) Waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.

Source:Laws 2014, LB749, § 58.

21-259. Record date.

(MBCA 7.07) (a) The bylaws may fix or provide the manner of fixing the record date or dates for one or more voting groups in order to determine the shareholders entitled to notice of a shareholders' meeting, to demand a special meeting, to vote, or to take any other action. If the bylaws do not fix or provide for fixing a record date, the board of directors of the corporation may fix a future date as the record date.

(b) A record date fixed under this section may not be more than seventy days before the meeting or action requiring a determination of shareholders.

(c) A determination of shareholders entitled to notice of or to vote at a shareholders' meeting is effective for any adjournment of the meeting unless the board of directors fixes a new record date or dates which it must do if the meeting is adjourned to a date more than one hundred twenty days after the date fixed for the original meeting.

(d) If a court orders a meeting adjourned to a date more than one hundred twenty days after the date fixed for the original meeting, it may provide that the original record date or dates continue in effect or it may fix a new record date or dates.

(e) The record date for a shareholders' meeting fixed by or in the manner provided in the bylaws or by the board of directors shall be the record date for determining shareholders entitled both to notice of and to vote at the shareholders' meeting, unless in the case of a record date fixed by the board of directors and to the extent not prohibited by the bylaws, the board, at the time it fixes the record date for shareholders entitled to notice of the meeting, fixes a later record date on or before the date of the meeting to determine the shareholders entitled to vote at the meeting.

Source:Laws 2014, LB749, § 59.

21-260. Conduct of the meeting.

(MBCA 7.08) (a) At each meeting of shareholders, a chairperson shall preside. The chairperson shall be appointed as provided in the bylaws or, in the absence of such provision, by the board.

(b) The chairperson, unless the articles of incorporation or bylaws provide otherwise, shall determine the order of business and shall have the authority to establish rules for the conduct of the meeting.

(d) The chairperson of the meeting shall announce at the meeting when the polls close for each matter voted upon. If no announcement is made, the polls shall be deemed to have closed upon the final adjournment of the meeting. After the polls close, no ballots, proxies, or votes nor any revocations or changes thereto may be accepted.

Source:Laws 2014, LB749, § 60.

21-261. Remote participation in annual and special meetings.

(MBCA 7.09) (a) Shareholders of any class or series may participate in any meeting of shareholders by means of remote communication to the extent the board of directors authorizes such participation for such class or series. Participation by means of remote communication shall be subject to such guidelines and procedures as the board of directors adopts and shall be in conformity with subsection (b) of this section.

(b) Shareholders participating in a shareholders' meeting by means of remote communication shall be deemed present and may vote at such a meeting if the corporation has implemented reasonable measures:

(1) To verify that each person participating remotely is a shareholder; and

(2) To provide such shareholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to communicate and to read or hear the proceedings of the meeting substantially concurrently with such proceedings.

Source:Laws 2014, LB749, § 61.

21-262. Shareholders' list for meeting.

(MBCA 7.20) (a) After fixing a record date for a meeting, a corporation shall prepare an alphabetical list of the names of all its shareholders who are entitled to notice of a shareholders' meeting. If the board of directors fixes a different record date under subsection (e) of section 21-259 to determine the shareholders entitled to vote at the meeting, a corporation also shall prepare an alphabetical list of the names of all its shareholders who are entitled to vote at the meeting. A list must be arranged by voting group, and within each voting group by class or series of shares, and show the address of and number of shares held by each shareholder.

(b) The shareholders' list for notice must be available for inspection by any shareholder, beginning two business days after notice of the meeting is given for which the list was prepared and continuing through the meeting, at the corporation's principal office or at a place identified in the meeting notice in the city where the meeting will be held. A shareholders' list for voting must be similarly available for inspection promptly after the record date for voting. A shareholder, or the shareholder's agent or attorney, is entitled upon written demand to inspect and, subject to the requirements of subsection (c) of section 21-2,222, to copy a list, during regular business hours and at the shareholder's expense, during the period it is available for inspection.

(c) The corporation shall make the list of shareholders entitled to vote available at the meeting, and any shareholder, or the shareholder's agent or attorney, is entitled to inspect the list at any time during the meeting or any adjournment.

(d) If the corporation refuses to allow a shareholder, or the shareholder's agent or attorney, to inspect a shareholders' list before or at the meeting or copy a list as permitted by subsection (b) of this section, the district court of the county where a corporation's principal office, or, if none in this state, its registered office, is located, on application of the shareholder, may summarily order the inspection or copying at the corporation's expense and may postpone the meeting for which the list was prepared until the inspection or copying is complete.

(e) Refusal or failure to prepare or make available the shareholders' list does not affect the validity of action taken at the meeting.

Source:Laws 2014, LB749, § 62.

21-263. Voting entitlement of shares.

(MBCA 7.21) (a) Except as provided in subsections (b) and (d) of this section or unless the articles of incorporation provide otherwise, each outstanding share, regardless of class, is entitled to one vote on each matter voted on at a shareholders' meeting. Only shares are entitled to vote.

(b) Absent special circumstances, the shares of a corporation are not entitled to vote if they are owned, directly or indirectly, by a second corporation, domestic or foreign, and the first corporation owns, directly or indirectly, a majority of the shares entitled to vote for directors of the second corporation.

(c) Subsection (b) of this section does not limit the power of a corporation to vote any shares, including its own shares, held by it in a fiduciary capacity.

(d) Redeemable shares are not entitled to vote after notice of redemption is mailed to the holders and a sum sufficient to redeem the shares has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares.

Source:Laws 2014, LB749, § 63.

21-264. Proxies.

(MBCA 7.22) (a) A shareholder may vote the shareholder's shares in person or by proxy.

(b) A shareholder, or the shareholder's agent or attorney-in-fact, may appoint a proxy to vote or otherwise act for the shareholder by signing an appointment form or by an electronic transmission. An electronic transmission must contain or be accompanied by information from which the recipient can determine the date of the transmission and that the transmission was authorized by the sender or the sender's agent or attorney-in-fact.

(c) An appointment of a proxy is effective when a signed appointment form or an electronic transmission of the appointment is received by the inspector of election or the officer or agent of the corporation authorized to count votes. An appointment is valid for the term provided in the appointment form and, if no term is provided, is valid for eleven months unless the appointment is irrevocable under subsection (d) of this section.

(d) An appointment of a proxy is revocable unless the appointment form or electronic transmission states that it is irrevocable and the appointment is coupled with an interest. Appointments coupled with an interest include the appointment of:

(1) A pledgee;

(2) A person who purchased or agreed to purchase the shares;

(3) A creditor of the corporation who extended it credit under terms requiring the appointment;

(4) An employee of the corporation whose employment contract requires the appointment; or

(5) A party to a voting agreement created under section 21-273.

(e) The death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to count votes before the proxy exercises authority under the appointment.

(f) An appointment made irrevocable under subsection (d) of this section is revoked when the interest with which it is coupled is extinguished.

(g) Unless it otherwise provides, an appointment made irrevocable under subsection (d) of this section continues in effect after a transfer of the shares and a transferee takes subject to the appointment, except that a transferee for value of shares subject to an irrevocable appointment may revoke the appointment if the transferee did not know of its existence when acquiring the shares and the existence of the irrevocable appointment was not noted conspicuously on the certificate representing the shares or on the information statement for shares without certificates.

(h) Subject to section 21-266 and to any express limitation on the proxy's authority stated in the appointment form or electronic transmission, a corporation is entitled to accept the proxy's vote or other action as that of the shareholder making the appointment.

Source:Laws 2014, LB749, § 64; Laws 2017, LB35, § 7.

21-265. Shares held by intermediaries and nominees.

(MBCA 7.23) (a) A corporation's board of directors may establish a procedure under which a person on whose behalf shares are registered in the name of an intermediary or nominee may elect to be treated by the corporation as the record shareholder by filing with the corporation a beneficial ownership certificate. The extent, terms, conditions, and limitations of this treatment shall be specified in the procedure. To the extent such person is treated under such procedure as having rights or privileges that the record shareholder otherwise would have, the record shareholder shall not have those rights or privileges.

(b) The procedure shall specify:

(1) The types of intermediaries or nominees to which it applies;

(2) The rights or privileges that the corporation recognizes in a person with respect to whom a beneficial ownership certificate is filed;

(3) The manner in which the procedure is selected, which shall include that the beneficial ownership certificate be signed or assented to by or on behalf of the record shareholder and the person or persons on whose behalf the shares are held;

(4) The information that must be provided when the procedure is selected;

(5) The period for which selection of the procedure is effective;

(6) Requirements for notice to the corporation with respect to the arrangement; and

(7) The form and contents of the beneficial ownership certificate.

(c) The procedure may specify any other aspects of the rights and duties created by the filing of a beneficial ownership certificate.

Source:Laws 2014, LB749, § 65; Laws 2017, LB35, § 8.

21-266. Corporation's acceptance of votes.

(MBCA 7.24) (a) If the name signed on a vote, ballot, consent, waiver, or proxy appointment corresponds to the name of a shareholder, the corporation if acting in good faith is entitled to accept the vote, ballot, consent, waiver, or proxy appointment and give it effect as the act of the shareholder.

(b) If the name signed on a vote, ballot, consent, waiver, or proxy appointment does not correspond to the name of its shareholder, the corporation if acting in good faith is nevertheless entitled to accept the vote, ballot, consent, waiver, or proxy appointment and give it effect as the act of the shareholder if:

(1) The shareholder is an entity and the name signed purports to be that of an officer or agent of the entity;

(2) The name signed purports to be that of an administrator, executor, guardian, or conservator representing the shareholder and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, ballot, consent, waiver, or proxy appointment;

(3) The name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, ballot, consent, waiver, or proxy appointment;

(4) The name signed purports to be that of a pledgee, beneficial owner, or attorney-in-fact of the shareholder and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the shareholder has been presented with respect to the vote, ballot, consent, waiver, or proxy appointment; or

(5) Two or more persons are the shareholder as cotenants or fiduciaries and the name signed purports to be the name of at least one of the co-owners and the person signing appears to be acting on behalf of all the co-owners.

(c) The corporation is entitled to reject a vote, ballot, consent, waiver, or proxy appointment if the person authorized to count votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the shareholder.

(d) Neither the corporation nor the person authorized to count votes, including an inspector of election under section 21-271, that accepts or rejects a vote, ballot, consent, waiver, or proxy appointment in good faith and in accordance with the standards of this section or subsection (b) of section 21-264 is liable in damages to the shareholder for the consequences of the acceptance or rejection.

(e) Corporate action based on the acceptance or rejection of a vote, ballot, consent, waiver, or proxy appointment under this section is valid unless a court of competent jurisdiction determines otherwise.

(f) If an inspector of election has been appointed under section 21-271, the inspector of election also has the authority to request information and make determinations under subsections (a), (b), and (c) of this section. Any determination made by the inspector of election under those subsections is controlling.

Source:Laws 2014, LB749, § 66; Laws 2017, LB35, § 9.

21-267. Quorum and voting requirements for voting groups.

(MBCA 7.25) (a) Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the articles of incorporation provide otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter.

(b) Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting.

(c) If a quorum exists, action on a matter, other than the election of directors, by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless the articles of incorporation require a greater number of affirmative votes.

(d) An amendment of articles of incorporation adding, changing, or deleting a quorum or voting requirement for a voting group greater than specified in subsection (a) or (c) of this section is governed by section 21-269.

(e) The election of directors is governed by section 21-270.

(f) Whenever a provision of the Nebraska Model Business Corporation Act provides for voting of classes or series as separate voting groups, the rules provided in subsection (c) of section 21-2,153 for amendments of articles of incorporation apply to that provision.

Source:Laws 2014, LB749, § 67.

21-268. Action by single and multiple voting groups.

(MBCA 7.26) (a) If the articles of incorporation or the Nebraska Model Business Corporation Act provide for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group as provided in section 21-267.

(b) If the articles of incorporation or the act provide for voting by two or more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately as provided in section 21-267. Action may be taken by one voting group on a matter even though no action is taken by another voting group entitled to vote on the matter.

Source:Laws 2014, LB749, § 68.

21-269. Greater quorum or voting requirements.

(MBCA 7.27) (a) The articles of incorporation may provide for a greater quorum or voting requirement for shareholders, or voting groups of shareholders, than is provided for by the Nebraska Model Business Corporation Act.

(b) An amendment to the articles of incorporation that adds, changes, or deletes a greater quorum or voting requirement must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirements then in effect or proposed to be adopted, whichever is greater.

Source:Laws 2014, LB749, § 69.

21-270. Voting for directors; cumulative voting.

(MBCA 7.28) (a) Unless otherwise provided in the articles of incorporation, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present.

(b) In all elections for directors, every shareholder entitled to vote at such elections shall have the right to vote in person or by proxy for the number of shares owned by him or her, for as many persons as there are directors to be elected or to cumulate such shares and give one candidate as many votes as the number of directors multiplied by the number of his or her shares shall equal, or to distribute them upon the same principle among as many candidates as he or she thinks fit, and such directors shall not be elected in any other manner.

Source:Laws 2014, LB749, § 70.

21-271. Inspectors of election.

(MBCA 7.29) (a) A public corporation shall, and any other corporation may, appoint one or more inspectors to act at a meeting of shareholders in connection with determining voting results. Each inspector shall certify in writing that the inspector will faithfully execute the duties of inspector with strict impartiality and according to the best of the inspector's ability. An inspector may be an officer or employee of the corporation. The inspectors may appoint or retain other persons to assist the inspectors in the performance of the duties of inspector under subsection (b) of this section, and may rely on information provided by such persons and other persons, including those appointed to count votes, unless the inspectors believe reliance is unwarranted.

(b) The inspectors shall:

(1) Ascertain the number of shares outstanding and the voting power of each;

(2) Determine the shares represented at a meeting;

(3) Determine the validity of proxy appointments and ballots;

(4) Count the votes; and

(5) Make a written report of the results.

(c) In performing their duties, the inspectors may examine (1) the proxy appointment forms and any other information provided in accordance with subsection (b) of section 21-264, (2) any envelope or related writing submitted with those appointment forms, (3) any ballots, (4) any evidence or other information specified in section 21-266, and (5) the relevant books and records of the corporation relating to its shareholders and their entitlement to vote, including any securities position list provided by a depository clearing agency.

(d) The inspectors also may consider other information that they believe is relevant and reliable for the purpose of performing any of the duties assigned to them pursuant to subsection (b) of this section, including for the purpose of evaluating inconsistent, incomplete, or erroneous information and reconciling information submitted on behalf of banks, brokers, their nominees, or similar persons that indicates more votes being cast than a proxy is authorized by the record shareholder to cast or more votes being cast than the record shareholder is entitled to cast. If the inspectors consider other information allowed by this subsection, they shall, in their report under subsection (b) of this section, specify the information considered by them, including the purpose or purposes for which the information was considered, the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained, and the basis for the inspectors' belief that such information is relevant and reliable.

(e) Determinations of law by the inspectors of election are subject to de novo review by a court in a proceeding under section 21-271.01 or other judicial proceeding.

Source:Laws 2014, LB749, § 71; Laws 2017, LB35, § 10.

21-271.01. Judicial review of corporate elections, shareholder votes, and other corporate governance disputes.

(MBCA 7.29A) (a) Upon application of or in a proceeding commenced by a person specified in subsection (b) of this section, the district court of the county where a corporation's principal office, or, if none in this state, its registered office, is located may determine:

(1) The validity of the election, appointment, removal, or resignation of a director or officer of the corporation;

(2) The right of an individual to hold the office of director or officer of the corporation;

(3) The result or validity of an election or vote by the shareholders of the corporation;

(4) The right of a director to membership on a committee of the board of directors; and

(5) The right of a person to nominate or an individual to be nominated as a candidate for election or appointment as a director of the corporation, and any right under a bylaw adopted pursuant to subsection (c) of section 21-224 or any comparable right under any provision of the articles of incorporation, contract, or applicable law.

(b) An application or proceeding pursuant to subsection (a) of this section may be filed or commenced by any of the following persons:

(1) The corporation;

(2) Any record shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner of the corporation;

(3) A director of the corporation, an individual claiming the office of director, or a director whose membership on a committee of the board of directors is contested, in each case who is seeking a determination of his or her right to such office or membership;

(4) An officer of the corporation or an individual claiming to be an officer of the corporation, in each case who is seeking a determination of his or her right to such office; and

(5) A person claiming a right covered by subdivision (a)(5) of this section and who is seeking a determination of such right.

(c) In connection with any application or proceeding under subsection (a) of this section, the following shall be named as defendants, unless such person made the application or commenced the proceeding:

(1) The corporation;

(2) Any individual whose right to office or membership on a committee of the board of directors is contested;

(3) Any individual claiming the office or membership at issue; and

(4) Any person claiming a right covered by subdivision (a)(5) of this section that is at issue.

(d) In connection with any application or proceeding under subsection (a) of this section, service of process may be made upon each of the persons specified in subsection (c) of this section either by:

(1) Serving on the corporation process addressed to such person in any manner provided by statute of this state or by rule of the applicable court for service on the corporation; or

(2) Service of process on such person in any manner provided by statute of this state or by rule of the applicable court.

(e) When service of process is made upon a person other than the corporation by service upon the corporation pursuant to subdivision (d)(1) of this section, the plaintiff and the corporation or its registered agent shall promptly provide written notice of such service, together with copies of all process and the application or complaint, to such person at the person's last-known residence or business address, or as permitted by statute of this state or by rule of the applicable court.

(f) In connection with any application or proceeding under subsection (a) of this section, the court shall dispose of the application or proceeding on an expedited basis and also may:

(1) Order such additional or further notice as the court deems proper under the circumstances;

(2) Order that additional persons be joined as parties to the proceeding if the court determines that such joinder is necessary for a just adjudication of matters before the court;

(3) Order an election or meeting be held in accordance with the provisions of subsection (b) of section 21-255 or otherwise;

(4) Appoint a master to conduct an election or meeting;

(5) Enter temporary, preliminary, or permanent injunctive relief;

(6) Resolve solely for the purpose of this proceeding any legal or factual issues necessary for the resolution of any of the matters specified in subsection (a) of this section, including the right and power of persons claiming to own shares to vote at any meeting of the shareholders; and

(7) Order such other relief as the court determines is equitable, just, and proper.

(g) It is not necessary to make shareholders parties to a proceeding or application pursuant to this section unless the shareholder is a required defendant under subdivision (c)(4) of this section, relief is sought against the shareholder individually, or the court orders joinder pursuant to subdivision (f)(2) of this section.

(h) Nothing in this section limits, restricts, or abolishes the subject matter jurisdiction or powers of the court as they existed prior to the enactment of this section, and an application or proceeding pursuant to this section is not the exclusive remedy or proceeding available with respect to the matters specified in subsection (a) of this section.

Source:Laws 2017, LB35, § 11.

21-272. Voting trusts.

(MBCA 7.30) (a) One or more shareholders may create a voting trust, conferring on a trustee the right to vote or otherwise act for them, by signing an agreement setting out the provisions of the trust, which may include anything consistent with its purpose, and transferring their shares to the trustee. When a voting trust agreement is signed, the trustee must prepare a list of the names and addresses of all voting trust beneficial owners, together with the number and class of shares each transferred to the trust, and deliver copies of the list and agreement to the corporation's principal office.

(b) A voting trust becomes effective on the date the first shares subject to the trust are registered in the trustee's name.

(c) Limits, if any, on the duration of a voting trust shall be as set forth in the voting trust. A voting trust that became effective when the business corporation statutes repealed by Laws 2014, LB749, provided a ten-year limit on its duration remains governed by the provisions of such statutes then in effect, unless the voting trust is amended to provide otherwise by unanimous agreement of the parties to the voting trust.

Source:Laws 2014, LB749, § 72.

21-273. Voting agreements.

(MBCA 7.31) (a) Two or more shareholders may provide for the manner in which they will vote their shares by signing an agreement for that purpose. A voting agreement created under this section is not subject to the provisions of section 21-272.

(b) A voting agreement created under this section is specifically enforceable.

Source:Laws 2014, LB749, § 73.

21-274. Shareholder agreements.

(MBCA 7.32) (a) An agreement among the shareholders of a corporation that complies with this section is effective among the shareholders and the corporation even though it is inconsistent with one or more other provisions of the Nebraska Model Business Corporation Act in that it:

(1) Eliminates the board of directors or restricts the discretion or powers of the board of directors;

(2) Governs the authorization or making of distributions whether or not in proportion to ownership of shares, subject to the limitations in section 21-252;

(3) Establishes who shall be directors or officers of the corporation or their terms of office or manner of selection or removal;

(4) Governs, in general or in regard to specific matters, the exercise or division of voting power by or between the shareholders and directors or by or among any of them, including use of weighted voting rights or director proxies;

(5) Establishes the terms and conditions of any agreement for the transfer or use of property or the provision of services between the corporation and any shareholder, director, officer, or employee of the corporation or among any of them;

(6) Transfers to one or more shareholders or other persons all or part of the authority to exercise the corporate powers or to manage the business and affairs of the corporation, including the resolution of any issue about which there exists a deadlock among directors or shareholders;

(7) Requires dissolution of the corporation at the request of one or more of the shareholders or upon the occurrence of a specified event or contingency; or

(8) Otherwise governs the exercise of the corporate powers or the management of the business and affairs of the corporation or the relationship among the shareholders, the directors, and the corporation, or among any of them, and is not contrary to public policy.

(b) An agreement authorized by this section shall be:

(1) As set forth (i) in the articles of incorporation or bylaws and approved by all persons who are shareholders at the time of the agreement or (ii) in a written agreement that is signed by all persons who are shareholders at the time of the agreement and is made known to the corporation; and

(2) Subject to amendment only by all persons who are shareholders at the time of the amendment, unless the agreement provides otherwise.

(c) The existence of an agreement authorized by this section shall be noted conspicuously on the front or back of each certificate for outstanding shares or on the information statement required by subsection (b) of section 21-247. If at the time of the agreement the corporation has shares outstanding represented by certificates, the corporation shall recall the outstanding certificates and issue substitute certificates that comply with this subsection. The failure to note the existence of the agreement on the certificate or information statement shall not affect the validity of the agreement or any action taken pursuant to it. Any purchaser of shares who, at the time of purchase, did not have knowledge of the existence of the agreement shall be entitled to rescission of the purchase. A purchaser shall be deemed to have knowledge of the existence of the agreement if its existence is noted on the certificate or information statement for the shares in compliance with this subsection and, if the shares are not represented by a certificate, the information statement is delivered to the purchaser at or prior to the time of purchase of the shares. An action to enforce the right of rescission authorized by this subsection must be commenced within the earlier of ninety days after discovery of the existence of the agreement or two years after the time of purchase of the shares.

(d) An agreement authorized by this section shall cease to be effective when the corporation becomes a public corporation. If the agreement ceases to be effective for any reason, the board of directors may, if the agreement is contained or referred to in the corporation's articles of incorporation or bylaws, adopt an amendment to the articles of incorporation or bylaws, without shareholder action, to delete the agreement and any references to it.

(e) An agreement authorized by this section that limits the discretion or powers of the board of directors shall relieve the directors of, and impose upon the person or persons in whom such discretion or powers are vested, liability for acts or omissions imposed by law on directors to the extent that the discretion or powers of the directors are limited by the agreement.

(f) The existence or performance of an agreement authorized by this section shall not be a ground for imposing personal liability on any shareholder for the acts or debts of the corporation even if the agreement or its performance treats the corporation as if it were a partnership or results in failure to observe the corporate formalities otherwise applicable to the matters governed by the agreement.

(g) Incorporators or subscribers for shares may act as shareholders with respect to an agreement authorized by this section if no shares have been issued when the agreement is made.

(h) Limits, if any, on the duration of an agreement authorized by this section shall be as set forth in the agreement. An agreement that became effective when the business corporation statutes repealed by Laws 2014, LB749, provided for a ten-year limit on duration of shareholder agreements, unless the agreement provided otherwise, remains governed by the provisions of such statutes then in effect.

Source:Laws 2014, LB749, § 74.

21-275. Subpart definitions.

(MBCA 7.40) In sections 21-275 to 21-282:

(1) Derivative proceeding means a civil suit in the right of a domestic corporation or, to the extent provided in section 21-282, in the right of a foreign corporation.

(2) Shareholder means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner.

Source:Laws 2014, LB749, § 75; Laws 2017, LB35, § 12.

21-276. Standing.

(MBCA 7.41) A shareholder may not commence or maintain a derivative proceeding unless the shareholder:

(1) Was a shareholder of the corporation at the time of the act or omission complained of or became a shareholder through transfer by operation of law from one who was a shareholder at that time; and

(2) Fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.

Source:Laws 2014, LB749, § 76.

21-277. Demand.

(MBCA 7.42) (a) No shareholder may commence a derivative proceeding until:

(1) A written demand has been made upon the corporation to take suitable action; and

(2) Ninety days have expired from the date delivery of the demand was made unless the shareholder has earlier been notified that the demand has been rejected by the corporation or unless irreparable injury to the corporation would result by waiting for the expiration of the ninety-day period.

(b) Venue for a proceeding under this section lies in the district court of the county where the corporation's principal office, or, if none in this state, its registered office, is located.

Source:Laws 2014, LB749, § 77.

21-278. Stay of proceedings.

(MBCA 7.43) If the corporation commences an inquiry into the allegations made in the demand or complaint, the court may stay any derivative proceeding for such period as the court deems appropriate.

Source:Laws 2014, LB749, § 78.

21-279. Dismissal.

(MBCA 7.44) (a) A derivative proceeding shall be dismissed by the court on motion by the corporation if one of the groups specified in subsection (b) or (e) of this section has determined in good faith, after conducting a reasonable inquiry upon which its conclusions are based, that the maintenance of the derivative proceeding is not in the best interests of the corporation.

(b) Unless a panel is appointed pursuant to subsection (e) of this section, the determination in subsection (a) of this section shall be made by:

(1) A majority vote of qualified directors present at a meeting of the board of directors if the qualified directors constitute a quorum; or

(2) A majority vote of a committee consisting of two or more qualified directors appointed by majority vote of qualified directors present at a meeting of the board of directors, regardless of whether such qualified directors constitute a quorum.

(c) If a derivative proceeding is commenced after a determination has been made rejecting a demand by a shareholder, the complaint shall allege with particularity facts establishing either (1) that a majority of the board of directors did not consist of qualified directors at the time the determination was made or (2) that the requirements of subsection (a) of this section have not been met.

(d) If a majority of the board of directors consisted of qualified directors at the time the determination was made, the plaintiff shall have the burden of proving that the requirements of subsection (a) of this section have not been met, and if not, the corporation shall have the burden of proving that the requirements of subsection (a) of this section have been met.

(e) Upon motion by the corporation, the court may appoint a panel of one or more individuals to make a determination whether the maintenance of the derivative proceeding is in the best interests of the corporation. In such case, the plaintiff shall have the burden of proving that the requirements of subsection (a) of this section have not been met.

Source:Laws 2014, LB749, § 79.

21-280. Discontinuance or settlement.

(MBCA 7.45) A derivative proceeding may not be discontinued or settled without the court's approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the corporation's shareholders or a class of shareholders, the court shall direct that notice be given to the shareholders affected.

Source:Laws 2014, LB749, § 80.

21-281. Payment of expenses.

(MBCA 7.46) On termination of the derivative proceeding the court may:

(1) Order the corporation to pay the plaintiff's reasonable expenses, including attorney's fees, incurred in the proceeding if it finds that the proceeding has resulted in a substantial benefit to the corporation;

(2) Order the plaintiff to pay any defendant's reasonable expenses, including attorney's fees, incurred in defending the proceeding if it finds that the proceeding was commenced or maintained without reasonable cause or for an improper purpose; or

(3) Order a party to pay an opposing party's reasonable expenses, including attorney's fees, incurred because of the filing of a pleading, motion, or other paper, if it finds that the pleading, motion, or other paper was not well grounded in fact, after reasonable inquiry, or warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law and was interposed for an improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation.

Source:Laws 2014, LB749, § 81.

21-282. Applicability to foreign corporations.

(MBCA 7.47) In any derivative proceeding in the right of a foreign corporation, the matters covered by sections 21-275 to 21-282 shall be governed by the laws of the jurisdiction of incorporation of the foreign corporation except for sections 21-278, 21-280, and 21-281.

Source:Laws 2014, LB749, § 82.

21-283. Shareholder action to appoint custodian or receiver.

(MBCA 7.48) (a) The court may appoint one or more persons to be custodians, or, if the corporation is insolvent, to be receivers, of and for a corporation in a proceeding by a shareholder when it is established that:

(1) The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered; or

(2) The directors or those in control of the corporation are acting fraudulently and irreparable injury to the corporation is threatened or being suffered.

(b) The court:

(1) May issue injunctions, appoint a temporary custodian or temporary receiver with all the powers and duties the court directs, take other action to preserve the corporate assets wherever located, and carry on the business of the corporation until a full hearing is held;

(2) Shall hold a full hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a custodian or receiver; and

(3) Has jurisdiction over the corporation and all of its property, wherever located.

(c) The court may appoint an individual or domestic or foreign corporation, authorized to transact business in this state, as a custodian or receiver and may require the custodian or receiver to post bond, with or without sureties, in an amount the court directs.

(d) The court shall describe the powers and duties of the custodian or receiver in its appointing order, which may be amended from time to time. Among other powers:

(1) A custodian may exercise all of the powers of the corporation, through or in place of its board of directors, to the extent necessary to manage the business and affairs of the corporation; and

(2) A receiver (i) may dispose of all or any part of the assets of the corporation wherever located, at a public or private sale, if authorized by the court and (ii) may sue and defend in the receiver's own name as receiver in all courts of this state.

(e) The court during a custodianship may redesignate the custodian a receiver, and during a receivership may redesignate the receiver a custodian, if doing so is in the best interests of the corporation.

(f) The court from time to time during the custodianship or receivership may order compensation paid and expense disbursements or reimbursements made to the custodian or receiver from the assets of the corporation or proceeds from the sale of its assets.

(g) In this section, shareholder means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner.

Source:Laws 2014, LB749, § 83; Laws 2017, LB35, § 13.

21-284. Requirement for and functions of board of directors.

(MBCA 8.01) (a) Except as provided in section 21-274, each corporation must have a board of directors.

(b) All corporate powers shall be exercised by or under the authority of the board of directors of the corporation, and the business and affairs of the corporation shall be managed by or under the direction and subject to the oversight of its board of directors, subject to any limitation set forth in the articles of incorporation or in an agreement authorized under section 21-274.

(1) Business performance and plans;

(2) Major risks to which the corporation is or may be exposed;

(3) The performance and compensation of senior officers;

(4) Policies and practices to foster the corporation's compliance with law and ethical conduct;

(5) Preparation of the corporation's financial statements;

(6) The effectiveness of the corporation's internal controls;

(7) Arrangements for providing adequate and timely information to directors; and

(8) The composition of the board and its committees, taking into account the important role of independent directors.

Source:Laws 2014, LB749, § 84.

21-285. Qualifications of directors.

(MBCA 8.02) (a) The articles of incorporation or bylaws may prescribe qualifications for directors or for nominees for directors. Qualifications must be reasonable as applied to the corporation and must be lawful.

(b) A requirement that is based on a past, current, or prospective action, or expression of an opinion, by a nominee or director that could limit the ability of a nominee or director to discharge his or her duties as a director is not a permissible qualification under this section. Notwithstanding the foregoing, qualifications may include not being or having been subject to specified criminal, civil, or regulatory sanctions or not having been removed as a director by judicial action or for cause.

(c) A director need not be a resident of this state or a shareholder of the corporation unless the articles of incorporation or bylaws so prescribe.

(d) A qualification for nomination for director prescribed before a person's nomination shall apply to such person at the time of nomination. A qualification for nomination for director prescribed after a person's nomination shall not apply to such person with respect to such nomination.

(e) A qualification for director prescribed before the start of a director's term may apply only at the time an individual becomes a director or may apply during a director's term. A qualification prescribed during a director's term shall not apply to that director before the end of that term.

Source:Laws 2014, LB749, § 85; Laws 2017, LB35, § 14.

21-286. Number and election of directors.

(MBCA 8.03) (a) A board of directors must consist of one or more individuals, with the number specified in or fixed in accordance with the articles of incorporation or bylaws.

(b) The number of directors may be increased or decreased from time to time by amendment to, or in the manner provided in, the articles of incorporation or the bylaws.

(c) Directors are elected at the first annual shareholders' meeting and at each annual meeting thereafter unless their terms are staggered under section 21-289.

(d) If a corporation is registered as an investment company under the federal Investment Company Act of 1940, as amended, 15 U.S.C. 80a-1 et seq., and, pursuant to section 21-220, has included in its articles of incorporation a provision limiting or eliminating the requirement to hold an annual meeting of the shareholders, the initial directors shall be elected at the first meeting of the shareholders after such provision limiting or eliminating such meeting is included in the articles of incorporation, and thereafter the election of directors by shareholders is not required unless required by such federal act or the rules and regulations under such act or otherwise required by the Nebraska Model Business Corporation Act.

Source:Laws 2014, LB749, § 86.

21-287. Election of directors by certain classes of shareholders.

(MBCA 8.04) If the articles of incorporation authorize dividing the shares into classes, the articles may also authorize the election of all or a specified number of directors by the holders of one or more authorized classes of shares. A class, or classes, of shares entitled to elect one or more directors is a separate voting group for purposes of the election of directors.

Source:Laws 2014, LB749, § 87.

21-288. Terms of directors generally.

(MBCA 8.05) (a) The terms of the initial directors of a corporation expire at the first shareholders' meeting at which directors are elected.

(b) The terms of all other directors expire at the next or, if their terms are staggered in accordance with section 21-289, at the applicable second or third annual shareholders' meeting following their election, except to the extent a shorter term is specified in the articles of incorporation in the event of a director nominee failing to receive a specified vote for election.

(d) The term of a director elected to fill a vacancy expires at the next shareholders' meeting at which directors are elected.

(e) Except to the extent otherwise provided in the articles of incorporation, despite the expiration of a director's term, the director continues to serve until the director's successor is elected and qualifies or there is a decrease in the number of directors.

Source:Laws 2014, LB749, § 88.

21-289. Staggered terms for directors.

(MBCA 8.06) The articles of incorporation may provide for staggering the terms of directors by dividing the total number of directors into two or three groups, with each group containing one-half or one-third of the total, as near as may be practicable. In that event, the terms of directors in the first group expire at the first annual shareholders' meeting after their election, the terms of the second group expire at the second annual shareholders' meeting after their election, and the terms of the third group, if any, expire at the third annual shareholders' meeting after their election. At each annual shareholders' meeting held thereafter, directors shall be chosen for a term of two years or three years, as the case may be, to succeed those whose terms expire.

Source:Laws 2014, LB749, § 89.

21-290. Resignation of directors.

(MBCA 8.07) (a) A director may resign at any time by delivering a written resignation to the board of directors or its chairperson or to the secretary of the corporation.

(b) A resignation is effective when the resignation is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. A resignation that is conditioned upon failing to receive a specified vote for election as a director may provide that it is irrevocable.

Source:Laws 2014, LB749, § 90.

21-291. Removal of directors by shareholders.

(MBCA 8.08) (a) The shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause.

(b) If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove that director.

(c) A director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against removal.

(d) A director may be removed by the shareholders only at a meeting called for the purpose of removing the director and the meeting notice must state that the purpose, or one of the purposes, of the meeting is removal of the director.

Source:Laws 2014, LB749, § 91.

21-292. Removal of directors by judicial proceeding.

(MBCA 8.09) (a) The district court of the county where a corporation's principal office, or, if none in this state, its registered office, is located may remove a director of the corporation from office in a proceeding commenced by or in the right of the corporation if the court finds that (1) the director engaged in fraudulent conduct with respect to the corporation or its shareholders, grossly abused the position of director, or intentionally inflicted harm on the corporation and (2) considering the director's course of conduct and the inadequacy of other available remedies, removal would be in the best interest of the corporation.

(b) A shareholder proceeding on behalf of the corporation under subsection (a) of this section shall comply with all of the requirements of sections 21-275 to 21-282, except subdivision (1) of section 21-276.

(c) The court, in addition to removing the director, may bar the director from reelection for a period prescribed by the court.

(d) Nothing in this section limits the equitable powers of the court to order other relief.

Source:Laws 2014, LB749, § 92.

21-293. Vacancy on board.

(MBCA 8.10) (a) Unless the articles of incorporation provide otherwise, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors:

(1) The shareholders may fill the vacancy;

(2) The board of directors may fill the vacancy; or

(3) If the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.

(b) If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the shareholders, and only the directors elected by that voting group are entitled to fill the vacancy if it is filled by the directors.

(c) A vacancy that will occur at a specific later date, by reason of a resignation effective at a later date under subsection (b) of section 21-290 or otherwise, may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.

Source:Laws 2014, LB749, § 93.

21-294. Compensation of directors.

(MBCA 8.11) Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors.

Source:Laws 2014, LB749, § 94.

21-295. Meetings.

(MBCA 8.20) (a) The board of directors may hold regular or special meetings in or out of this state.

(b) Unless the articles of incorporation or bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.

Source:Laws 2014, LB749, § 95.

21-296. Action without meeting.

(MBCA 8.21) (a) Except to the extent that the articles of incorporation or bylaws require that action by the board of directors be taken at a meeting, action required or permitted by the Nebraska Model Business Corporation Act to be taken by the board of directors may be taken without a meeting if each director signs a consent describing the action to be taken and delivers it to the corporation.

(b) Action taken under this section is the act of the board of directors when one or more consents signed by all the directors are delivered to the corporation. The consent may specify the time at which the action taken thereunder is to be effective. A director's consent may be withdrawn by a revocation signed by the director and delivered to the corporation prior to delivery to the corporation of unrevoked written consents signed by all the directors.

(c) A consent signed under this section has the effect of action taken at a meeting of the board of directors and may be described as such in any document.

Source:Laws 2014, LB749, § 96.

21-297. Notice of meeting.

(MBCA 8.22) (a) Unless the articles of incorporation or bylaws provide otherwise, regular meetings of the board of directors may be held without notice of the date, time, place, or purpose of the meeting.

(b) Unless the articles of incorporation or bylaws provide for a longer or shorter period, special meetings of the board of directors must be preceded by at least two days' notice of the date, time, and place of the meeting. The notice need not describe the purpose of the special meeting unless required by the articles of incorporation or bylaws.

Source:Laws 2014, LB749, § 97.

21-298. Waiver of notice.

(MBCA 8.23) (a) A director may waive any notice required by the Nebraska Model Business Corporation Act, the articles of incorporation, or bylaws before or after the date and time stated in the notice. Except as provided by subsection (b) of this section, the waiver must be in writing, signed by the director entitled to the notice, and filed with the minutes or corporate records.

(b) A director's attendance at or participation in a meeting waives any required notice to the director of the meeting unless the director at the beginning of the meeting, or promptly upon arrival, objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.

Source:Laws 2014, LB749, § 98.

21-299. Quorum and voting.

(MBCA 8.24) (a) Unless the articles of incorporation or bylaws require a greater number or unless otherwise specifically provided in the Nebraska Model Business Corporation Act, a quorum of a board of directors consists of:

(1) A majority of the fixed number of directors if the corporation has a fixed board size; or

(2) A majority of the number of directors prescribed, or if no number is prescribed the number in office immediately before the meeting begins, if the corporation has a variable-range size board.

(b) The articles of incorporation or bylaws may authorize a quorum of a board of directors to consist of no fewer than one-third of the fixed or prescribed number of directors determined under subsection (a) of this section.

(c) If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the board of directors unless the articles of incorporation or bylaws require the vote of a greater number of directors.

(d) A director who is present at a meeting of the board of directors or a committee of the board of directors when corporate action is taken is deemed to have assented to the action taken unless: (1) The director objects at the beginning of the meeting, or promptly upon arrival, to holding it or transacting business at the meeting; (2) the dissent or abstention from the action taken is entered in the minutes of the meeting; or (3) the director delivers written notice of the director's dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation immediately after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken.

Source:Laws 2014, LB749, § 99.

21-2,100. Committees.

(MBCA 8.25) (a) Unless the Nebraska Model Business Corporation Act or the articles of incorporation or bylaws provide otherwise, a board of directors may create one or more committees and appoint one or more members of the board of directors to serve on any such committee.

(b) Unless the Nebraska Model Business Corporation Act otherwise provides, the creation of a committee and appointment of members to it must be approved by the greater of (1) a majority of all the directors in office when the action is taken or (2) the number of directors required by the articles of incorporation or bylaws to take action under section 21-299.

(d) To the extent specified by the board of directors or in the articles of incorporation or bylaws, each committee may exercise the powers of the board of directors under section 21-284.

(e) A committee may not, however:

(1) Authorize or approve distributions, except according to a formula or method, or within limits, prescribed by the board of directors;

(2) Approve or propose to shareholders action that the Nebraska Model Business Corporation Act requires be approved by shareholders;

(3) Fill vacancies on the board of directors or, subject to subsection (g) of this section, on any of its committees; or

(4) Adopt, amend, or repeal bylaws.

(f) The creation of, delegation of authority to, or action by a committee does not alone constitute compliance by a director with the standards of conduct described in section 21-2,102.

(g) The board of directors may appoint one or more directors as alternate members of any committee to replace any absent or disqualified member during the member's absence or disqualification. Unless the articles of incorporation or the bylaws or the resolution creating the committee provide otherwise, in the event of the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, unanimously, may appoint another director to act in place of the absent or disqualified member.

Source:Laws 2014, LB749, § 100.

21-2,101. Submission of matters for shareholder vote.

(MBCA 8.26) A corporation may agree to submit a matter to a vote of its shareholders even if, after approving the matter, the board of directors determines it no longer recommends the matter.

Source:Laws 2014, LB749, § 101.

21-2,102. Standards of conduct for directors.

(MBCA 8.30) (a)(1) Each member of the board of directors, when discharging the duties of a director, shall act (i) in good faith and (ii) in a manner the director reasonably believes to be in the best interests of the corporation.

(2) A director may, but need not, in considering the best interests of the corporation, consider, among other things, the effects of any action on employees, suppliers, creditors, and customers of the corporation and communities in which offices or other facilities of the corporation are located.

(b) The members of the board of directors or a committee of the board, when becoming informed in connection with their decisionmaking function or devoting attention to their oversight function, shall discharge their duties with the care that a person in a like position would reasonably believe appropriate under similar circumstances.

(c) In discharging board or committee duties, a director shall disclose, or cause to be disclosed, to the other board or committee members information not already known by them but known by the director to be material to the discharge of their decisionmaking or oversight functions, except that disclosure is not required to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule.

(d) In discharging board or committee duties, a director who does not have knowledge that makes reliance unwarranted is entitled to rely on the performance by any of the persons specified in subdivision (f)(1) or (f)(3) of this section to whom the board may have delegated, formally or informally by course of conduct, the authority or duty to perform one or more of the board's functions that are delegable under applicable law.

(e) In discharging board or committee duties a director who does not have knowledge that makes reliance unwarranted is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, prepared or presented by any of the persons specified in subsection (f) of this section.

(f) A director is entitled to rely, in accordance with subsection (d) or (e) of this section, on:

(1) One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the functions performed or the information, opinions, reports, or statements provided;

(2) Legal counsel, public accountants, or other persons retained by the corporation as to matters involving skills or expertise the director reasonably believes are matters (i) within the particular person's professional or expert competence or (ii) as to which the particular person merits confidence; or

(3) A committee of the board of directors of which the director is not a member if the director reasonably believes the committee merits confidence.

Source:Laws 2014, LB749, § 102.

21-2,103. Standards of liability for directors.

(MBCA 8.31) (a) A director shall not be liable to the corporation or its shareholders for any decision to take or not to take action, or any failure to take any action, as a director unless the party asserting liability in a proceeding establishes that:

(1) No defense interposed by the director based on (i) any provision in the articles of incorporation authorized by subdivision (b)(4) or (6) of section 21-220, (ii) the protection afforded by section 21-2,121 for action taken in compliance with section 21-2,122 or 21-2,123, or (iii) the protection afforded by section 21-2,124, precludes liability; and

(2) The challenged conduct consisted or was the result of:

(i) Action not in good faith;

(ii) A decision:

(A) Which the director did not reasonably believe to be in the best interests of the corporation; or

(B) As to which the director was not informed to an extent the director reasonably believed appropriate in the circumstances;

(iii) A lack of objectivity due to the director's familial, financial, or business relationship with, or a lack of independence due to the director's domination or control by, another person having a material interest in the challenged conduct:

(A) Which relationship or which domination or control could reasonably be expected to have affected the director's judgment respecting the challenged conduct in a manner adverse to the corporation; and

(B) After a reasonable expectation to such effect has been established, the director shall not have established that the challenged conduct was reasonably believed by the director to be in the best interests of the corporation;

(iv) A sustained failure of the director to devote attention to ongoing oversight of the business and affairs of the corporation or a failure to devote timely attention by making, or causing to be made, appropriate inquiry when particular facts and circumstances of significant concern materialize that would alert a reasonably attentive director to the need therefor; or

(v) Receipt of a financial benefit to which the director was not entitled or any other breach of the director's duties to deal fairly with the corporation and its shareholders that is actionable under applicable law.

(b) The party seeking to hold the director liable:

(1) For money damages shall also have the burden of establishing that:

(i) Harm to the corporation or its shareholders has been suffered; and

(ii) The harm suffered was proximately caused by the director's challenged conduct;

(2) For other money payment under a legal remedy, such as compensation for the unauthorized use of corporate assets, shall also have whatever persuasion burden may be called for to establish that the payment sought is appropriate in the circumstances; or

(3) For other money payment under an equitable remedy, such as profit recovery by or disgorgement to the corporation, shall also have whatever persuasion burden may be called for to establish that the equitable remedy sought is appropriate in the circumstances.

(c) Nothing contained in this section shall (1) in any instance where fairness is at issue, such as consideration of the fairness of a transaction to the corporation under subdivision (b)(3) of section 21-2,121, alter the burden of proving the fact or lack of fairness otherwise applicable, (2) alter the fact or lack of liability of a director under another section of the Nebraska Model Business Corporation Act, such as the provisions governing the consequences of an unlawful distribution under section 21-2,104 or a transactional interest under section 21-2,121, or (3) affect any rights to which the corporation or a shareholder may be entitled under another statute of this state or the United States.

Source:Laws 2014, LB749, § 103; Laws 2017, LB35, § 15.

21-2,104. Directors' liability for unlawful distributions.

(MBCA 8.33) (a) A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to subsection (a) of section 21-252 or subsection (a) of section 21-2,192 is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating subsection (a) of section 21-252 or subsection (a) of section 21-2,192 if the party asserting liability establishes that when taking the action the director did not comply with section 21-2,102.

(b) A director held liable under subsection (a) of this section for an unlawful distribution is entitled to:

(1) Contribution from every other director who could be held liable under subsection (a) of this section for the unlawful distribution; and

(2) Recoupment from each shareholder of the pro rata portion of the amount of the unlawful distribution the shareholder accepted, knowing the distribution was made in violation of subsection (a) of section 21-252 or subsection (a) of section 21-2,192.

(1) The liability of a director under subsection (a) of this section is barred unless it is commenced within two years after the date (i) on which the effect of the distribution was measured under subsection (e) or (g) of section 21-252, (ii) as of which the violation of subsection (a) of section 21-252 occurred as the consequence of disregard of a restriction in the articles of incorporation, or (iii) on which the distribution of assets to shareholders under subsection (a) of section 21-2,192 was made; or

(2) Contribution or recoupment under subsection (b) of this section is barred unless it is commenced within one year after the liability of the claimant has been finally adjudicated under subsection (a) of this section.

Source:Laws 2014, LB749, § 104.

21-2,105. Officers.

(MBCA 8.40) (a) A corporation has the officers described in its bylaws or appointed by the board of directors in accordance with the bylaws.

(b) The board of directors may elect individuals to fill one or more offices of the corporation. An officer may appoint one or more officers if authorized by the bylaws or the board of directors.

(c) The bylaws or the board of directors shall assign to one of the officers responsibility for preparing the minutes of the directors' and shareholders' meetings and for maintaining and authenticating the records of the corporation required to be kept under subsections (a) and (e) of section 21-2,221.

(d) The same individual may simultaneously hold more than one office in a corporation.

Source:Laws 2014, LB749, § 105.

21-2,106. Functions of officers.

(MBCA 8.41) Each officer has the authority and shall perform the functions set forth in the bylaws or, to the extent consistent with the bylaws, the functions prescribed by the board of directors or by direction of an officer authorized by the board of directors to prescribe the functions of other officers.

Source:Laws 2014, LB749, § 106.

21-2,107. Standards of conduct for officers.

(MBCA 8.42) (a) An officer, when performing in such capacity, has the duty to act:

(1) In good faith;

(2) With the care that a person in a like position would reasonably exercise under similar circumstances; and

(3) In a manner the officer reasonably believes to be in the best interests of the corporation.

(b) The duty of an officer includes the obligation:

(1) To inform the superior officer to whom, or the board of directors or the committee thereof to which, the officer reports of information about the affairs of the corporation known to the officer, within the scope of the officer's functions, and known to the officer to be material to such superior officer, board, or committee; and

(2) To inform his or her superior officer, or another appropriate person within the corporation, or the board of directors, or a committee thereof, of any actual or probable material violation of law involving the corporation or material breach of duty to the corporation by an officer, employee, or agent of the corporation, that the officer believes has occurred or is likely to occur.

(c) In discharging his or her duties, an officer who does not have knowledge that makes reliance unwarranted is entitled to rely on:

(1) The performance of properly delegated responsibilities by one or more employees of the corporation whom the officer reasonably believes to be reliable and competent in performing the responsibilities delegated; or

(2) Information, opinions, reports, or statements, including financial statements and other financial data, prepared or presented by one or more employees of the corporation whom the officer reasonably believes to be reliable and competent in the matters presented or by legal counsel, public accountants, or other persons retained by the corporation as to matters involving skills or expertise the officer reasonably believes are matters (i) within the particular person's professional or expert competence or (ii) as to which the particular person merits confidence.

(d) An officer shall not be liable to the corporation or its shareholders for any decision to take or not to take action or any failure to take any action as an officer if the duties of the office are performed in compliance with this section. Whether an officer who does not comply with this section shall have liability will depend in such instance on applicable law, including those principles of section 21-2,103 that have relevance.

Source:Laws 2014, LB749, § 107.

21-2,108. Resignation and removal of officers.

(MBCA 8.43) (a) An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is delivered unless the notice specifies a later effective time. If a resignation is made effective at a later time and the board or the appointing officer accepts the future effective time, the board or the appointing officer may fill the pending vacancy before the effective time if the board or the appointing officer provides that the successor does not take office until the effective time.

(b) An officer may be removed at any time with or without cause by (1) the board of directors, (2) the officer who appointed such officer, unless the bylaws or the board of directors provide otherwise, or (3) any other officer if authorized by the bylaws or the board of directors.

(c) In this section, appointing officer means the officer, including any successor to that officer, who appointed the officer resigning or being removed.

Source:Laws 2014, LB749, § 108.

21-2,109. Contract rights of officers.

(MBCA 8.44) (a) The appointment of an officer does not itself create contract rights.

(b) An officer's removal does not affect the officer's contract rights, if any, with the corporation. An officer's resignation does not affect the corporation's contract rights, if any, with the officer.

Source:Laws 2014, LB749, § 109.

21-2,110. Subpart definitions.

(MBCA 8.50) In sections 21-2,110 to 21-2,119:

(1) Corporation includes any domestic or foreign predecessor entity of a corporation in a merger.

(2) Director or officer means an individual who is or was a director or officer, respectively, of a corporation or who, while a director or officer of the corporation, is or was serving at the corporation's request as a director, officer, manager, member of a limited liability company, partner, trustee, employee, or agent of another entity or employee benefit plan. A director or officer is considered to be serving an employee benefit plan at the corporation's request if the individual's duties to the corporation also impose duties on, or otherwise involve services by, the individual to the plan or to participants in or beneficiaries of the plan. Director or officer includes, unless the context requires otherwise, the estate or personal representative of a director or officer.

(3) Liability means the obligation to pay a judgment, settlement, penalty, fine, including an excise tax assessed with respect to an employee benefit plan, or reasonable expenses incurred with respect to a proceeding.

(4) Official capacity means (i) when used with respect to a director, the office of director in a corporation and (ii) when used with respect to an officer, as contemplated in section 21-2,116, the office in a corporation held by the officer. Official capacity does not include service for any other domestic or foreign corporation or any limited liability company, partnership, joint venture, trust, employee benefit plan, or other entity.

(5) Party means an individual who was, is, or is threatened to be made, a defendant or respondent in a proceeding.

(6) Proceeding means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative and whether formal or informal.

Source:Laws 2014, LB749, § 110; Laws 2016, LB794, § 8.

21-2,111. Permissible indemnification.

(MBCA 8.51) (a) Except as otherwise provided in this section, a corporation may indemnify an individual who is a party to a proceeding because the individual is a director against liability incurred in the proceeding if:

(1)(i) The director conducted himself or herself in good faith; and

(ii) Reasonably believed:

(A) In the case of conduct in an official capacity, that his or her conduct was in the best interests of the corporation; and

(B) In all other cases, that the director's conduct was at least not opposed to the best interests of the corporation; and

(iii) In the case of any criminal proceeding, the director had no reasonable cause to believe his or her conduct was unlawful; or

(2) The director engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the articles of incorporation, as authorized by subdivision (b)(5) of section 21-220.

(b) A director's conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the interests of the participants in, and the beneficiaries of, the plan is conduct that satisfies the requirement of subdivision (a)(1)(ii)(B) of this section.

(c) The termination of a proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, is not, of itself, determinative that the director did not meet the relevant standard of conduct described in this section.

(d) Unless ordered by a court under subdivision (a)(3) of section 21-2,114, a corporation may not indemnify a director:

(1) In connection with a proceeding by or in the right of the corporation, except for expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct under subsection (a) of this section; or

(2) In connection with any proceeding with respect to conduct for which the director was adjudged liable on the basis of receiving a financial benefit to which he or she was not entitled, whether or not involving action in the director's official capacity.

Source:Laws 2014, LB749, § 111.

21-2,112. Mandatory indemnification.

(MBCA 8.52) A corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because he or she was a director of the corporation against expenses incurred by the director in connection with the proceeding.

Source:Laws 2014, LB749, § 112.

21-2,113. Advance for expenses.

(MBCA 8.53) (a) A corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse expenses incurred in connection with the proceeding by an individual who is a party to the proceeding because that individual is a member of the board of directors if the director delivers to the corporation a signed written undertaking of the director to repay any funds advanced (1) if the director is not entitled to mandatory indemnification under section 21-2,112 and (2) it is ultimately determined under section 21-2,114 or 21-2,115 that the director is not entitled to indemnification.

(b) The undertaking required by subdivision (a) of this section must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to the financial ability of the director to make repayment.

(1) By the board of directors:

(i) If there are two or more qualified directors, by a majority vote of all the qualified directors, a majority of whom shall for such purpose constitute a quorum, or by a majority of the members of a committee consisting solely of two or more qualified directors appointed by such a vote; or

(ii) If there are fewer than two qualified directors, by the vote necessary for action by the board in accordance with subsection (c) of section 21-299, in which authorization directors who are not qualified directors may participate; or

(2) By the shareholders, but shares owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the authorization.

Source:Laws 2014, LB749, § 113; Laws 2017, LB35, § 16.

21-2,114. Court-ordered indemnification and advance for expenses.

(MBCA 8.54) (a) A director who is a party to a proceeding because he or she is a director may apply for indemnification or an advance for expenses to the court conducting the proceeding or to another court of competent jurisdiction. After receipt of an application and after giving any notice it considers necessary, the court shall:

(1) Order indemnification if the court determines that the director is entitled to mandatory indemnification under section 21-2,112;

(2) Order indemnification or advance for expenses if the court determines that the director is entitled to indemnification or advance for expenses pursuant to a provision authorized by subsection (a) of section 21-2,118; or

(3) Order indemnification or advance for expenses if the court determines, in view of all the relevant circumstances, that it is fair and reasonable:

(i) To indemnify the director; or

(ii) To advance expenses to the director, even if, in the case of subdivision (a)(3)(i) or (ii) of this section he or she has not met the relevant standard of conduct set forth in subsection (a) of section 21-2,111, failed to comply with section 21-2,113, or was adjudged liable in a proceeding referred to in subdivision (d)(1) or (2) of section 21-2,111, but if the director was adjudged so liable indemnification shall be limited to expenses incurred in connection with the proceeding.

(b) If the court determines that the director is entitled to indemnification under subdivision (a)(1) of this section or to indemnification or advance for expenses under subdivision (a)(2) of this section, it shall also order the corporation to pay the director's expenses incurred in connection with obtaining court-ordered indemnification or advance for expenses. If the court determines that the director is entitled to indemnification or advance for expenses under subdivision (a)(3) of this section, it may also order the corporation to pay the director's expenses to obtain court-ordered indemnification or advance for expenses.

Source:Laws 2014, LB749, § 114; Laws 2017, LB35, § 17.

Annotations

Because this section provides that a director may apply for indemnification for attorney fees "to the court conducting the proceeding" and because "proceeding" includes an appeal, this section provides that a director may apply to an appellate court for indemnification related to an appeal that took place in the appellate court. Gerber v. P & L Finance Co., 301 Neb. 463, 919 N.W.2d 116 (2018).

"Proceeding," as used in this section, includes appeals, and therefore, this section applies to indemnification for attorney fees incurred in an appeal. Gerber v. P & L Finance Co., 301 Neb. 463, 919 N.W.2d 116 (2018).

21-2,115. Determination and authorization of indemnification.

(MBCA 8.55) (a) A corporation may not indemnify a director under section 21-2,111 unless authorized for a specific proceeding after a determination has been made that indemnification is permissible because the director has met the relevant standard of conduct set forth in section 21-2,111.

(b) The determination shall be made:

(1) If there are two or more qualified directors, by the board of directors by a majority vote of all the qualified directors, a majority of whom shall for such purpose constitute a quorum, or by a majority of the members of a committee of two or more qualified directors appointed by such a vote;

(2) By special legal counsel:

(i) Selected in the manner prescribed in subdivision (1) of this subsection; or

(ii) If there are fewer than two qualified directors, selected by the board of directors, in which selection directors who are not qualified directors may participate; or

(3) By the shareholders, but shares owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the determination.

(c) Authorization of indemnification shall be made in the same manner as the determination that indemnification is permissible, except that if there are fewer than two qualified directors, or if the determination is made by special legal counsel, authorization of indemnification shall be made by those entitled to select special legal counsel under subdivision (b)(2)(ii) of this section.

Source:Laws 2014, LB749, § 115.

21-2,116. Indemnification of officers.

(MBCA 8.56) (a) A corporation may indemnify and advance expenses under sections 21-2,110 to 21-2,119 to an officer of the corporation who is a party to a proceeding because he or she is an officer of the corporation:

(1) To the same extent as a director; and

(2) If he or she is an officer but not a director, to such further extent as may be provided by the articles of incorporation, the bylaws, a resolution of the board of directors, or contract except for:

(i) Liability in connection with a proceeding by or in the right of the corporation other than for expenses incurred in connection with the proceeding; or

(ii) Liability arising out of conduct that constitutes:

(A) Receipt by the officer of a financial benefit to which he or she is not entitled;

(B) An intentional infliction of harm on the corporation or the shareholders; or

(b) The provisions of subdivision (a)(2) of this section shall apply to an officer who is also a director if the basis on which he or she is made a party to the proceeding is an act or omission solely as an officer.

(c) An officer of a corporation who is not a director is entitled to mandatory indemnification under section 21-2,112 and may apply to a court under section 21-2,114 for indemnification or an advance for expenses, in each case to the same extent to which a director may be entitled to indemnification or advance for expenses under such provisions.

Source:Laws 2014, LB749, § 116.

21-2,117. Insurance.

(MBCA 8.57) A corporation may purchase and maintain insurance on behalf of an individual who is a director or officer of the corporation, or who, while a director or officer of the corporation, serves at the corporation's request as a director, officer, member, partner, trustee, employee, or agent of another domestic or foreign corporation, limited liability company, partnership, joint venture, trust, employee benefit plan, or other entity, against liability asserted against or incurred by the individual in that capacity or arising from his or her status as a director or officer, whether or not the corporation would have power to indemnify or advance expenses to the individual against the same liability under sections 21-2,110 to 21-2,119.

Source:Laws 2014, LB749, § 117; Laws 2016, LB794, § 9.

21-2,118. Variation by corporate action; application of subchapter.

(MBCA 8.58) (a) A corporation may, by a provision in its articles of incorporation or bylaws or in a resolution adopted or a contract approved by its board of directors or shareholders, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification in accordance with section 21-2,111 or advance funds to pay for or reimburse expenses in accordance with section 21-2,113. Any such obligatory provision shall be deemed to satisfy the requirements for authorization referred to in subsection (c) of section 21-2,113 and in subsection (c) of section 21-2,115. Any such provision that obligates the corporation to provide indemnification to the fullest extent permitted by law shall be deemed to obligate the corporation to advance funds to pay for or reimburse expenses in accordance with section 21-2,113 to the fullest extent permitted by law, unless the provision specifically provides otherwise.

(b) A right of indemnification or to advances for expenses created by sections 21-2,110 to 21-2,119 or under subsection (a) of this section and in effect at the time of an act or omission shall not be eliminated or impaired with respect to such act or omission by an amendment of the articles of incorporation or bylaws or a resolution of the directors or shareholders, adopted after the occurrence of such act or omission, unless, in the case of a right created under subsection (a) of this section, the provision creating such right and in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such act or omission has occurred.

(c) Any provision pursuant to subsection (a) of this section shall not obligate the corporation to indemnify or advance expenses to a director of a predecessor of the corporation, pertaining to conduct with respect to the predecessor, unless otherwise specifically provided. Any provision for indemnification or advance for expenses in the articles of incorporation, bylaws, or a resolution of the board of directors or shareholders of a predecessor of the corporation in a merger or in a contract to which the predecessor is a party existing at the time the merger takes effect shall be governed by subdivision (a)(4) of section 21-2,167.

(d) Subject to subsection (b) of this section, a corporation may, by a provision in its articles of incorporation, limit any of the rights to indemnification or advance for expenses created by or pursuant to sections 21-2,110 to 21-2,119.

(e) Sections 21-2,110 to 21-2,119 do not limit a corporation's power to pay or reimburse expenses incurred by a director or an officer in connection with appearing as a witness in a proceeding at a time when he or she is not a party.

(f) Sections 21-2,110 to 21-2,119 do not limit a corporation's power to indemnify, advance expenses to, or provide or maintain insurance on behalf of an employee or agent.

Source:Laws 2014, LB749, § 118.

21-2,119. Exclusivity of subpart.

(MBCA 8.59) A corporation may provide indemnification or advance expenses to a director or an officer only as permitted by sections 21-2,110 to 21-2,119.

Source:Laws 2014, LB749, § 119.

21-2,120. Subpart definitions.

(MBCA 8.60) In sections 21-2,120 to 21-2,123:

(1) Director's conflicting interest transaction means a transaction effected or proposed to be effected by the corporation or by an entity controlled by the corporation:

(i) To which, at the relevant time, the director is a party;

(ii) Respecting which, at the relevant time, the director had knowledge and a material financial interest known to the director; or

(iii) Respecting which, at the relevant time, the director knew that a related person was a party or had a material financial interest.

(2) Control, including the term controlled by, means (i) having the power, directly or indirectly, to elect or remove a majority of the members of the board of directors or other governing body of an entity, whether through the ownership of voting shares or interests, by contract, or otherwise, or (ii) being subject to a majority of the risk of loss from the entity's activities or entitled to receive a majority of the entity's residual returns.

(3) Relevant time means (i) the time at which directors' action respecting the transaction is taken in compliance with section 21-2,122, or (ii) if the transaction is not brought before the board of directors of the corporation, or its committee, for action under section 21-2,122, at the time the corporation, or an entity controlled by the corporation, becomes legally obligated to consummate the transaction.

(4) Material financial interest means a financial interest in a transaction that would reasonably be expected to impair the objectivity of the director's judgment when participating in action on the authorization of the transaction.

(5) Related person means:

(i) The individual's spouse;

(ii) A child, stepchild, grandchild, parent, stepparent, grandparent, sibling, stepsibling, half-sibling, aunt, uncle, niece, or nephew, or spouse of any thereof, of the individual or of the individual's spouse;

(iii) A natural person living in the same home as the individual;

(iv) An entity, other than the corporation or an entity controlled by the corporation, controlled by the individual or any person specified in subdivisions (5)(i) through (iii) of this section;

(v) A domestic or foreign (A) business or nonprofit corporation, other than the corporation or an entity controlled by the corporation, of which the individual is a director, (B) unincorporated entity of which the individual is a general partner or a member of the governing body, or (C) individual, trust, or estate for whom or of which the individual is a trustee, guardian, personal representative, or like fiduciary; or

(vi) A person that is, or an entity that is controlled by, an employer of the individual.

(6) Fair to the corporation means, for purposes of subdivision (b)(3) of section 21-2,121, that the transaction as a whole was beneficial to the corporation, taking into appropriate account whether it was (i) fair in terms of the director's dealings with the corporation and (ii) comparable to what might have been obtainable in an arm's length transaction, given the consideration paid or received by the corporation.

(7) Required disclosure means disclosure of (i) the existence and nature of the director's conflicting interest and (ii) all facts known to the director respecting the subject matter of the transaction that a director free of such conflicting interest would reasonably believe to be material in deciding whether to proceed with the transaction.

Source:Laws 2014, LB749, § 120; Laws 2017, LB35, § 18.

21-2,121. Judicial action.

(MBCA 8.61) (a) A transaction effected or proposed to be effected by the corporation, or by an entity controlled by the corporation, may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation on the ground that the director has an interest respecting the transaction if it is not a director's conflicting interest transaction.

(b) A director's conflicting interest transaction may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation on the ground that the director has an interest respecting the transaction if:

(1) Directors' action respecting the transaction was taken in compliance with section 21-2,122 at any time;

(2) Shareholders' action respecting the transaction was taken in compliance with section 21-2,123 at any time; or

(3) The transaction, judged according to the circumstances at the relevant time, is established to have been fair to the corporation.

Source:Laws 2014, LB749, § 121.

21-2,122. Directors' action.

(MBCA 8.62) (a) Directors' action respecting a director's conflicting interest transaction is effective for purposes of subdivision (b)(1) of section 21-2,121 if the transaction has been authorized by the affirmative vote of a majority, but no fewer than two, of the qualified directors who voted on the transaction after required disclosure by the conflicted director of information not already known by such qualified directors or after modified disclosure in compliance with subsection (b) of this section if:

(1) The qualified directors have deliberated and voted outside the presence of and without the participation by any other director; and

(2) When the action has been taken by a committee, all members of the committee were qualified directors and either (i) the committee was composed of all the qualified directors on the board of directors or (ii) the members of the committee were appointed by the affirmative vote of a majority of the qualified directors on the board.

(b) Notwithstanding subsection (a) of this section, when a transaction is a director's conflicting interest transaction only because a related person described in subdivision (5)(v) or (vi) of section 21-2,120 is a party to or has a material financial interest in the transaction, the conflicted director is not obligated to make required disclosure to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule if the conflicted director discloses to the qualified directors voting on the transaction:

(1) All information required to be disclosed that is not so violative;

(2) The existence and nature of the director's conflicting interest; and

(3) The nature of the conflicted director's duty not to disclose the confidential information.

(c) A majority, but no fewer than two, of all the qualified directors on the board of directors, or on the committee, constitutes a quorum for purposes of action that complies with this section.

(d) Where directors' action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation, the bylaws, or a provision of law, independent action to satisfy those authorization requirements must be taken by the board of directors or a committee in which action directors who are not qualified directors may participate.

Source:Laws 2014, LB749, § 122.

21-2,123. Shareholders' action.

(MBCA 8.63) (a) Shareholders' action respecting a director's conflicting interest transaction is effective for purposes of subdivision (b)(2) of section 21-2,121 if a majority of the votes cast by the holders of all qualified shares are in favor of the transaction after (1) notice to shareholders describing the action to be taken respecting the transaction, (2) provision to the corporation of the information referred to in subsection (b) of this section, and (3) communication to the shareholders entitled to vote on the transaction of the information that is the subject of required disclosure to the extent the information is not known by them. In the case of shareholders' action at a meeting, the shareholders entitled to vote shall be determined as of the record date for notice of the meeting.

(b) A director who has a conflicting interest respecting the transaction shall, before the shareholders' vote, inform the secretary or other officer or agent of the corporation authorized to count votes, in writing, of the number of shares that the director knows are not qualified shares under subsection (c) of this section and the identity of the holders of those shares.

(c) For purposes of this section: (1) Holder means and held by refers to shares held by a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner; and (2) qualified shares means all shares entitled to be voted with respect to the transaction except for shares that the secretary or other officer or agent of the corporation authorized to count votes either knows, or under subsection (b) of this section is notified, are held by (i) a director who has a conflicting interest respecting the transaction or (ii) a related person of the director, excluding a person described in subdivision (5)(vi) of section 21-2,120.

(d) A majority of the votes entitled to be cast by the holders of all qualified shares constitutes a quorum for purposes of compliance with this section. Subject to subsection (e) of this section, shareholders' action that otherwise complies with this section is not affected by the presence of holders, or by the voting, of shares that are not qualified shares.

(e) If a shareholders' vote does not comply with subsection (a) of this section solely because of a director's failure to comply with subsection (b) of this section and if the director establishes that the failure was not intended to influence and did not in fact determine the outcome of the vote, the court may take such action respecting the transaction and the director and may give such effect, if any, to the shareholders' vote as the court considers appropriate in the circumstances.

(f) When shareholders' action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation or the bylaws or a provision of law, independent action to satisfy those authorization requirements must be taken by the shareholders in which action shares that are not qualified shares may participate.

Source:Laws 2014, LB749, § 123; Laws 2017, LB35, § 19.

21-2,124. Business opportunities.

(MBCA 8.70) (a) If a director or officer pursues or takes advantage of a business opportunity, directly, or indirectly through or on behalf of another person, that action may not be the subject of equitable relief or give rise to an award of damages or other sanctions against the director, officer, or other person in a proceeding by or in the right of the corporation on the ground that the opportunity should have first been offered to the corporation if:

(1) Before the director, officer, or other person becomes legally obligated respecting the opportunity, the director or officer brings it to the attention of the corporation and either:

(i) Action by qualified directors disclaiming the corporation's interest in the opportunity is taken in compliance with the procedures set forth in section 21-2,122; or

(ii) Shareholders' action disclaiming the corporation's interest in the opportunity is taken in compliance with the procedures set forth in section 21-2,123; in either case as if the decision being made concerned a director's conflicting interest transaction, except that, rather than making required disclosure as defined in section 21-2,120, the director or officer shall have made prior disclosure to those acting on behalf of the corporation of all material facts concerning the business opportunity known to the director or officer; or

(2) The duty to offer the corporation the business opportunity has been limited or eliminated pursuant to a provision of the articles of incorporation adopted, and where required, made effective by action of qualified directors, in accordance with subdivision (b)(6) of section 21-220.

(b) In any proceeding seeking equitable relief or other remedies based upon an alleged improper pursuit or taking advantage of a business opportunity by a director or officer, directly, or indirectly through or on behalf of another person, the fact that the director or officer did not employ the procedure described in subdivision (a)(1)(i) or (ii) of this section before pursuing or taking advantage of the opportunity shall not create an implication that the opportunity should have been first presented to the corporation or alter the burden of proof otherwise applicable to establish that the director or officer breached a duty to the corporation in the circumstances.

Source:Laws 2014, LB749, § 124; Laws 2017, LB35, § 20.

21-2,125. Excluded transactions.

(MBCA 9.01) Sections 21-2,125 to 21-2,149 may not be used to effect a transaction that converts an insurance company organized on the mutual principle to one organized on a stock-share basis.

Source:Laws 2014, LB749, § 125.

21-2,126. Required approvals.

(MBCA 9.02) (a) If a domestic or foreign business corporation or eligible entity may not be a party to a merger without the approval of the Attorney General, the Department of Banking and Finance, the Department of Insurance, or the Public Service Commission, the corporation or eligible entity shall not be a party to a transaction under sections 21-2,125 to 21-2,149 without the prior approval of that agency.

(b) Property held in trust or for charitable purposes under the laws of this state by a domestic or foreign eligible entity shall not, by any transaction under sections 21-2,125 to 21-2,149, be diverted from the objects for which it was donated, granted, or devised unless and until the eligible entity obtains an order of the court specifying the disposition of the property to the extent required by and pursuant to cy pres or other nondiversion law of this state.

Source:Laws 2014, LB749, § 126.

21-2,127. Domestication.

(MBCA 9.20) (a) A foreign business corporation may become a domestic business corporation only if the domestication is permitted by the organic law of the foreign corporation.

(b) A domestic business corporation may become a foreign business corporation if the domestication is permitted by the laws of the foreign jurisdiction. Regardless of whether the laws of the foreign jurisdiction require the adoption of a plan of domestication, the domestication shall be approved by the adoption by the corporation of a plan of domestication in the manner provided in sections 21-2,127 to 21-2,132.

(1) A statement of the jurisdiction in which the corporation is to be domesticated;

(2) The terms and conditions of the domestication;

(3) The manner and basis of reclassifying the shares of the corporation following its domestication into shares or other securities, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing; and

(4) Any desired amendments to the articles of incorporation of the corporation following its domestication.

(d) The plan of domestication may also include a provision that the plan may be amended prior to filing the document required by the laws of this state or the other jurisdiction to consummate the domestication, except that subsequent to approval of the plan by the shareholders the plan may not be amended to change:

(1) The amount or kind of shares or other securities, obligations, rights to acquire shares or other securities, cash, or other property to be received by the shareholders under the plan;

(2) The articles of incorporation as they will be in effect immediately following the domestication, except for changes permitted by section 21-2,154 or by comparable provisions of the laws of the other jurisdiction; or

(3) Any of the other terms or conditions of the plan if the change would adversely affect any of the shareholders in any material respect.

(e) Terms of a plan of domestication may be made dependent upon facts objectively ascertainable outside the plan in accordance with subsection (k) of section 21-203.

(f) If any debt security, note, or similar evidence of indebtedness for money borrowed, whether secured or unsecured, or a contract of any kind, issued, incurred, or signed by a domestic business corporation before January 1, 2017, contains a provision applying to a merger of the corporation and the document does not refer to a domestication of the corporation, the provision shall be deemed to apply to a domestication of the corporation until such time as the provision is amended subsequent to that date.

Source:Laws 2014, LB749, § 127; Laws 2015, LB157, § 2.

21-2,128. Action on a plan of domestication.

(MBCA 9.21) In the case of a domestication of a domestic business corporation in a foreign jurisdiction:

(1) The plan of domestication must be adopted by the board of directors.

(2) After adopting the plan of domestication, the board of directors must submit the plan to the shareholders for their approval. The board of directors must also transmit to the shareholders a recommendation that the shareholders approve the plan unless (i) the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation or (ii) section 21-2,101 applies. If subdivision (2)(i) or (ii) of this section applies, the board must transmit to the shareholders the basis for so proceeding.

(3) The board of directors may condition its submission of the plan of domestication to the shareholders on any basis.

(4) If the approval of the shareholders is to be given at a meeting, the corporation must notify each shareholder, whether or not entitled to vote, of the meeting of shareholders at which the plan of domestication is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the plan and must contain or be accompanied by a copy or summary of the plan. The notice shall include or be accompanied by a copy of the articles of incorporation as they will be in effect immediately after the domestication.

(5) Unless the articles of incorporation, or the board of directors acting pursuant to subdivision (3) of this section, requires a greater vote or a greater number of votes to be present, approval of the plan of domestication requires the approval of the shareholders at a meeting at which a quorum consisting of at least a majority of the votes entitled to be cast on the plan exists, and if any class or series of shares is entitled to vote as a separate group on the plan, the approval of each such separate voting group at a meeting at which a quorum of the voting group consisting of at least a majority of the votes entitled to be cast on the domestication by that voting group exists.

(6) Subject to subdivision (7) of this section, separate voting by voting groups is required by each class or series of shares that:

(i) Are to be reclassified under the plan of domestication into other securities, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing;

(ii) Are entitled to vote as a separate group on a provision of the plan that constitutes a proposed amendment to articles of incorporation of the corporation following its domestication that requires action by separate voting groups under section 21-2,153; or

(iii) Is entitled under the articles of incorporation to vote as a voting group to approve an amendment of the articles.

(7) The articles of incorporation may expressly limit or eliminate the separate voting rights provided in subdivision (6)(i) of this section.

(8) If any provision of the articles of incorporation, bylaws, or an agreement to which any of the directors or shareholders are parties, adopted or entered into before January 1, 2017, applies to a merger of the corporation and that document does not refer to a domestication of the corporation, the provision shall be deemed to apply to a domestication of the corporation until such time as the provision is amended subsequent to that date.

Source:Laws 2014, LB749, § 128; Laws 2015, LB157, § 3.

21-2,129. Articles of domestication.

(MBCA 9.22) (a) After the domestication of a foreign business corporation has been authorized as required by the laws of the foreign jurisdiction, articles of domestication shall be signed by any officer or other duly authorized representative. The articles shall set forth:

(1) The name of the corporation immediately before the filing of the articles of domestication and, if that name is unavailable for use in this state or the corporation desires to change its name in connection with the domestication, a name that satisfies the requirements of section 21-230;

(2) The jurisdiction of incorporation of the corporation immediately before the filing of the articles of domestication and the date the corporation was incorporated in that jurisdiction; and

(3) A statement that the domestication of the corporation in this state was duly authorized as required by the laws of the jurisdiction in which the corporation was incorporated immediately before its domestication in this state.

(b) The articles of domestication shall either contain all of the provisions that subsection (a) of section 21-220 requires to be set forth in articles of incorporation and any other desired provisions that subsection (b) of section 21-220 permits to be included in articles of incorporation or shall have attached articles of incorporation. In either case, provisions that would not be required to be included in restated articles of incorporation may be omitted.

(c) The articles of domestication shall be delivered to the Secretary of State for filing, and shall take effect at the effective time provided in section 21-206. Within ten business days after the articles of domestication take effect, a foreign business corporation becoming a domestic business corporation shall send written notice of domestication to the last-known address of any holder of a security interest in collateral of such foreign business corporation.

(d) If the foreign corporation is authorized to transact business in this state under sections 21-2,203 to 21-2,220, its certificate of authority shall be canceled automatically on the effective date of its domestication.

Source:Laws 2014, LB749, § 129; Laws 2017, LB99, § 1.

21-2,130. Surrender of charter upon domestication.

(MBCA 9.23) (a) Whenever a domestic business corporation has adopted and approved, in the manner required by sections 21-2,127 to 21-2,132, a plan of domestication providing for the corporation to be domesticated in a foreign jurisdiction, articles of charter surrender shall be signed on behalf of the corporation by any officer or other duly authorized representative. The articles of charter surrender shall set forth:

(1) The name of the corporation;

(2) A statement that the articles of charter surrender are being filed in connection with the domestication of the corporation in a foreign jurisdiction;

(3) A statement that the domestication was duly approved by the shareholders and, if voting by any separate voting group was required, by each such separate voting group, in the manner required by the Nebraska Model Business Corporation Act and the articles of incorporation; and

(4) The corporation's new jurisdiction of incorporation.

(b) The articles of charter surrender shall be delivered by the corporation to the Secretary of State for filing. The articles of charter surrender shall take effect at the effective time provided in section 21-206. Within ten business days after the articles of charter surrender take effect, a domestic business corporation becoming domesticated in a foreign jurisdiction shall send written notice of charter surrender to the last-known address of any holder of a security interest in collateral of such domestic business corporation.

Source:Laws 2014, LB749, § 130; Laws 2017, LB99, § 2.

21-2,131. Effect of domestication.

(MBCA 9.24) (a) When a domestication becomes effective:

(1) The title to all real and personal property, both tangible and intangible, of the corporation remains in the corporation without reversion or impairment;

(2) The liabilities of the corporation remain the liabilities of the corporation;

(3) An action or proceeding pending against the corporation continues against the corporation as if the domestication had not occurred;

(4) The articles of domestication, or the articles of incorporation attached to the articles of domestication, constitute the articles of incorporation of a foreign corporation domesticating in this state;

(5) The shares of the corporation are reclassified into shares, other securities, obligations, rights to acquire shares or other securities, or into cash or other property in accordance with the terms of the domestication, and the shareholders are entitled only to the rights provided by those terms and to any appraisal rights they may have under the organic law of the domesticating corporation; and

(6) The corporation is deemed to:

(i) Be incorporated under and subject to the organic law of the domesticated corporation for all purposes;

(ii) Be the same corporation without interruption as the domesticating corporation; and

(iii) Have been incorporated on the date the domesticating corporation was originally incorporated.

(b) When a domestication of a domestic business corporation in a foreign jurisdiction becomes effective, the foreign business corporation is deemed to agree that it will promptly pay the amount, if any, to which such shareholders are entitled under sections 21-2,171 to 21-2,183.

(c) The owner liability of a shareholder in a foreign corporation that is domesticated in this state shall be as follows:

(1) The domestication does not discharge any owner liability under the laws of the foreign jurisdiction to the extent any such owner liability arose before the effective time of the articles of domestication;

(2) The shareholder shall not have owner liability under the laws of the foreign jurisdiction for any debt, obligation, or liability of the corporation that arises after the effective time of the articles of domestication;

(3) The provisions of the laws of the foreign jurisdiction shall continue to apply to the collection or discharge of any owner liability preserved by subdivision (1) of this subsection, as if the domestication had not occurred; and

(4) The shareholder shall have whatever rights of contribution from other shareholders are provided by the laws of the foreign jurisdiction with respect to any owner liability preserved by subdivision (1) of this subsection, if the domestication had not occurred.

(d) A shareholder who becomes subject to owner liability for some or all of the debts, obligations, or liabilities of the corporation as a result of its domestication in this state shall have owner liability only for those debts, obligations, or liabilities of the corporation that arise after the effective time of the articles of domestication.

Source:Laws 2014, LB749, § 131.

21-2,132. Abandonment of a domestication.

(MBCA 9.25) (a) Unless otherwise provided in a plan of domestication of a domestic business corporation, after the plan has been adopted and approved as required by sections 21-2,127 to 21-2,132, and at any time before the domestication has become effective, it may be abandoned by the board of directors without action by the shareholders.

(b) If a domestication is abandoned under subsection (a) of this section after articles of charter surrender have been filed with the Secretary of State but before the domestication has become effective, a statement that the domestication has been abandoned in accordance with this section, signed by an officer or other duly authorized representative, shall be delivered to the Secretary of State for filing prior to the effective date of the domestication. The statement shall take effect upon filing and the domestication shall be deemed abandoned and shall not become effective.

(c) If the domestication of a foreign business corporation in this state is abandoned in accordance with the laws of the foreign jurisdiction after articles of domestication have been filed with the Secretary of State, a statement that the domestication has been abandoned, signed by an officer or other duly authorized representative, shall be delivered to the Secretary of State for filing. The statement shall take effect upon filing and the domestication shall be deemed abandoned and shall not become effective.

Source:Laws 2014, LB749, § 132.

21-2,133. Nonprofit conversion.

(MBCA 9.30) (a) A domestic business corporation may become a domestic nonprofit corporation pursuant to a plan of nonprofit conversion.

(b) A domestic business corporation may become a foreign nonprofit corporation if the nonprofit conversion is permitted by the laws of the foreign jurisdiction. Regardless of whether the laws of the foreign jurisdiction require the adoption of a plan of nonprofit conversion, the foreign nonprofit conversion shall be approved by the adoption by the domestic business corporation of a plan of nonprofit conversion in the manner provided in sections 21-2,133 to 21-2,138.

(1) The terms and conditions of the conversion;

(2) The manner and basis of reclassifying the shares of the corporation following its conversion into memberships, if any, or securities, obligations, rights to acquire memberships or securities, cash, other property, or any combination of the foregoing;

(3) Any desired amendments to the articles of incorporation of the corporation following its conversion; and

(4) If the domestic business corporation is to be converted to a foreign nonprofit corporation, a statement of the jurisdiction in which the corporation will be incorporated after the conversion.

(d) The plan of nonprofit conversion may also include a provision that the plan may be amended prior to filing articles of nonprofit conversion, except that subsequent to approval of the plan by the shareholders the plan may not be amended to change:

(1) The amount or kind of memberships or securities, obligations, rights to acquire memberships or securities, cash, or other property to be received by the shareholders under the plan;

(2) The articles of incorporation as they will be in effect immediately following the conversion, except for changes permitted by section 21-2,154; or

(3) Any of the other terms or conditions of the plan if the change would adversely affect any of the shareholders in any material respect.

(e) Terms of a plan of nonprofit conversion may be made dependent upon facts objectively ascertainable outside the plan in accordance with subsection (k) of section 21-203.

(f) If any debt security, note, or similar evidence of indebtedness for money borrowed, whether secured or unsecured, or a contract of any kind, issued, incurred, or signed by a domestic business corporation before January 1, 2017, contains a provision applying to a merger of the corporation and the document does not refer to a nonprofit conversion of the corporation, the provision shall be deemed to apply to a nonprofit conversion of the corporation until such time as the provision is amended subsequent to that date.

Source:Laws 2014, LB749, § 133; Laws 2015, LB157, § 4.

21-2,134. Action on a plan of nonprofit conversion.

(MBCA 9.31) In the case of a conversion of a domestic business corporation to a domestic or foreign nonprofit corporation:

(1) The plan of nonprofit conversion must be adopted by the board of directors.

(2) After adopting the plan of nonprofit conversion, the board of directors must submit the plan to the shareholders for their approval. The board of directors must also transmit to the shareholders a recommendation that the shareholders approve the plan, unless (i) the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation or (ii) section 21-2,101 applies. If subdivision (2)(i) or (ii) of this section applies, the board must transmit to the shareholders the basis for so proceeding.

(3) The board of directors may condition its submission of the plan of nonprofit conversion to the shareholders on any basis.

(4) If the approval of the shareholders is to be given at a meeting, the corporation must notify each shareholder of the meeting of shareholders at which the plan of nonprofit conversion is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the plan and must contain or be accompanied by a copy or summary of the plan. The notice shall include or be accompanied by a copy of the articles of incorporation as they will be in effect immediately after the nonprofit conversion.

(5) Unless the articles of incorporation, or the board of directors acting pursuant to subdivision (3) of this section, requires a greater vote or a greater number of votes to be present, approval of the plan of nonprofit conversion requires the approval of each class or series of shares of the corporation voting as a separate voting group at a meeting at which a quorum of the voting group consisting of at least a majority of the votes entitled to be cast on the nonprofit conversion by that voting group exists.

(6) If any provision of the articles of incorporation, bylaws, or an agreement to which any of the directors or shareholders are parties, adopted or entered into before January 1, 2017, applies to a merger, other than a provision that eliminates or limits voting or appraisal rights, and the document does not refer to a nonprofit conversion of the corporation, the provision shall be deemed to apply to a nonprofit conversion of the corporation until such time as the provision is amended subsequent to that date.

Source:Laws 2014, LB749, § 134; Laws 2015, LB157, § 5.

21-2,135. Articles of nonprofit conversion.

(MBCA 9.32) (a) After a plan of nonprofit conversion providing for the conversion of a domestic business corporation to a domestic nonprofit corporation has been adopted and approved as required by the Nebraska Model Business Corporation Act, articles of nonprofit conversion shall be signed on behalf of the corporation by any officer or other duly authorized representative. The articles shall set forth:

(1) The name of the corporation immediately before the filing of the articles of nonprofit conversion and if that name does not satisfy the requirements of the Nebraska Nonprofit Corporation Act, or the corporation desires to change its name in connection with the conversion, a name that satisfies the requirements of the Nebraska Nonprofit Corporation Act; and

(2) A statement that the plan of nonprofit conversion was duly approved by the shareholders in the manner required by the Nebraska Model Business Corporation Act and the articles of incorporation.

(b) The articles of nonprofit conversion shall either contain all of the provisions that the Nebraska Nonprofit Corporation Act requires to be set forth in articles of incorporation of a domestic nonprofit corporation and any other desired provisions permitted by the Nebraska Nonprofit Corporation Act or shall have attached articles of incorporation that satisfy the requirements of the Nebraska Nonprofit Corporation Act. In either case, provisions that would not be required to be included in restated articles of incorporation of a domestic nonprofit corporation may be omitted.

(c) The articles of nonprofit conversion shall be delivered to the Secretary of State for filing and shall take effect at the effective time provided in section 21-206. Within ten business days after the articles of nonprofit conversion take effect, a domestic business corporation converting into a domestic nonprofit corporation shall send written notice of conversion to the last-known address of any holder of a security interest in collateral of such domestic business corporation.

Source:Laws 2014, LB749, § 135; Laws 2017, LB99, § 3.

Cross References

Nebraska Nonprofit Corporation Act, see section 21-1901.

21-2,136. Surrender of charter upon foreign nonprofit conversion.

(MBCA 9.33) (a) Whenever a domestic business corporation has adopted and approved, in the manner required by sections 21-2,133 to 21-2,138, a plan of nonprofit conversion providing for the corporation to be converted to a foreign nonprofit corporation, articles of charter surrender shall be signed on behalf of the corporation by any officer or other duly authorized representative. The articles of charter surrender shall set forth:

(1) The name of the corporation;

(2) A statement that the articles of charter surrender are being filed in connection with the conversion of the corporation to a foreign nonprofit corporation;

(3) A statement that the foreign nonprofit conversion was duly approved by the shareholders in the manner required by the Nebraska Model Business Corporation Act and the articles of incorporation; and

(4) The corporation's new jurisdiction of incorporation.

(b) The articles of charter surrender shall be delivered by the corporation to the Secretary of State for filing. The articles of charter surrender shall take effect on the effective time provided in section 21-206.

Source:Laws 2014, LB749, § 136.

21-2,137. Effect of nonprofit conversion.

(MBCA 9.34) (a) When a conversion of a domestic business corporation to a domestic nonprofit corporation becomes effective:

(1) The title to all real and personal property, both tangible and intangible, of the corporation remains in the corporation without reversion or impairment;

(2) The liabilities of the corporation remain the liabilities of the corporation;

(3) An action or proceeding pending against the corporation continues against the corporation as if the conversion had not occurred;

(4) The articles of incorporation of the domestic or foreign nonprofit corporation become effective;

(5) The shares of the corporation are reclassified into memberships, securities, obligations, rights to acquire memberships or securities, or into cash or other property in accordance with the plan of conversion, and the shareholders are entitled only to the rights provided in the plan of nonprofit conversion or to any rights they may have under sections 21-2,171 to 21-2,183; and

(6) The corporation is deemed to:

(i) Be a domestic nonprofit corporation for all purposes;

(ii) Be the same corporation without interruption as the corporation that existed prior to the conversion; and

(iii) Have been incorporated on the date that it was originally incorporated as a domestic business corporation.

(b) When a conversion of a domestic business corporation to a foreign nonprofit corporation becomes effective, the foreign nonprofit corporation is deemed to agree that it will promptly pay the amount, if any, to which such shareholders are entitled under sections 21-2,171 to 21-2,183.

(c) The owner liability of a shareholder in a domestic business corporation that converts to a domestic nonprofit corporation shall be as follows:

(1) The conversion does not discharge any owner liability of the shareholder as a shareholder of the business corporation to the extent any such owner liability arose before the effective time of the articles of nonprofit conversion;

(2) The shareholder shall not have owner liability for any debt, obligation, or liability of the nonprofit corporation that arises after the effective time of the articles of nonprofit conversion;

(3) The laws of this state shall continue to apply to the collection or discharge of any owner liability preserved by subdivision (1) of this subsection as if the conversion had not occurred and the nonprofit corporation was still a business corporation; and

(4) The shareholder shall have whatever rights of contribution from other shareholders that are provided by the laws of this state with respect to any owner liability preserved by subdivision (1) of this subsection as if the conversion had not occurred and the nonprofit corporation were still a business corporation.

(d) A shareholder who becomes subject to owner liability for some or all of the debts, obligations, or liabilities of the nonprofit corporation shall have owner liability only for those debts, obligations, or liabilities of the nonprofit corporation that arise after the effective time of the articles of nonprofit conversion.

Source:Laws 2014, LB749, § 137.

21-2,138. Abandonment of a nonprofit conversion.

(MBCA 9.35) (a) Unless otherwise provided in a plan of nonprofit conversion of a domestic business corporation, after the plan has been adopted and approved as required by sections 21-2,133 to 21-2,138, and at any time before the nonprofit conversion has become effective, it may be abandoned by the board of directors without action by the shareholders.

(b) If a nonprofit conversion is abandoned under subsection (a) of this section after articles of nonprofit conversion or articles of charter surrender have been filed with the Secretary of State but before the nonprofit conversion has become effective, a statement that the nonprofit conversion has been abandoned in accordance with this section, signed by an officer or other duly authorized representative, shall be delivered to the Secretary of State for filing prior to the effective date of the nonprofit conversion. The statement shall take effect upon filing and the nonprofit conversion shall be deemed abandoned and shall not become effective.

Source:Laws 2014, LB749, § 138.

21-2,139. Foreign nonprofit domestication and conversion.

(MBCA 9.40) A foreign nonprofit corporation may become a domestic business corporation if the domestication and conversion is permitted by the organic law of the foreign nonprofit corporation.

Source:Laws 2014, LB749, § 139.

21-2,140. Articles of domestication and conversion.

(MBCA 9.41) (a) After the conversion of a foreign nonprofit corporation to a domestic business corporation has been authorized as required by the laws of the foreign jurisdiction, articles of domestication and conversion shall be signed by any officer or other duly authorized representative. The articles shall set forth:

(1) The name of the corporation immediately before the filing of the articles of domestication and conversion and, if that name is unavailable for use in this state or the corporation desires to change its name in connection with the domestication and conversion, a name that satisfies the requirements of section 21-230;

(2) The jurisdiction of incorporation of the corporation immediately before the filing of the articles of domestication and conversion and the date the corporation was incorporated in that jurisdiction; and

(3) A statement that the domestication and conversion of the corporation in this state was duly authorized as required by the laws of the jurisdiction in which the corporation was incorporated immediately before its domestication and conversion in this state.

(b) The articles of domestication and conversion shall either contain all of the provisions that subsection (a) of section 21-220 requires to be set forth in articles of incorporation and any other desired provisions that subsection (b) of section 21-220 permits to be included in articles of incorporation or shall have attached articles of incorporation. In either case, provisions that would not be required to be included in restated articles of incorporation may be omitted.

(c) The articles of domestication and conversion shall be delivered to the Secretary of State for filing and shall take effect at the effective time provided in section 21-206. Within ten business days after the articles of domestication and conversion take effect, a foreign nonprofit corporation converting into a domestic business corporation shall send written notice of domestication and conversion to the last-known address of any holder of a security interest in collateral of such foreign nonprofit corporation.

(d) If the foreign nonprofit corporation is authorized to transact business in this state under the foreign qualification provision of the Nebraska Nonprofit Corporation Act, its certificate of authority shall be canceled automatically on the effective date of its domestication and conversion.

Source:Laws 2014, LB749, § 140; Laws 2017, LB99, § 4.

Cross References

Nebraska Nonprofit Corporation Act, see section 21-1901.

21-2,141. Effect of foreign nonprofit domestication and conversion.

(MBCA 9.42) (a) When a domestication and conversion of a foreign nonprofit corporation to a domestic business corporation becomes effective:

(1) The title to all real and personal property, both tangible and intangible, of the corporation remains in the corporation without reversion or impairment;

(2) The liabilities of the corporation remain the liabilities of the corporation;

(3) An action or proceeding pending against the corporation continues against the corporation as if the domestication and conversion had not occurred;

(4) The articles of domestication and conversion, or the articles of incorporation attached to the articles of domestication and conversion, constitute the articles of incorporation of the corporation;

(5) Shares, other securities, obligations, rights to acquire shares or other securities of the corporation, or cash or other property shall be issued or paid as provided pursuant to the laws of the foreign jurisdiction so long as at least one share is outstanding immediately after the effective time; and

(6) The corporation is deemed to:

(i) Be a domestic corporation for all purposes;

(ii) Be the same corporation without interruption as the foreign nonprofit corporation; and

(iii) Have been incorporated on the date the foreign nonprofit corporation was originally incorporated.

(b) The owner liability of a member of a foreign nonprofit corporation that domesticates and converts to a domestic business corporation shall be as follows:

(1) The domestication and conversion does not discharge any owner liability under the laws of the foreign jurisdiction to the extent any such owner liability arose before the effective time of the articles of domestication and conversion;

(2) The member shall not have owner liability under the laws of the foreign jurisdiction for any debt, obligation, or liability of the corporation that arises after the effective time of the articles of domestication and conversion;

(4) The member shall have whatever rights of contribution from other members are provided by the laws of the foreign jurisdiction with respect to any owner liability preserved by subdivision (1) of this subsection as if the domestication and conversion had not occurred.

(c) A member of a foreign nonprofit corporation who becomes subject to owner liability for some or all of the debts, obligations, or liabilities of the corporation as a result of its domestication and conversion in this state shall have owner liability only for those debts, obligations, or liabilities of the corporation that arise after the effective time of the articles of domestication and conversion.

Source:Laws 2014, LB749, § 141.

21-2,142. Abandonment of a foreign nonprofit domestication and conversion.

(MBCA 9.43) If the domestication and conversion of a foreign nonprofit corporation to a domestic business corporation is abandoned in accordance with the laws of the foreign jurisdiction after articles of domestication and conversion have been filed with the Secretary of State, a statement that the domestication and conversion has been abandoned, signed by an officer or other duly authorized representative, shall be delivered to the Secretary of State for filing. The statement shall take effect upon filing and the domestication and conversion shall be deemed abandoned and shall not become effective.

Source:Laws 2014, LB749, § 142.

21-2,143. Entity conversion authorized; definitions.

(MBCA 9.50) (a) A domestic business corporation may become a domestic unincorporated entity pursuant to a plan of entity conversion.

(b) A domestic business corporation may become a foreign unincorporated entity if the entity conversion is permitted by the laws of the foreign jurisdiction.

(c) A domestic unincorporated entity may become a domestic business corporation. If the organic law of a domestic unincorporated entity does not provide procedures for the approval of an entity conversion, the conversion shall be adopted and approved, and the entity conversion effectuated, in the same manner as a merger of the unincorporated entity. If the organic law of a domestic unincorporated entity does not provide procedures for the approval of either an entity conversion or a merger, a plan of entity conversion shall be adopted and approved, the entity conversion effectuated, and appraisal rights exercised in accordance with the procedures in sections 21-2,143 to 21-2,149 and sections 21-2,171 to 21-2,183. Without limiting the provisions of this subsection, a domestic unincorporated entity whose organic law does not provide procedures for the approval of an entity conversion shall be subject to subsection (e) of this section and subdivision (7) of section 21-2,145. For purposes of applying sections 21-2,143 to 21-2,149 and 21-2,171 to 21-2,183:

(1) The unincorporated entity, its interest holders, interests, and organic documents taken together, shall be deemed to be a domestic business corporation, shareholders, shares, and articles of incorporation, respectively and vice versa, as the context may require; and

(2) If the business and affairs of the unincorporated entity are managed by a group of persons that is not identical to the interest holders, that group shall be deemed to be the board of directors.

(d) A foreign unincorporated entity may become a domestic business corporation if the organic law of the foreign unincorporated entity authorizes it to become a corporation in another jurisdiction.

(e) If any debt security, note, or similar evidence of indebtedness for money borrowed, whether secured or unsecured, or a contract of any kind, issued, incurred, or signed by a domestic business corporation before January 1, 2017, applies to a merger of the corporation and the document does not refer to an entity conversion of the corporation, the provision shall be deemed to apply to an entity conversion of the corporation until such time as the provision is amended subsequent to that date.

(f) As used in sections 21-2,143 to 21-2,149:

(1) Converting entity means the domestic business corporation or domestic unincorporated entity that adopts a plan of entity conversion or the foreign unincorporated entity converting to a domestic business corporation; and

(2) Surviving entity means the corporation or unincorporated entity that is in existence immediately after consummation of an entity conversion pursuant to sections 21-2,143 to 21-2,149.

Source:Laws 2014, LB749, § 143; Laws 2015, LB157, § 6.

21-2,144. Plan of entity conversion.

(MBCA 9.51) (a) A plan of entity conversion must include:

(1) A statement of the type of other entity the surviving entity will be and, if it will be a foreign other entity, its jurisdiction of organization;

(2) The terms and conditions of the conversion;

(3) The manner and basis of converting the shares of the domestic business corporation following its conversion into interests or other securities, obligations, rights to acquire interests or other securities, cash, other property, or any combination of the foregoing; and

(4) The full text, as they will be in effect immediately after consummation of the conversion, of the organic documents of the surviving entity.

(b) The plan of entity conversion may also include a provision that the plan may be amended prior to filing articles of entity conversion, except that subsequent to approval of the plan by the shareholders the plan may not be amended to change:

(1) The amount or kind of shares or other securities, interests, obligations, rights to acquire shares, other securities, or interests, cash, or other property to be received under the plan by the shareholders;

(2) The organic documents that will be in effect immediately following the conversion, except for changes permitted by a provision of the organic law of the surviving entity comparable to section 21-2,154; or

(3) Any of the other terms or conditions of the plan if the change would adversely affect any of the shareholders in any material respect.

(c) Terms of a plan of entity conversion may be made dependent upon facts objectively ascertainable outside the plan in accordance with subsection (k) of section 21-203.

Source:Laws 2014, LB749, § 144.

21-2,145. Action on a plan of entity conversion.

(MBCA 9.52) In the case of an entity conversion of a domestic business corporation to a domestic or foreign unincorporated entity:

(1) The plan of entity conversion must be adopted by the board of directors.

(2) After adopting the plan of entity conversion, the board of directors must submit the plan to the shareholders for their approval. The board of directors must also transmit to the shareholders a recommendation that the shareholders approve the plan unless (i) the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation or (ii) section 21-2,101 applies. If subdivision (2)(i) or (ii) of this section applies, the board must transmit to the shareholders the basis for so proceeding.

(3) The board of directors may condition its submission of the plan of entity conversion to the shareholders on any basis.

(4) If the approval of the shareholders is to be given at a meeting, the corporation must notify each shareholder, whether or not entitled to vote, of the meeting of shareholders at which the plan of entity conversion is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the plan and must contain or be accompanied by a copy or summary of the plan. The notice shall include or be accompanied by a copy of the organic documents as they will be in effect immediately after the entity conversion.

(5) Unless the articles of incorporation, or the board of directors acting pursuant to subdivision (3) of this section, requires a greater vote or a greater number of votes to be present, approval of the plan of entity conversion requires the approval of each class or series of shares of the corporation voting as a separate voting group at a meeting at which a quorum of the voting group consisting of at least a majority of the votes entitled to be cast on the conversion by that voting group exists.

(6) If any provision of the articles of incorporation, bylaws, or an agreement to which any of the directors or shareholders are parties, adopted or entered into before January 1, 2017, applies to a merger of the corporation, other than a provision that limits or eliminates voting or appraisal rights, and the document does not refer to an entity conversion of the corporation, the provision shall be deemed to apply to an entity conversion of the corporation until such time as the provision is subsequently amended.

(7) If as a result of the conversion one or more shareholders of the corporation would become subject to owner liability for the debts, obligations, or liabilities of any other person or entity, approval of the plan of conversion shall require the signing, by each such shareholder, of a separate written consent to become subject to such owner liability.

Source:Laws 2014, LB749, § 145; Laws 2015, LB157, § 7.

21-2,146. Articles of entity conversion.

(MBCA 9.53) (a) After the conversion of a domestic business corporation to a domestic unincorporated entity has been adopted and approved as required by the Nebraska Model Business Corporation Act, articles of entity conversion shall be signed on behalf of the corporation by any officer or other duly authorized representative. The articles shall:

(1) Set forth the name of the corporation immediately before the filing of the articles of entity conversion and the name to which the name of the corporation is to be changed, which shall be a name that satisfies the organic law of the surviving entity;

(2) State the type of unincorporated entity that the surviving entity will be;

(3) Set forth a statement that the plan of entity conversion was duly approved by the shareholders in the manner required by the act and the articles of incorporation; and

(4) If the surviving entity is a filing entity, either contain all of the provisions required to be set forth in its public organic document and any other desired provisions that are permitted or have attached a public organic document; except that, in either case, provisions that would not be required to be included in a restated public organic document may be omitted.

(b) After the conversion of a domestic unincorporated entity to a domestic business corporation has been adopted and approved as required by the organic law of the unincorporated entity, articles of entity conversion shall be signed on behalf of the unincorporated entity by any officer or other duly authorized representative. The articles shall:

(1) Set forth the name of the unincorporated entity immediately before the filing of the articles of entity conversion and the name to which the name of the unincorporated entity is to be changed which shall be a name that satisfies the requirements of section 21-230;

(2) Set forth a statement that the plan of entity conversion was duly approved in accordance with the organic law of the unincorporated entity; and

(3) Either contain all of the provisions that subsection (a) of section 21-220 requires to be set forth in articles of incorporation and any other desired provisions that subsection (b) of section 21-220 permits to be included in articles of incorporation or have attached articles of incorporation; except that, in either case, provisions that would not be required to be included in restated articles of incorporation of a domestic business corporation may be omitted.

(c) After the conversion of a foreign unincorporated entity to a domestic business corporation has been authorized as required by the laws of the foreign jurisdiction, articles of entity conversion shall be signed on behalf of the foreign unincorporated entity by any officer or other duly authorized representative. The articles shall:

(2) Set forth the jurisdiction under the laws of which the unincorporated entity was organized immediately before the filing of the articles of entity conversion and the date on which the unincorporated entity was organized in that jurisdiction;

(3) Set forth a statement that the conversion of the unincorporated entity was duly approved in the manner required by its organic law; and

(4) Either contain all of the provisions that subsection (a) of section 21-220 requires to be set forth in articles of incorporation and any other desired provisions that subsection (b) of section 21-220 permits to be included in articles of incorporation or have attached articles of incorporation; except that, in either case, provisions that would not be required to be included in restated articles of incorporation of a domestic business corporation may be omitted.

(d) The articles of entity conversion shall be delivered to the Secretary of State for filing and shall take effect at the effective time provided in section 21-206. Within ten business days after the articles of entity conversion take effect, the converting entity shall send written notice of conversion to the last-known address of any holder of a security interest in collateral of the converting entity. Articles of entity conversion under subsection (a) or (b) of this section may be combined with any required conversion filing under the organic law of the domestic unincorporated entity if the combined filing satisfies the requirements of both this section and the other organic law.

(e) If the converting entity is a foreign unincorporated entity that is authorized to transact business in this state under a provision of law similar to sections 21-2,203 to 21-2,220, its certificate of authority or other type of foreign qualification shall be canceled automatically on the effective date of its conversion.

Source:Laws 2014, LB749, § 146; Laws 2017, LB99, § 5.

21-2,147. Surrender of charter upon conversion.

(MBCA 9.54) (a) Whenever a domestic business corporation has adopted and approved, in the manner required by sections 21-2,143 to 21-2,149, a plan of entity conversion providing for the corporation to be converted to a foreign unincorporated entity, articles of charter surrender shall be signed on behalf of the corporation by any officer or other duly authorized representative. The articles of charter surrender shall set forth:

(1) The name of the corporation;

(2) A statement that the articles of charter surrender are being filed in connection with the conversion of the corporation to a foreign unincorporated entity;

(3) A statement that the conversion was duly approved by the shareholders in the manner required by the Nebraska Model Business Corporation Act and the articles of incorporation;

(4) The jurisdiction under the laws of which the surviving entity will be organized; and

(5) If the surviving entity will be a nonfiling entity, the address of its executive office immediately after the conversion.

Source:Laws 2014, LB749, § 147.

21-2,148. Effect of entity conversion.

(MBCA 9.55) (a) When a conversion under sections 21-2,143 to 21-2,149 becomes effective:

(1) The title to all real and personal property, both tangible and intangible, of the converting entity remains in the surviving entity without reversion or impairment;

(2) The liabilities of the converting entity remain the liabilities of the surviving entity;

(3) An action or proceeding pending against the converting entity continues against the surviving entity as if the conversion had not occurred;

(4) In the case of a surviving entity that is a filing entity, its articles of incorporation or public organic document and its private organic document become effective;

(5) In the case of a surviving entity that is a nonfiling entity, its private organic document becomes effective;

(6) The shares or interests of the converting entity are reclassified into shares, interests, other securities, obligations, rights to acquire shares, interests, or other securities, or into cash or other property in accordance with the plan of conversion, and the shareholders or interest holders of the converting entity are entitled only to the rights provided to them under the terms of the conversion and to any appraisal rights they may have under the organic law of the converting entity; and

(7) The surviving entity is deemed to:

(i) Be incorporated or organized under and subject to the organic law of the converting entity for all purposes;

(ii) Be the same corporation or unincorporated entity without interruption as the converting entity; and

(iii) Have been incorporated or otherwise organized on the date that the converting entity was originally incorporated or organized.

(b) When a conversion of a domestic business corporation to a foreign other entity becomes effective, the surviving entity is deemed to agree that it will promptly pay the amount, if any, to which such shareholders are entitled under sections 21-2,171 to 21-2,183.

(c) A shareholder who becomes subject to owner liability for some or all of the debts, obligations, or liabilities of the surviving entity shall be personally liable only for those debts, obligations, or liabilities of the surviving entity that arise after the effective time of the articles of entity conversion.

(d) The owner liability of an interest holder in an unincorporated entity that converts to a domestic business corporation shall be as follows:

(1) The conversion does not discharge any owner liability under the organic law of the unincorporated entity to the extent any such owner liability arose before the effective time of the articles of entity conversion;

(2) The interest holder shall not have owner liability under the organic law of the unincorporated entity for any debt, obligation, or liability of the corporation that arises after the effective time of the articles of entity conversion;

(3) The provisions of the organic law of the unincorporated entity shall continue to apply to the collection or discharge of any owner liability preserved by subdivision (1) of this subsection as if the conversion had not occurred; and

(4) The interest holder shall have whatever rights of contribution from other interest holders that are provided by the organic law of the unincorporated entity with respect to any owner liability preserved by subdivision (1) of this subsection as if the conversion had not occurred.

Source:Laws 2014, LB749, § 148.

21-2,149. Abandonment of an entity conversion.

(MBCA 9.56) (a) Unless otherwise provided in a plan of entity conversion of a domestic business corporation, after the plan has been adopted and approved as required by sections 21-2,143 to 21-2,149 and at any time before the entity conversion has become effective, it may be abandoned by the board of directors without action by the shareholders.

(b) If an entity conversion is abandoned after articles of entity conversion or articles of charter surrender have been filed with the Secretary of State but before the entity conversion has become effective, a statement that the entity conversion has been abandoned in accordance with this section, signed by an officer or other duly authorized representative, shall be delivered to the Secretary of State for filing prior to the effective date of the entity conversion. Upon filing, the statement shall take effect and the entity conversion shall be deemed abandoned and shall not become effective.

Source:Laws 2014, LB749, § 149.

21-2,150. Authority to amend.

(MBCA 10.01) (a) A corporation may amend its articles of incorporation at any time to add or change a provision that is required or permitted in the articles of incorporation as of the effective date of the amendment or to delete a provision that is not required to be contained in the articles of incorporation.

(b) A shareholder of the corporation does not have a vested property right resulting from any provision in the articles of incorporation, including provisions relating to management, control, capital structure, dividend entitlement, or purpose or duration of the corporation.

Source:Laws 2014, LB749, § 150.

21-2,151. Amendment before issuance of shares.

(MBCA 10.02) If a corporation has not yet issued shares, its board of directors or its incorporators if it has no board of directors may adopt one or more amendments to the corporation's articles of incorporation.

Source:Laws 2014, LB749, § 151.

21-2,152. Amendment by board of directors and shareholders.

(MBCA 10.03) If a corporation has issued shares, an amendment to the articles of incorporation shall be adopted in the following manner:

(1) The proposed amendment must be adopted by the board of directors.

(2) Except as provided in sections 21-2,154, 21-2,156, and 21-2,157, after adopting the proposed amendment the board of directors must submit the amendment to the shareholders for their approval. The board of directors must also transmit to the shareholders a recommendation that the shareholders approve the amendment unless (i) the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation or (ii) section 21-2,101 applies. If subdivision (2)(i) or (ii) of this section applies, the board must transmit to the shareholders the basis for so proceeding.

(3) The board of directors may condition its submission of the amendment to the shareholders on any basis.

(4) If the amendment is required to be approved by the shareholders and the approval is to be given at a meeting, the corporation must notify each shareholder, whether or not entitled to vote, of the meeting of shareholders at which the amendment is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the amendment and must contain or be accompanied by a copy of the amendment.

(5) Unless the articles of incorporation, or the board of directors acting pursuant to subdivision (3) of this section, requires a greater vote or a greater number of shares to be present, approval of the amendment requires the approval of the shareholders at a meeting at which a quorum consisting of at least a majority of the votes entitled to be cast on the amendment exists, and, if any class or series of shares is entitled to vote as a separate group on the amendment, except as provided in subsection (c) of section 21-2,153, the approval of each such separate voting group at a meeting at which a quorum of the voting group consisting of at least a majority of the votes entitled to be cast on the amendment by that voting group exists.

Source:Laws 2014, LB749, § 152.

21-2,153. Voting on amendments by voting groups.

(MBCA 10.04) (a) If a corporation has more than one class of shares outstanding, the holders of the outstanding shares of a class are entitled to vote as a separate voting group, if shareholder voting is otherwise required by the Nebraska Model Business Corporation Act, on a proposed amendment to the articles of incorporation if the amendment would:

(1) Effect an exchange or reclassification of all or part of the shares of the class into shares of another class;

(2) Effect an exchange or reclassification or create the right of exchange of all or part of the shares of another class into shares of the class;

(3) Change the rights, preferences, or limitations of all or part of the shares of the class;

(4) Change the shares of all or part of the class into a different number of shares of the same class;

(5) Create a new class of shares having rights or preferences with respect to distributions that are prior or superior to the shares of the class;

(6) Increase the rights, preferences, or number of authorized shares of any class that, after giving effect to the amendment, have rights or preferences with respect to distributions that are prior or superior to the shares of the class;

(7) Limit or deny an existing preemptive right of all or part of the shares of the class; or

(8) Cancel or otherwise affect rights to distributions that have accumulated but not yet been authorized on all or part of the shares of the class.

(b) If a proposed amendment would affect a series of a class of shares in one or more of the ways described in subsection (a) of this section, the holders of shares of that series are entitled to vote as a separate voting group on the proposed amendment.

(c) If a proposed amendment that entitles the holders of two or more classes or series of shares to vote as separate voting groups under this section would affect those two or more classes or series in the same or a substantially similar way, the holders of shares of all the classes or series so affected must vote together as a single voting group on the proposed amendment unless otherwise provided in the articles of incorporation or required by the board of directors.

(d) A class or series of shares is entitled to the voting rights granted by this section although the articles of incorporation provide that the shares are nonvoting shares.

Source:Laws 2014, LB749, § 153.

21-2,154. Amendment by board of directors.

(MBCA 10.05) Unless the articles of incorporation provide otherwise, a corporation's board of directors may adopt amendments to the corporation's articles of incorporation without shareholder approval:

(1) To extend the duration of the corporation if it was incorporated at a time when limited duration was required by law;

(2) To delete the names and addresses of the initial directors;

(3) To delete the name and address of the initial registered agent or registered office, if a statement of change is on file with the Secretary of State;

(4) If the corporation has only one class of shares outstanding:

(i) To change each issued and unissued authorized share of the class into a greater number of whole shares of that class; or

(ii) To increase the number of authorized shares of the class to the extent necessary to permit the issuance of shares as a share dividend;

(5) To change the corporate name by substituting the word corporation, incorporated, company, limited, or the abbreviation corp., inc., co., or ltd., for a similar word or abbreviation in the name or by adding, deleting, or changing a geographical attribution for the name;

(6) To reflect a reduction in authorized shares, as a result of the operation of subsection (b) of section 21-251, when the corporation has acquired its own shares and the articles of incorporation prohibit the reissue of the acquired shares;

(7) To delete a class of shares from the articles of incorporation, as a result of the operation of subsection (b) of section 21-251, when there are no remaining shares of the class because the corporation has acquired all shares of the class and the articles of incorporation prohibit the reissue of the acquired shares; or

(8) To make any change expressly permitted by subsection (a) or (b) of section 21-238 to be made without shareholder approval.

Source:Laws 2014, LB749, § 154.

21-2,155. Articles of amendment.

(MBCA 10.06) After an amendment to the articles of incorporation has been adopted and approved in the manner required by the Nebraska Model Business Corporation Act and by the articles of incorporation, the corporation shall deliver to the Secretary of State, for filing, articles of amendment, which shall set forth:

(1) The name of the corporation;

(2) The text of each amendment adopted, or the information required by subdivision (k)(5) of section 21-203;

(3) If an amendment provides for an exchange, reclassification, or cancellation of issued shares, provisions for implementing the amendment if not contained in the amendment itself, which may be made dependent upon facts objectively ascertainable outside the articles of amendment in accordance with subdivision (k)(5) of section 21-203;

(4) The date of each amendment's adoption; and

(5) If an amendment:

(i) Was adopted by the incorporators or board of directors without shareholder approval, a statement that the amendment was duly approved by the incorporators or by the board of directors, as the case may be, and that shareholder approval was not required;

(ii) Required approval by the shareholders, a statement that the amendment was duly approved by the shareholders in the manner required by the act and by the articles of incorporation; or

(iii) Is being filed pursuant to subdivision (k)(5) of section 21-203, a statement to that effect.

Source:Laws 2014, LB749, § 155.

21-2,156. Restated articles of incorporation.

(MBCA 10.07) (a) A corporation's board of directors may restate its articles of incorporation at any time, with or without shareholder approval, to consolidate all amendments into a single document.

(b) If the restated articles include one or more new amendments that require shareholder approval, the amendments must be adopted and approved as provided in section 21-2,152.

(c) A corporation that restates its articles of incorporation shall deliver to the Secretary of State for filing articles of restatement setting forth the name of the corporation and the text of the restated articles of incorporation together with a certificate which states that the restated articles consolidate all amendments into a single document and, if a new amendment is included in the restated articles, also includes the statements required under section 21-2,155.

(d) Duly adopted restated articles of incorporation supersede the original articles of incorporation and all amendments thereto.

(e) The Secretary of State may certify restated articles of incorporation as the articles of incorporation currently in effect without including the certificate information required by subsection (c) of this section.

Source:Laws 2014, LB749, § 156.

21-2,157. Amendment pursuant to reorganization.

(MBCA 10.08) (a) A corporation's articles of incorporation may be amended without action by the board of directors or shareholders to carry out a plan of reorganization ordered or decreed by a court of competent jurisdiction under the authority of a law of the United States.

(b) The individual or individuals designated by the court shall deliver to the Secretary of State for filing articles of amendment setting forth:

(1) The name of the corporation;

(2) The text of each amendment approved by the court;

(3) The date of the court's order or decree approving the articles of amendment;

(4) The title of the reorganization proceeding in which the order or decree was entered; and

(5) A statement that the court had jurisdiction of the proceeding under federal statute.

(c) This section does not apply after entry of a final decree in the reorganization proceeding even though the court retains jurisdiction of the proceeding for limited purposes unrelated to consummation of the reorganization plan.

Source:Laws 2014, LB749, § 157.

21-2,158. Effect of amendment.

(MBCA 10.09) An amendment to the articles of incorporation does not affect a cause of action existing against or in favor of the corporation, a proceeding to which the corporation is a party, or the existing rights of persons other than shareholders of the corporation. An amendment changing a corporation's name does not abate a proceeding brought by or against the corporation in its former name.

Source:Laws 2014, LB749, § 158.

21-2,159. Amendment by board of directors or shareholders.

(MBCA 10.20) (a) A corporation's shareholders may amend or repeal the corporation's bylaws.

(b) A corporation's board of directors may amend or repeal the corporation's bylaws, unless:

(1) The articles of incorporation or section 21-2,160 reserves that power exclusively to the shareholders in whole or part; or

(2) Except as provided in subsection (d) of section 21-224, the shareholders in amending, repealing, or adopting a bylaw expressly provide that the board of directors may not amend, repeal, or reinstate that bylaw.

Source:Laws 2014, LB749, § 159.

21-2,160. Bylaw increasing quorum or voting requirement for directors.

(MBCA 10.21) (a) A bylaw that increases a quorum or voting requirement for the board of directors may be amended or repealed:

(1) If originally adopted by the shareholders, only by the shareholders unless the bylaw otherwise provides; or

(2) If adopted by the board of directors, either by the shareholders or by the board of directors.

(b) A bylaw adopted or amended by the shareholders that increases a quorum or voting requirement for the board of directors may provide that it can be amended or repealed only by a specified vote of either the shareholders or the board of directors.

(c) Action by the board of directors under subsection (a) of this section to amend or repeal a bylaw that changes the quorum or voting requirement for the board of directors must meet the same quorum requirement and be adopted by the same vote required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater.

Source:Laws 2014, LB749, § 160.

21-2,161. Definitions.

(MBCA 11.01) As used in sections 21-2,161 to 21-2,168:

(1) Merger means a business combination pursuant to section 21-2,162.

(2) Party to a merger or party to a share exchange means any domestic or foreign corporation or eligible entity that will:

(i) Merge under a plan of merger;

(ii) Acquire shares or eligible interests of another corporation or an eligible entity in a share exchange; or

(iii) Have all of its shares or eligible interests or all of one or more classes or series of its shares or eligible interests acquired in a share exchange.

(3) Share exchange means a business combination pursuant to section 21-2,163.

(4) Survivor in a merger means the corporation or eligible entity into which one or more other corporations or eligible entities are merged. A survivor of a merger may preexist the merger or be created by the merger.

Source:Laws 2014, LB749, § 161.

21-2,162. Merger.

(MBCA 11.02) (a) One or more domestic business corporations may merge with one or more domestic or foreign business corporations or eligible entities pursuant to a plan of merger or two or more foreign business corporations or domestic or foreign eligible entities may merge into a new domestic business corporation to be created in the merger in the manner provided in sections 21-2,161 to 21-2,168.

(b) A foreign business corporation, or a foreign eligible entity, may be a party to a merger with a domestic business corporation or may be created by the terms of the plan of merger only if the merger is permitted by the organic law of the foreign business corporation or eligible entity.

(c) If the organic law of a domestic eligible entity does not provide procedures for the approval of a merger, a plan of merger may be adopted and approved, the merger effectuated, and appraisal rights exercised in accordance with the procedures in sections 21-2,161 to 21-2,168 and 21-2,171 to 21-2,183. For the purposes of applying sections 21-2,161 to 21-2,168 and 21-2,171 to 21-2,183:

(1) The eligible entity, its members or interest holders, eligible interests, and organic documents taken together shall be deemed to be a domestic business corporation, shareholders, shares, and articles of incorporation, respectively and vice versa as the context may require; and

(2) If the business and affairs of the eligible entity are managed by a group of persons that is not identical to the members or interest holders, that group shall be deemed to be the board of directors.

(d) The plan of merger must include:

(1) The name of each domestic or foreign business corporation or eligible entity that will merge and the name of the domestic or foreign business corporation or eligible entity that will be the survivor of the merger;

(2) The terms and conditions of the merger;

(3) The manner and basis of converting the shares of each merging domestic or foreign business corporation and eligible interests of each merging domestic or foreign eligible entity into shares or other securities, eligible interests, obligations, rights to acquire shares, other securities, or eligible interests, cash, other property, or any combination of the foregoing;

(4) The articles of incorporation of any domestic or foreign business or nonprofit corporation or the organic documents of any domestic or foreign unincorporated entity to be created by the merger or, if a new domestic or foreign business or nonprofit corporation or unincorporated entity is not to be created by the merger, any amendments to the survivor's articles of incorporation or organic documents; and

(5) Any other provisions required by the laws under which any party to the merger is organized or by which it is governed or by the articles of incorporation or organic document of any such party.

(e) Terms of a plan of merger may be made dependent on facts objectively ascertainable outside the plan in accordance with subsection (k) of section 21-203.

(f) The plan of merger may also include a provision that the plan may be amended prior to filing articles of merger, but if the shareholders of a domestic corporation that is a party to the merger are required or permitted to vote on the plan, the plan must provide that subsequent to approval of the plan by such shareholders the plan may not be amended to change:

(1) The amount or kind of shares or other securities, eligible interests, obligations, rights to acquire shares, other securities, or eligible interests, cash, or other property to be received under the plan by the shareholders of or owners of eligible interests in any party to the merger;

(2) The articles of incorporation of any corporation or the organic documents of any unincorporated entity that will survive or be created as a result of the merger, except for changes permitted by section 21-2,154 or by comparable provisions of the organic laws of any such foreign corporation or domestic or foreign unincorporated entity; or

(3) Any of the other terms or conditions of the plan if the change would adversely affect such shareholders in any material respect.

(g) Property held in trust or for charitable purposes under the laws of this state by a domestic or foreign eligible entity shall not be diverted by a merger from the objects for which it was donated, granted, or devised unless and until the eligible entity obtains an order of the court specifying the disposition of the property to the extent required by and pursuant to cy pres or other nondiversion law of this state.

Source:Laws 2014, LB749, § 162.

21-2,163. Share exchange.

(MBCA 11.03) (a) Through a share exchange:

(1) A domestic corporation may acquire all of the shares of one or more classes or series of shares of another domestic or foreign corporation, or all of the interests of one or more classes or series of interests of a domestic or foreign other entity, in exchange for shares or other securities, interests, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing pursuant to a plan of share exchange; or

(2) All of the shares of one or more classes or series of shares of a domestic corporation may be acquired by another domestic or foreign corporation or other entity in exchange for shares or other securities, interests, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing pursuant to a plan of share exchange.

(b) A foreign corporation or eligible entity may be a party to a share exchange only if the share exchange is permitted by the organic law of the corporation or other entity.

(c) If the organic law of a domestic other entity does not provide procedures for the approval of a share exchange, a plan of share exchange may be adopted and approved and the share exchange effectuated in accordance with the procedures, if any, for a merger. If the organic law of a domestic other entity does not provide procedures for the approval of either a share exchange or a merger, a plan of share exchange may be adopted and approved, the share exchange effectuated, and appraisal rights exercised, in accordance with the procedures in sections 21-2,161 to 21-2,168 and 21-2,171 to 21-2,183. For the purposes of applying sections 21-2,161 to 21-2,168 and 21-2,171 to 21-2,183:

(1) The other entity, its interest holders, interests, and organic documents taken together shall be deemed to be a domestic business corporation, shareholders, shares, and articles of incorporation, respectively and vice versa as the context may require; and

(2) If the business and affairs of the other entity are managed by a group of persons that is not identical to the interest holders, that group shall be deemed to be the board of directors.

(d) The plan of share exchange must include:

(1) The name of each corporation or other entity whose shares or interests will be acquired and the name of the corporation or other entity that will acquire those shares or interests;

(2) The terms and conditions of the share exchange;

(3) The manner and basis of exchanging shares of a corporation or interests in an other entity whose shares or interests will be acquired under the share exchange into shares or other securities, interests, obligations, rights to acquire shares, other securities, or interests, cash, other property, or any combination of the foregoing; and

(4) Any other provisions required by the laws under which any party to the share exchange is organized or by the articles of incorporation or organic document of any such party.

(e) Terms of a plan of share exchange may be made dependent on facts objectively ascertainable outside the plan in accordance with subsection (k) of section 21-203.

(f) The plan of share exchange may also include a provision that the plan may be amended prior to filing articles of share exchange, but if the shareholders of a domestic corporation that is a party to the share exchange are required or permitted to vote on the plan, the plan must provide that subsequent to approval of the plan by such shareholders the plan may not be amended to change:

(1) The amount or kind of shares or other securities, interests, obligations, rights to acquire shares, other securities, or interests, cash, or other property to be issued by the corporation or to be received under the plan by the shareholders of or owners of interests in any party to the share exchange; or

(2) Any of the other terms or conditions of the plan if the change would adversely affect such shareholders in any material respect.

(g) This section does not limit the power of a domestic corporation to acquire shares of another corporation or interests in another entity in a transaction other than a share exchange.

Source:Laws 2014, LB749, § 163.

21-2,164. Action on a plan of merger or share exchange.

(MBCA 11.04) In the case of a domestic corporation that is a party to a merger or share exchange:

(1) The plan of merger or share exchange must be adopted by the board of directors.

(2) Except as provided in subdivision (8) of this section and in section 21-2,165, after adopting the plan of merger or share exchange the board of directors must submit the plan to the shareholders for their approval. The board of directors must also transmit to the shareholders a recommendation that the shareholders approve the plan unless (i) the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation or (ii) section 21-2,101 applies. If either subdivision (2)(i) or (ii) of this section applies, the board must transmit to the shareholders the basis for so proceeding.

(3) The board of directors may condition its submission of the plan of merger or share exchange to the shareholders on any basis.

(4) If the plan of merger or share exchange is required to be approved by the shareholders and if the approval is to be given at a meeting, the corporation must notify each shareholder, whether or not entitled to vote, of the meeting of shareholders at which the plan is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the plan and must contain or be accompanied by a copy or summary of the plan. If the corporation is to be merged into an existing corporation or other entity, the notice shall also include or be accompanied by a copy or summary of the articles of incorporation or organizational documents of that corporation or other entity. If the corporation is to be merged into a corporation or other entity that is to be created pursuant to the merger, the notice shall include or be accompanied by a copy or a summary of the articles of incorporation or organizational documents of the new corporation or other entity.

(5) Unless the articles of incorporation or the board of directors acting pursuant to subdivision (3) of this section requires a greater vote or a greater number of votes to be present, approval of the plan of merger or share exchange requires the approval of the shareholders at a meeting at which a quorum consisting of at least a majority of the votes entitled to be cast on the plan exists, and if any class or series of shares is entitled to vote as a separate group on the plan of merger or share exchange, the approval of each such separate voting group at a meeting at which a quorum of the voting group consisting of at least a majority of the votes entitled to be cast on the merger or share exchange by that voting group is present.

(6) Subject to subdivision (7) of this section, separate voting by voting groups is required:

(i) On a plan of merger, by each class or series of shares that:

(A) Are to be converted under the plan of merger into other securities, interests, obligations, rights to acquire shares, other securities, or interests, cash, other property, or any combination of the foregoing; or

(B) Are entitled to vote as a separate group on a provision in the plan that constitutes a proposed amendment to articles of incorporation of a surviving corporation, that requires action by separate voting groups under section 21-2,153;

(ii) On a plan of share exchange, by each class or series of shares included in the exchange with each class or series constituting a separate voting group; and

(iii) On a plan of merger or share exchange, if the voting group is entitled under the articles of incorporation to vote as a voting group to approve a plan of merger or share exchange.

(7) The articles of incorporation may expressly limit or eliminate the separate voting rights provided in subdivisions (6)(i)(A) and (6)(ii) of this section as to any class or series of shares, except for a transaction that (i) includes what is or would be, if the corporation were the surviving corporation, an amendment subject to subdivision (6)(i)(B) of this section and (ii) will effect no significant change in the assets of the resulting entity, including all parents and subsidiaries on a consolidated basis.

(8) Unless the articles of incorporation otherwise provide, approval by the corporation's shareholders of a plan of merger or share exchange is not required if:

(i) The corporation will survive the merger or is the acquiring corporation in a share exchange;

(ii) Except for amendments permitted by section 21-2,154, its articles of incorporation will not be changed;

(iii) Each shareholder of the corporation whose shares were outstanding immediately before the effective date of the merger or share exchange will hold the same number of shares, with identical preferences, limitations, and relative rights, immediately after the effective date of change; and

(iv) The issuance in the merger or share exchange of shares or other securities convertible into or rights exercisable for shares does not require a vote under subsection (f) of section 21-242.

(9) If as a result of a merger or share exchange one or more shareholders of a domestic corporation would become subject to owner liability for the debts, obligations, or liabilities of any other person or entity, approval of the plan of merger or share exchange shall require the execution by each such shareholder of a separate written consent to become subject to such owner liability.

Source:Laws 2014, LB749, § 164.

21-2,165. Merger between parent and subsidiary or between subsidiaries.

(MBCA 11.05) (a) A domestic parent corporation that owns shares of a domestic or foreign subsidiary corporation that carry at least ninety percent of the voting power of each class and series of the outstanding shares of the subsidiary that have voting power may merge the subsidiary into itself or into another such subsidiary, or merge itself into the subsidiary, without the approval of the board of directors or shareholders of the subsidiary unless the articles of incorporation of any of the corporations otherwise provide, and unless, in the case of a foreign subsidiary, approval by the subsidiary's board of directors or shareholders is required by the laws under which the subsidiary is organized.

(b) If under subsection (a) of this section approval of a merger by the subsidiary's shareholders is not required, the parent corporation shall within ten days after the effective date of the merger notify each of the subsidiary's shareholders that the merger has become effective.

(c) Except as provided in subsections (a) and (b) of this section, a merger between a parent and a subsidiary shall be governed by the provisions of sections 21-2,161 to 21-2,168 applicable to mergers generally.

Source:Laws 2014, LB749, § 165.

21-2,166. Articles of merger or share exchange.

(MBCA 11.06) (a) After a plan of merger or share exchange has been adopted and approved as required by the Nebraska Model Business Corporation Act, articles of merger or share exchange shall be signed on behalf of each party to the merger or share exchange by any officer or other duly authorized representative. The articles shall set forth:

(1) The names of the parties to the merger or share exchange;

(2) If the articles of incorporation of the survivor of a merger are amended, or if a new corporation is created as a result of a merger, the amendments to the survivor's articles of incorporation or the articles of incorporation of the new corporation;

(3) If the plan of merger or share exchange required approval by the shareholders of a domestic corporation that was a party to the merger or share exchange, a statement that the plan was duly approved by the shareholders and, if voting by any separate voting group was required, by each such separate voting group, in the manner required by the act and the articles of incorporation;

(4) If the plan of merger or share exchange did not require approval by the shareholders of a domestic corporation that was a party to the merger or share exchange, a statement to that effect; and

(5) As to each foreign corporation or eligible entity that was a party to the merger or share exchange, a statement that the participation of the foreign corporation or eligible entity was duly authorized as required by the organic law of the corporation or eligible entity.

(b) Articles of merger or share exchange shall be delivered to the Secretary of State for filing by the survivor of the merger or the acquiring corporation in a share exchange and shall take effect at the effective time provided in section 21-206. Articles of merger or share exchange filed under this section may be combined with any filing required under the organic law of any domestic eligible entity involved in the transaction if the combined filing satisfies the requirements of both this section and the other organic law.

Source:Laws 2014, LB749, § 166.

21-2,167. Effect of merger or share exchange.

(MBCA 11.07) (a) When a merger becomes effective:

(1) The corporation or eligible entity that is designated in the plan of merger as the survivor continues or comes into existence, as the case may be;

(2) The separate existence of every corporation or eligible entity that is merged into the survivor ceases;

(3) All property owned by and every contract right possessed by each corporation or eligible entity that merges into the survivor is vested in the survivor without reversion or impairment;

(4) All liabilities of each corporation or eligible entity that is merged into the survivor are vested in the survivor;

(5) The name of the survivor may, but need not be, substituted in any pending proceeding for the name of any party to the merger whose separate existence ceased in the merger;

(6) The articles of incorporation or organic documents of the survivor are amended to the extent provided in the plan of merger;

(7) The articles of incorporation or organic documents of a survivor that is created by the merger become effective; and

(8) The shares of each corporation that is a party to the merger and the interests in an eligible entity that is a party to a merger that are to be converted under the plan of merger into shares, eligible interests, obligations, rights to acquire securities, other securities, or eligible interests, cash, other property, or any combination of the foregoing, are converted, and the former holders of such shares or eligible interests are entitled only to the rights provided to them in the plan of merger or to any rights they may have under sections 21-2,171 to 21-2,183 or the organic law of the eligible entity.

(b) When a share exchange becomes effective, the shares of each domestic corporation that are to be exchanged for shares or other securities, interests, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing are entitled only to the rights provided to them in the plan of share exchange or to any rights they may have under sections 21-2,171 to 21-2,183.

(c) A person who becomes subject to owner liability for some or all of the debts, obligations, or liabilities of any entity as a result of a merger or share exchange shall have owner liability only to the extent provided in the organic law of the entity and only for those debts, obligations, and liabilities that arise after the effective time of the articles of merger or share exchange.

(d) Upon a merger becoming effective, a foreign corporation or a foreign eligible entity that is the survivor of the merger is deemed to agree that it will promptly pay the amount, if any, to which such shareholders are entitled under sections 21-2,171 to 21-2,183.

(e) The effect of a merger or share exchange on the owner liability of a person who had owner liability for some or all of the debts, obligations, or liabilities of a party to the merger or share exchange shall be as follows:

(1) The merger or share exchange does not discharge any owner liability under the organic law of the entity in which the person was a shareholder or interest holder to the extent any such owner liability arose before the effective time of the articles of merger or share exchange;

(2) The person shall not have owner liability under the organic law of the entity in which the person was a shareholder or interest holder prior to the merger or share exchange for any debt, obligation, or liability that arises after the effective time of the articles of merger or share exchange;

(3) The provisions of the organic law of any entity for which the person had owner liability before the merger or share exchange shall continue to apply to the collection or discharge of any owner liability preserved by subdivision (1) of this subsection as if the merger or share exchange had not occurred; and

(4) The person shall have whatever rights of contribution from other persons provided by the organic law of the entity for which the person had owner liability with respect to any owner liability preserved by subdivision (1) of this subsection as if the merger or share exchange had not occurred.

Source:Laws 2014, LB749, § 167.

21-2,168. Abandonment of a merger or share exchange.

(MBCA 11.08) (a) Unless otherwise provided in a plan of merger or share exchange or in the laws under which a foreign business corporation or a domestic or foreign eligible entity that is a party to a merger or a share exchange is organized or by which it is governed, after the plan has been adopted and approved as required by sections 21-2,161 to 21-2,168, and at any time before the merger or share exchange has become effective, it may be abandoned by a domestic business corporation that is a party thereto without action by its shareholders in accordance with any procedures set forth in the plan of merger or share exchange or, if no such procedures are set forth in the plan, in the manner determined by the board of directors, subject to any contractual rights of other parties to the merger or share exchange.

(b) If a merger or share exchange is abandoned under subsection (a) of this section after articles of merger or share exchange have been filed with the Secretary of State but before the merger or share exchange has become effective, a statement that the merger or share exchange has been abandoned in accordance with this section, signed on behalf of a party to the merger or share exchange by an officer or other duly authorized representative, shall be delivered to the Secretary of State for filing prior to the effective date of the merger or share exchange. Upon filing, the statement shall take effect and the merger or share exchange shall be deemed abandoned and shall not become effective.

Source:Laws 2014, LB749, § 168.

21-2,169. Disposition of assets not requiring shareholder approval.

(MBCA 12.01) No approval of the shareholders of a corporation is required, unless the articles of incorporation otherwise provide:

(1) To sell, lease, exchange, or otherwise dispose of any or all of the corporation's assets in the usual and regular course of business;

(2) To mortgage, pledge, dedicate to the repayment of indebtedness, whether with or without recourse, or otherwise encumber any or all of the corporation's assets, whether or not in the usual and regular course of business;

(3) To transfer any or all of the corporation's assets to one or more corporations or other entities all of the shares or interests of which are owned by the corporation; or

(4) To distribute assets pro rata to the holders of one or more classes or series of the corporation's shares.

Source:Laws 2014, LB749, § 169.

21-2,170. Shareholder approval of certain dispositions.

(MBCA 12.02) (a) A sale, lease, exchange, or other disposition of assets, other than a disposition described in section 21-2,169, requires approval of the corporation's shareholders if the disposition would leave the corporation without a significant continuing business activity. If a corporation retains a business activity that represented at least twenty-five percent of total assets at the end of the most recently completed fiscal year, and twenty-five percent of either income from continuing operations before taxes or revenue from continuing operations for that fiscal year, in each case of the corporation and its subsidiaries on a consolidated basis, the corporation will conclusively be deemed to have retained a significant continuing business activity.

(b) A disposition that requires approval of the shareholders under subsection (a) of this section shall be initiated by a resolution by the board of directors authorizing the disposition. After adoption of such a resolution, the board of directors shall submit the proposed disposition to the shareholders for their approval. The board of directors shall also transmit to the shareholders a recommendation that the shareholders approve the proposed disposition, unless (1) the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation or (2) section 21-2,101 applies. If either subdivision (b)(1) or (2) of this section applies, the board of directors shall transmit to the shareholders the basis for so proceeding.

(c) The board of directors may condition its submission of a disposition to the shareholders under subsection (b) of this section on any basis.

(d) If a disposition is required to be approved by the shareholders under subsection (a) of this section and if the approval is to be given at a meeting, the corporation shall notify each shareholder, whether or not entitled to vote, of the meeting of shareholders at which the disposition is to be submitted for approval. The notice shall state that the purpose, or one of the purposes, of the meeting is to consider the disposition and shall contain a description of the disposition, including the terms and conditions thereof and the consideration to be received by the corporation.

(e) Unless the articles of incorporation or the board of directors acting pursuant to subsection (c) of this section requires a greater vote or a greater number of votes to be present, the approval of a disposition by the shareholders shall require the approval of the shareholders at a meeting at which a quorum consisting of at least a majority of the votes entitled to be cast on the disposition exists.

(f) After a disposition has been approved by the shareholders under subsection (b) of this section and at any time before the disposition has been consummated, it may be abandoned by the corporation without action by the shareholders, subject to any contractual rights of other parties to the disposition.

(g) A disposition of assets in the course of dissolution under sections 21-2,184 to 21-2,202 is not governed by this section.

(h) The assets of a direct or indirect consolidated subsidiary shall be deemed the assets of the parent corporation for the purposes of this section.

Source:Laws 2014, LB749, § 170.

21-2,171. Definitions.

(MBCA 13.01) In sections 21-2,171 to 21-2,183:

(1) Affiliate means a person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with another person or is a senior executive thereof. For purposes of subdivision (5) of this section, a person is deemed to be an affiliate of its senior executives.

(2) Corporation means the issuer of the shares held by a shareholder demanding appraisal and, for matters covered in sections 21-2,176 to 21-2,182, includes the surviving entity in a merger.

(3) Fair value means the value of the corporation's shares determined:

(i) Immediately before the effectuation of the corporate action to which the shareholder objects;

(ii) Using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal; and

(iii) Without discounting for lack of marketability or minority status except, if appropriate, for amendments to the articles pursuant to subdivision (a)(5) of section 21-2,172.

(4) Interest means interest from the effective date of the corporate action until the date of payment at the rate of interest specified in section 45-104, as such rate may from time to time be adjusted by the Legislature.

(5) Interested transaction means a corporate action described in subsection (a) of section 21-2,172, other than a merger pursuant to section 21-2,165, involving an interested person in which any of the shares or assets of the corporation are being acquired or converted. As used in this definition:

(i) Interested person means a person or an affiliate of a person who at any time during the one-year period immediately preceding approval by the board of directors of the corporate action:

(A) Was the beneficial owner of twenty percent or more of the voting power of the corporation, other than as owner of excluded shares;

(B) Had the power, contractually or otherwise, other than as owner of excluded shares, to cause the appointment or election of twenty-five percent or more of the directors to the board of directors of the corporation; or

(C) Was a senior executive or director of the corporation or a senior executive of any affiliate thereof and that senior executive or director will receive, as a result of the corporate action, a financial benefit not generally available to other shareholders as such, other than:

(I) Employment, consulting, retirement, or similar benefits established separately and not as part of or in contemplation of the corporate action;

(II) Employment, consulting, retirement, or similar benefits established in contemplation of or as part of the corporate action that are not more favorable than those existing before the corporate action or, if more favorable, that have been approved on behalf of the corporation in the same manner as is provided in section 21-2,122; or

(III) In the case of a director of the corporation who will, in the corporate action, become a director of the acquiring entity in the corporate action or one of its affiliates, rights and benefits as a director that are provided on the same basis as those afforded by the acquiring entity generally to other directors of such entity or such affiliate;

(ii) Beneficial owner means any person who, directly or indirectly, through any contract, arrangement, or understanding, other than a revocable proxy, has or shares the power to vote or to direct the voting of shares; except that a member of a national securities exchange is not deemed to be a beneficial owner of securities held directly or indirectly by it on behalf of another person solely because the member is the record holder of the securities if the member is precluded by the rules of the exchange from voting without instruction on contested matters or matters that may affect substantially the rights or privileges of the holders of the securities to be voted. When two or more persons agree to act together for the purpose of voting their shares of the corporation, each member of the group formed thereby is deemed to have acquired beneficial ownership, as of the date of the agreement, of all voting shares of the corporation beneficially owned by any member of the group; and

(iii) Excluded shares means shares acquired pursuant to an offer for all shares having voting power if the offer was made within one year prior to the corporate action for consideration of the same kind and of a value equal to or less than that paid in connection with the corporate action.

(6) Preferred shares means a class or series of shares whose holders have preference over any other class or series with respect to distributions.

(7) Senior executive means the chief executive officer, chief operating officer, chief financial officer, and anyone in charge of a principal business unit or function.

(8) Shareholder means a record shareholder, a beneficial shareholder, and a voting trust beneficial owner.

Source:Laws 2014, LB749, § 171; Laws 2017, LB35, § 21.

Annotations

The determination of fair value for purposes of an elect-to-purchase action under part 14 shall be defined using the definition of fair value, in its entirety, as provided within part 13 at subdivision (3) of this section, which precludes the use of discounting for lack of marketability or minority status. Bohac v. Benes Service Co., 310 Neb. 722, 969 N.W.2d 103 (2022).

21-2,172. Right to appraisal.

(MBCA 13.02) (a) A shareholder is entitled to appraisal rights and to obtain payment of the fair value of that shareholder's shares in the event of any of the following corporate actions:

(1) Consummation of a merger to which the corporation is a party (i) if shareholder approval is required for the merger by section 21-2,164, except that appraisal rights shall not be available to any shareholder of the corporation with respect to shares of any class or series that remain outstanding after consummation of the merger or (ii) if the corporation is a subsidiary and the merger is governed by section 21-2,165;

(2) Consummation of a share exchange to which the corporation is a party as the corporation whose shares will be acquired, except that appraisal rights shall not be available to any shareholder of the corporation with respect to any class or series of shares of the corporation that is not exchanged;

(3) Consummation of a disposition of assets pursuant to section 21-2,170 if the shareholder is entitled to vote on the disposition, except that appraisal rights shall not be available to any shareholder of the corporation with respect to shares of any class or series if (i) under the terms of the corporate action approved by the shareholders there is to be distributed to shareholders in cash its net assets, in excess of a reasonable amount reserved to meet claims of the type described in sections 21-2,189 and 21-2,190, (A) within one year after the shareholders' approval of the action and (B) in accordance with their respective interests determined at the time of distribution and (ii) the disposition of assets is not an interested transaction;

(4) An amendment of the articles of incorporation with respect to a class or series of shares that reduces the number of shares of a class or series owned by the shareholder to a fraction of a share if the corporation has the obligation or right to repurchase the fractional share so created;

(5) Any other amendment to the articles of incorporation, merger, share exchange, or disposition of assets to the extent provided by the articles of incorporation, bylaws, or a resolution of the board of directors;

(6) Consummation of a domestication if the shareholder does not receive shares in the foreign corporation resulting from the domestication that have terms as favorable to the shareholder in all material respects and represent at least the same percentage interest of the total voting rights of the outstanding shares of the corporation as the shares held by the shareholder before the domestication;

(7) Consummation of a conversion of the corporation to nonprofit status pursuant to sections 21-2,133 to 21-2,138; or

(8) Consummation of a conversion of the corporation to an unincorporated entity pursuant to sections 21-2,143 to 21-2,149.

(b) Notwithstanding subsection (a) of this section, the availability of appraisal rights under subdivisions (a)(1), (2), (3), (4), (6), and (8) of this section shall be limited in accordance with the following provisions:

(1) Appraisal rights shall not be available for the holders of shares of any class or series of shares which is:

(i) A covered security under section 18(b)(1)(A) or (B) of the federal Securities Act of 1933, as amended, 15 U.S.C. 77r(b)(1)(A) or (B);

(ii) Traded in an organized market and has at least two thousand shareholders and a market value of at least twenty million dollars, exclusive of the value of such shares held by the corporation's subsidiaries, senior executives, directors, beneficial shareholders, and voting trust beneficial owners owning more than ten percent of such shares; or

(iii) Issued by an open-end management investment company registered with the Securities and Exchange Commission under the federal Investment Company Act of 1940, as amended, 15 U.S.C. 80a-1 et seq., and may be redeemed at the option of the holder at net asset value;

(2) The applicability of subdivision (b)(1) of this section shall be determined as of:

(i) The record date fixed to determine the shareholders entitled to receive notice of the meeting of shareholders to act upon the corporate action requiring appraisal rights; or

(ii) The day before the effective date of such corporate action if there is no meeting of shareholders;

(3) Subdivision (b)(1) of this section shall not be applicable and appraisal rights shall be available pursuant to subsection (a) of this section for the holders of any class or series of shares (i) who are required by the terms of the corporate action requiring appraisal rights to accept for such shares anything other than cash or shares of any class or any series of shares of any corporation or any other proprietary interest of any other entity that satisfies the standards set forth in subdivision (b)(1) of this section at the time the corporate action becomes effective or (ii) in the case of the consummation of a disposition of assets pursuant to section 21-2,170, unless such cash, shares, or proprietary interests are, under the terms of the corporate action approved by the shareholders as part of a distribution to shareholders of the net assets of the corporation in excess of a reasonable amount to meet claims of the type described in sections 21-2,189 and 21-2,190, (A) within one year after the shareholders' approval of the action and (B) in accordance with their respective interests determined at the time of the distribution; and

(4) Subdivision (b)(1) of this section shall not be applicable and appraisal rights shall be available pursuant to subsection (a) of this section for the holders of any class or series of shares where the corporate action is an interested transaction.

(c) Notwithstanding any other provision of this section, the articles of incorporation as originally filed or any amendment thereto may limit or eliminate appraisal rights for any class or series of preferred shares, except that (1) no such limitation or elimination shall be effective if the class or series does not have the right to vote separately as a voting group, alone or as part of a group, on the action or if the action is a nonprofit conversion under sections 21-2,133 to 21-2,138, or a conversion to an unincorporated entity under sections 21-2,143 to 21-2,149, or a merger having a similar effect and (2) any such limitation or elimination contained in an amendment to the articles of incorporation that limits or eliminates appraisal rights for any of such shares that are outstanding immediately prior to the effective date of such amendment or that the corporation is or may be required to issue or sell thereafter pursuant to any conversion, exchange, or other right existing immediately before the effective date of such amendment shall not apply to any corporate action that becomes effective within one year after that date if such action would otherwise afford appraisal rights.

(d) The right to dissent and obtain payment under sections 21-2,171 to 21-2,183 shall not apply to shareholders of a bank, trust company, stock-owned savings and loan association, or the holding company of any such bank, trust company, or stock-owned savings and loan association.

Source:Laws 2014, LB749, § 172; Laws 2016, LB794, § 10; Laws 2017, LB35, § 22.

21-2,173. Assertion of rights by nominees and beneficial owners.

(MBCA 13.03) (a) A record shareholder may assert appraisal rights as to fewer than all the shares registered in the record shareholder's name but owned by a beneficial shareholder or a voting trust beneficial owner only if the record shareholder objects with respect to all shares of the class or series owned by the beneficial shareholder or the voting trust beneficial owner and notifies the corporation in writing of the name and address of each beneficial shareholder or voting trust beneficial owner on whose behalf appraisal rights are being asserted. The rights of a record shareholder who asserts appraisal rights for only part of the shares held of record in the record shareholder's name under this subsection shall be determined as if the shares as to which the record shareholder objects and the record shareholder's other shares were registered in the names of different record shareholders.

(b) A beneficial shareholder and a voting trust beneficial owner may assert appraisal rights as to shares of any class or series held on behalf of the shareholder only if such shareholder:

(1) Submits to the corporation the record shareholder's written consent to the assertion of such rights no later than the date referred to in subdivision (b)(2)(ii) of section 21-2,176; and

(2) Does so with respect to all shares of the class or series that are beneficially owned by the beneficial shareholder or the voting trust beneficial owner.

Source:Laws 2014, LB749, § 173; Laws 2017, LB35, § 23.

21-2,174. Notice of appraisal rights.

(MBCA 13.20) (a) When any corporate action specified in subsection (a) of section 21-2,172 is to be submitted to a vote at a shareholders' meeting, the meeting notice must state that the corporation has concluded that the shareholders are, are not, or may be entitled to assert appraisal rights under sections 21-2,171 to 21-2,183. If the corporation concludes that appraisal rights are or may be available, a copy of sections 21-2,171 to 21-2,183 must accompany the meeting notice sent to those record shareholders entitled to exercise appraisal rights.

(b) In a merger pursuant to section 21-2,165, the parent corporation must notify in writing all record shareholders of the subsidiary who are entitled to assert appraisal rights that the corporate action became effective. Such notice must be sent within ten days after the corporate action became effective and include the materials described in section 21-2,176.

(c) When any corporate action specified in subsection (a) of section 21-2,172 is to be approved by written consent of the shareholders pursuant to section 21-256:

(1) Written notice that appraisal rights are, are not, or may be available must be sent to each record shareholder from whom a consent is solicited at the time consent of such shareholder is first solicited and, if the corporation has concluded that appraisal rights are or may be available, must be accompanied by a copy of sections 21-2,171 to 21-2,183; and

(2) Written notice that appraisal rights are, are not, or may be available must be delivered together with the notice to nonconsenting and nonvoting shareholders required by subsections (e) and (f) of section 21-256, may include the materials described in section 21-2,176, and, if the corporation has concluded that appraisal rights are or may be available, must be accompanied by a copy of sections 21-2,171 to 21-2,183.

(d) When corporate action described in subsection (a) of section 21-2,172 is proposed or a merger pursuant to section 21-2,165 is effected, the notice referred to in subsection (a) or (c) of this section, if the corporation concludes that appraisal rights are or may be available, and in subsection (b) of this section shall be accompanied by:

(1) The annual financial statements specified in subsection (a) of section 21-2,227 of the corporation that issued the shares that may be subject to appraisal, which shall be as of a date ending not more than sixteen months before the date of the notice and shall comply with subsection (b) of section 21-2,227, except that if such annual financial statements are not reasonably available, the corporation shall provide reasonably equivalent financial information; and

(2) The latest available quarterly financial statements of such corporation, if any.

(e) The right to receive the information described in subsection (d) of this section may be waived in writing by a shareholder before or after the corporate action.

Source:Laws 2014, LB749, § 174.

21-2,175. Notice of intent to demand payment and consequences of voting or consenting.

(MBCA 13.21) (a) If a corporate action specified in subsection (a) of section 21-2,172 is submitted to a vote at a shareholders' meeting, a shareholder who wishes to assert appraisal rights with respect to any class or series of shares:

(1) Must deliver to the corporation, before the vote is taken, written notice of the shareholder's intent to demand payment if the proposed action is effectuated; and

(2) Must not vote, or cause or permit to be voted, any shares of such class or series in favor of the proposed action.

(b) If a corporate action specified in subsection (a) of section 21-2,172 is to be approved by less than unanimous written consent, a shareholder who wishes to assert appraisal rights with respect to any class or series of shares must not sign a consent in favor of the proposed action with respect to that class or series of shares.

(c) A shareholder who fails to satisfy the requirements of subsection (a) or (b) of this section is not entitled to payment under sections 21-2,171 to 21-2,183.

Source:Laws 2014, LB749, § 175.

21-2,176. Appraisal notice and form.

(MBCA 13.22) (a) If a corporate action requiring appraisal rights under subsection (a) of section 21-2,172 becomes effective, the corporation must send a written appraisal notice and form required by subdivision (b)(1) of this section to all shareholders who satisfy the requirements of subsection (a) or (b) of section 21-2,175. In the case of a merger under section 21-2,165, the parent must deliver an appraisal notice and form to all record shareholders who may be entitled to assert appraisal rights.

(b) The appraisal notice must be delivered no earlier than the date the corporate action specified in subsection (a) of section 21-2,172 became effective, and no later than ten days after such date, and must:

(1) Supply a form that (i) specifies the first date of any announcement to shareholders made prior to the date the corporate action became effective of the principal terms of the proposed corporate action, (ii) if such announcement was made, requires the shareholder asserting appraisal rights to certify whether beneficial ownership of those shares for which appraisal rights are asserted was acquired before that date, and (iii) requires the shareholder asserting appraisal rights to certify that such shareholder did not vote for or consent to the transaction;

(2) State:

(i) Where the form must be sent and where certificates for certificated shares must be deposited and the date by which those certificates must be deposited, which date may not be earlier than the date for receiving the required form under subdivision (2)(ii) of this subsection;

(ii) A date by which the corporation must receive the form, which date may not be fewer than forty nor more than sixty days after the date the appraisal notice under subsection (a) of this section is sent, and state that the shareholder shall have waived the right to demand appraisal with respect to the shares unless the form is received by the corporation by such specified date;

(iii) The corporation's estimate of the fair value of the shares;

(iv) That, if requested in writing, the corporation will provide, to the shareholder so requesting within ten days after the date specified in subdivision (2)(ii) of this subsection, the number of shareholders who return the forms by the specified date and the total number of shares owned by them; and

(v) The date by which the notice to withdraw under section 21-2,177 must be received, which date must be within twenty days after the date specified in subdivision (2)(ii) of this subsection; and

(3) Be accompanied by a copy of sections 21-2,171 to 21-2,183.

Source:Laws 2014, LB749, § 176.

21-2,177. Perfection of rights; right to withdraw.

(MBCA 13.23) (a) A shareholder who receives notice pursuant to section 21-2,176 and who wishes to exercise appraisal rights must sign and return the form sent by the corporation and, in the case of certificated shares, deposit the shareholder's certificates in accordance with the terms of the notice by the date referred to in the notice pursuant to subdivision (b)(2)(ii) of section 21-2,176. In addition, if applicable, the shareholder must certify on the form whether the beneficial owner of such shares acquired beneficial ownership of the shares before the date required to be set forth in the notice pursuant to subdivision (b)(1) of section 21-2,176. If a shareholder fails to make this certification, the corporation may elect to treat the shareholder's shares as after-acquired shares under section 21-2,179. Once a shareholder deposits that shareholder's certificates or, in the case of uncertificated shares, returns the signed forms, that shareholder loses all rights as a shareholder unless the shareholder withdraws pursuant to subsection (b) of this section.

(b) A shareholder who has complied with subsection (a) of this section may nevertheless decline to exercise appraisal rights and withdraw from the appraisal process by so notifying the corporation in writing by the date set forth in the appraisal notice pursuant to subdivision (b)(2)(v) of section 21-2,176. A shareholder who fails to so withdraw from the appraisal process may not thereafter withdraw without the corporation's written consent.

(c) A shareholder who does not sign and return the form and, in the case of certificated shares, deposit that shareholder's share certificates where required, each by the date set forth in the notice described in subsection (b) of section 21-2,176, shall not be entitled to payment under sections 21-2,171 to 21-2,183.

Source:Laws 2014, LB749, § 177.

21-2,178. Payment.

(MBCA 13.24) (a) Except as provided in section 21-2,179, within thirty days after the form required by subdivision (b)(2)(ii) of section 21-2,176 is due, the corporation shall pay in cash to those shareholders who complied with subsection (a) of section 21-2,177 the amount the corporation estimates to be the fair value of their shares, plus interest.

(b) The payment to each shareholder pursuant to subsection (a) of this section must be accompanied by:

(1)(i) The annual financial statements specified in subsection (a) of section 21-2,227 of the corporation that issued the shares to be appraised, which shall be of a date ending not more than sixteen months before the date of payment and shall comply with subsection (b) of section 21-2,227, except that if such annual financial statements are not reasonably available, the corporation shall provide reasonably equivalent financial information, and (ii) the latest available quarterly financial statements of such corporation, if any;

(2) A statement of the corporation's estimate of the fair value of the shares, which estimate must equal or exceed the corporation's estimate given pursuant to subdivision (b)(2)(iii) of section 21-2,176; and

(3) A statement that shareholders described in subsection (a) of this section have the right to demand further payment under section 21-2,180 and that if any such shareholder does not do so within the time period specified therein, such shareholder shall be deemed to have accepted such payment in full satisfaction of the corporation's obligations under sections 21-2,171 to 21-2,183.

Source:Laws 2014, LB749, § 178.

21-2,179. After-acquired shares.

(MBCA 13.25) (a) A corporation may elect to withhold payment required by section 21-2,178 from any shareholder who was required to, but did not, certify that beneficial ownership of all the shareholder's shares for which appraisal rights are asserted was acquired before the date set forth in the appraisal notice sent pursuant to subdivision (b)(1) of section 21-2,176.

(b) If the corporation elected to withhold payment under subsection (a) of this section, it must, within thirty days after the form required by subdivision (b)(2)(ii) of section 21-2,176 is due, notify all shareholders who are described in subsection (a) of this section:

(1) Of the information required by subdivision (b)(1) of section 21-2,178;

(2) Of the corporation's estimate of fair value pursuant to subdivision (b)(2) of section 21-2,178;

(3) That they may accept the corporation's estimate of fair value, plus interest, in full satisfaction of their demands or demand appraisal under section 21-2,180;

(4) That those shareholders who wish to accept such offer must so notify the corporation of their acceptance of the corporation's offer within thirty days after receiving the offer; and

(5) That those shareholders who do not satisfy the requirements for demanding appraisal under section 21-2,180 shall be deemed to have accepted the corporation's offer.

(c) Within ten days after receiving the shareholder's acceptance pursuant to subsection (b) of this section, the corporation must pay in cash the amount it offered under subdivision (b)(2) of this section to each shareholder who agreed to accept the corporation's offer in full satisfaction of the shareholder's demand.

(d) Within forty days after sending the notice described in subsection (b) of this section, the corporation must pay in cash the amount it offered to pay under subdivision (b)(2) of this section to each shareholder described in subdivision (b)(5) of this section.

Source:Laws 2014, LB749, § 179.

21-2,180. Procedure if shareholder dissatisfied with payment or offer.

(MBCA 13.26) (a) A shareholder paid pursuant to section 21-2,178 who is dissatisfied with the amount of the payment must notify the corporation in writing of that shareholder's estimate of the fair value of the shares and demand payment of that estimate plus interest, less any payment under section 21-2,178. A shareholder offered payment under section 21-2,179 who is dissatisfied with that offer must reject the offer and demand payment of the shareholder's stated estimate of the fair value of the shares plus interest.

(b) A shareholder who fails to notify the corporation in writing of that shareholder's demand to be paid the shareholder's stated estimate of the fair value plus interest under subsection (a) of this section within thirty days after receiving the corporation's payment or offer of payment under section 21-2,178 or 21-2,179, respectively, waives the right to demand payment under this section and shall be entitled only to the payment made or offered pursuant to those respective sections.

Source:Laws 2014, LB749, § 180.

21-2,181. Court action.

(MBCA 13.30) (a) If a shareholder makes demand for payment under section 21-2,180 which remains unsettled, the corporation shall commence a proceeding within sixty days after receiving the payment demand and petition the court to determine the fair value of the shares and accrued interest. If the corporation does not commence the proceeding within the sixty-day period, it shall pay in cash to each shareholder the amount the shareholder demanded pursuant to section 21-2,180 plus interest.

(b) The corporation shall commence the proceeding in the district court of the county where the corporation's principal office, or, if none in this state, its registered office, is located. If the corporation is a foreign corporation without a registered office in this state, it shall commence the proceeding in the county in this state where the principal office or registered office of the domestic corporation merged with the foreign corporation was located at the time of the transaction.

(c) The corporation shall make all shareholders, whether or not residents of this state, whose demands remain unsettled parties to the proceeding as in an action against their shares, and all parties must be served with a copy of the petition. Nonresidents may be served by registered or certified mail or by publication as provided by law.

(d) The jurisdiction of the court in which the proceeding is commenced under subsection (b) of this section is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. The appraisers shall have the powers described in the order appointing them or in any amendment to it. The shareholders demanding appraisal rights are entitled to the same discovery rights as parties in other civil proceedings. There shall be no right to a jury trial.

(e) Each shareholder made a party to the proceeding is entitled to judgment (1) for the amount, if any, by which the court finds the fair value of the shareholder's shares, plus interest, exceeds the amount paid by the corporation to the shareholder for such shares or (2) for the fair value, plus interest, of the shareholder's shares for which the corporation elected to withhold payment under section 21-2,179.

Source:Laws 2014, LB749, § 181.

21-2,182. Court costs and expenses.

(MBCA 13.31) (a) The court in an appraisal proceeding commenced under section 21-2,181 shall determine all court costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court. The court shall assess the court costs against the corporation, except that the court may assess court costs against all or some of the shareholders demanding appraisal, in amounts which the court finds equitable, to the extent the court finds such shareholders acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by sections 21-2,171 to 21-2,183.

(b) The court in an appraisal proceeding may also assess the expenses of the respective parties in amounts the court finds equitable:

(1) Against the corporation and in favor of any or all shareholders demanding appraisal if the court finds the corporation did not substantially comply with the requirements of section 21-2,174, 21-2,176, 21-2,178, or 21-2,179; or

(2) Against either the corporation or a shareholder demanding appraisal, in favor of any other party, if the court finds the party against whom expenses are assessed acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by sections 21-2,171 to 21-2,183.

(c) If the court in an appraisal proceeding finds that the expenses incurred by any shareholder were of substantial benefit to other shareholders similarly situated and that such expenses should not be assessed against the corporation, the court may direct that such expenses be paid out of the amounts awarded the shareholders who were benefited.

(d) To the extent the corporation fails to make a required payment pursuant to section 21-2,178, 21-2,179, or 21-2,180, the shareholder may sue directly for the amount owed and, to the extent successful, shall be entitled to recover from the corporation all expenses of the suit.

Source:Laws 2014, LB749, § 182.

21-2,183. Other remedies limited.

(MBCA 13.40) (a) The legality of a proposed or completed corporate action described in subsection (a) of section 21-2,172 may not be contested, nor may the corporate action be enjoined, set aside, or rescinded, in a legal or equitable proceeding by a shareholder after the shareholders have approved the corporate action.

(b) Subsection (a) of this section does not apply to a corporate action that:

(1) Was not authorized and approved in accordance with the applicable provisions of:

(i) Sections 21-2,125 to 21-2,170;

(ii) The articles of incorporation or bylaws; or

(iii) The resolution of the board of directors authorizing the corporate action;

(2) Was procured as a result of fraud, a material misrepresentation, or an omission of a material fact necessary to make statements made, in light of the circumstances in which they were made, not misleading;

(3) Is an interested transaction, unless it has been recommended by the board of directors in the same manner as is provided in section 21-2,122 and has been approved by the shareholders in the same manner as is provided in section 21-2,123 as if the interested transaction were a director's conflicting interest transaction; or

(4) Is approved by less than unanimous consent of the voting shareholders pursuant to section 21-256 if:

(i) The challenge to the corporate action is brought by a shareholder who did not consent and as to whom notice of the approval of the corporate action was not effective at least ten days before the corporate action was effected; and

(ii) The proceeding challenging the corporate action is commenced within ten days after notice of the approval of the corporate action is effective as to the shareholder bringing the proceeding.

Source:Laws 2014, LB749, § 183.

21-2,184. Dissolution by incorporators or initial directors.

(MBCA 14.01) A majority of the incorporators or initial directors of a corporation that has not issued shares or has not commenced business may dissolve the corporation by delivering to the Secretary of State for filing articles of dissolution that set forth:

(1) The name of the corporation;

(2) The date of its incorporation;

(3) Either (i) that none of the corporation's shares has been issued or (ii) that the corporation has not commenced business;

(4) That no debt of the corporation remains unpaid;

(5) That the net assets of the corporation remaining after winding up have been distributed to the shareholders, if shares were issued; and

(6) That a majority of the incorporators or initial directors authorized the dissolution.

Source:Laws 2014, LB749, § 184.

21-2,185. Dissolution by board of directors and shareholders.

(MBCA 14.02) (a) A corporation's board of directors may propose dissolution for submission to the shareholders.

(b) For a proposal to dissolve to be adopted:

(1) The board of directors must recommend dissolution to the shareholders unless (i) the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation or (ii) section 21-2,101 applies. If either subdivision (1)(i) or (ii) of this subsection applies, it must communicate the basis for so proceeding; and

(2) The shareholders entitled to vote must approve the proposal to dissolve as provided in subsection (e) of this section.

(d) The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolving the corporation.

(e) Unless the articles of incorporation or the board of directors acting pursuant to subsection (c) of this section require a greater vote, a greater number of shares to be present, or a vote by voting groups, adoption of the proposal to dissolve shall require the approval of the shareholders at a meeting at which a quorum consisting of at least a majority of the votes entitled to be cast exists.

Source:Laws 2014, LB749, § 185.

21-2,186. Articles of dissolution.

(MBCA 14.03) (a) At any time after dissolution is authorized, the corporation may dissolve by delivering to the Secretary of State for filing articles of dissolution setting forth:

(1) The name of the corporation;

(2) The date dissolution was authorized; and

(3) If dissolution was approved by the shareholders, a statement that the proposal to dissolve was duly approved by the shareholders in the manner required by the Nebraska Model Business Corporation Act and by the articles of incorporation.

(b) A corporation is dissolved upon the effective date of its articles of dissolution.

(c) For purposes of sections 21-2,184 to 21-2,192, dissolved corporation means a corporation whose articles of dissolution have become effective and includes a successor entity to which the remaining assets of the corporation are transferred subject to its liabilities for purposes of liquidation.

Source:Laws 2014, LB749, § 186.

21-2,187. Revocation of dissolution.

(MBCA 14.04) (a) A corporation may revoke its dissolution within one hundred twenty days of its effective date.

(b) Revocation of dissolution must be authorized in the same manner as the dissolution was authorized unless that authorization permitted revocation by action of the board of directors alone, in which event the board of directors may revoke the dissolution without shareholder action.

(c) After the revocation of dissolution is authorized, the corporation may revoke the dissolution by delivering to the Secretary of State for filing articles of revocation of dissolution, together with a copy of its articles of dissolution, that set forth:

(1) The name of the corporation;

(2) The effective date of the dissolution that was revoked;

(3) The date that the revocation of dissolution was authorized;

(4) If the corporation's board of directors, or incorporators, revoked the dissolution, a statement to that effect;

(5) If the corporation's board of directors revoked a dissolution authorized by the shareholders, a statement that revocation was permitted by action by the board of directors alone pursuant to that authorization; and

(6) If shareholder action was required to revoke the dissolution, the information required by subdivision (a)(3) of section 21-2,186.

(d) Revocation of dissolution is effective upon the effective date of the articles of revocation of dissolution.

(e) When the revocation of dissolution is effective, it relates back to and takes effect as of the effective date of the dissolution and the corporation resumes carrying on its business as if dissolution had never occurred.

Source:Laws 2014, LB749, § 187.

21-2,188. Effect of dissolution.

(MBCA 14.05) (a) A dissolved corporation continues its corporate existence but may not carry on any business except that appropriate to wind up and liquidate its business and affairs, including:

(1) Collecting its assets;

(2) Disposing of its properties that will not be distributed in kind to its shareholders;

(3) Discharging or making provision for discharging its liabilities;

(4) Distributing its remaining property among its shareholders according to their interests; and

(5) Doing every other act necessary to wind up and liquidate its business and affairs.

(b) Dissolution of a corporation does not:

(1) Transfer title to the corporation's property;

(2) Prevent transfer of its shares or securities, although the authorization to dissolve may provide for closing the corporation's share transfer records;

(3) Subject its directors or officers to standards of conduct different from those prescribed in sections 21-284 to 21-2,124;

(4) Change quorum or voting requirements for its board of directors or shareholders; change provisions for selection, resignation, or removal of its directors or officers or both; or change provisions for amending its bylaws;

(5) Prevent commencement of a proceeding by or against the corporation in its corporate name;

(6) Abate or suspend a proceeding pending by or against the corporation on the effective date of dissolution; or

(7) Terminate the authority of the registered agent of the corporation.

Source:Laws 2014, LB749, § 188.

21-2,189. Known claims against dissolved corporation.

(MBCA 14.06) (a) A dissolved corporation may dispose of the known claims against it by notifying its known claimants in writing of the dissolution at any time after its effective date.

(b) The written notice must:

(1) Describe information that must be included in a claim;

(2) Provide a mailing address where a claim may be sent;

(3) State the deadline, which may not be fewer than one hundred twenty days after the effective date of the written notice, by which the dissolved corporation must receive the claim; and

(4) State that the claim will be barred if not received by the deadline.

(1) If a claimant who was given written notice under subsection (b) of this section does not deliver the claim to the dissolved corporation by the deadline; or

(2) If a claimant whose claim was rejected by the dissolved corporation does not commence a proceeding to enforce the claim within ninety days after the effective date of the rejection notice.

(d) For purposes of this section, claim does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution.

Source:Laws 2014, LB749, § 189.

21-2,190. Other claims against dissolved corporation.

(MBCA 14.07) (a) A dissolved corporation may also publish notice of its dissolution and request that persons with claims against the dissolved corporation present them in accordance with the notice.

(b) The notice must:

(1) Be published one time in a newspaper of general circulation in the county where the dissolved corporation's principal office, or, if none in this state, its registered office, is or was last located;

(2) Describe the information that must be included in a claim and provide a mailing address where the claim may be sent; and

(3) State that a claim against the dissolved corporation will be barred unless a proceeding to enforce the claim is commenced within three years after the publication of the notice.

(c) If the dissolved corporation publishes a newspaper notice in accordance with subsection (b) of this section, the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the dissolved corporation within three years after the publication date of the newspaper notice:

(1) A claimant who was not given written notice under section 21-2,189;

(2) A claimant whose claim was timely sent to the dissolved corporation but not acted on; or

(3) A claimant whose claim is contingent or based on an event occurring after the effective date of dissolution.

(d) A claim that is not barred by subsection (b) of section 21-2,189 or subsection (c) of this section may be enforced:

(1) Against the dissolved corporation to the extent of its undistributed assets; or

(2) Except as provided in subsection (d) of section 21-2,191, if the assets have been distributed in liquidation, against a shareholder of the dissolved corporation to the extent of the shareholder's pro rata share of the claim or the corporate assets distributed to the shareholder in liquidation, whichever is less, but a shareholder's total liability for all claims under this section may not exceed the total amount of assets distributed to the shareholder.

Source:Laws 2014, LB749, § 190.

21-2,191. Court proceedings.

(MBCA 14.08) (a) A dissolved corporation that has published a notice under section 21-2,190 may file an application with the district court of the county where the dissolved corporation's principal office, or, if none in this state, its registered office, is located for a determination of the amount and form of security to be provided for payment of claims that are contingent or have not been made known to the dissolved corporation or that are based on an event occurring after the effective date of dissolution but that, based on the facts known to the dissolved corporation, are reasonably estimated to arise after the effective date of dissolution. Provision need not be made for any claim that is or is reasonably anticipated to be barred under subsection (c) of section 21-2,190.

(b) Within ten days after the filing of the application, notice of the proceeding shall be given by the dissolved corporation to each claimant holding a contingent claim whose contingent claim is shown on the records of the dissolved corporation.

(c) The court may appoint a guardian ad litem to represent all claimants whose identities are unknown in any proceeding brought under this section. The reasonable fees and expenses of such guardian, including all reasonable expert witness fees, shall be paid by the dissolved corporation.

(d) Provision by the dissolved corporation for security in the amount and the form ordered by the court under subsection (a) of this section shall satisfy the dissolved corporation's obligations with respect to claims that are contingent, have not been made known to the dissolved corporation, or are based on an event occurring after the effective date of dissolution, and such claims may not be enforced against a shareholder who received assets in liquidation.

Source:Laws 2014, LB749, § 191.

21-2,192. Director duties.

(MBCA 14.09) (a) Directors shall cause the dissolved corporation to discharge or make reasonable provision for the payment of claims and make distributions of assets to shareholders after payment or provision for claims.

(b) Directors of a dissolved corporation which has disposed of claims under section 21-2,189, 21-2,190, or 21-2,191 shall not be liable for breach of subsection (a) of this section with respect to claims against the dissolved corporation that are barred or satisfied under section 21-2,189, 21-2,190, or 21-2,191.

Source:Laws 2014, LB749, § 192.

21-2,193. Grounds for administrative dissolution.

(MBCA 14.20) The Secretary of State may commence a proceeding under section 21-2,194 to administratively dissolve a corporation if:

(1) The corporation is without a registered agent or registered office in this state for sixty days or more;

(2) The corporation does not notify the Secretary of State within sixty days that its registered agent or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued; or

(3) The corporation's period of duration stated in its articles of incorporation expires.

Source:Laws 2014, LB749, § 193.

21-2,194. Procedure for and effect of administrative dissolution.

(MBCA 14.21) (a) If the Secretary of State determines that one or more grounds exist under section 21-2,193 for dissolving a corporation, the Secretary of State shall serve the corporation with written notice of such determination under section 21-236.

(b) If the corporation does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within sixty days after service of the notice is perfected under section 21-236, the Secretary of State shall administratively dissolve the corporation by signing a certificate of dissolution that recites the ground or grounds for dissolution and its effective date. The Secretary of State shall file the original of the certificate and serve a copy on the corporation under section 21-236.

(c) A corporation administratively dissolved continues its corporate existence but may not carry on any business except that necessary to wind up and liquidate its business and affairs under section 21-2,188 and notify claimants under sections 21-2,189 and 21-2,190.

(d) The administrative dissolution of a corporation does not terminate the authority of its registered agent.

Source:Laws 2014, LB749, § 194.

21-2,195. Reinstatement following administrative dissolution.

(MBCA 14.22) (a) A corporation administratively dissolved under section 21-2,194 may apply to the Secretary of State for reinstatement within five years after the effective date of dissolution. The application must:

(1) Recite the name of the corporation and the effective date of its administrative dissolution;

(2) State that the ground or grounds for dissolution either did not exist or have been eliminated; and

(3) State that the corporation's name satisfies the requirements of section 21-230.

(b) If the Secretary of State determines (1) that the application for reinstatement contains the information required by subsection (a) of this section and that the information is correct and (2) that the corporation has paid to the Secretary of State all delinquent fees and has delivered to the Secretary of State a properly executed and signed biennial report, the Secretary of State shall cancel the certificate of dissolution and prepare a certificate of reinstatement that recites such determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the corporation under section 21-236.

(c) A corporation that has been administratively dissolved under section 21-2,194 for more than five years may apply to the Secretary of State for late reinstatement. The application, along with the fee set forth in section 21-205, must:

(1) Recite the name of the corporation and the effective date of its administrative dissolution;

(2) State that the ground or grounds for dissolution either did not exist or have been eliminated;

(3) State that the corporation's name satisfies the requirements of section 21-230;

(4) State that a legitimate reason exists for reinstatement and what such legitimate reason is; and

(5) State that such reinstatement does not constitute fraud on the public.

(d) If the Secretary of State determines (1) that the application for late reinstatement contains the information required by subsection (c) of this section and that the information is correct and (2) that the corporation has paid to the Secretary of State all delinquent fees and has delivered to the Secretary of State a properly executed and signed biennial report, the Secretary of State shall cancel the certificate of dissolution and prepare a certificate of late reinstatement that recites such determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the corporation under section 21-236.

(e) When the reinstatement is effective, it relates back to and takes effect as of the effective date of the administrative dissolution and the corporation resumes carrying on its business as if the administrative dissolution had never occurred.

Source:Laws 2014, LB749, § 195; Laws 2015, LB279, § 4.

21-2,196. Appeal from denial of reinstatement.

(MBCA 14.23) (a) If the Secretary of State denies a corporation's application for reinstatement following administrative dissolution, the Secretary of State shall serve the corporation under section 21-236 with a written notice that explains the reason or reasons for denial.

(b) The corporation may appeal the denial of reinstatement to the district court of Lancaster County within thirty days after service of the notice of denial is perfected. The corporation appeals by petitioning the court to set aside the dissolution and attaching to the petition copies of the Secretary of State's certificate of dissolution, the corporation's application for reinstatement, and the Secretary of State's notice of denial.

(c) The court may summarily order the Secretary of State to reinstate the dissolved corporation or may take other action the court considers appropriate.

(d) The court's final decision may be appealed as in other civil proceedings.

Source:Laws 2014, LB749, § 196.

21-2,197. Grounds for judicial dissolution.

(MBCA 14.30) (a) Except as provided in subdivision (2)(ii) of this subsection, the court may dissolve a corporation:

(1) In a proceeding by the Attorney General if it is established that:

(i) The corporation obtained its articles of incorporation through fraud; or

(ii) The corporation has continued to exceed or abuse the authority conferred upon it by law;

(2)(i) In a proceeding by a shareholder if it is established that:

(A) The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered or the business and affairs of the corporation can no longer be conducted to the advantage of the shareholders generally because of the deadlock;

(B) The directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent;

(C) The shareholders are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired; or

(D) The corporate assets are being misapplied or wasted; and

(ii) The right to bring a proceeding under this subdivision does not apply to shareholders of a bank, trust company, or stock-owned savings and loan association;

(3) In a proceeding by a creditor if it is established that:

(i) The creditor's claim has been reduced to judgment, the execution on the judgment returned unsatisfied, and the corporation is insolvent; or

(ii) The corporation has admitted in writing that the creditor's claim is due and owing and the corporation is insolvent;

(4) In a proceeding by the corporation to have its voluntary dissolution continued under court supervision; or

(5) In a proceeding by a shareholder if the corporation has abandoned its business and has failed within a reasonable time to liquidate and distribute its assets and dissolve.

(b) Subdivision (a)(2) of this section shall not apply in the case of a corporation that, on the date of the filing of the proceeding, has shares which are:

(1) A covered security under section (18)(b)(1)(A) or (B) of the Securities Act of 1933, as amended; or

(2) Not a covered security, but are held by at least three hundred shareholders and the shares outstanding have a market value of at least twenty million dollars, exclusive of the value of such shares held by the corporation's subsidiaries, senior executives, directors, beneficial shareholders, and voting trust beneficial owners owning more than ten percent of such shares.

(c) In subsection (a) of this section, shareholder means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner; in subsection (b) of this section, shareholder means a record shareholder, a beneficial shareholder, and a voting trust beneficial owner.

Source:Laws 2014, LB749, § 197; Laws 2017, LB35, § 24.

21-2,198. Procedure for judicial dissolution.

(MBCA 14.31) (a) Venue for a proceeding by the Attorney General to dissolve a corporation lies in the district court of Lancaster County. Venue for a proceeding brought by any other party named in subsection (a) of section 21-2,197 lies in the district court of the county where a corporation's principal office, or, if none in this state, its registered office, is or was last located.

(b) It is not necessary to make shareholders parties to a proceeding to dissolve a corporation unless relief is sought against them individually.

(c) A court in a proceeding brought to dissolve a corporation may issue injunctions, appoint a receiver or custodian pendente lite with all powers and duties the court directs, take other action required to preserve the corporate assets wherever located, and carry on the business of the corporation until a full hearing can be held.

(d) Within ten days of the commencement of a proceeding to dissolve a corporation under subdivision (a)(2) of section 21-2,197, the corporation must send to all shareholders, other than the petitioner, a notice stating that the shareholders are entitled to avoid the dissolution of the corporation by electing to purchase the petitioner's shares under section 21-2,201 and accompanied by a copy of section 21-2,201.

Source:Laws 2014, LB749, § 198.

21-2,199. Receivership or custodianship.

(MBCA 14.32) (a) Unless an election to purchase has been filed under section 21-2,201, a court in a judicial proceeding brought to dissolve a corporation may appoint one or more receivers to wind up and liquidate, or one or more custodians to manage, the business and affairs of the corporation. The court shall hold a hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a receiver or custodian. The court appointing a receiver or custodian has jurisdiction over the corporation and all of its property wherever located.

(b) The court may appoint an individual or a domestic or foreign corporation, authorized to transact business in this state, as a receiver or custodian. The court may require the receiver or custodian to post bond, with or without sureties, in an amount the court directs.

(c) The court shall describe the powers and duties of the receiver or custodian in its appointing order, which may be amended from time to time. Among other powers:

(1) The receiver (i) may dispose of all or any part of the assets of the corporation wherever located, at a public or private sale, if authorized by the court, and (ii) may sue and defend in his or her own name as receiver of the corporation in all courts of this state; and

(2) The custodian may exercise all of the powers of the corporation, through or in place of its board of directors, to the extent necessary to manage the affairs of the corporation in the best interests of its shareholders and creditors.

(d) The court during a receivership may redesignate the receiver a custodian, and during a custodianship may redesignate the custodian a receiver, if doing so is in the best interests of the corporation, its shareholders, and creditors.

(e) The court from time to time during the receivership or custodianship may order compensation paid and expenses paid or reimbursed to the receiver or custodian from the assets of the corporation or proceeds from the sale of the assets.

Source:Laws 2014, LB749, § 199.

21-2,200. Decree of dissolution.

(MBCA 14.33) (a) If after a hearing the court determines that one or more grounds for judicial dissolution described in section 21-2,197 exist, it may enter a decree dissolving the corporation and specifying the effective date of the dissolution, and the clerk of the court shall deliver a certified copy of the decree to the Secretary of State who shall file it.

(b) After entering the decree of dissolution, the court shall direct the winding-up and liquidation of the corporation's business and affairs in accordance with section 21-2,188 and the notification of claimants in accordance with sections 21-2,189 and 21-2,190.

Source:Laws 2014, LB749, § 200.

21-2,201. Election to purchase in lieu of dissolution.

(MBCA 14.34) (a) In a proceeding under subdivision (a)(2) of section 21-2,197 to dissolve a corporation, the corporation may elect or, if it fails to elect, one or more shareholders may elect to purchase all shares owned by the petitioning shareholder at the fair value of the shares. An election pursuant to this section shall be irrevocable unless the court determines that it is equitable to set aside or modify the election.

(b) An election to purchase pursuant to this section may be filed with the court at any time within ninety days after the filing of the petition under subdivision (a)(2) of section 21-2,197 or at such later time as the court in its discretion may allow. If the election to purchase is filed by one or more shareholders, the corporation shall, within ten days thereafter, give written notice to all shareholders, other than the petitioner. The notice must state the name and number of shares owned by the petitioner and the name and number of shares owned by each electing shareholder and must advise the recipients of their right to join in the election to purchase shares in accordance with this section. Shareholders who wish to participate must file notice of their intention to join in the purchase no later than thirty days after the effective date of the notice to them. All shareholders who have filed an election or notice of their intention to participate in the election to purchase thereby become parties to the proceeding and shall participate in the purchase in proportion to their ownership of shares as of the date the first election was filed, unless they otherwise agree or the court otherwise directs. After an election has been filed by the corporation or one or more shareholders, the proceeding under subdivision (a)(2) of section 21-2,197 may not be discontinued or settled, nor may the petitioning shareholder sell or otherwise dispose of his or her shares, unless the court determines that it would be equitable to the corporation and the shareholders, other than the petitioner, to permit such discontinuance, settlement, sale, or other disposition.

(c) If, within sixty days of the filing of the first election, the parties reach agreement as to the fair value and terms of purchase of the petitioner's shares, the court shall enter an order directing the purchase of petitioner's shares upon the terms and conditions agreed to by the parties.

(d) If the parties are unable to reach an agreement as provided for in subsection (c) of this section, the court, upon application of any party, shall stay the proceedings under subdivision (a)(2) of section 21-2,197 and determine the fair value of the petitioner's shares as of the day before the date on which the petition under subdivision (a)(2) of section 21-2,197 was filed or as of such other date as the court deems appropriate under the circumstances.

(e) Upon determining the fair value of the shares, the court shall enter an order directing the purchase upon such terms and conditions as the court deems appropriate, which may include payment of the purchase price in installments, where necessary in the interests of equity, provision for security to assure payment of the purchase price and any additional expenses as may have been awarded, and, if the shares are to be purchased by shareholders, the allocation of shares among them. In allocating petitioner's shares among holders of different classes of shares, the court should attempt to preserve the existing distribution of voting rights among holders of different classes insofar as practicable and may direct that holders of a specific class or classes shall not participate in the purchase. Interest may be allowed at the rate specified in section 45-104, as such rate may from time to time be adjusted by the Legislature, and from the date determined by the court to be equitable, but if the court finds that the refusal of the petitioning shareholder to accept an offer of payment was arbitrary or otherwise not in good faith, no interest shall be allowed. If the court finds that the petitioning shareholder had probable grounds for relief under subdivision (a)(2)(i)(B) or (D) of section 21-2,197, it may award expenses to the petitioning shareholder.

(f) Upon entry of an order under subsection (c) or (e) of this section, the court shall dismiss the petition to dissolve the corporation under subdivision (a)(2) of section 21-2,197, and the petitioning shareholder shall no longer have any rights or status as a shareholder of the corporation, except the right to receive the amounts awarded by the order of the court which shall be enforceable in the same manner as any other judgment.

(g) The purchase ordered pursuant to subsection (e) of this section shall be made within ten days after the date the order becomes final.

(h) Any payment by the corporation pursuant to an order under subsection (c) or (e) of this section, other than an award of expenses pursuant to subsection (e) of this section, is subject to the provisions of section 21-252.

Source:Laws 2014, LB749, § 201; Laws 2017, LB35, § 25.

Annotations

Expenses under subsection (e) of this section do not include attorney fees. Bohac v. Benes Service Co., 310 Neb. 722, 969 N.W.2d 103 (2022).

"Fair value" as used within this section and applied to a closely held corporation shall be determined using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal. Bohac v. Benes Service Co., 310 Neb. 722, 969 N.W.2d 103 (2022).

A proceeding under this section to determine the fair value of a petitioning shareholder's shares of stock is equitable in nature. Anderson v. A & R Ag Spraying & Trucking, 306 Neb. 484, 946 N.W.2d 435 (2020).

In order to award expenses to a petitioning shareholder under subsection (e) of this section, a court must make findings that the shareholder established probable grounds for relief concerning corporate dissolution. Anderson v. A & R Ag Spraying & Trucking, 306 Neb. 484, 946 N.W.2d 435 (2020).

Where a corporation or shareholder is not a party to election-to-purchase proceedings, a court lacks authority to enter judgment against that party once it has determined the value of the shares to be purchased. Anderson v. A & R Ag Spraying & Trucking, 306 Neb. 484, 946 N.W.2d 435 (2020).

21-2,202. Deposit with State Treasurer.

(MBCA 14.40) Assets of a dissolved corporation that should be transferred to a creditor, claimant, or shareholder of the corporation who cannot be found or who is not competent to receive them shall be reduced to cash and deposited with the State Treasurer in accordance with the Uniform Disposition of Unclaimed Property Act. When the creditor, claimant, or shareholder furnishes satisfactory proof of entitlement to the amount deposited, the State Treasurer shall pay such person or his or her representative that amount in accordance with the act.

Source:Laws 2014, LB749, § 202.

Cross References

Uniform Disposition of Unclaimed Property Act, see section 69-1329.

21-2,203. Authority to transact business required.

(MBCA 15.01) (a) A foreign corporation may not transact business in this state until it obtains a certificate of authority from the Secretary of State.

(b) The following activities, among others, do not constitute transacting business within the meaning of subsection (a) of this section:

(1) Maintaining, defending, or settling any proceeding;

(2) Holding meetings of the board of directors or shareholders or carrying on other activities concerning internal corporate affairs;

(3) Maintaining bank accounts;

(4) Maintaining offices or agencies for the transfer, exchange, and registration of the corporation's own securities or maintaining trustees or depositaries with respect to those securities;

(5) Selling through independent contractors;

(6) Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;

(7) Creating or acquiring indebtedness, mortgages, and security interests in real or personal property;

(8) Securing or collecting debts or enforcing mortgages and security interests in property securing the debts;

(9) Owning, without more, real or personal property;

(10) Conducting an isolated transaction that is completed within thirty days and that is not one in the course of repeated transactions of a like nature;

(11) Transacting business in interstate commerce; or

(12) Acting as a foreign corporate trustee to the extent authorized under section 30-3820.

(d) The requirements of the Nebraska Model Business Corporation Act are not applicable to foreign or alien insurers which are subject to the requirements of Chapter 44.

Source:Laws 2014, LB749, § 203.

21-2,204. Consequences of transacting business without authority.

(MBCA 15.02) (a) A foreign corporation transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority.

(b) The successor to a foreign corporation that transacted business in this state without a certificate of authority and the assignee of a cause of action arising out of that business may not maintain a proceeding based on that cause of action in any court in this state until the foreign corporation or its successor obtains a certificate of authority.

(c) A court may stay a proceeding commenced by a foreign corporation, its successor, or assignee until it determines whether the foreign corporation or its successor requires a certificate of authority. If it so determines, the court may further stay the proceeding until the foreign corporation or its successor obtains the certificate.

(d) A foreign corporation is liable for a civil penalty of five hundred dollars for each day, but not to exceed a total of ten thousand dollars for each year, it transacts business in this state without a certificate of authority. The Attorney General may collect all penalties due under this subsection and shall remit them to the State Treasurer for distribution in accordance with Article VII, section 5, of the Constitution of Nebraska.

(e) Notwithstanding subsections (a) and (b) of this section, the failure of a foreign corporation to obtain a certificate of authority does not impair the validity of its corporate acts or prevent it from defending any proceeding in this state.

Source:Laws 2014, LB749, § 204.

21-2,205. Application for certificate of authority.

(MBCA 15.03) (a) A foreign corporation may apply for a certificate of authority to transact business in this state by delivering an application to the Secretary of State for filing. The application must set forth:

(1) The name of the foreign corporation or, if its name is unavailable for use in this state, a corporate name that satisfies the requirements of section 21-2,208;

(2) The name of the state or country under whose law it is incorporated;

(3) Its date of incorporation and period of duration;

(4) The street address of its principal office;

(5) The street address of its registered office in this state and the name of its current registered agent at that office. A post office box number may be provided in addition to the street address; and

(6) The names and street addresses of its current directors and officers.

(b) The foreign corporation shall deliver with the completed application a certificate of existence, or a document of similar import, duly authenticated by the secretary of state or other official having custody of corporate records in the state or country under whose law it is incorporated. Such certificate or document shall not bear a date of more than sixty days prior to the date the application is delivered.

Source:Laws 2014, LB749, § 205.

21-2,206. Amended certificate of authority.

(MBCA 15.04) (a) A foreign corporation authorized to transact business in this state must obtain an amended certificate of authority from the Secretary of State if it changes:

(1) Its corporate name;

(2) The period of its duration; or

(3) The state or country of its incorporation.

(b) The requirements of section 21-2,205 for obtaining an original certificate of authority apply to obtaining an amended certificate under this section.

Source:Laws 2014, LB749, § 206.

21-2,207. Effect of certificate of authority.

(MBCA 15.05) (a) A certificate of authority authorizes the foreign corporation to which it is issued to transact business in this state subject, however, to the right of the state to revoke the certificate as provided in the Nebraska Model Business Corporation Act.

(b) A foreign corporation with a valid certificate of authority has the same but no greater rights and has the same but no greater privileges as and, except as otherwise provided by the Nebraska Model Business Corporation Act, is subject to the same duties, restrictions, penalties, and liabilities now or later imposed on a domestic corporation of like character.

(c) The Nebraska Model Business Corporation Act does not authorize this state to regulate the organization or internal affairs of a foreign corporation authorized to transact business in this state.

Source:Laws 2014, LB749, § 207.

21-2,208. Corporate name of foreign corporation.

(MBCA 15.06) (a) If the corporate name of a foreign corporation does not satisfy the requirements of section 21-230, the foreign corporation to obtain or maintain a certificate of authority to transact business in this state:

(1) May add to its corporate name for use in this state the word corporation, incorporated, company, or limited, or the abbreviation corp., inc., co., or ltd.; or

(2) May use a fictitious name to transact business in this state if its real name is unavailable and it delivers to the Secretary of State for filing a copy of the resolution of its board of directors, certified by its secretary, adopting the fictitious name.

(b) Except as authorized by subsections (c) and (d) of this section, the corporate name, including a fictitious name, of a foreign corporation must not be deceptively similar to, upon the records of the Secretary of State:

(1) The corporate name of a corporation incorporated or authorized to transact business in this state;

(2) A corporate name reserved or registered under section 21-231 or 21-232;

(3) The fictitious name of another foreign corporation authorized to transact business in this state;

(4) The corporate name of a not-for-profit corporation incorporated or authorized to transact business in this state;

(5) A trade name registered in this state pursuant to sections 87-208 to 87-219.01; and

(6) Any other business entity name registered or filed with the Secretary of State pursuant to the law of this state.

(c) A foreign corporation may apply to the Secretary of State for authorization to use in this state the name of another corporation or business entity, incorporated or authorized to transact business in this state, that is deceptively similar to, upon the records of the Secretary of State, the name applied for. The Secretary of State shall authorize use of the name applied for if:

(1) The other corporation or business entity consents to the use in writing; or

(2) The applicant delivers to the Secretary of State a certified copy of a final judgment of a court of competent jurisdiction establishing the applicant's right to use the name applied for in this state.

(d) A foreign corporation may use in this state the name, including the fictitious name, of another domestic or foreign corporation or business entity that is used in this state if the other corporation or business entity is incorporated or authorized to transact business in this state and the foreign corporation:

(1) Has merged with the other corporation or business entity;

(2) Has been formed by reorganization of the other corporation or business entity; or

(3) Has acquired all or substantially all of the assets, including the corporate name, of the other corporation or business entity.

(e) If a foreign corporation authorized to transact business in this state changes its corporate name to one that does not satisfy the requirements of section 21-230, it may not transact business in this state under the changed name until it adopts a name satisfying the requirements of section 21-230 and obtains an amended certificate of authority under section 21-2,206.

Source:Laws 2014, LB749, § 208.

21-2,209. Registered office and registered agent of foreign corporation.

(MBCA 15.07) Each foreign corporation authorized to transact business in this state must continuously maintain in this state:

(1) A registered office that may be the same as any of its places of business; and

(2) A registered agent, who may be:

(i) An individual who resides in this state and whose business office is identical with the registered office;

(ii) A domestic corporation or not-for-profit domestic corporation whose business office is identical with the registered office; or

(iii) A foreign corporation or foreign not-for-profit corporation authorized to transact business in this state whose business office is identical with the registered office.

Source:Laws 2014, LB749, § 209.

21-2,210. Change of registered office or registered agent of foreign corporation.

(MBCA 15.08) (a) A foreign corporation authorized to transact business in this state may change its registered office or registered agent by delivering to the Secretary of State for filing a statement of change that sets forth:

(1) Its name;

(2) The street address of its current registered office;

(3) If the current registered office is to be changed, the street address of its new registered office;

(4) The name and street address of its current registered agent. A post office box number may be provided in addition to the street address;

(5) If the current registered agent is to be changed, the name of its new registered agent and the new agent's written consent, either on the statement or attached to it, to the appointment; and

(6) That after the change or changes are made, the street addresses of its registered office and the business office of its registered agent will be identical.

(b) If the street address or post office box number of a registered agent's business office changes, the agent may change the street address or post office box number of the registered office of any foreign corporation for which the person is the registered agent by notifying the corporation in writing of the change, and signing and delivering to the Secretary of State for filing a statement of change that complies with the requirements of subsection (a) of this section and recites that the corporation has been notified of the change.

Source:Laws 2014, LB749, § 210.

21-2,211. Resignation of registered agent of foreign corporation.

(MBCA 15.09) (a) The registered agent of a foreign corporation may resign the agency appointment by signing and delivering to the Secretary of State for filing the signed original and two exact or conformed copies of a statement of resignation. The statement of resignation may include a statement that the registered office is also discontinued.

(b) After filing the statement, the Secretary of State shall attach the filing receipt to one copy and mail the copy and receipt to the registered office if not discontinued. The Secretary of State shall mail the other copy to the foreign corporation at its principal office address shown in its most recent biennial report.

(c) The agency appointment is terminated, and the registered office discontinued if so provided, on the thirty-first day after the date on which the statement was filed.

Source:Laws 2014, LB749, § 211.

21-2,212. Service on foreign corporation.

(MBCA 15.10) (a) The registered agent of a foreign corporation authorized to transact business in this state is the corporation's agent for service of process, notice, or demand required or permitted by law to be served on the foreign corporation. By being authorized to transact business in this state, the foreign corporation's agent for service of process also consents to service of process directed to the foreign corporation's agent in this state for a search warrant issued pursuant to sections 29-812 to 29-821, or for any other validly issued and properly served court order or subpoena, including those authorized under sections 86-2,106 and 86-2,112, for records or documents that are in the possession of the foreign corporation and are located inside or outside of this state. The consent to service of a court order, subpoena, or search warrant applies to a foreign corporation that is a party or nonparty to the matter for which the court order, subpoena, or search warrant is sought.

(b) A foreign corporation may be served by registered or certified mail, return receipt requested, addressed to the secretary of the foreign corporation or the designated custodian of records at its principal office shown in its application for a certificate of authority or in its most recent biennial report if the foreign corporation:

(1) Has no registered agent or its registered agent cannot with reasonable diligence be served;

(2) Has withdrawn from transacting business in this state under section 21-2,213; or

(3) Has had its certificate of authority revoked under section 21-2,218.

(1) The date the foreign corporation receives the mail;

(2) The date shown on the return receipt, if signed on behalf of the foreign corporation; or

(3) Five days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed.

(d) This section does not prescribe the only means, or necessarily the required means, of serving a foreign corporation.

Source:Laws 2014, LB749, § 212; Laws 2015, LB294, § 6.

21-2,213. Withdrawal of foreign corporation.

(MBCA 15.20) (a) A foreign corporation authorized to transact business in this state may not withdraw from this state until it obtains a certificate of withdrawal from the Secretary of State.

(b) A foreign corporation authorized to transact business in this state may apply for a certificate of withdrawal by delivering an application to the Secretary of State for filing. The application must set forth:

(1) The name of the foreign corporation and the name of the state or country under whose law it is incorporated;

(2) That it is not transacting business in this state and that it surrenders its authority to transact business in this state;

(3) That it revokes the authority of its registered agent to accept service on its behalf and consents that service of process in any proceeding based on a cause of action arising during the time it was authorized to transact business in this state may thereafter be made on such corporation outside this state; and

(4) A mailing address at which process against the corporation may be served.

Source:Laws 2014, LB749, § 213.

21-2,214. Automatic withdrawal upon certain conversions.

(MBCA 15.21) A foreign corporation authorized to transact business in this state that converts to a domestic nonprofit corporation or any form of domestic filing entity shall be deemed to have withdrawn on the effective date of the conversion.

Source:Laws 2014, LB749, § 214.

21-2,215. Withdrawal upon conversion to a nonfiling entity.

(MBCA 15.22) (a) A foreign corporation authorized to transact business in this state that converts to a domestic or foreign nonfiling entity shall apply for a certificate of withdrawal by delivering an application to the Secretary of State for filing. The application must set forth:

(1) The name of the foreign corporation and the name of the state or country under whose law it was incorporated before the conversion;

(2) That it surrenders its authority to transact business in this state as a foreign corporation;

(3) The type of unincorporated entity to which it has been converted and the jurisdiction whose laws govern its internal affairs; and

(4) If it has been converted to a foreign unincorporated entity:

(i) That it revokes the authority of its registered agent to accept service on its behalf and consents that service of process in any proceeding based on a cause of action arising during the time it was authorized to transact business in this state may thereafter be made on such foreign unincorporated entity outside this state; and

(ii) A mailing address at which process against the foreign unincorporated entity may be served.

(b) After the withdrawal under this section of a corporation that has converted to a domestic unincorporated entity is effective, service of process shall be made on the unincorporated entity in accordance with the regular procedures for service of process on the form of unincorporated entity to which the corporation was converted.

Source:Laws 2014, LB749, § 215.

21-2,216. Transfer of authority.

(MBCA 15.23) (a) A foreign business corporation authorized to transact business in this state that converts to a foreign nonprofit corporation or to any form of foreign unincorporated entity that is required to obtain a certificate of authority or make a similar type of filing with the Secretary of State if it transacts business in this state shall file with the Secretary of State an application for transfer of authority signed by any officer or other duly authorized representative. The application shall set forth:

(1) The name of the corporation;

(2) The type of unincorporated entity to which it has been converted and the jurisdiction whose laws govern its internal affairs; and

(3) Any other information that would be required in a filing under the laws of this state by an unincorporated entity of the type the corporation has become seeking authority to transact business in this state.

(b) The application for transfer of authority shall be delivered to the Secretary of State for filing and shall take effect at the effective time provided in section 21-206.

(c) Upon the effectiveness of the application for transfer of authority, the authority of the corporation under sections 21-2,203 to 21-2,220 to transact business in this state shall be transferred without interruption to the converted entity which shall thereafter hold such authority subject to the provisions of the laws of this state applicable to that type of unincorporated entity.

Source:Laws 2014, LB749, § 216.

21-2,217. Grounds for revocation.

(MBCA 15.30) The Secretary of State may commence a proceeding under section 21-2,218 to administratively revoke the certificate of authority of a foreign corporation authorized to transact business in this state if:

(1) The foreign corporation is without a registered agent or registered office in this state for sixty days or more;

(2) The foreign corporation does not inform the Secretary of State under section 21-2,210 or 21-2,211 that its registered agent or registered office has changed, that its registered agent has resigned, or that its registered office has been discontinued within sixty days of the change, resignation, or discontinuance;

(3) An incorporator, director, officer, or agent of the foreign corporation signed a document knowing it was false in any material respect with intent that the document be delivered to the Secretary of State for filing;

(4) The foreign corporation or its agent for service of process does not comply with section 21-2,212; or

(5) The Secretary of State receives a duly authenticated certificate from the secretary of state or other official having custody of corporate records in the state or country under whose law the foreign corporation is incorporated stating that it has been dissolved or disappeared as the result of a merger.

Source:Laws 2014, LB749, § 217.

21-2,218. Procedure for and effect of revocation.

(MBCA 15.31) (a) If the Secretary of State determines that one or more grounds exist under section 21-2,217 for revocation of a certificate of authority, the Secretary of State shall serve the foreign corporation with written notice of such determination under section 21-2,212.

(b) If the foreign corporation does not correct each ground for revocation or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within sixty days after service of the notice is perfected under section 21-2,212, the Secretary of State shall administratively revoke the foreign corporation's certificate of authority by signing a certificate of revocation that recites the ground or grounds for revocation and its effective date. The Secretary of State shall file the original of the certificate and serve a copy on the foreign corporation under section 21-2,212.

(c) The authority of a foreign corporation to transact business in this state ceases on the date shown on the certificate revoking its certificate of authority.

(d) Revocation of a foreign corporation's certificate of authority does not terminate the authority of the registered agent of the corporation.

Source:Laws 2014, LB749, § 218.

21-2,219. Foreign corporation; reinstatement.

(a) A foreign corporation, the certificate of authority of which has been administratively revoked under section 21-2,218, may apply to the Secretary of State for reinstatement within five years after the effective date of the revocation. The application must:

(1) Recite the name of the foreign corporation and the effective date of the revocation;

(2) State that the ground or grounds for revocation either did not exist or have been eliminated; and

(3) State that the foreign corporation's name satisfies the requirements of section 21-2,208.

(b) If the Secretary of State determines (1) that the application for reinstatement contains the information required by subsection (a) of this section and that the information is correct and (2) that the foreign corporation has paid to the Secretary of State all delinquent fees and has delivered to the Secretary of State a properly executed and signed biennial report, he or she shall cancel the certificate of revocation, prepare a certificate of reinstatement that recites his or her determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the foreign corporation under section 21-2,212.

(c) A foreign corporation, the certificate of authority of which has been administratively revoked under section 21-2,218 for more than five years, may apply to the Secretary of State for late reinstatement. The application, along with the fee set forth in section 21-205, must:

(1) Recite the name of the foreign corporation and the effective date of the revocation;

(2) State that the ground or grounds for revocation either did not exist or have been eliminated;

(3) State that the foreign corporation's name satisfies the requirements of section 21-2,208;

(4) State that a legitimate reason exists for reinstatement and what such legitimate reason is; and

(5) State that such reinstatement does not constitute fraud on the public.

(d) If the Secretary of State determines (1) that the application for late reinstatement contains the information required by subsection (c) of this section and that the information is correct and (2) that the foreign corporation has paid to the Secretary of State all delinquent fees and has delivered to the Secretary of State a properly executed and signed biennial report, he or she shall cancel the certificate of revocation, prepare a certificate of late reinstatement that recites his or her determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the foreign corporation under section 21-2,212.

(e) When the reinstatement is effective, it relates back to and takes effect as of the effective date of the revocation and the foreign corporation shall resume carrying on its business as if the revocation had never occurred.

Source:Laws 2014, LB749, § 219; Laws 2015, LB279, § 5.

21-2,220. Appeal from revocation.

(MBCA 15.32) (a) If the Secretary of State denies a foreign corporation's application for reinstatement following administrative revocation of its certificate of authority under section 21-2,218, he or she shall serve the foreign corporation under section 21-2,212 with a written notice that explains the reason or reasons for denial.

(b) A foreign corporation may appeal the denial of reinstatement to the district court of Lancaster County within thirty days after service of the notice of denial is perfected under section 21-2,212. The foreign corporation appeals by petitioning the court to set aside the revocation and attaching to the petition copies of the Secretary of State's certificate of revocation, the foreign corporation's application for reinstatement, and the Secretary of State's notice of denial.

(c) The court may summarily order the Secretary of State to reinstate the certificate of authority or may take any other action the court considers appropriate.

(d) The court's final decision may be appealed as in other civil proceedings.

Source:Laws 2014, LB749, § 220.

21-2,220.01. Foreign corporation; domestication; procedure.

In lieu of compliance with section 21-2,203, relating to the authorization of foreign corporations to transact business in this state, any corporation organized under the laws of any other state or states which has heretofore filed, or which may hereafter file, with the Secretary of State of this state a copy, certified by the Secretary of State or other proper officer of the state or country under the laws of which such foreign corporation is formed, of its charter or articles of association or incorporation, together with all amendments to such date, the street address of its registered office in this state and the name and street address and, if one exists, a post office box number, of its current registered agent at that office, on filing with the Secretary of State a certified copy of a resolution adopted by its board of directors, including the date the resolution was adopted, accepting and agreeing to be bound by the provisions of the Nebraska Model Business Corporation Act with respect to its property and business operations within this state shall become and be a body corporate of this state as a foreign domesticated corporation. If the stock is no par, a resolution of the corporation, signed by an officer of the corporation, shall state the book value of the no par stock, which in no event shall be less than one dollar per share.

Source:Laws 2016, LB794, § 11.

21-2,220.02. Foreign corporation; cessation of domestication.

Any foreign corporation which has domesticated pursuant to section 21-2,220.01 may cease to be a foreign domesticated corporation by filing with the Secretary of State a certified copy of a resolution adopted by its board of directors renouncing its domestication and withdrawing its acceptance and agreement provided for in section 21-2,220.01.

Source:Laws 2016, LB794, § 12.

21-2,220.03. Foreign corporation; surrender of foreign charter; effect.

If a foreign corporation which has domesticated pursuant to section 21-2,220.01 surrenders its foreign corporate charter, and files, records, and publishes notice of amended articles of incorporation in the manner, time, and places required by sections 21-219, 21-220, and 21-2,229, such foreign domesticated corporation shall thereupon become and be a domestic corporation organized under the Nebraska Model Business Corporation Act.

Source:Laws 2016, LB794, § 13.

21-2,220.04. Foreign corporation; domesticated under prior law; status.

Any corporation organized under the laws of any other state which had become, prior to January 1, 2017, a body corporate of this state as a foreign domesticated corporation, shall retain such status for all purposes.

Source:Laws 2016, LB794, § 14.

21-2,221. Corporate records.

(MBCA 16.01) (a) A corporation shall keep as permanent records minutes of all meetings of its shareholders and board of directors, a record of all actions taken by the shareholders or board of directors without a meeting, and a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation.

(b) A corporation shall maintain appropriate accounting records.

(c) A corporation or its agent shall maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each.

(d) A corporation shall maintain its records in the form of a document, including an electronic record or in another form capable of conversion into paper form within a reasonable time.

(e) A corporation shall keep a copy of the following records at its principal office:

(1) Its articles or restated articles of incorporation, all amendments to them currently in effect, and any notices to shareholders referred to in subdivision (k)(5) of section 21-203 regarding facts on which a filed document is dependent;

(2) Its bylaws or restated bylaws and all amendments to them currently in effect;

(3) Resolutions adopted by its board of directors creating one or more classes or series of shares and fixing their relative rights, preferences, and limitations if shares issued pursuant to those resolutions are outstanding;

(4) The minutes of all shareholders' meetings and records of all action taken by shareholders without a meeting for the past three years;

(5) All written communications to shareholders generally within the past three years, including the financial statements furnished for the past three years under section 21-2,227;

(6) A list of the names and business addresses of its current directors and officers; and

(7) Its most recent biennial report delivered to the Secretary of State under section 21-2,228.

Source:Laws 2014, LB749, § 221.

21-2,222. Inspection of records by shareholders.

(MBCA 16.02) (a) A shareholder of a corporation is entitled to inspect and copy, during regular business hours at the corporation's principal office, any of the records of the corporation described in subsection (e) of section 21-2,221 if the shareholder gives the corporation a signed written notice of the shareholder's demand at least five business days before the date on which the shareholder wishes to inspect and copy.

(b) For any meeting of shareholders for which the record date for determining shareholders entitled to vote at the meeting is different than the record date for notice of the meeting, any person who becomes a shareholder subsequent to the record date for notice of the meeting and is entitled to vote at the meeting is entitled to obtain from the corporation upon request the notice and any other information provided by the corporation to shareholders in connection with the meeting unless the corporation has made such information generally available to shareholders by posting it on its website or by other generally recognized means. Failure of a corporation to provide such information does not affect the validity of action taken at the meeting.

(c) A shareholder of a corporation is entitled to inspect and copy, during regular business hours at a reasonable location specified by the corporation, any of the following records of the corporation if the shareholder meets the requirements of subsection (d) of this section and gives the corporation a signed written notice of the shareholder's demand at least five business days before the date on which the shareholder wishes to inspect and copy:

(1) Excerpts from minutes of any meeting of the board of directors or a committee of the board of directors while acting in place of the board of directors on behalf of the corporation, minutes of any meeting of the shareholders, and records of action taken by the shareholders, board of directors, or a committee of the board without a meeting, to the extent not subject to inspection under subsection (a) of this section;

(2) Accounting records of the corporation; and

(3) The record of shareholders.

(d) A shareholder may inspect and copy the records described in subsection (c) of this section only if:

(1) The shareholder's demand is made in good faith and for a proper purpose;

(2) The shareholder describes with reasonable particularity the shareholder's purpose and the records the shareholder desires to inspect; and

(3) The records are directly connected with the shareholder's purpose.

(e) The right of inspection granted by this section may not be abolished or limited by a corporation's articles of incorporation or bylaws.

(f) This section does not affect:

(1) The right of a shareholder to inspect records under section 21-262 or, if the shareholder is in litigation with the corporation, to the same extent as any other litigant; or

(2) The power of a court, independently of the Nebraska Model Business Corporation Act, to compel the production of corporate records for examination.

(g) For purposes of this section, shareholder means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner.

Source:Laws 2014, LB749, § 222; Laws 2017, LB35, § 26.

21-2,223. Scope of inspection right.

(MBCA 16.03) (a) A shareholder's agent or attorney has the same inspection and copying rights as the shareholder represented.

(b) The right to copy records under section 21-2,222 includes, if reasonable, the right to receive copies by xerographic or other means, including copies through an electronic transmission if available and so requested by the shareholder.

(c) The corporation may comply at its expense with a shareholder's demand to inspect the record of shareholders under subdivision (c)(3) of section 21-2,222 by providing the shareholder with a list of shareholders that was compiled no earlier than the date of the shareholder's demand.

(d) The corporation may impose a reasonable charge, covering the costs of labor and material, for copies of any documents provided to the shareholder. The charge may not exceed the estimated cost of production, reproduction, or transmission of the records.

Source:Laws 2014, LB749, § 223.

21-2,224. Court-ordered inspection.

(MBCA 16.04) (a) If a corporation does not allow a shareholder who complies with subsection (a) of section 21-2,222 to inspect and copy any records required by that subsection to be available for inspection, the district court of the county where the corporation's principal office, or, if none in this state, its registered office, is located may summarily order inspection and copying of the records demanded at the corporation's expense upon application of the shareholder.

(b) If a corporation does not within a reasonable time allow a shareholder to inspect and copy any other record, the shareholder who complies with subsections (c) and (d) of section 21-2,222 may apply to the district court of the county where the corporation's principal office, or, if none in this state, its registered office, is located for an order to permit inspection and copying of the records demanded. The court shall dispose of an application under this subsection on an expedited basis.

Source:Laws 2014, LB749, § 224.

21-2,225. Inspection of records by directors.

(MBCA 16.05) (a) A director of a corporation is entitled to inspect and copy the books, records, and documents of the corporation at any reasonable time to the extent reasonably related to the performance of the director's duties as a director, including duties as a member of a committee, but not for any other purpose or in any manner that would violate any duty to the corporation.

(b) The district court of the county where the corporation's principal office, or, if none in this state, its registered office, is located may order inspection and copying of the books, records, and documents at the corporation's expense upon application of a director who has been refused such inspection rights, unless the corporation establishes that the director is not entitled to such inspection rights. The court shall dispose of an application under this subsection on an expedited basis.

(c) If an order is issued, the court may include provisions protecting the corporation from undue burden or expense and provisions prohibiting the director from using information obtained upon exercise of the inspection rights in a manner that would violate a duty to the corporation, and the court may also order the corporation to reimburse the director for the director's expenses incurred in connection with the application.

Source:Laws 2014, LB749, § 225.

21-2,226. Exception to notice requirements.

(MBCA 16.06) (a) Whenever notice would otherwise be required to be given under any provision of the Nebraska Model Business Corporation Act to a shareholder, such notice need not be given if:

(1) Notices to shareholders of two consecutive annual meetings and all notices of meetings during the period between such two consecutive annual meetings have been sent to such shareholder at such shareholder's address as shown on the records of the corporation and have been returned undeliverable or could not be delivered; or

(2) All, but not less than two, payments of dividends on securities during a twelve-month period, or two consecutive payments of dividends on securities during a period of more than twelve months, have been sent to such shareholder at such shareholder's address as shown on the records of the corporation and have been returned undeliverable or could not be delivered.

(b) If any such shareholder shall deliver to the corporation a written notice setting forth such shareholder's then-current address, the requirement that notice be given to such shareholder shall be reinstated.

Source:Laws 2014, LB749, § 226.

21-2,227. Financial statements for shareholders.

(MBCA 16.20) (a) A corporation shall deliver to its shareholders annual financial statements, which may be consolidated or combined statements of the corporation and one or more of its subsidiaries, as appropriate, that include a balance sheet as of the end of the fiscal year, an income statement for that year, and a statement of changes in shareholders' equity for the year unless that information appears elsewhere in the financial statements. If financial statements are prepared for the corporation on the basis of generally accepted accounting principles, the annual financial statements must also be prepared on that basis.

(b) If the annual financial statements are reported upon by a public accountant, the report must accompany them. If not, the statements must be accompanied by a statement of the president or the person responsible for the corporation's accounting records:

(1) Stating such person's reasonable belief whether the statements were prepared on the basis of generally accepted accounting principles and, if not, describing the basis of preparation; and

(2) Describing any respects in which the statements were not prepared on a basis of accounting consistent with the statements prepared for the preceding year.

(c) Within one hundred twenty days after the close of each fiscal year, the corporation shall send the annual financial statements to each shareholder. Thereafter, on written request from a shareholder to whom the statements were not sent, the corporation shall send the shareholder the latest financial statements. A public corporation may fulfill its responsibilities under this section by delivering the specified financial statements or otherwise making them available in any manner permitted by the applicable rules and regulations of the United States Securities and Exchange Commission.

Source:Laws 2014, LB749, § 227.

21-2,228. Biennial report for Secretary of State.

(MBCA 16.21) Each domestic corporation and each foreign corporation authorized to transact business in this state shall deliver to the Secretary of State for filing a biennial report as required under section 21-301 or 21-304.

Source:Laws 2014, LB749, § 228.

21-2,229. Notice of incorporation, amendment, merger, or share exchange; notice of dissolution.

(a) Notice of incorporation, amendment, merger, or share exchange of a domestic corporation shall be published for three successive weeks in some legal newspaper of general circulation in the county where the corporation's principal office, or, if none in this state, its registered office, is located.

A notice of incorporation shall show (1) the corporate name for the corporation, (2) the number of shares the corporation is authorized to issue, (3) the street address of the corporation's initial registered office and the name of its initial registered agent at that office, and (4) the name and street address of each incorporator.

A brief resume of any amendment, merger, or share exchange of the corporation shall be published in the same manner and for the same period of time as a notice of incorporation is required to be published.

(b) Notice of the dissolution of a domestic corporation and the terms and conditions of such dissolution and the names of the persons who are to wind up and liquidate its business and affairs and their official titles with a statement of assets and liabilities of the corporation shall be published for three successive weeks in some legal newspaper of general circulation in the county where the corporation's principal office, or, if none in this state, its registered office, is located.

(c) Proof of publication of any of the notices required to be published under this section shall be filed in the office of the Secretary of State. In the event any notice required to be given pursuant to this section is not given but is subsequently published for the required time and proof of the publication thereof is filed in the office of the Secretary of State, the acts of such corporation prior to, as well as after, such publication shall be valid.

Source:Laws 2014, LB749, § 229.

21-2,230. Application to existing domestic corporations.

(MBCA 17.01) The Nebraska Model Business Corporation Act applies to all domestic corporations in existence on January 1, 2017, that were incorporated under any general statute of this state providing for incorporation of corporations for profit if power to amend or repeal the statute under which the corporation was incorporated was reserved.

Source:Laws 2014, LB749, § 230; Laws 2015, LB157, § 8.

21-2,231. Application to qualified foreign corporations.

(MBCA 17.02) A foreign corporation authorized to transact business in this state on January 1, 2017, is subject to the Nebraska Model Business Corporation Act but is not required to obtain a new certificate of authority to transact business under the act.

Source:Laws 2014, LB749, § 231; Laws 2015, LB157, § 9.

21-2,232. Saving provisions.

(MBCA 17.03) (a) Except as provided in subsection (b) of this section, the repeal of a statute by Laws 2014, LB749, does not affect:

(1) The operation of the statute or any action taken under it before its repeal;

(2) Any ratification, right, remedy, privilege, obligation, or liability acquired, accrued, or incurred under the statute before its repeal;

(3) Any violation of the statute, or any penalty, forfeiture, or punishment incurred because of the violation, before its repeal; or

(4) Any proceeding, reorganization, or dissolution commenced under the statute before its repeal, and the proceeding, reorganization, or dissolution may be completed in accordance with the statute as if it had not been repealed.

(b) If a penalty or punishment imposed for violation of a statute repealed by Laws 2014, LB749, is reduced by Laws 2014, LB749, the penalty or punishment if not already imposed shall be imposed in accordance with Laws 2014, LB749.

(c) In the event that any provisions of the Nebraska Model Business Corporation Act are deemed to modify, limit, or supersede the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. 7001 et seq., as the act existed on January 1, 2014, the provisions of the Nebraska Model Business Corporation Act shall control to the maximum extent permitted by section 102(a)(2) of that federal act, 15 U.S.C. 7002(a)(2).

Source:Laws 2014, LB749, § 232.

21-301. Domestic corporations; biennial report and occupation tax; procedure.

(1) Each domestic corporation subject to the Nebraska Model Business Corporation Act shall deliver a biennial report to the Secretary of State, as of January 1 of each even-numbered year, in such form as the Secretary of State may prescribe. The report shall be signed by one of the following: The president, a vice president, a secretary, or a treasurer of the corporation. The signature may be digital or electronic if it conforms to section 86-611. The report and occupation tax shall be delivered to the Secretary of State. The report and occupation tax shall be due on March 1 of each even-numbered year and shall become delinquent if not filed and paid by April 15 of each even-numbered year. If the Secretary of State finds that such report and occupation tax conform to the requirements of the law, the Secretary of State shall file the report. If the Secretary of State finds that the report or occupation tax does not conform, the Secretary of State shall not file the report or accept the occupation tax but shall return the report and occupation tax to the corporation for any necessary corrections. A correction or amendment to the report may be filed at any time.

(2) In each even-numbered year, the Secretary of State shall cause a notice to be sent either by United States mail or electronically transmitted to each corporation for which a report and occupation tax as described in this section have not been received as of March 1. The notice shall state that the report has not been received, that the report and occupation tax are due on March 1, and that the corporation will be administratively dissolved if the report and proper occupation tax are not received by April 15.

Source:Laws 1913, c. 240, § 1, p. 745; R.S.1913, § 761; C.S.1922, § 679; C.S.1929, § 24-1701; R.S.1943, § 21-301; Laws 1967, c. 101, § 1, p. 309; Laws 1969, c. 124, § 1, p. 567; Laws 1982, LB 928, § 6; Laws 2002, LB 989, § 1; Laws 2003, LB 524, § 1; Laws 2006, LB 647, § 1; Laws 2008, LB379, § 1; Laws 2014, LB749, § 238.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

Annotations

Intention of Legislature was to place domestic and foreign corporation upon an equality as regards tax. State ex rel. J. I. Case Threshing Machine Co. v. Marsh, 117 Neb. 832, 223 N.W. 126 (1929).

21-302. Domestic corporations; biennial report; contents.

The biennial report required under section 21-301 from a domestic corporation shall show:

(1) The exact corporate name of the corporation;

(2) The street address of the corporation's registered office and the name of its current registered agent at that office in this state. A post office box number may be provided in addition to the street address;

(3) The street address of the corporation's principal office;

(4) The names and street addresses of the corporation's directors and principal officers, which shall include the president, secretary, and treasurer;

(5) A brief description of the nature of the corporation's business;

(6) The amount of paid-up capital stock; and

(7) The change or changes, if any, in the above particulars made since the last biennial report.

Source:Laws 1913, c. 240, § 2, p. 745; R.S.1913, § 762; C.S.1922, § 680; C.S.1929, § 24-1702; R.S.1943, § 21-302; Laws 1967, c. 101, § 2, p. 309; Laws 1995, LB 109, § 195; Laws 2003, LB 524, § 2; Laws 2008, LB379, § 2; Laws 2014, LB749, § 239.

21-303. Corporations; occupation tax; amount; stock without par value, determination of amount.

(1) Upon the delivery of the biennial report required under section 21-301 to the Secretary of State, it shall be the duty of every corporation for profit, registered in the office of the Secretary of State on January 1, whether incorporated under the laws of this state or incorporated under the laws of any other state when such corporations have domesticated in this state pursuant to section 21-2,220.01, to pay to the Secretary of State an occupation tax in each even-numbered calendar year beginning January 1, which occupation tax shall be due and assessable on such date and delinquent if not paid on or before April 15 of each even-numbered year.

(2) The occupation tax shall be as follows: When the paid-up capital stock of a corporation does not exceed ten thousand dollars, an occupation tax of twenty-six dollars; when such paid-up capital stock exceeds ten thousand dollars but does not exceed twenty thousand dollars, an occupation tax of forty dollars; when such paid-up capital stock exceeds twenty thousand dollars but does not exceed thirty thousand dollars, an occupation tax of sixty dollars; when such paid-up capital stock exceeds thirty thousand dollars but does not exceed forty thousand dollars, an occupation tax of eighty dollars; when such paid-up capital stock exceeds forty thousand dollars but does not exceed fifty thousand dollars, an occupation tax of one hundred dollars; when such paid-up capital stock exceeds fifty thousand dollars but does not exceed sixty thousand dollars, an occupation tax of one hundred twenty dollars; when such paid-up capital stock exceeds sixty thousand dollars but does not exceed seventy thousand dollars, an occupation tax of one hundred forty dollars; when such paid-up capital stock exceeds seventy thousand dollars but does not exceed eighty thousand dollars, an occupation tax of one hundred sixty dollars; when such paid-up capital stock exceeds eighty thousand dollars but does not exceed ninety thousand dollars, an occupation tax of one hundred eighty dollars; when such paid-up capital stock exceeds ninety thousand dollars but does not exceed one hundred thousand dollars, an occupation tax of two hundred dollars; when such paid-up capital stock exceeds one hundred thousand dollars but does not exceed one hundred twenty-five thousand dollars, an occupation tax of two hundred forty dollars; when such paid-up capital stock exceeds one hundred twenty-five thousand dollars but does not exceed one hundred fifty thousand dollars, an occupation tax of two hundred eighty dollars; when such paid-up capital stock exceeds one hundred fifty thousand dollars but does not exceed one hundred seventy-five thousand dollars, an occupation tax of three hundred twenty dollars; when such paid-up capital stock exceeds one hundred seventy-five thousand dollars but does not exceed two hundred thousand dollars, an occupation tax of three hundred sixty dollars; when such paid-up capital stock exceeds two hundred thousand dollars but does not exceed two hundred twenty-five thousand dollars, an occupation tax of four hundred dollars; when such paid-up capital stock exceeds two hundred twenty-five thousand dollars but does not exceed two hundred fifty thousand dollars, an occupation tax of four hundred forty dollars; when such paid-up capital stock exceeds two hundred fifty thousand dollars but does not exceed two hundred seventy-five thousand dollars, an occupation tax of four hundred eighty dollars; when such paid-up capital stock exceeds two hundred seventy-five thousand dollars but does not exceed three hundred thousand dollars, an occupation tax of five hundred twenty dollars; when such paid-up capital stock exceeds three hundred thousand dollars but does not exceed three hundred twenty-five thousand dollars, an occupation tax of five hundred sixty dollars; when such paid-up capital stock exceeds three hundred twenty-five thousand dollars but does not exceed three hundred fifty thousand dollars, an occupation tax of six hundred dollars; when such paid-up capital stock exceeds three hundred fifty thousand dollars but does not exceed four hundred thousand dollars, an occupation tax of six hundred sixty-six dollars; when such paid-up capital stock exceeds four hundred thousand dollars but does not exceed four hundred fifty thousand dollars, an occupation tax of seven hundred thirty dollars; when such paid-up capital stock exceeds four hundred fifty thousand dollars but does not exceed five hundred thousand dollars, an occupation tax of eight hundred dollars; when such paid-up capital stock exceeds five hundred thousand dollars but does not exceed six hundred thousand dollars, an occupation tax of nine hundred ten dollars; when such paid-up capital stock exceeds six hundred thousand dollars but does not exceed seven hundred thousand dollars, an occupation tax of one thousand ten dollars; when such paid-up capital stock exceeds seven hundred thousand dollars but does not exceed eight hundred thousand dollars, an occupation tax of one thousand one hundred twenty dollars; when such paid-up capital stock exceeds eight hundred thousand dollars but does not exceed nine hundred thousand dollars, an occupation tax of one thousand two hundred thirty dollars; when such paid-up capital stock exceeds nine hundred thousand dollars but does not exceed one million dollars, an occupation tax of one thousand three hundred thirty dollars; when such paid-up capital stock exceeds one million dollars but does not exceed ten million dollars, an occupation tax of one thousand three hundred thirty dollars, and eight hundred dollars additional for each million or fraction thereof over and above one million dollars; when such paid-up capital stock exceeds ten million dollars but does not exceed fifteen million dollars, an occupation tax of twelve thousand dollars; when such paid-up capital stock exceeds fifteen million dollars but does not exceed twenty million dollars, an occupation tax of fourteen thousand six hundred sixty dollars; when such paid-up capital stock exceeds twenty million dollars but does not exceed twenty-five million dollars, an occupation tax of seventeen thousand three hundred thirty dollars; when such paid-up capital stock exceeds twenty-five million dollars but does not exceed fifty million dollars, an occupation tax of twenty thousand six hundred sixty dollars; when such paid-up capital stock exceeds fifty million dollars but does not exceed one hundred million dollars, an occupation tax of twenty-one thousand three hundred thirty dollars; and when such paid-up capital stock exceeds one hundred million dollars, an occupation tax of twenty-three thousand nine hundred ninety dollars. The minimum occupation tax for filing such report shall be twenty-six dollars. For purposes of determining the occupation tax, the stock of corporations incorporated under the laws of any other state, which corporations have domesticated in this state pursuant to section 21-2,220.01 and which stock is without par value, shall be deemed to have a par value of an amount equal to the amount paid in as capital for such shares at the time of the issuance thereof.

Source:Laws 1913, c. 240, § 3, p. 745; R.S.1913, § 763; C.S.1922, § 681; C.S.1929, § 24-1703; R.S.1943, § 21-303; Laws 1947, c. 55, § 1, p. 185; Laws 1955, c. 63, § 2, p. 200; Laws 1965, c. 87, § 1, p. 350; Laws 1967, c. 101, § 3, p. 310; Laws 1969, c. 124, § 2, p. 568; Laws 1982, LB 928, § 7; Laws 1992, LB 719A, § 90; Laws 2003, LB 524, § 3; Laws 2014, LB749, § 240; Laws 2016, LB794, § 15.

Annotations

Distinction between domestic and domesticated foreign corporation is recognized. Omaha Nat. Bank v. Jensen, 157 Neb. 22, 58 N.W.2d 582 (1953).

Under former law, all occupation taxes assessed against domestic corporation for profit were a lien upon all property of corporation. Licking v. Hays Lumber Co., 146 Neb. 240, 19 N.W.2d 148 (1945).

Tax hereunder is in nature of franchise tax, rather than tax upon property, capital stock, or business, and it is not a tax on interstate commerce. State of Nebraska ex rel. Beatrice Creamery Co. v. Marsh, 119 Neb. 197, 227 N.W. 926 (1929), appeal dismissed 282 U.S. 799 (1930).

Paid-up capital of Nebraska corporation means amount of authorized capital stock employed in business. State ex rel. J. I. Case Threshing Machine Co. v. Marsh, 117 Neb. 832, 223 N.W. 126 (1929).

21-304. Foreign corporations; biennial report and occupation tax; procedure.

(1) Each foreign corporation subject to the Nebraska Model Business Corporation Act, doing business in this state, owning or using a part or all of its capital or plant in this state, and subject to compliance with all other provisions of law shall, in addition to all other statements required by law, deliver a biennial report to the Secretary of State, as of January 1 of each even-numbered year, in such form as the Secretary of State may prescribe. The report shall be signed by one of the following: The president, a vice president, a secretary, or a treasurer of the corporation. The signature may be digital or electronic if it conforms to section 86-611. The report and occupation tax shall be delivered to the Secretary of State. The report and occupation tax shall be due on March 1 of each even-numbered year and shall become delinquent if not filed and paid by April 15 of each even-numbered year. If the Secretary of State finds that such report and occupation tax conform to the requirements of the law, the Secretary of State shall file the report. If the Secretary of State finds that the report or occupation tax does not conform, the Secretary of State shall not file the report or accept the occupation tax but shall return the report and occupation tax to the corporation for any necessary corrections. A correction or amendment to the report may be filed at any time.

(2) In each even-numbered year, the Secretary of State shall cause a notice to be sent either by United States mail or electronically transmitted to each corporation for which a report and occupation tax as described in this section have not been received as of March 1. The notice shall state that the report has not been received, that the report and occupation tax are due on March 1, and that the authority of the corporation to transact business in this state will be administratively revoked if the report and proper occupation tax are not received by April 15 of each even-numbered year.

Source:Laws 1913, c. 240, § 4, p. 748; R.S.1913, § 764; C.S.1922, § 682; C.S.1929, § 24-1704; R.S.1943, § 21-304; Laws 1955, c. 63, § 3, p. 203; Laws 1967, c. 101, § 4, p. 313; Laws 1969, c. 124, § 3, p. 571; Laws 1982, LB 928, § 8; Laws 2002, LB 989, § 2; Laws 2003, LB 524, § 4; Laws 2006, LB 647, § 2; Laws 2008, LB379, § 3; Laws 2014, LB749, § 241.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

Annotations

This section requires statement of how much capital is employed within and how much without the state. State ex rel. J. I. Case Threshing Machine Co. v. Marsh, 117 Neb. 832, 223 N.W. 126 (1929).

State only can complain of failure to conform to statutory requirements. Northwest Ready Roofing Co. v. Antes, 117 Neb. 121, 219 N.W. 848 (1928).

21-305. Foreign corporations; biennial report; contents.

The biennial report required under section 21-304 from a foreign corporation shall show:

(1) The exact corporate name of the foreign corporation and the name of the state or country under whose law it is incorporated;

(2) The street address of the foreign corporation's registered office and the name of its current registered agent at that office in this state. A post office box number may be provided in addition to the street address;

(3) The street address of the foreign corporation's principal office;

(4) The names and street addresses of the foreign corporation's directors and principal officers which shall include the president, secretary, and treasurer;

(5) A brief description of the nature of the foreign corporation's business;

(6) The value of the property owned and used by the foreign corporation in this state and where such property is situated; and

(7) The change or changes, if any, in the above particulars made since the last biennial report.

Source:Laws 1913, c. 240, § 5, p. 749; R.S.1913, § 765; C.S.1922, § 683; C.S.1929, § 24-1705; R.S.1943, § 21-305; Laws 1967, c. 101, § 5, p. 313; Laws 1995, LB 109, § 196; Laws 2003, LB 524, § 5; Laws 2008, LB379, § 4; Laws 2014, LB749, § 242.

Annotations

Domestic and foreign corporations are treated differently for purpose of tax. State of Nebraska ex rel. Beatrice Creamery Co. v. Marsh, 119 Neb. 197, 227 N.W. 926 (1929), appeal dismissed 282 U.S. 799 (1930).

21-306. Foreign corporations; occupation tax; investigation by Secretary of State for collection purposes.

Upon the delivery of the biennial report required under section 21-304 to the Secretary of State, it shall be the duty of every foreign corporation doing business in this state to pay to the Secretary of State an occupation tax each even-numbered calendar year beginning January 1 and become due and assessable on March 1 of that year and become delinquent if not paid by April 15 of each even-numbered year. The occupation tax shall be measured by the property employed by the foreign corporation in the conduct of its business in this state. For such purpose the property shall consist of the sum total of the actual value of all real estate and personal property employed in this state by such foreign corporation in the transaction of its business. The occupation tax to be paid by such foreign corporation shall be based upon the sum so determined and shall be considered the capital stock of such foreign corporation in this state for the purpose of the occupation tax. The schedule of payment shall be double the occupation tax set forth in section 21-303, or any amendments thereto, except that the occupation tax shall not exceed thirty thousand dollars, and the Secretary of State, or any person deputized by the Secretary of State, shall have authority to investigate and obtain information from such corporation or any state, county, or city official. Such officers are authorized by this section to furnish such information to the Secretary of State, or anyone deputized by the Secretary of State, in order to determine all facts and give effect to the collection of the occupation tax.

Source:Laws 1913, c. 240, § 6, p. 749; R.S.1913, § 766; C.S.1922, § 684; C.S.1929, § 24-1706; Laws 1933, c. 32, § 1, p. 212; Laws 1935, c. 47, § 1, p. 172; C.S.Supp.,1941, § 24-1706; R.S.1943, § 21-306; Laws 1955, c. 63, § 4, p. 203; Laws 1965, c. 87, § 2, p. 353; Laws 1967, c. 101, § 6, p. 313; Laws 1969, c. 124, § 4, p. 571; Laws 1982, LB 928, § 9; Laws 2002, LB 989, § 3; Laws 2003, LB 524, § 6; Laws 2014, LB749, § 243.

Annotations

Occupation tax of foreign corporation is computed upon basis of paid-up capital stock employed in this state. State ex rel. J. I. Case Threshing Machine Co. v. Marsh, 117 Neb. 832, 223 N.W. 126 (1929).

21-307. Repealed. Laws 1969, c. 124, § 11.

21-308. Repealed. Laws 1969, c. 124, § 11.

21-309. Repealed. Laws 1969, c. 124, § 11.

21-310. Repealed. Laws 1967, c. 101, § 14.

21-311. Occupation taxes; disposition; monthly report of Secretary of State.

The Secretary of State shall make a report monthly to the Tax Commissioner of the occupation taxes collected under sections 21-301 to 21-330 and remit them to the State Treasurer for credit to the General Fund. The report shall include the amount of any refunds paid out under section 21-328.

Source:Laws 1913, c. 240, § 11, p. 750; R.S.1913, § 771; C.S.1922, § 689; C.S.1929, § 24-1711; R.S.1943, § 21-311; Laws 1984, LB 799, § 2; Laws 2003, LB 524, § 7; Laws 2014, LB749, § 244.

21-312. Occupation taxes; lien; notice; lien subject to prior liens.

The occupation taxes required to be paid by sections 21-301 to 21-330 shall be the first and best lien on all property of the corporation whether such real or personal property is employed by the corporation in the prosecution of its business or is in the hands of an assignee, trustee, or receiver for the benefit of the creditors and stockholders thereof. The Secretary of State may file notice of such lien in the office of the county clerk of the county wherein the personal property sought to be charged with such lien is situated and with the county clerk or register of deeds of the county wherein the real estate sought to be charged with such lien is situated. The lien provided for in this section shall be invalid as to any mortgagee or pledgee whose lien is filed, as against any judgment lien which attached, or as against any purchaser whose rights accrued, prior to the filing of such notice.

Source:Laws 1913, c. 240, § 12, p. 750; R.S.1913, § 772; C.S.1922, § 690; C.S.1929, § 24-1712; Laws 1943, c. 54, § 1, p. 218; R.S.1943, § 21-312; Laws 1969, c. 124, § 5, p. 572; Laws 1988, LB 800, § 1; Laws 2014, LB749, § 245.

Annotations

Under prior statute, occupation taxes were a lien although not filed in office of register of deeds or county clerk. Licking v. Hays Lumber Co., 146 Neb. 240, 19 N.W.2d 148 (1945).

21-313. Domestic corporation; foreign corporation; failure to file report or pay occupation tax; effect.

(1) If a domestic corporation required to deliver the biennial report and pay the occupation tax prescribed in sections 21-301 to 21-330 fails or neglects to deliver such report or pay such occupation tax by April 15 of each even-numbered year, such corporation shall be administratively dissolved on April 16 of such year.

(2) If a foreign corporation required to deliver the biennial report and pay the occupation tax prescribed in sections 21-301 to 21-330 fails or neglects to deliver such report or pay such occupation tax by April 15 of each even-numbered year, the authority of such corporation to transact business in this state shall be administratively revoked on April 16 of such year.

Source:Laws 1913, c. 240, § 13, p. 750; R.S.1913, § 773; C.S.1922, § 691; C.S.1929, § 24-1713; R.S.1943, § 21-313; Laws 1945, c. 39, § 1, p. 195; Laws 1955, c. 63, § 7, p. 204; Laws 1967, c. 101, § 9, p. 315; Laws 1969, c. 124, § 6, p. 572; Laws 1982, LB 928, § 10; Laws 2002, LB 989, § 4; Laws 2003, LB 524, § 8; Laws 2014, LB749, § 246.

Annotations

Foreign corporation tax is computed upon the amount of its paid-up capital stock employed in Nebraska. State ex rel. J. I. Case Threshing Machine Co. v. Marsh, 117 Neb. 832, 223 N.W. 126 (1929).

After action has been brought in name of dissolved corporation, amendment may be allowed substituting as plaintiffs the managing directors as trustees. Weekes Grain & Live Stock Co. v. Ware & Leland, 99 Neb. 126, 155 N.W. 233 (1915).

After charter has been forfeited for nonpayment of occupation tax, corporation cannot sue in corporate name. Weekes Grain & Live Stock Co. v. Ware & Leland, 99 Neb. 126, 155 N.W. 233 (1915); Havens & Co. v. Colonial Apartment House Co., 97 Neb. 639, 150 N.W. 1011 (1915).

21-314. Occupation taxes; how collected; credited to General Fund.

Occupation tax or taxes to be paid as provided in sections 21-301 to 21-330 may be recovered by an action in the name of the state and on collection shall be remitted to the State Treasurer for credit to the General Fund.

Source:Laws 1913, c. 240, § 14, p. 750; R.S.1913, § 774; C.S.1922, § 692; C.S.1929, § 24-1714; R.S.1943, § 21-314; Laws 1969, c. 124, § 7, p. 573; Laws 1988, LB 800, § 2; Laws 2003, LB 524, § 9; Laws 2014, LB749, § 247.

21-315. Occupation taxes; collection; venue of action.

The Attorney General, on request of the Secretary of State, shall institute such action to recover occupation taxes in the district court of Lancaster County or any other county in the state in which such corporation has an office or place of business.

Source:Laws 1913, c. 240, § 15, p. 750; R.S.1913, § 775; C.S.1922, § 693; C.S.1929, § 24-1715; R.S.1943, § 21-315; Laws 2014, LB749, § 248.

21-316. Repealed. Laws 1971, LB 485, § 2.

21-317. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-318. List of corporations; duty of Secretary of State.

It shall be the duty of the Secretary of State to prepare and keep a correct list of all corporations subject to sections 21-301 to 21-330 and engaged in business within this state. For the purpose of obtaining the necessary information, the Secretary of State, or other person deputized by him or her, shall have access to the records of the offices of the county clerks of the state.

Source:Laws 1913, c. 240, § 18, p. 751; R.S.1913, § 778; C.S.1922, § 696; C.S.1929, § 24-1718; R.S.1943, § 21-318; Laws 1988, LB 800, § 3; Laws 2014, LB749, § 249.

21-319. Investigation by Secretary of State for collection purposes; duty of county clerk.

Any county clerk shall, upon request of the Secretary of State, furnish him or her with such information as is shown by the records of his or her office concerning corporations located within his or her county and subject to sections 21-301 to 21-330. The Secretary of State, or any person deputized by him or her for the purpose of determining the amount of the occupation tax due from such corporation, shall have authority to investigate and determine the facts showing the proportion of the paid-up capital stock of the company represented by its property and business in this state.

Source:Laws 1913, c. 240, § 19, p. 751; R.S.1913, § 779; C.S.1922, § 697; C.S.1929, § 24-1719; R.S.1943, § 21-319; Laws 1988, LB 800, § 4; Laws 2014, LB749, § 250.

21-320. Repealed. Laws 1969, c. 124, § 11.

21-321. Reports and fees; exemptions.

All banking, insurance, and building and loan association corporations paying fees and making reports to the Director of Insurance or the Director of Banking and Finance and all other corporations paying an occupation tax to the state under any other statutory provisions than those of sections 21-301 to 21-330 shall be exempt from the provisions of such sections.

Source:Laws 1913, c. 240, § 21, p. 752; R.S.1913, § 781; C.S.1922, § 699; C.S.1929, § 24-1721; R.S.1943, § 21-321; Laws 1969, c. 124, § 8, p. 573; Laws 1988, LB 800, § 5; Laws 2003, LB 524, § 10; Laws 2014, LB749, § 251.

21-322. Dissolution; certificate required; filing; fees.

In case of dissolution of a corporation by action of a competent court, or the winding up of a corporation, either foreign or domestic, by proceedings in assignment or bankruptcy, a certificate shall be signed by the clerk of the court in which such proceedings were had and filed in the office of the Secretary of State. The fees for making and filing such certificate shall be taxed as costs in the proceedings and paid out of the funds of the corporation and shall have the same priority as other costs.

Source:Laws 1913, c. 240, § 22, p. 752; R.S.1913, § 782; C.S.1922, § 700; C.S.1929, § 24-1722; Laws 1943, c. 54, § 2, p. 218; R.S.1943, § 21-322; Laws 1967, c. 101, § 11, p. 315; Laws 2014, LB749, § 252.

21-323. Domestic corporations; reports and taxes; notice; failure to pay; administrative dissolution; lien; priority.

(1) Prior to January 1 of each even-numbered year, the Secretary of State shall cause to be mailed by first-class mail to the last-named and appointed registered agent at the last-named street address of the registered office of each domestic corporation subject to sections 21-301 to 21-330 a notice stating that on or before March 1 of each even-numbered year occupation taxes are due to be paid and a properly executed and signed biennial report is due to be filed. If such occupation taxes are not paid and the report is not filed by April 15 of each even-numbered year, (a) such taxes and report shall become delinquent, (b) the delinquent corporation shall be administratively dissolved on April 16 of such year for nonpayment of occupation taxes and failure to file the report, and (c) the delinquent occupation tax shall be a lien upon the assets of the corporation subsequent only to state, county, and municipal taxes.

(2) Upon the failure of any domestic corporation to pay its occupation tax and deliver the biennial report within the time limited by sections 21-301 to 21-330, the Secretary of State shall on April 16 of such year administratively dissolve the corporation for nonpayment of taxes and make such entry and showing upon the records of his or her office.

(3)(a) The Secretary of State shall administratively dissolve a corporation by signing a certificate of dissolution that recites the ground or grounds for dissolution and its effective date. The Secretary of State shall file the original of the certificate and serve a copy on the corporation under section 21-236.

(b) A corporation administratively dissolved continues its corporate existence but may not carry on any business, except that business necessary to wind up and liquidate its business and affairs under section 21-2,188 and notify claimants under sections 21-2,189 and 21-2,190.

(4) All delinquent occupation taxes of the corporation shall be a lien upon the assets of the corporation, subsequent only to state, county, and municipal taxes.

(5) No domestic corporation shall be voluntarily dissolved until all occupation taxes and fees due to or assessable by the state have been paid and the biennial report filed by such corporation.

Source:Laws 1913, c. 240, § 22, p. 752; R.S.1913, § 782; C.S.1922, § 700; C.S.1929, § 24-1722; Laws 1943, c. 54, § 2, p. 218; R.S.1943, § 21-323; Laws 1957, c. 242, § 10, p. 823; Laws 1967, c. 101, § 12, p. 316; Laws 1969, c. 124, § 9, p. 573; Laws 1971, LB 485, § 1; Laws 1982, LB 928, § 11; Laws 1995, LB 109, § 197; Laws 2002, LB 989, § 5; Laws 2003, LB 524, § 11; Laws 2014, LB749, § 253.

Annotations

Under former law, lien of occupation taxes was not cut off by foreclosure of tax sale certificate where state was not made party defendant to suit and perfected lien. Licking v. Hays Lumber Co., 146 Neb. 240, 19 N.W.2d 148 (1945).

21-323.01. Domestic corporation administratively dissolved; reinstatement; application; procedure; payment required.

(1)(a) Until January 1, 2017, the provisions of this subsection apply. A corporation automatically dissolved under section 21-323 may apply to the Secretary of State for reinstatement within five years after the effective date of its automatic dissolution. The application shall:

(i) Recite the name of the corporation and the effective date of its automatic dissolution;

(ii) State that the ground or grounds for dissolution either did not exist or have been eliminated;

(iii) State that the corporation's name satisfies the requirements of section 21-2028; and

(iv) Be accompanied by a fee in the amount prescribed in section 21-2005, as such section may from time to time be amended, for an application for reinstatement.

(b) If the Secretary of State determines (i) that the application for reinstatement contains the information required by subdivision (a) of this subsection and that the information is correct and (ii) that the corporation has complied with subdivision (f) of this subsection, he or she shall cancel the certificate of dissolution, prepare a certificate of reinstatement that recites his or her determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the corporation under section 21-2034.

(c) A corporation that has been automatically dissolved under section 21-323 for more than five years may apply to the Secretary of State for late reinstatement. The application shall:

(i) Recite the name of the corporation and the effective date of its automatic dissolution;

(ii) State that the ground or grounds for dissolution either did not exist or have been eliminated;

(iii) State that the corporation's name satisfies the requirements of section 21-2028;

(iv) State that a legitimate reason exists for reinstatement and what such legitimate reason is;

(v) State that such reinstatement does not constitute fraud on the public; and

(vi) Be accompanied by a fee in the amount prescribed in section 21-2005, as such section may from time to time be amended, for an application for late reinstatement.

(d) If the Secretary of State determines (i) that an application for late reinstatement contains the information required by subdivision (c) of this subsection and that the information is correct and (ii) that the corporation has complied with subdivision (f) of this subsection, he or she shall cancel the certificate of dissolution, prepare a certificate of late reinstatement that recites his or her determination and the effective date of the reinstatement, file the original of the certificate, and serve a copy on the corporation under section 21-2034.

(e) When the reinstatement is effective, it shall relate back to and take effect as of the effective date of the automatic dissolution and the corporation shall resume carrying on its business as if the automatic dissolution had never occurred.

(f) A corporation applying for reinstatement under this subsection shall:

(i)(A) Pay to the Secretary of State a sum equal to all occupation taxes delinquent at the time the corporation was automatically dissolved, plus a sum equal to all occupation taxes which would otherwise have been due for the years the corporation was automatically dissolved; and (B) deliver to the Secretary of State a properly executed and signed biennial report for the most recent even-numbered year; and

(ii) Pay to the Secretary of State an additional amount derived by multiplying the rate specified in section 45-104.02, as such rate may from time to time be adjusted, times the amount of occupation taxes required to be paid by it for each year that such corporation was automatically dissolved.

(2)(a) Beginning January 1, 2017, the provisions of this subsection apply. A corporation administratively dissolved under section 21-323 may apply to the Secretary of State for reinstatement within five years after the effective date of its administrative dissolution. The application shall:

(i) Recite the name of the corporation and the effective date of its administrative dissolution;

(ii) State that the ground or grounds for dissolution either did not exist or have been eliminated;

(iii) State that the corporation's name satisfies the requirements of section 21-230; and

(iv) Be accompanied by a fee in the amount prescribed in section 21-205, as such section may from time to time be amended, for an application for reinstatement.

(c) A corporation administratively dissolved under section 21-323 for more than five years may apply to the Secretary of State for late reinstatement. The application shall:

(i) Recite the name of the corporation and the effective date of its administrative dissolution;

(ii) State that the ground or grounds for dissolution either did not exist or have been eliminated;

(iii) State that the corporation's name satisfies the requirements of section 21-230;

(iv) State that a legitimate reason exists for reinstatement and what such legitimate reason is;

(v) State that such reinstatement does not constitute fraud on the public; and

(vi) Be accompanied by a fee in the amount prescribed in section 21-205, as such section may from time to time be amended, for an application for late reinstatement.

(d) If the Secretary of State determines (i) that the application for late reinstatement contains the information required by subdivision (c) of this subsection and that the information is correct and (ii) that the corporation has complied with subdivision (f) of this subsection, he or she shall cancel the certificate of dissolution, prepare a certificate of late reinstatement that recites his or her determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the corporation under section 21-236.

(e) When the reinstatement is effective, it shall relate back to and take effect as of the effective date of the administrative dissolution and the corporation shall resume carrying on its business as if the administrative dissolution had never occurred.

(f) A corporation applying for reinstatement under this subsection shall:

(i)(A) Pay to the Secretary of State a sum equal to all occupation taxes delinquent at the time the corporation was administratively dissolved, plus a sum equal to all occupation taxes which would otherwise have been due for the years the corporation was administratively dissolved and (B) deliver to the Secretary of State a properly executed and signed biennial report for the most recent even-numbered year; and

Source:Laws 1995, LB 109, § 198; Laws 1996, LB 1036, § 1; Laws 2003, LB 524, § 12; Laws 2012, LB854, § 2; Laws 2014, LB749, § 254; Laws 2015, LB279, § 6.

21-323.02. Domestic corporation administratively dissolved; denial of reinstatement; appeal.

(1) If the Secretary of State denies a corporation's application for reinstatement following administrative dissolution under section 21-323, he or she shall serve the corporation under section 21-236 with a written notice that explains the reason or reasons for denial.

(2) The corporation may appeal the denial of reinstatement to the district court of Lancaster County within thirty days after service of the notice of denial is perfected under section 21-236. The corporation shall appeal by petitioning the court to set aside the dissolution and attaching to the petition copies of the Secretary of State's certificate of dissolution, the corporation's application for reinstatement, and the Secretary of State's notice of denial.

(3) The court may summarily order the Secretary of State to reinstate the dissolved corporation or may take other action the court considers appropriate.

(4) The court's final decision may be appealed as in other civil proceedings.

Source:Laws 1995, LB 109, § 199; Laws 2014, LB749, § 255.

21-324. Repealed. Laws 1967, c. 101, § 14.

21-325. Foreign corporations; reports and taxes; notice; failure to pay; authority to transact business revoked; lien; priority.

(1) Prior to January 1 of each even-numbered year, the Secretary of State shall cause to be mailed by first-class mail to the last-known address of each foreign corporation subject to sections 21-301 to 21-330 a notice stating that on or before March 1 of each even-numbered year occupation taxes are due to be paid and a properly executed and signed biennial report is due to be filed. If such occupation taxes are not paid and the report is not filed by April 15 of each even-numbered year, (a) such taxes and report shall become delinquent, (b) the authority of the delinquent corporation to transact business in this state shall be administratively revoked on April 16 of such year for nonpayment of occupation taxes and failure to file the report, and (c) the delinquent occupation tax shall be a lien upon the assets of the corporation subject only to state, county, and municipal taxes.

(2) Upon the failure of any foreign corporation to pay its occupation tax and deliver the biennial report within the time limited by sections 21-301 to 21-330, the Secretary of State shall on April 16 of such year administratively revoke the authority of the corporation to transact business in this state for nonpayment of taxes and shall bar the corporation from doing business in this state under the corporation laws of this state and make such entry and showing upon the records of his or her office.

(3)(a) The Secretary of State shall administratively revoke the authority of a foreign corporation by signing a certificate of revocation of authority to transact business in this state that recites the ground or grounds for revocation and its effective date. The Secretary of State shall file the original of the certificate and serve a copy on the foreign corporation under section 21-2,212.

(b) The authority of a foreign corporation to transact business in this state shall cease on the date shown on the certificate revoking its certificate of authority.

(c) Revocation of a foreign corporation's certificate of authority shall not terminate the authority of the registered agent of the corporation.

(4) All delinquent corporation occupation taxes of the foreign corporation shall be a lien upon the assets of the corporation within the state, subsequent only to state, county, and municipal taxes. Nothing in sections 21-322 to 21-330 shall be construed to allow a foreign corporation to do business in this state without complying with the laws of this state.

(5) No foreign corporation shall be voluntarily withdrawn until all occupation taxes due to or assessable by this state have been paid and the biennial report filed by such corporation.

Source:Laws 1913, c. 240, § 23, p. 752; R.S.1913, § 783; Laws 1921, c. 173, § 2, p. 668; C.S.1922, § 701; C.S.1929, § 24-1723; R.S.1943, § 21-325; Laws 1957, c. 242, § 11, p. 824; Laws 1967, c. 101, § 13, p. 316; Laws 1969, c. 124, § 10, p. 574; Laws 1982, LB 928, § 12; Laws 1995, LB 109, § 200; Laws 2002, LB 989, § 6; Laws 2003, LB 524, § 13; Laws 2014, LB749, § 256.

21-325.01. Foreign corporation authority to transact business revoked; reinstatement; procedure.

(1)(a) Until January 1, 2017, the provisions of this subsection apply. A foreign corporation, the certificate of authority of which has been revoked under section 21-325, may apply to the Secretary of State for reinstatement within five years after the effective date of the revocation. The application shall:

(i) Recite the name of the foreign corporation and the effective date of the revocation;

(ii) State that the ground or grounds for revocation either did not exist or have been eliminated;

(iii) State that the foreign corporation's name satisfies the requirements of section 21-20,173; and

(iv) Be accompanied by a fee in the amount prescribed in section 21-2005, as such section may from time to time be amended, for an application for reinstatement.

(b) If the Secretary of State determines (i) that the application contains the information required by subdivision (a) of this subsection and that the information is correct and (ii) that the foreign corporation has complied with subdivision (f) of this subsection, he or she shall cancel the certificate of revocation, prepare a certificate of reinstatement that recites his or her determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the foreign corporation under section 21-20,177.

(c) A foreign corporation, the certificate of authority of which has been automatically revoked under section 21-325 for more than five years, may apply to the Secretary of State for late reinstatement. The application shall:

(i) Recite the name of the foreign corporation and the effective date of the revocation;

(ii) State that the ground or grounds for revocation either did not exist or have been eliminated;

(iii) State that the foreign corporation's name satisfies the requirements of section 21-20,173;

(iv) State that a legitimate reason exists for reinstatement and what such legitimate reason is;

(v) State that such reinstatement does not constitute fraud on the public; and

(vi) Be accompanied by a fee in the amount prescribed in section 21-2005, as such section may from time to time be amended, for an application for late reinstatement.

(d) If the Secretary of State determines (i) that the application for late reinstatement contains the information required by subdivision (c) of this subsection and that the information is correct and (ii) that the foreign corporation has complied with subdivision (f) of this subsection, he or she shall cancel the certificate of revocation, prepare a certificate of late reinstatement that recites his or her determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the foreign corporation under section 21-20,177.

(e) When the reinstatement is effective, it shall relate back to and take effect as of the effective date of the revocation and the foreign corporation shall resume carrying on its business as if the revocation had never occurred.

(f) A foreign corporation applying for reinstatement under this subsection shall:

(i)(A) Pay to the Secretary of State a sum equal to all occupation taxes delinquent as of the effective date of the revocation, plus a sum equal to all occupation taxes which would otherwise have been due for the years the foreign corporation's certificate of authority was revoked; and (B) deliver to the Secretary of State a properly executed and signed biennial report for the most recent even-numbered year; and

(2)(a) Beginning January 1, 2017, the provisions of this subsection apply. A foreign corporation, the certificate of authority of which has been administratively revoked under section 21-325, may apply to the Secretary of State for reinstatement within five years after the effective date of the revocation. The application shall:

(i) Recite the name of the foreign corporation and the effective date of the revocation;

(ii) State that the ground or grounds for revocation either did not exist or have been eliminated;

(iii) State that the foreign corporation's name satisfies the requirements of section 21-2,208; and

(iv) Be accompanied by a fee in the amount prescribed in section 21-205, as such section may from time to time be amended, for an application for reinstatement.

(c) A foreign corporation, the certificate of authority of which has been administratively revoked under section 21-325 for more than five years, may apply to the Secretary of State for late reinstatement. The application shall:

(i) Recite the name of the foreign corporation and the effective date of the revocation;

(ii) State that the ground or grounds for revocation either did not exist or have been eliminated;

(iii) State that the foreign corporation's name satisfies the requirements of section 21-2,208;

(iv) State that a legitimate reason exists for reinstatement and what such legitimate reason is;

(v) State that such reinstatement does not constitute fraud on the public; and

(vi) Be accompanied by a fee in the amount prescribed in section 21-205, as such section may from time to time be amended, for an application for late reinstatement.

(d) If the Secretary of State determines (i) that the application for late reinstatement contains the information required by subdivision (c) of this subsection and that the information is correct and (ii) that the foreign corporation has complied with subdivision (f) of this subsection, he or she shall cancel the certificate of revocation, prepare a certificate of late reinstatement that recites his or her determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the foreign corporation under section 21-2,212.

(e) When the reinstatement is effective, it shall relate back to and take effect as of the effective date of the administrative revocation and the foreign corporation shall resume carrying on its business as if the administrative revocation had never occurred.

(f) A foreign corporation applying for reinstatement under this subsection shall:

(i)(A) Pay to the Secretary of State a sum equal to all occupation taxes delinquent as of the effective date of the revocation, plus a sum equal to all occupation taxes which would otherwise have been due for the years the foreign corporation's certificate of authority was revoked, and (B) deliver to the Secretary of State a properly executed and signed biennial report for the most recent even-numbered year; and

Source:Laws 1995, LB 109, § 201; Laws 1996, LB 1036, § 2; Laws 2003, LB 524, § 14; Laws 2012, LB854, § 3; Laws 2014, LB749, § 257; Laws 2015, LB279, § 7.

21-325.02. Foreign corporation authority to transact business; reinstatement denied; appeal.

(1) If the Secretary of State denies a foreign corporation's application for reinstatement following administrative revocation of its certificate of authority under section 21-325, he or she shall serve the foreign corporation under section 21-2,212 with a written notice that explains the reason or reasons for denial.

(2) The foreign corporation may appeal the denial of reinstatement to the district court of Lancaster County within thirty days after service of the notice of denial is perfected under section 21-2,212. The foreign corporation shall appeal by petitioning the court to set aside the revocation and attaching to the petition copies of the Secretary of State's certificate of revocation, the foreign corporation's application for reinstatement, and the Secretary of State's notice of denial.

(3) The court may summarily order the Secretary of State to reinstate the certificate of authority or may take any other action the court considers appropriate.

(4) The court's final decision may be appealed as in other civil proceedings.

Source:Laws 1996, LB 1036, § 3; Laws 2014, LB749, § 258.

21-326. Repealed. Laws 1967, c. 101, § 14.

21-327. Repealed. Laws 1967, c. 101, § 14

21-328. Occupation tax; refund; procedure; appeal.

Any corporation paying the occupation tax imposed by section 21-303 or 21-306 may claim a refund if the payment of such occupation tax was invalid for any reason. The corporation shall file a written claim and any evidence supporting the claim within two years after payment of such occupation tax. The Secretary of State shall either approve or deny the claim within thirty days after such filing. Any approved claims shall be paid out of the General Fund. Appeal of a decision by the Secretary of State shall be in accordance with the Administrative Procedure Act.

Source:Laws 1984, LB 799, § 1; Laws 1988, LB 352, § 21; Laws 2014, LB749, § 259.

Cross References

Administrative Procedure Act, see section 84-920.

21-329. Paid-up capital stock, defined.

For purposes of sections 21-301 to 21-330, the term paid-up capital stock shall mean, at any particular time, the sum of the par value of all shares of capital stock of the corporation issued and outstanding.

Source:Laws 1984, LB 800, § 1; Laws 1995, LB 109, § 202; Laws 1999, LB 35, § 1; Laws 2014, LB749, § 260.

21-330. Corporations; excess payment; refund.

Any corporation which has paid occupation tax in excess of the proper amount of the occupation tax imposed in sections 21-301 to 21-330 shall be entitled to a refund of such excess payment. Claims for refund shall be filed with the Secretary of State or may be submitted by the Secretary of State based on his or her own investigation. If approved or submitted by the Secretary of State, the claim shall be forwarded to the State Treasurer for payment from the General Fund. The Secretary of State shall not refund any excess occupation tax payment if five years have passed from the date of the excess payment.

Source:Laws 1991, LB 829, § 25; Laws 1992, Fourth Spec. Sess., LB 1, § 1; Laws 1993, LB 345, § 1; Laws 1995, LB 182, § 21; Laws 2003, LB 524, § 15; Laws 2006, LB 647, § 3; Laws 2014, LB749, § 261.

21-401. Act, how cited.

Sections 21-401 to 21-414 shall be known and may be cited as the Nebraska Benefit Corporation Act.

Source:Laws 2014, LB751, § 1.

21-402. Applicability of act; Nebraska Model Business Corporation Act generally applicable.

(1) The Nebraska Benefit Corporation Act applies to all benefit corporations.

(2) The existence of a provision of the Nebraska Benefit Corporation Act does not of itself create an implication that a contrary or different rule of law is applicable to a business corporation that is not a benefit corporation. The act does not affect a statute or rule of law that is applicable to a business corporation that is not a benefit corporation.

(3) Except as otherwise provided in the Nebraska Benefit Corporation Act, the Nebraska Model Business Corporation Act is generally applicable to all benefit corporations. The specific provisions of the Nebraska Benefit Corporation Act control over the general provisions of the Nebraska Model Business Corporation Act. A benefit corporation may be subject simultaneously to the Nebraska Benefit Corporation Act and one or more other statutes that provide for the incorporation of a specific type of business corporation.

(4) A provision of the articles of incorporation or bylaws of a benefit corporation may not limit, be inconsistent with, or supersede a provision of the Nebraska Benefit Corporation Act.

Source:Laws 2014, LB751, § 2; Laws 2015, LB35, § 1.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

21-403. Terms, defined.

The following words and phrases when used in the Nebraska Benefit Corporation Act have the meanings given to them in this section unless the context clearly indicates otherwise:

(1) Benefit corporation means a business corporation:

(a) Which has elected to become subject to the act; and

(b) The status of which as a benefit corporation has not been terminated;

(2) Benefit director means the director designated as the benefit director of a benefit corporation under section 21-409;

(3) Benefit enforcement proceeding means any claim or action or proceeding for:

(a) Failure of a benefit corporation to pursue or create general public benefit or a specific public benefit purpose set forth in its articles of incorporation; or

(b) Violation of any obligation, duty, or standard of conduct under the act;

(4) Benefit officer means the officer designated as the benefit officer of a benefit corporation under section 21-411;

(5) Business corporation means a domestic corporation as defined in section 21-214;

(6) General public benefit means a material positive impact on society and the environment, taken as a whole, assessed against a third-party standard, from the business and operations of a benefit corporation;

(7) Independent means having no material relationship with a benefit corporation or a subsidiary of the benefit corporation. Serving as benefit director or benefit officer does not make an individual not independent. A material relationship between an individual and a benefit corporation or any of its subsidiaries will be conclusively presumed to exist if:

(a) The individual is, or has been within the last three years, an employee other than a benefit officer of the benefit corporation or a subsidiary;

(b) An immediate family member of the individual is, or has been within the last three years, an executive officer other than a benefit officer of the benefit corporation or a subsidiary; or

(c) There is beneficial or record ownership of five percent or more of the outstanding shares of the benefit corporation, calculated as if all outstanding rights to acquire equity interests in the benefit corporation had been exercised, by:

(i) The individual; or

(ii) An entity:

(A) Of which the individual is a director, an officer, or a manager; or

(B) In which the individual owns beneficially or of record five percent or more of the outstanding equity interests, calculated as if all outstanding rights to acquire equity interests in the entity had been exercised;

(8) Minimum status vote means:

(a) In the case of a business corporation, in addition to any other required approval or vote, the satisfaction of the following conditions:

(i) The shareholders of every class or series are entitled to vote separately on a corporate action regardless of a limitation stated in the articles of incorporation or bylaws on the voting rights of any class or series; and

(ii) The corporate action must be approved by a vote of the shareholders of each class or series entitled to cast at least two-thirds of the votes that all shareholders of the class or series are entitled to cast on the action; and

(b) In the case of a domestic entity other than a business corporation, in addition to any other required approval, vote, or consent, the satisfaction of the following conditions:

(i) The holders of every class or series of equity interests in the entity that are entitled to receive a distribution of any kind from the entity are entitled to vote separately on or consent to the action regardless of any otherwise applicable limitation on the voting or consent rights of any class or series; and

(ii) The action must be approved by a vote or consent of the holders described in subdivision (i) of this subdivision entitled to cast at least two-thirds of the votes or consents that all of those holders are entitled to cast on the action;

(9) Publicly traded corporation means a business corporation that has shares listed on a national securities exchange or traded in a market maintained by one or more members of a national securities association;

(10) Specific public benefit includes:

(a) Providing low-income or underserved individuals or communities with beneficial products or services;

(b) Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;

(d) Improving human health;

(e) Promoting the arts, sciences, or advancement of knowledge;

(f) Increasing the flow of capital to entities with a purpose to benefit society or the environment; and

(g) Conferring any other particular benefit on society or the environment;

(11) Subsidiary means in relation to a person, an entity in which the person owns beneficially or of record fifty percent or more of the outstanding equity interests; and

(12) Third-party standard means a recognized standard for defining, reporting, and assessing corporate social and environmental performance that is:

(a) Comprehensive because it assesses the effect of the business and its operations upon the interests listed in subdivisions (1)(a)(ii), (iii), (iv), and (v) of section 21-408;

(b) Developed by an entity that is not controlled by the benefit corporation;

(i) Has access to necessary expertise to assess overall corporate social and environmental performance; and

(ii) Uses a balanced multistakeholder approach to develop the standard, including a reasonable public comment period; and

(d) Transparent because the following information is publicly available:

(i) About the standard:

(A) The criteria considered when measuring the overall social and environmental performance of a business; and

(B) The relative weightings, if any, of those criteria; and

(ii) About the development and revision of the standard:

(A) The identity of the directors, officers, material owners, and governing body of the entity that developed and controls revisions to the standard;

(B) The process by which revisions to the standard and changes to the membership of the governing body are made; and

(C) An accounting of the revenue and sources of financial support for the entity, with sufficient detail to disclose any relationships that could reasonably be considered to present a potential conflict of interest.

Source:Laws 2014, LB751, § 3; Laws 2015, LB35, § 2.

21-404. Incorporation; articles of incorporation; statement required.

A benefit corporation shall be incorporated in accordance with the Nebraska Model Business Corporation Act, but its articles of incorporation must also state that it is a benefit corporation.

Source:Laws 2014, LB751, § 4; Laws 2015, LB35, § 3.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

21-405. Existing business corporation; amend articles of incorporation; statement required; other entities; procedure.

(1) An existing business corporation may become a benefit corporation under the Nebraska Benefit Corporation Act by amending its articles of incorporation so that they contain, in addition to the requirements of section 21-220, a statement that the corporation is a benefit corporation. In order to be effective, the amendment must be adopted by at least the minimum status vote.

(2) An entity that is not a benefit corporation may become a benefit corporation pursuant to subsection (1) of this section if the entity is (a) a party to a merger or conversion or (b) an exchanging entity in a share exchange, and the surviving, new, or resulting entity in the merger, conversion, or share exchange is to be a benefit corporation. In order to be effective, a plan of merger, conversion, or share exchange subject to this subsection must be adopted by at least the minimum status vote.

Source:Laws 2014, LB751, § 5; Laws 2015, LB35, § 4.

21-406. Benefit corporation; terminate status; procedure.

(1) A benefit corporation may terminate its status as such and cease to be subject to the Nebraska Benefit Corporation Act by amending its articles of incorporation to delete the provision required by section 21-404 or 21-405 to be stated in the articles of a benefit corporation. In order to be effective, the amendment must be adopted by at least the minimum status vote.

(2) If a plan of merger, conversion, or share exchange would have the effect of terminating the status of a business corporation as a benefit corporation, the plan must be adopted by at least the minimum status vote in order to be effective. Any sale, lease, exchange, or other disposition of all or substantially all of the assets of a benefit corporation, unless the transaction is in the usual and regular course of business, is not effective unless the transaction is approved by at least the minimum status vote.

Source:Laws 2014, LB751, § 6.

21-407. General public benefit; specific public benefit.

(1) A benefit corporation shall have a purpose of creating general public benefit. This purpose is in addition to its purpose under section 21-226.

(2) The articles of incorporation of a benefit corporation may identify one or more specific public benefits that it is the purpose of the benefit corporation to create in addition to its purposes under section 21-226 and subsection (1) of this section. The identification of a specific public benefit under this subsection does not limit the purpose of a benefit corporation to create general public benefit under subsection (1) of this section.

(3) The creation of general public benefit and specific public benefit under subsections (1) and (2) of this section is in the best interests of the benefit corporation.

(4) A benefit corporation may amend its articles of incorporation to add, amend, or delete the identification of a specific public benefit that it is the purpose of the benefit corporation to create. In order to be effective, the amendment must be adopted by at least the minimum status vote.

Source:Laws 2014, LB751, § 7; Laws 2015, LB35, § 5.

21-408. Board of directors, committees of the board, and directors; duties; powers; liability.

(1) In discharging the duties of their respective positions and in considering the best interests of the benefit corporation, the board of directors, committees of the board, and individual directors of a benefit corporation:

(a) Shall consider the effects of any action or inaction upon:

(i) The shareholders of the benefit corporation;

(ii) The employees and work force of the benefit corporation, its subsidiaries, and its suppliers;

(iii) The interests of customers as beneficiaries of the general public benefit or specific public benefit purposes of the benefit corporation;

(iv) Community and societal factors, including those of each community in which offices or facilities of the benefit corporation, its subsidiaries, or its suppliers are located;

(v) The local and global environment;

(vi) The short-term and long-term interests of the benefit corporation, including benefits that may accrue to the benefit corporation from its long-term plans and the possibility that these interests may be best served by the continued independence of the benefit corporation; and

(vii) The ability of the benefit corporation to accomplish its general public benefit purpose and any specific public benefit purpose;

(b) May consider other pertinent factors or the interests of any other group that they deem appropriate; and

(c) Need not give priority to the interests of a particular person or group referred to in subdivision (a) or (b) of this subsection over the interests of any other person or group unless the benefit corporation has stated in its articles of incorporation its intention to give priority to certain interests related to its accomplishment of its general public benefit purpose or of a specific public benefit purpose identified in its articles of incorporation.

(2) The consideration of interests and factors in the manner required by subsection (1) of this section does not constitute a violation of section 21-2,102.

(3) Except as provided in the articles of incorporation or bylaws, a director is not personally liable for monetary damages for:

(a) Any action or inaction in the course of performing the duties of a director under subsection (1) of this section if the director performed the duties of office in compliance with section 21-2,102 and this section; or

(b) Failure of the benefit corporation to pursue or create general public benefit or specific public benefit.

(4) A director does not have a duty to a person that is a beneficiary of the general public benefit purpose or a specific public benefit purpose of a benefit corporation arising from the status of the person as a beneficiary.

(5) A director who makes a business judgment in good faith fulfills the duty under this section if the director:

(a) Is not interested in the subject of the business judgment;

(b) Is informed with respect to the subject of the business judgment to the extent the director reasonably believes to be appropriate under the circumstances; and

Source:Laws 2014, LB751, § 8; Laws 2015, LB35, § 6.

21-409. Board of directors; benefit director; annual benefit report; contents; liability.

(1) The board of directors of a benefit corporation that is a publicly traded corporation shall, and the board of any other benefit corporation may, include a director, who:

(a) Shall be designated the benefit director; and

(b) Shall have, in addition to the powers, duties, rights, and immunities of the other directors of the benefit corporation, the powers, duties, rights, and immunities provided in this section.

(2) The benefit director shall be elected and may be removed in the manner provided by the Nebraska Model Business Corporation Act. The benefit director shall be an individual who is independent. The benefit director may serve as the benefit officer at the same time as serving as the benefit director. The articles of incorporation or bylaws of a benefit corporation may prescribe additional qualifications of the benefit director not inconsistent with this subsection.

(3) The benefit director shall prepare, and the benefit corporation shall include in the annual benefit report to shareholders required by section 21-413, the opinion of the benefit director on all of the following:

(a) Whether the benefit corporation acted in accordance with its general public benefit purpose and any specific public benefit purpose in all material respects during the period covered by the benefit report;

(b) Whether the directors and officers complied with subsection (1) of section 21-408 and subsection (1) of section 21-410, respectively; and

(c) If, in the opinion of the benefit director, the benefit corporation or its directors or officers failed to act or comply in the manner described in subdivisions (3)(a) and (b) of this subsection, a description of the ways in which the benefit corporation or its directors or officers failed to act or comply.

(4) The action or inaction of an individual in the capacity of a benefit director constitutes for all purposes an action or inaction of that individual in the capacity of a director of the benefit corporation.

(5) Regardless of whether the articles of incorporation or bylaws of a benefit corporation include a provision eliminating or limiting the personal liability of directors authorized by section 21-220, a benefit director is not personally liable for an act or omission in the capacity of a benefit director unless the act or omission constitutes self-dealing, willful misconduct, or a knowing violation of law.

Source:Laws 2014, LB751, § 9; Laws 2015, LB35, § 7.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

21-410. Officer; consider interests and factors; liability; duties.

(1) Each officer of a benefit corporation shall consider the interests and factors described in subsection (1) of section 21-408 in the manner provided in that subsection if:

(a) The officer has discretion to act with respect to a matter; and

(b) It reasonably appears to the officer that the matter may have a material effect on the creation by the benefit corporation of general public benefit or a specific public benefit identified in the articles of incorporation of the benefit corporation.

(2) The consideration of interests and factors in the manner described in subsection (1) of this section does not constitute a violation of section 21-2,107.

(3) Except as provided in the articles of incorporation or bylaws, an officer is not personally liable for monetary damages for:

(a) An action or inaction as an officer in the course of performing the duties of an officer under subsection (1) of this section if the officer performed the duties of the position in compliance with section 21-2,107 and this section; or

(b) Failure of the benefit corporation to pursue or create general public benefit or specific public benefit.

(4) An officer does not have a duty to a person that is a beneficiary of the general public benefit purpose or a specific public benefit purpose of a benefit corporation arising from the status of the person as a beneficiary.

(5) An officer who makes a business judgment in good faith fulfills the duty under this section if the officer:

(a) Is not interested in the subject of the business judgment;

(b) Is informed with respect to the subject of the business judgment to the extent the officer reasonably believes to be appropriate under the circumstances; and

Source:Laws 2014, LB751, § 10; Laws 2015, LB35, § 8.

21-411. Benefit officer; powers and duties.

(1) A benefit corporation may have an officer designated the benefit officer.

(2) A benefit officer shall have:

(a) The powers and duties relating to the purpose of the corporation to create general public benefit or specific public benefit provided:

(i) By the bylaws; or

(ii) Absent controlling provisions in the bylaws, by resolutions or orders of the board of directors; and

(b) The duty to prepare the annual benefit report required by section 21-413.

Source:Laws 2014, LB751, § 11.

21-412. Limitation on actions and claims; liability; benefit enforcement proceeding; when authorized.

(1)(a) Except in a benefit enforcement proceeding, no person may bring an action or assert a claim against a benefit corporation or its directors or officers with respect to:

(i) Failure to pursue or create general public benefit or a specific public benefit set forth in its articles of incorporation; or

(ii) Violation of an obligation, duty, or standard of conduct under the Nebraska Benefit Corporation Act.

(b) A benefit corporation is not liable for monetary damages under the act for any failure of the benefit corporation to pursue or create general public benefit or a specific public benefit.

(2) A benefit enforcement proceeding may be commenced or maintained only:

(a) Directly by the benefit corporation; or

(b) Derivatively in accordance with the Nebraska Model Business Corporation Act by:

(i) A person or group of persons that owned beneficially or of record at least two percent of the total number of shares of a class or series outstanding at the time of the act or omission complained of;

(ii) A director;

(iii) A person or group of persons that owned beneficially or of record five percent or more of the outstanding equity interests in an entity of which the benefit corporation is a subsidiary at the time of the act or omission complained of; or

(iv) Other persons as specified in the articles of incorporation or bylaws of the benefit corporation.

(3) For purposes of this section, a person is the beneficial owner of shares or equity interests if the shares or equity interests are held in a voting trust or by a nominee on behalf of the beneficial owner.

Source:Laws 2014, LB751, § 12; Laws 2015, LB35, § 9.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

21-413. Annual benefit report; contents.

(1) A benefit corporation shall prepare an annual benefit report including all of the following:

(a) A narrative description of:

(i) The ways in which the benefit corporation pursued general public benefit during the year and the extent to which general public benefit was created;

(ii) Both:

(A) The ways in which the benefit corporation pursued a specific public benefit that the articles of incorporation state it is the purpose of the benefit corporation to create; and

(B) The extent to which that specific public benefit was created;

(iii) Any circumstances that have hindered the creation by the benefit corporation of general public benefit or specific public benefit; and

(iv) The process and rationale for selecting or changing the third-party standard used to prepare the benefit report;

(b) An assessment of the overall social and environmental performance of the benefit corporation against a third-party standard:

(i) Applied consistently with any application of that standard in prior benefit reports; or

(ii) Accompanied by an explanation of the reasons for:

(A) Any inconsistent application; or

(B) The change to that standard from the one used in the immediately prior benefit report;

(c) The name of the benefit director and the benefit officer, if any, and the address to which correspondence to each of them may be directed;

(d) The compensation paid by the benefit corporation during the year to each director in the capacity of a director;

(e) The statement of the benefit director described in subsection (3) of section 21-409; and

(f) A statement of any connection between the organization that established the third-party standard, or its directors, officers, or any holder of five percent or more of the governance interests in the organization, and the benefit corporation or its directors, officers, or any holder of five percent or more of the outstanding shares of the benefit corporation, including any financial or governance relationship which might materially affect the credibility of the use of the third-party standard.

(2) If, during the year covered by a benefit report, a benefit director resigned from or refused to stand for reelection to the position of benefit director, or was removed from the position of benefit director, and the benefit director furnished the benefit corporation with any written correspondence concerning the circumstances surrounding the resignation, refusal, or removal, the benefit report shall include that correspondence as an exhibit.

(3) Neither the benefit report nor the assessment of the performance of the benefit corporation in the benefit report required by subdivision (1)(b) of this section needs to be audited or certified by a third-party standards provider.

Source:Laws 2014, LB751, § 13.

21-414. Annual benefit report; distribution; posting; Secretary of State; filing; fee.

(1) A benefit corporation shall send its annual benefit report to each shareholder:

(a) Within one hundred twenty days following the end of the fiscal year of the benefit corporation; or

(b) At the same time that the benefit corporation delivers any other annual report to its shareholders.

(2) A benefit corporation shall post all of its benefit reports on the public portion of its Internet website, if any, except that the compensation paid to directors and financial or proprietary information included in the benefit reports may be omitted from the benefit reports as posted.

(3) If a benefit corporation does not have an Internet website, the benefit corporation shall provide a copy of its most recent benefit report, without charge, to any person that requests a copy, except that the compensation paid to directors and financial or proprietary information included in the benefit report may be omitted from the copy of the benefit report provided.

(4)(a) Concurrently with the delivery of the benefit report to shareholders under subsection (1) of this section, the benefit corporation shall deliver a copy of the benefit report to the Secretary of State for filing, except that the compensation paid to directors and financial or proprietary information included in the benefit report may be omitted from the benefit report as delivered to the Secretary of State.

(b) The Secretary of State shall charge a fee in the amount prescribed in subdivision (a)(12) of section 21-205 for filing a benefit report. The Secretary of State shall collect the fees imposed in this section and remit the fees to the State Treasurer. The State Treasurer shall credit sixty percent of the fees to the General Fund and forty percent of the fees to the Secretary of State Cash Fund.

Source:Laws 2014, LB751, § 14; Laws 2015, LB35, § 10; Laws 2015, LB279, § 8; Laws 2020, LB910, § 6.

21-501. Short title.

Sections 21-501 to 21-542 shall be known and may be cited as the Nebraska Uniform Protected Series Act.

Source:Laws 2018, LB1121, § 2.

Cross References

Nebraska Uniform Limited Liability Company Act, see section 21-101.

21-502. Definitions.

In the Nebraska Uniform Protected Series Act:

(1) Asset means property:

(A) in which a series limited liability company or protected series has rights; or

(B) as to which the company or protected series has the power to transfer rights.

(2) Associated asset means an asset that meets the requirements of section 21-515.

(3) Associated member means a member that meets the requirements of section 21-516.

(4) Foreign protected series means an arrangement, configuration, or other structure established by a foreign limited liability company which has attributes comparable to a protected series established under the act. The term applies whether or not the law under which the foreign company is organized refers to protected series.

(5) Foreign series limited liability company means a foreign limited liability company that has at least one foreign protected series.

(6) Nonassociated asset means:

(A) an asset of a series limited liability company which is not an associated asset of the company; or

(B) an asset of a protected series of the company which is not an associated asset of the protected series.

(7) Person includes a protected series.

(8) Protected series, except in the phrase foreign protected series, means a protected series established under section 21-509.

(9) Protected-series manager means a person under whose authority the powers of a protected series are exercised and under whose direction the activities and affairs of the protected series are managed under the operating agreement, the Nebraska Uniform Protected Series Act, and the Nebraska Uniform Limited Liability Company Act.

(10) Protected-series transferable interest means a right to receive a distribution from a protected series.

(11) Protected-series transferee means a person to which all or part of a protected-series transferable interest of a protected series of a series limited liability company has been transferred, other than the company. The term includes a person that owns a protected-series transferable interest as a result of ceasing to be an associated member of a protected series.

(12) Series limited liability company, except in the phrase foreign series limited liability company, means a limited liability company that has at least one protected series.

Source:Laws 2018, LB1121, § 3.

Cross References

Nebraska Uniform Limited Liability Company Act, see section 21-101.

21-503. Nature of protected series.

A protected series of a series limited liability company is a person distinct from:

(1) the company, subject to subsection (c) of section 21-504, subdivision (1) of section 21-524, and subsection (d) of section 21-525;

(2) another protected series of the company;

(3) a member of the company, whether or not the member is an associated member of the protected series;

(4) a protected-series transferee of a protected series of the company; and

(5) a transferee of a transferable interest of the company.

Source:Laws 2018, LB1121, § 4.

21-504. Powers and duration of protected series.

(a) A protected series of a series limited liability company has the capacity to sue and be sued in its own name.

(b) Except as otherwise provided in subsections (c) and (d) of this section, a protected series of a series limited liability company has the same powers and purposes as the company.

(c) A protected series of a series limited liability company ceases to exist not later than when the company completes its winding up.

(d) A protected series of a series limited liability company may not:

(1) be a member of the company;

(2) establish a protected series;

(3) render a professional service; or

(4) except as permitted by law of this state other than the Nebraska Uniform Protected Series Act, have a purpose or power that the law of this state other than the Nebraska Uniform Protected Series Act prohibits a limited liability company from doing or having.

Source:Laws 2018, LB1121, § 5; Laws 2021, LB253, § 2.

21-505. Governing law.

The law of this state governs:

(1) the internal affairs of a protected series of a series limited liability company, including:

(A) relations among any associated members of the protected series;

(B) relations among the protected series and:

(i) any associated member;

(ii) the protected-series manager; or

(iii) any protected-series transferee;

(i) the protected-series manager; or

(ii) any protected-series transferee;

(D) the rights and duties of a protected-series manager;

(E) governance decisions affecting the activities and affairs of the protected series and the conduct of those activities and affairs; and

(F) procedures and conditions for becoming an associated member or protected-series transferee;

(2) the relations between a protected series of a series limited liability company and each of the following:

(A) the company;

(B) another protected series of the company;

(D) a protected-series manager that is not a protected-series manager of the protected series; and

(E) a protected-series transferee that is not a protected-series transferee of the protected series;

(3) the liability of a person for a debt, obligation, or other liability of a protected series of a series limited liability company if the debt, obligation, or liability is asserted solely by reason of the person being or acting as:

(A) an associated member, protected-series transferee, or protected-series manager of the protected series;

(B) a member of the company which is not an associated member of the protected series;

(D) a protected-series transferee that is not a protected-series transferee of the protected series;

(E) a manager of the company; or

(F) a transferee of a transferable interest of the company;

(4) the liability of a series limited liability company for a debt, obligation, or other liability of a protected series of the company if the debt, obligation, or liability is asserted solely by reason of the company:

(A) having delivered to the Secretary of State for filing under subsection (b) of section 21-509 a protected-series designation pertaining to the protected series or under subsection (d) of section 21-509 or subsection (c) of section 21-510 a statement of designation change pertaining to the protected series;

(B) being or acting as a protected-series manager of the protected series;

(D) owning a protected-series transferable interest of the protected series; and

(5) the liability of a protected series of a series limited liability company for a debt, obligation, or other liability of the company or of another protected series of the company if the debt, obligation, or liability is asserted solely by reason of:

(A) the protected series:

(i) being a protected series of the company or having as a protected-series manager the company or another protected series of the company; or

(ii) being or acting as a protected-series manager of another protected series of the company or a manager of the company; or

(B) the company owning a protected-series transferable interest of the protected series.

Source:Laws 2018, LB1121, § 6.

21-506. Relation of operating agreement, this act, and Nebraska Uniform Limited Liability Company Act.

(a) Except as otherwise provided in this section and subject to sections 21-507 and 21-508, the operating agreement of a series limited liability company governs:

(1) the internal affairs of a protected series, including:

(A) relations among any associated members of the protected series;

(B) relations among the protected series and:

(i) any associated member;

(ii) the protected-series manager; or

(iii) any protected-series transferee;

(i) the protected-series manager; or

(ii) any protected-series transferee;

(D) the rights and duties of a protected-series manager;

(E) governance decisions affecting the activities and affairs of the protected series and the conduct of those activities and affairs; and

(F) procedures and conditions for becoming an associated member or protected-series transferee;

(2) relations among the protected series, the company, and any other protected series of the company;

(3) relations between:

(A) the protected series, its protected-series manager, any associated member of the protected series, or any protected-series transferee of the protected series; and

(B) a person in the person’s capacity as:

(i) a member of the company which is not an associated member of the protected series;

(ii) a protected-series transferee or protected-series manager of another protected series; or

(iii) a transferee of the company.

(b) If the Nebraska Uniform Limited Liability Company Act restricts the power of an operating agreement to affect a matter, the restriction applies to a matter under the Nebraska Uniform Protected Series Act in accordance with section 21-508.

(c) If law of this state other than the Nebraska Uniform Protected Series Act imposes a prohibition, limitation, requirement, condition, obligation, liability, or other restriction on a limited liability company, a member, manager, or other agent of the company, or a transferee of the company, except as otherwise provided in law of this state other than the Nebraska Uniform Protected Series Act, the restriction applies in accordance with section 21-508.

(d) Except as otherwise provided in section 21-507, if the operating agreement of a series limited liability company does not provide for a matter described in subsection (a) of this section in a manner permitted by the Nebraska Uniform Protected Series Act, the matter is determined in accordance with the following rules:

(1) To the extent the Nebraska Uniform Protected Series Act addresses the matter, the Nebraska Uniform Protected Series Act governs.

(2) To the extent the Nebraska Uniform Protected Series Act does not address the matter, the Nebraska Uniform Limited Liability Company Act governs the matter in accordance with section 21-508.

Source:Laws 2018, LB1121, § 7.

Cross References

Nebraska Uniform Limited Liability Company Act, see section 21-101.

21-507. Additional limitations on operating agreement.

(a) An operating agreement may not vary the effect of:

(1) this section;

(2) section 21-503;

(3) subsection (a) of section 21-504;

(4) subsection (b) of section 21-504 to provide a protected series a power beyond the powers the Nebraska Uniform Limited Liability Company Act provides a limited liability company;

(5) subsection (c) or (d) of section 21-504;

(6) section 21-505;

(7) section 21-506;

(8) section 21-508;

(9) section 21-509, except to vary the manner in which a limited liability company approves establishing a protected series;

(10) section 21-510;

(11) section 21-515;

(12) section 21-516;

(13) subsection (a) or (b) of section 21-517;

(14) subsection (c) or (f) of section 21-518;

(15) section 21-520, except to decrease or eliminate a limitation of liability stated in section 21-520;

(16) section 21-521;

(17) section 21-522;

(18) section 21-523;

(19) subdivisions (1), (4), and (5) of section 21-524;

(20) section 21-525, except to designate a different person to manage winding up;

(21) section 21-526;

(22) sections 21-527 to 21-534;

(23) sections 21-535 to 21-538;

(24) section 21-542; or

(25) a provision of the Nebraska Uniform Protected Series Act pertaining to:

(A) registered agents; or

(B) the Secretary of State, including provisions pertaining to records authorized or required to be delivered to the Secretary of State for filing under the act.

(b) An operating agreement may not unreasonably restrict the duties and rights under section 21-519 but may impose reasonable restrictions on the availability and use of information obtained under section 21-519 and may provide appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use.

Source:Laws 2018, LB1121, § 8; Laws 2019, LB78, § 3.

Cross References

Nebraska Uniform Limited Liability Company Act, see section 21-101.

21-508. Rules for applying Nebraska Uniform Limited Liability Company Act to specified provisions of act.

(a) Except as otherwise provided in subsection (b) of this section and section 21-507, the following rules apply in applying section 21-506, subsections (c) and (f) of section 21-518, subdivision (4)(A) of section 21-524, subsection (a) of section 21-525, and subdivision (2) of section 21-526:

(1) A protected series of a series limited liability company is deemed to be a limited liability company that is formed separately from the series limited liability company and is distinct from the series limited liability company and any other protected series of the series limited liability company.

(2) An associated member of the protected series is deemed to be a member of the company deemed to exist under subdivision (a)(1) of this section.

(3) A protected-series transferee of the protected series is deemed to be a transferee of the company deemed to exist under subdivision (a)(1) of this section.

(4) A protected-series transferable interest of the protected series is deemed to be a transferable interest of the company deemed to exist under subdivision (a)(1) of this section.

(5) A protected-series manager is deemed to be a manager of the company deemed to exist under subdivision (a)(1) of this section.

(6) An asset of the protected series is deemed to be an asset of the company deemed to exist under subdivision (a)(1) of this section, whether or not the asset is an associated asset of the protected series.

(7) Any creditor or other obligee of the protected series is deemed to be a creditor or obligee of the company deemed to exist under subdivision (a)(1) of this section.

(b) Subsection (a) of this section does not apply if its application would:

(1) contravene section 21-110; or

(2) authorize or require the Secretary of State to:

(A) accept for filing a type of record that neither the Nebraska Uniform Protected Series Act nor the Nebraska Uniform Limited Liability Company Act authorizes or requires a person to deliver to the Secretary of State for filing; or

(B) make or deliver a record that neither the Nebraska Uniform Protected Series Act nor the Nebraska Uniform Limited Liability Company Act authorizes or requires the Secretary of State to make or deliver.

Source:Laws 2018, LB1121, § 9.

Cross References

Nebraska Uniform Limited Liability Company Act, see section 21-101.

21-509. Protected series designation; amendment.

(a) With the affirmative vote or consent of all members of a limited liability company, the company may establish a protected series.

(b) To establish one or more protected series, a limited liability company shall deliver to the Secretary of State for filing a protected-series designation, signed by the company, stating the name of the company and the name or names of the protected series to be established.

(d) To amend a protected-series designation, a series limited liability company shall deliver to the Secretary of State for filing a statement of designation change, signed by the company, that changes the name of the company, the name or names of the protected series to which the designation applies, or both. The change takes effect when the statement of designation change takes effect under section 21-121.

Source:Laws 2018, LB1121, § 10; Laws 2019, LB78, § 4.

21-510. Name.

(a) Except as otherwise provided in subsection (b) of this section, the name of a protected series must be distinguishable in the records of the Secretary of State from:

(1) the name of each person that is not an individual and that is incorporated, organized, or authorized to transact business in this state; and

(2) each name reserved under section 21-109 or other state laws allowing the reservation or registration of business names, including fictitious or assumed name statutes.

(b) The name of a protected series of a series limited liability company must:

(1) begin with the name of the company, including any word or abbreviation required by section 21-108; and

(2) contain the phrase Protected Series or protected series or the abbreviation P.S. or PS.

(c) If a series limited liability company changes its name, the company shall deliver to the Secretary of State for filing a statement of designation change for the company’s protected series, changing the name of each protected series to comply with this section.

Source:Laws 2018, LB1121, § 11; Laws 2019, LB78, § 5.

21-511. Registered agent.

(a) The registered agent in this state for a series limited liability company is the registered agent in this state for each protected series of the company.

(b) Before delivering a protected-series designation to the Secretary of State for filing, a limited liability company shall agree with a registered agent that the agent will serve as the registered agent in this state for both the company and the protected series.

(c) A person that signs a protected-series designation delivered to the Secretary of State for filing affirms as a fact that the limited liability company on whose behalf the designation is delivered has complied with subsection (b) of this section.

(d) A person that ceases to be the registered agent for a series limited liability company ceases to be the registered agent for each protected series of the company.

(e) A person that ceases to be the registered agent for a protected series of a series limited liability company, other than as a result of the termination of the protected series, ceases to be the registered agent of the company and any other protected series of the company.

(f) Except as otherwise agreed by a series limited liability company and its registered agent, the agent is not obligated to distinguish between a process, notice, demand, or other record concerning the company and a process, notice, demand, or other record concerning a protected series of the company.

Source:Laws 2018, LB1121, § 12.

21-512. Service of process, notice, demand, or other record.

(a) A protected series of a series limited liability company may be served with a process, notice, demand, or other record required or permitted by law by:

(1) serving the company;

(2) serving the registered agent of the protected series; or

(3) other means authorized by law of this state other than the Nebraska Uniform Limited Liability Company Act.

(b) Service of a summons and complaint on a series limited liability company is notice to each protected series of the company of service of the summons and complaint and the contents of the complaint.

(c) Service of a summons and complaint on a protected series of a series limited liability company is notice to the company and any other protected series of the company of service of the summons and complaint and the contents of the complaint.

(d) Service of a summons and complaint on a foreign series limited liability company is notice to each foreign protected series of the foreign company of service of the summons and complaint and the contents of the complaint.

(e) Service of a summons and complaint on a foreign protected series of a foreign series limited liability company is notice to the foreign company and any other foreign protected series of the company of service of the summons and complaint and the contents of the complaint.

(f) Notice to a person under subsection (b), (c), (d), or (e) of this section is effective whether or not the summons and complaint identify the person if the summons and complaint name as a party and identify:

(1) the series limited liability company or a protected series of the company; or

(2) the foreign series limited liability company or a foreign protected series of the foreign company.

Source:Laws 2018, LB1121, § 13.

Cross References

Nebraska Uniform Limited Liability Company Act, see section 21-101.

21-513. Certificate of existence for protected series; certificate of authority for foreign protected series.

(a) On request of any person, the Secretary of State shall issue a certificate of existence for a protected series of a series limited liability company or a certificate of authority for a foreign protected series if:

(1) in the case of a protected series:

(A) no statement of dissolution, termination, or relocation pertaining to the protected series has been filed; and

(B) the company has delivered to the Secretary of State for filing the most recent biennial report required by section 21-125 and the report includes the name of the protected series, unless:

(i) when the company delivered the report for filing, the protected series designation pertaining to the protected series had not yet taken effect; or

(ii) after the company delivered the report for filing, the company delivered to the Secretary of State for filing a statement of designation change changing the name of the protected series; or

(2) in the case of a foreign protected series, it is authorized to do business in this state.

(b) A certificate issued under subsection (a) of this section must state:

(1) in the case of a protected series:

(A) the name of the protected series of the series limited liability company and the name of the company;

(B) that the requirements of subsection (a) of this section are met;

(D) if a statement of designation change pertaining to the protected series has been filed, the effective date and contents of the statement;

(2) in the case of a foreign protected series, that it is authorized to do business in this state;

(3) that the fees, taxes, interest, and penalties owed to this state by the protected series or foreign protected series and collected through the Secretary of State have been paid, if:

(A) payment is reflected in the records of the Secretary of State; and

(B) nonpayment affects the good standing of the protected series; and

(4) other facts reflected in the records of the Secretary of State pertaining to the protected series or foreign protected series which the person requesting the certificate reasonably requests.

(c) Subject to any qualification stated by the Secretary of State in a certificate issued under subsection (a) of this section, the certificate may be relied on as conclusive evidence of the facts stated in the certificate.

Source:Laws 2018, LB1121, § 14; Laws 2019, LB78, § 6.

21-514. Information required in biennial report; effect of failure to provide.

(a) In the biennial report required by section 21-125, a series limited liability company shall include the name of each protected series of the company:

(1) for which the company has previously delivered to the Secretary of State for filing a protected-series designation; and

(2) which has not dissolved and completed winding up.

(b) A failure by a series limited liability company to comply with subsection (a) of this section with regard to a protected series prevents issuance of a certificate of existence pertaining to the protected series but does not otherwise affect the protected series.

Source:Laws 2018, LB1121, § 15; Laws 2019, LB78, § 7.

21-515. Associated asset.

(a) Only an asset of a protected series may be an associated asset of the protected series. Only an asset of a series limited liability company may be an associated asset of the company.

(b) An asset of a protected series of a series limited liability company is an associated asset of the protected series only if the protected series creates and maintains records that state the name of the protected series and describe the asset with sufficient specificity to permit a disinterested, reasonable individual to:

(1) identify the asset and distinguish it from any other asset of the protected series, any asset of the company, and any asset of any other protected series of the company;

(2) determine when and from what person the protected series acquired the asset or how the asset otherwise became an asset of the protected series; and

(3) if the protected series acquired the asset from the company or another protected series of the company, determine any consideration paid, the payor, and the payee.

(c) An asset of a series limited liability company is an associated asset of the company only if the company creates and maintains records that state the name of the company and describe the asset with sufficient specificity to permit a disinterested, reasonable individual to:

(1) identify the asset and distinguish it from any other asset of the company and any asset of any protected series of the company;

(2) determine when and from what person the company acquired the asset or how the asset otherwise became an asset of the company; and

(3) if the company acquired the asset from a protected series of the company, determine any consideration paid, the payor, and the payee.

(d) The records and record keeping required by subsections (b) and (c) of this section may be organized by specific listing, category, type, quantity, or computational or allocational formula or procedure, including a percentage or share of any asset, or in any other reasonable manner.

(e) To the extent permitted by this section and law of this state other than the Nebraska Uniform Protected Series Act, a series limited liability company or protected series of the company may hold an associated asset directly or indirectly, through a representative, nominee, or similar arrangement, except that:

(1) a protected series may not hold an associated asset in the name of the company or another protected series of the company; and

(2) the company may not hold an associated asset in the name of a protected series of the company.

Source:Laws 2018, LB1121, § 16.

21-516. Associated member.

(a) Only a member of a series limited liability company may be an associated member of a protected series of the company.

(b) A member of a series limited liability company becomes an associated member of a protected series of the company if the operating agreement or a procedure established by the agreement states:

(1) that the member is an associated member of the protected series;

(2) the date on which the member became an associated member; and

(3) any protected-series transferable interest the associated member has in connection with becoming or being an associated member.

(c) If a person that is an associated member of a protected series of a series limited liability company is dissociated from the company, the person ceases to be an associated member of the protected series.

Source:Laws 2018, LB1121, § 17.

21-517. Protected-series transferable interest.

(a) A protected-series transferable interest of a protected series of a series limited liability company must be owned initially by an associated member of the protected series or the company.

(b) If a protected series of a series limited liability company has no associated members when established, the company owns the protected-series transferable interests in the protected series.

(c) In addition to acquiring a protected-series transferable interest under subsection (b) of this section, a series limited liability company may acquire a protected-series transferable interest through a transfer from another person or as provided in the operating agreement.

(d) Except for subdivision (a)(3) of section 21-508, a provision of the Nebraska Uniform Protected Series Act which applies to a protected-series transferee of a protected series of a series limited liability company applies to the company in its capacity as an owner of a protected-series transferable interest of the protected series. A provision of the operating agreement of a series limited liability company which applies to a protected-series transferee of a protected series of the company applies to the company in its capacity as an owner of a protected-series transferable interest of the protected series.

Source:Laws 2018, LB1121, § 18; Laws 2019, LB78, § 8.

21-518. Management.

(a) A protected series may have more than one protected-series manager.

(b) If a protected series has no associated members, the series limited liability company is the protected-series manager.

(c) Section 21-508 applies to determine any duties of a protected-series manager of a protected series of a series limited liability company to:

(1) the protected series;

(2) any associated member of the protected series; and

(3) any protected-series transferee of the protected series.

(d) Solely by reason of being or acting as a protected-series manager of a protected series of a series limited liability company, a person owes no duty to:

(1) the company;

(2) another protected series of the company; or

(3) another person in that person’s capacity as:

(A) a member of the company which is not an associated member of the protected series;

(B) a protected-series transferee or protected-series manager of another protected series; or

(e) An associated member of a protected series of a series limited liability company has the same rights as any other member of the company to vote on or consent to an amendment to the company’s operating agreement or any other matter being decided by the members, whether or not the amendment or matter affects the interests of the protected series or the associated member.

(f) Sections 21-164 to 21-169 apply to a protected series in accordance with section 21-508.

Source:Laws 2018, LB1121, § 19.

21-519. Right of person not associated member of protected series to information concerning protected series.

(a) A member of a series limited liability company which is not an associated member of a protected series of the company has a right to information concerning the protected series to the same extent, in the same manner, and under the same conditions that a member that is not a manager of a manager-managed limited liability company has a right to information concerning the company under section 21-139.

(b) A person formerly an associated member of a protected series has a right to information concerning the protected series to the same extent, in the same manner, and under the same conditions that a person dissociated as a member of a manager-managed limited liability company has a right to information concerning the company under section 21-139.

(c) If an associated member of a protected series dies, the legal representative of the deceased associated member has a right to information concerning the protected series to the same extent, in the same manner, and under the same conditions that the legal representative of a deceased member of a limited liability company has a right to information concerning the company under section 21-139.

(d) A protected-series manager of a protected series has a right to information concerning the protected series to the same extent, in the same manner, and under the same conditions that a manager of a manager-managed limited liability company has a right to information concerning the company under section 21-139.

Source:Laws 2018, LB1121, § 20.

21-520. Limitations on liability.

(a) A person is not liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or other liability of:

(1) a protected series of a series limited liability company solely by reason of being or acting as:

(A) an associated member, protected-series manager, or protected-series transferee of the protected series; or

(B) a member, manager, or a transferee of the company; or

(2) a series limited liability company solely by reason of being or acting as an associated member, protected-series manager, or protected-series transferee of a protected series of the company.

(b) Subject to section 21-523, the following rules apply:

(1) A debt, obligation, or other liability of a series limited liability company is solely the debt, obligation, or liability of the company.

(2) A debt, obligation, or other liability of a protected series is solely the debt, obligation, or liability of the protected series.

(3) A series limited liability company is not liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or other liability of a protected series of the company solely by reason of the protected series being a protected series of the company or the company:

(A) being or acting as a protected-series manager of the protected series;

(B) having the protected series manage the company; or

(4) A protected series of a series limited liability company is not liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or other liability of the company or another protected series of the company solely by reason of:

(A) being a protected series of the company;

(B) being or acting as a manager of the company or a protected-series manager of another protected series of the company; or

(C) having the company or another protected series of the company be or act as a protected-series manager of the protected series.

Source:Laws 2018, LB1121, § 21; Laws 2019, LB78, § 9.

21-521. Claim seeking to disregard limitation of liability.

(a) Except as otherwise provided in subsection (b) of this section, a claim seeking to disregard a limitation in section 21-520 is governed by the principles of law and equity, including a principle providing a right to a creditor or holding a person liable for a debt, obligation, or other liability of another person, which would apply if each protected series of a series limited liability company were a limited liability company formed separately from the series limited liability company and distinct from the series limited liability company and any other protected series of the series limited liability company.

(b) The failure of a limited liability company or a protected series to observe formalities relating to the exercise of its powers or management of its activities and affairs is not a ground to disregard a limitation in subsection (a) of section 21-520 but may be a ground to disregard a limitation in subsection (b) of section 21-520.

(c) This section applies to a claim seeking to disregard a limitation of liability applicable to a foreign series limited liability company or foreign protected series and comparable to a limitation stated in section 21-520, if:

(1) the claimant is a resident of this state or doing business or authorized to do business in this state; or

(2) the claim is to establish or enforce a liability arising under law of this state other than the Nebraska Uniform Protected Series Act or from an act or omission in this state.

Source:Laws 2018, LB1121, § 22; Laws 2019, LB78, § 10.

21-522. Remedies of judgment creditor of associated member or protected-series transferee.

Section 21-142 applies to a judgment creditor of:

(1) an associated member or protected-series transferee of a protected series; or

(2) a series limited liability company, to the extent the company owns a protected-series transferable interest of a protected series.

Source:Laws 2018, LB1121, § 23; Laws 2019, LB78, § 11.

21-523. Enforcement against nonassociated asset.

(a) In this section:

(1) Enforcement date means 12:01 a.m. on the date on which a claimant first serves process on a series limited liability company or protected series in an action seeking to enforce under this section a claim against an asset of the company or protected series by attachment, levy, or the like.

(2) Subject to subsection (b) of section 21-534, incurrence date means the date on which a series limited liability company or protected series incurred the liability giving rise to a claim that a claimant seeks to enforce under this section.

(b) If a claim against a series limited liability company or a protected series of the company has been reduced to judgment, in addition to any other remedy provided by law or equity, the judgment may be enforced in accordance with the following rules:

(1) A judgment against the company may be enforced against an asset of a protected series of the company if the asset:

(A) was a nonassociated asset of the protected series on the incurrence date; or

(B) is a nonassociated asset of the protected series on the enforcement date.

(2) A judgment against a protected series may be enforced against an asset of the company if the asset:

(A) was a nonassociated asset of the company on the incurrence date; or

(B) is a nonassociated asset of the company on the enforcement date.

(3) A judgment against a protected series may be enforced against an asset of another protected series of the company if the asset:

(A) was a nonassociated asset of the other protected series on the incurrence date; or

(B) is a nonassociated asset of the other protected series on the enforcement date.

(c) In addition to any other remedy provided by law or equity, if a claim against a series limited liability company or a protected series has not been reduced to a judgment and law other than the Nebraska Uniform Protected Series Act permits a prejudgment remedy by attachment, levy, or the like, the court may apply subsection (b) of this section as a prejudgment remedy.

(d) In a proceeding under this section, the party asserting that an asset is or was an associated asset of a series limited liability company or a protected series of the company has the burden of proof on the issue.

(e) This section applies to an asset of a foreign series limited liability company or foreign protected series if:

(1) the asset is real or tangible property located in this state;

(2) the claimant is a resident of this state or doing business or authorized to do business in this state, or the claim under this section is to enforce a judgment, or to seek a prejudgment remedy, pertaining to a liability arising from law of this state other than the Nebraska Uniform Protected Series Act or an act or omission in this state; and

(3) the asset is not identified in the records of the foreign series limited liability company or foreign protected series in a manner comparable to the manner required by section 21-515.

Source:Laws 2018, LB1121, § 24; Laws 2019, LB78, § 12.

21-524. Events causing dissolution of protected series.

A protected series of a series limited liability company is dissolved, and its activities and affairs must be wound up, only on the:

(1) dissolution of the company;

(2) occurrence of an event or circumstance the operating agreement states causes dissolution of the protected series;

(3) affirmative vote or consent of all members; or

(4) entry by the court of an order dissolving the protected series on application by an associated member or protected-series manager of the protected series:

(A) in accordance with section 21-508; and

(B) to the same extent, in the same manner, and on the same grounds the court would enter an order dissolving a limited liability company on application by a member or manager of the company; or

(5) entry by the court of an order dissolving the protected series on application by the company or a member of the company on the ground that the conduct of all or substantially all the activities and affairs of the protected series is illegal.

Source:Laws 2018, LB1121, § 25.

21-525. Winding up dissolved protected series.

(a) Subject to subsections (b) and (c) of this section and in accordance with section 21-508:

(1) a dissolved protected series shall wind up its activities and affairs in the same manner that a limited liability company winds up its activities and affairs under sections 21-147 to 21-154, subject to the same requirements and conditions and with the same effects; and

(2) judicial supervision or another judicial remedy is available in the winding up of the protected series to the same extent, in the same manner, under the same conditions, and with the same effects that apply under subsection (e) of section 21-148.

(b) When a protected series of a series limited liability company dissolves, the company shall deliver to the Secretary of State for filing a statement of protected-series dissolution stating the name of the company and the protected series and that the protected series is dissolved. The filing of the statement by the Secretary of State has the same effect as the filing by the Secretary of State of a statement of dissolution under subdivision (d)(2)(A) of section 21-103.

(c) When a protected series of a series limited liability company has completed winding up, the company may deliver to the Secretary of State for filing a statement of designation cancellation stating the name of the company and the protected series and that the protected series is terminated. The filing of the statement by the Secretary of State has the same effect as the filing by the Secretary of State of a statement of termination under subdivision (d)(2)(B) of section 21-103.

(d) A series limited liability company has not completed its winding up until each of the protected series of the company has completed its winding up.

Source:Laws 2018, LB1121, § 26; Laws 2019, LB78, § 13.

21-526. Effect of reinstatement of series limited liability company or revocation of voluntary dissolution.

If a series limited liability company that has been administratively dissolved is reinstated, or a series limited liability company that voluntarily dissolved rescinds its dissolution:

(1) each protected series of the company ceases winding up; and

(2) section 21-152 applies to each protected series of the company in accordance with section 21-508.

Source:Laws 2018, LB1121, § 27; Laws 2019, LB78, § 14.

21-527. Definitions.

In sections 21-527 to 21-534:

(1) After a merger or after the merger means when a merger under section 21-530 becomes effective and afterwards.

(2) Before a merger or before the merger means before a merger under section 21-530 becomes effective.

(3) Continuing protected series means a protected series of a surviving company which continues in uninterrupted existence after a merger under section 21-530.

(4) Merging company means a limited liability company that is party to a merger under section 21-530.

(5) Nonsurviving company means a merging company that does not continue in existence after a merger under section 21-530.

(6) Relocated protected series means a protected series of a nonsurviving company which, after a merger under section 21-530, continues in uninterrupted existence as a protected series of the surviving company.

(7) Surviving company means a merging company that continues in existence after a merger under section 21-530.

Source:Laws 2018, LB1121, § 28.

21-528. Protected series; prohibited acts.

A protected series may not:

(1) be an acquiring, acquired, converting, converted, merging, or surviving organization;

(2) participate in a domestication; or

(3) be a party to or be formed, organized, established, or created in a transaction substantially like a merger, interest exchange, conversion, or domestication.

Source:Laws 2018, LB1121, § 29; Laws 2019, LB78, § 15.

21-529. Series limited liability company; prohibited acts.

A series limited liability company may not be:

(1) an acquiring, acquired, converting, converted, domesticating, or domesticated organization; or

(2) except as otherwise provided in section 21-530, a party to or the surviving company of a merger.

Source:Laws 2018, LB1121, § 30; Laws 2019, LB78, § 16.

21-530. Merger authorized; parties restricted.

A series limited liability company may be party to a merger in accordance with sections 21-171 to 21-174, this section, and sections 21-531 to 21-534 only if:

(1) each other party to the merger is a limited liability company; and

(2) the surviving company is not created in the merger.

Source:Laws 2018, LB1121, § 31.

21-531. Plan of merger.

In a merger under section 21-530, the plan of merger must:

(1) comply with sections 21-171 to 21-174; and

(2) state in a record:

(A) for any protected series of a nonsurviving company, whether after the merger the protected series will be a relocated protected series or be dissolved, wound up, and terminated;

(B) for any protected series of the surviving company which exists before the merger, whether after the merger the protected series will be a continuing protected series or be dissolved, wound up, and terminated;

(i) the name of any person that becomes an associated member or protected-series transferee of the protected series after the merger, any consideration to be paid by, on behalf of, or in respect of the person, the name of the payor, and the name of the payee;

(ii) the name of any person whose rights or obligations in the person’s capacity as an associated member or protected-series transferee will change after the merger;

(iii) any consideration to be paid to a person who before the merger was an associated member or protected-series transferee of the protected series and the name of the payor; and

(iv) if after the merger the protected series will be a relocated protected series, its new name;

(D) for any protected series to be established by the surviving company as a result of the merger:

(i) the name of the protected series;

(ii) any protected-series transferable interest to be owned by the surviving company when the protected series is established; and

(iii) the name of and any protected-series transferable interest owned by any person that will be an associated member of the protected series when the protected series is established; and

(E) for any person that is an associated member of a relocated protected series and will remain a member after the merger, any amendment to the operating agreement of the surviving company which:

(1) is or is proposed to be in a record; and

(2) is necessary or appropriate to state the rights and obligations of the person as a member of the surviving company.

Source:Laws 2018, LB1121, § 32.

21-532. Articles of merger.

In a merger under section 21-530, the articles of merger must:

(1) comply with sections 21-171 to 21-174; and

(2) include as an attachment the following records, each to become effective when the merger becomes effective:

(A) for a protected series of a merging company being terminated as a result of the merger, a statement of termination signed by the company;

(B) for a protected series of a nonsurviving company which after the merger will be a relocated protected series:

(i) a statement of relocation signed by the nonsurviving company which contains the name of the company and the name of the protected series before and after the merger; and

(ii) a statement of protected-series designation signed by the surviving company; and

(C) for a protected series being established by the surviving company as a result of the merger, a statement of designation signed by the company.

Source:Laws 2018, LB1121, § 33; Laws 2019, LB78, § 17.

21-533. Effect of merger.

When a merger under section 21-530 becomes effective, in addition to the effects stated in sections 21-171 to 21-174:

(1) as provided in the plan of merger, each protected series of each merging company which was established before the merger:

(A) is a relocated protected series or continuing protected series; or

(B) is dissolved, wound up, and terminated;

(2) any protected series to be established as a result of the merger is established;

(3) any relocated protected series or continuing protected series is the same person without interruption as it was before the merger;

(4) all property of a relocated protected series or continuing protected series continues to be vested in the protected series without transfer, reversion, or impairment;

(5) all debts, obligations, and other liabilities of a relocated protected series or continuing protected series continue as debts, obligations, and other liabilities of the protected series;

(6) except as otherwise provided by law or the plan of merger, all the rights, privileges, immunities, powers, and purposes of a relocated protected series or continuing protected series remain in the protected series;

(7) the new name of a relocated protected series may be substituted for the former name of the protected series in any pending action or proceeding;

(8) if provided in the plan of merger:

(A) a person becomes an associated member or protected-series transferee of a relocated protected series or continuing protected series;

(B) a person becomes an associated member of a protected series established by the surviving company as a result of the merger;

(C) any change in the rights or obligations of a person in the person’s capacity as an associated member or protected-series transferee of a relocated protected series or continuing protected series take effect; and

(D) any consideration to be paid to a person that before the merger was an associated member or protected-series transferee of a relocated protected series or continuing protected series is due; and

(9) any person that is a member of a relocated protected series becomes a member of the surviving company, if not already a member.

Source:Laws 2018, LB1121, § 34.

21-534. Application of section 21-523 after merger.

(a) A creditor’s right that existed under section 21-523 immediately before a merger under section 21-530 may be enforced after the merger in accordance with the following rules:

(1) A creditor’s right that existed immediately before the merger against the surviving company, a continuing protected series, or a relocated protected series continues without change after the merger.

(2) A creditor’s right that existed immediately before the merger against a nonsurviving company:

(A) may be asserted against an asset of the nonsurviving company which vested in the surviving company as a result of the merger; and

(B) does not otherwise change.

(3) Subject to subsection (b) of this section, the following rules apply:

(A) In addition to the remedy stated in subdivision (a)(1) of this section, a creditor with a right under section 21-523 which existed immediately before the merger against a nonsurviving company or a relocated protected series may assert the right against:

(i) an asset of the surviving company, other than an asset of the nonsurviving company which vested in the surviving company as a result of the merger;

(ii) an asset of a continuing protected series; or

(iii) an asset of a protected series established by the surviving company as a result of the merger;

(iv) if the creditor’s right was against an asset of the nonsurviving company, an asset of a relocated series; or

(v) if the creditor’s right was against an asset of a relocated protected series, an asset of another relocated protected series.

(B) In addition to the remedy stated in subdivision (a)(2) of this section, a creditor with a right that existed immediately before the merger against the surviving company or a continuing protected series may assert the right against:

(i) an asset of a relocated protected series; or

(ii) an asset of a nonsurviving company which vested in the surviving company as a result of the merger.

(b) For the purposes of subdivision (a)(3) of this section and subdivisions (b)(1)(A), (b)(2)(A), and (b)(3)(A) of section 21-523, the incurrence date is deemed to be the date on which the merger becomes effective.

(c) A merger under section 21-530 does not affect the manner in which section 21-523 applies to a liability incurred after the merger.

Source:Laws 2018, LB1121, § 35; Laws 2019, LB78, § 18.

21-535. Governing law.

The law of the jurisdiction of formation of a foreign series limited liability company governs:

(1) the internal affairs of a foreign protected series of the company, including:

(A) relations among any associated members of the foreign protected series;

(B) relations between the foreign protected series and:

(i) any associated member;

(ii) the protected-series manager; or

(iii) any protected-series transferee;

(i) the protected-series manager; or

(ii) any protected-series transferee;

(D) the rights and duties of a protected-series manager;

(E) governance decisions affecting the activities and affairs of the foreign protected series and the conduct of those activities and affairs; and

(F) procedures and conditions for becoming an associated member or protected-series transferee;

(2) relations between the foreign protected series and:

(A) the company;

(B) another foreign protected series of the company;

(D) a foreign protected-series manager that is not a protected-series manager of the protected series;

(E) a foreign protected-series transferee that is not a foreign protected-series transferee of the protected series; and

(F) a transferee of a transferable interest of the company;

(3) except as otherwise provided in sections 21-521 and 21-523, the liability of a person for a debt, obligation, or other liability of a foreign protected series of a foreign series limited liability company if the debt, obligation, or liability is asserted solely by reason of the person being or acting as:

(A) an associated member, protected-series transferee, or protected-series manager of the foreign protected series;

(B) a member of the company which is not an associated member of the foreign protected series;

(D) a protected-series transferee of another foreign protected series of the company;

(E) a manager of the company; or

(F) a transferee of a transferable interest of the company; and

(4) except as otherwise provided in sections 21-521 and 21-523:

(A) the liability of the foreign series limited liability company for a debt, obligation, or other liability of a foreign protected series of the company if the debt, obligation, or liability is asserted solely by reason of the foreign protected series being a foreign protected series of the company or the company:

(i) being or acting as a foreign protected-series manager of the foreign protected series;

(ii) having the foreign protected series manage the company; or

(iii) owning a protected-series transferable interest of the foreign protected series; and

(B) the liability of a foreign protected series for a debt, obligation, or other liability of the company or another foreign protected series of the company if the debt, obligation, or liability is asserted solely by reason of the foreign protected series:

(i) being a foreign protected series of the company or having the company or another foreign protected series of the company be or act as foreign protected-series manager of the foreign protected series; or

(ii) managing the company or being or acting as a foreign protected-series manager of another foreign protected series of the company.

Source:Laws 2018, LB1121, § 36.

21-536. No attribution of activities constituting doing business or for establishing jurisdiction.

In determining whether a foreign series limited liability company or foreign protected series of the company does business in this state or is subject to the personal jurisdiction of the courts of this state:

(1) the activities and affairs of the company are not attributable to a foreign protected series of the company solely by reason of the foreign protected series being a foreign protected series of the company; and

(2) the activities and affairs of a foreign protected series are not attributable to the company or another foreign protected series of the company solely by reason of the foreign protected series being a foreign protected series of the company.

Source:Laws 2018, LB1121, § 37.

21-537. Authorization of foreign protected series.

(a) Except as otherwise provided in this section and subject to sections 21-521 and 21-523, the law of this state governing the authorization of a foreign limited liability company to do business in this state, including the consequences of not complying with that law, applies to a foreign protected series of a foreign series limited liability company as if the foreign protected series were a foreign limited liability company formed separately from the foreign series limited liability company and distinct from the foreign series limited liability company and any other foreign protected series of the foreign series limited liability company.

(b) An application by a foreign protected series of a foreign series limited liability company for a certificate of authority to do business in this state must include:

(1) the name and jurisdiction of formation of the foreign series limited liability company along with a certificate of existence or equivalent for the foreign protected series issued in its jurisdiction of formation, except that if the jurisdiction of formation of the foreign series limited liability company does not provide for issuance of a certificate of existence or equivalent for a foreign protected series, the application must include a certificate of existence or equivalent for the foreign series limited liability company and in that case the foreign protected series is deemed to be in existence as long as the foreign series limited liability company is in existence or good standing in its jurisdiction of formation; and

(2) if the company has other foreign protected series, the name and street and mailing address of an individual who knows the name and street and mailing address of:

(A) each other foreign protected series of the foreign series limited liability company; and

(B) the foreign protected-series manager of and agent for service of process for each other foreign protected series of the foreign series limited liability company.

(c) The name of a foreign protected series applying for a certificate of authority to do business in this state must comply with section 21-108 and subsection (b) of section 21-510 and may do so using subsection (d) of section 21-108, if the fictitious name complies with section 21-108 and subsection (b) of section 21-510.

(d) A foreign protected series that has been issued a certificate of authority to do business in this state pursuant to this section shall file an amendment to its application if there is any change in the information required by subsection (b) of this section.

Source:Laws 2018, LB1121, § 38; Laws 2019, LB78, § 19.

21-538. Disclosure required when foreign series limited liability company or foreign protected series party to proceeding.

(a) Not later than thirty days after becoming a party to a proceeding before a civil, administrative, or other adjudicative tribunal of or located in this state or a tribunal of the United States located in this state:

(1) a foreign series limited liability company shall disclose to each other party the name and street and mailing address of:

(A) each foreign protected series of the company; and

(B) each foreign protected-series manager of and a registered agent for service of process for each foreign protected series of the company; and

(2) a foreign protected series of a foreign series limited liability company shall disclose to each other party the name and street and mailing address of:

(A) the company and each manager of the company and an agent for service of process for the company; and

(B) any other foreign protected series of the company and each foreign protected-series manager of and an agent for service of process for the other foreign protected series.

(b) If a foreign series limited liability company or foreign protected series challenges the personal jurisdiction of the tribunal, the requirement that the foreign company or foreign protected series make disclosure under subsection (a) of this section is tolled until the tribunal determines whether it has personal jurisdiction.

(c) If a foreign series limited liability company or foreign protected series does not comply with subsection (a) of this section, a party to the proceeding may:

(1) request the tribunal to treat the noncompliance as a failure to comply with the tribunal’s discovery rules; or

(2) bring a separate proceeding in the court to enforce subsection (a) of this section.

Source:Laws 2018, LB1121, § 39.

21-539. Uniformity of application and construction.

In applying and construing the Nebraska Uniform Protected Series Act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact the Uniform Protected Series Act.

Source:Laws 2018, LB1121, § 40; Laws 2019, LB78, § 20.

21-540. Relation to Electronic Signatures in Global and National Commerce Act.

The Nebraska Uniform Protected Series Act modifies, limits, or supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. 7001 et seq., but does not modify, limit, or supersede section 101(c) of that act, 15 U.S.C. 7001(c), or authorize electronic delivery of any of the notices described in section 103(b) of that act, 15 U.S.C. 7003(b).

Source:Laws 2018, LB1121, § 41.

21-541. Repealed. Laws 2019, LB78, § 24.

21-542. Savings clause.

The Nebraska Uniform Protected Series Act does not affect an action commenced, proceeding brought, or right accrued before January 1, 2021.

Source:Laws 2018, LB1121, § 43.

21-601. Repealed. Laws 1961, c. 71, § 1.

21-602. Repealed. Laws 1961, c. 71, § 1.

21-603. Repealed. Laws 1961, c. 71, § 1.

21-604. Repealed. Laws 1961, c. 71, § 1.

21-605. Repealed. Laws 1961, c. 71, § 1.

21-606. Repealed. Laws 1961, c. 71, § 1.

21-607. Repealed. Laws 1961, c. 71, § 1.

21-608. Societies declared to be corporations; status of subordinate organizations.

All state, grand, supreme, national, secret, fraternal, benevolent, or charitable orders, lodges, organizations, societies, or other bodies issuing charters to and having subordinate or auxiliary orders, lodges, organizations, societies, or other bodies within this state which have been or may be regularly established and chartered, including the following: The Grand Lodge, Ancient Free and Accepted Masons; The Supreme Guardian Council of the International Order of Job's Daughters; The Grand Chapter of the Order of the Eastern Star, of the State of Nebraska; the Grand Lodge Independent Order of Odd Fellows, the Grand Encampment I.O.O.F.; the Rebekah State Assembly, I.O.O.F.; the Department Council Patriarch Militant, I.O.O.F.; The Farmers' Alliance; Knights of Labor; The Grand Lodge Knights of Pythias of Nebraska; Pythian Sisterhood; Nebraska State Grange; Good Templars; Grand Army of the Republic; Women's Relief Corps, Department of Nebraska; United Spanish War Veterans, Department of Nebraska; The Benevolent and Protective Order of Elks of the United States of America; Benevolent, Patriotic Order of Does of the United States of America; the Western Bohemian Fraternal Association, Z.C.B.J.; The Bohemian Ladies' Society, J.C.D.; The Bohemian Benevolent Society, C.S.P.S.; The Bohemian Roman Catholic Benevolent Society, C.R.K.J.P. of Nebraska; The Women's Christian Temperance Union; The Young Women's Christian Association of the United States of America; Nebraska District Young Women's Christian Association; The Brotherhood of St. Andrews; The Improved Order of Red Men's League, an adoptive degree of the Improved Order of Red Men; Degree of Pocahontas; The Great Council of Nebraska Order of Red Men; The Grand Lodge Fraternal Order of Eagles; The Knights of Columbus; Order of the Alhambra; The Modern Woodmen of America; The Woodmen of the World; The Ancient Order of United Workmen; Grand Lodge, Sons of Herman of Nebraska; The American Legion; Disabled American Veterans; The Marine Corps League; Eastern Orthodox Church; Katolicky Delnik, K.D., Catholic Workmen; The Western Bohemian Catholic Union, Z.C.K.J.; Catholic Youth Organization; The American Legion Auxiliary; the following college societies: Acacia, Alpha Gamma Rho, Alpha Sigma Phi, Alpha Tau Omega, Alpha Theta Chi, Chi Phi, Beta Theta Pi, Delta Chi, Delta Sigma Phi, Delta Tau Delta, Delta Upsilon, Kappa Delta Phi, Kappa Sigma, Lambda Chi Alpha, Phi Delta Theta, Phi Kappa Psi, Pi Kappa Phi, Pi Phi Chi, Sigma Alpha Epsilon, Sigma Chi, Sigma Nu, Sigma Phi Epsilon, Phi Gamma Delta, Phi Alpha Delta, Phi Delta Phi, Phi Delta Chi, Delta Sigma Delta, Xi Psi Phi, Nu Sigma Nu, Phi Chi, Phi Rho Sigma, Achoth, Alpha Chi Omega, Alpha Delta Pi, Alpha Omicron Pi, Alpha Phi, Alpha Xi Delta, Chi Omega, Delta Delta Delta, Delta Gamma, Delta Zeta, Gamma Phi Beta, Kappa Alpha Theta, Kappa Delta, Kappa Kappa Gamma, Pi Beta Phi, Kappa Alpha Psi, Gamma Eta Gamma, Bushnell Guild, Farm House, Silver Lynx, Theta Chi, Phi Mu, and Delta Sigma Pi; the Newman Club; the Nebraska Press Association; Boy Scouts of America; Boy Scouts of America Local Councils; Camp Fire Girls of America; Camp Fire Girls of America Local Councils; Pathfinder Club International; Firemen's Relief Association of Nebraska; Rotary International; Sertoma International; Kiwanis International; Cosmopolitan International; Optimist International; Stuart Lodge of the Catholic Knights of America; Pulaski Club of America; Katolicky Sokol of America; Telocvicna Jednota Sokol organizations in Nebraska; International Association of Lions Clubs; the Veterans of Foreign Wars of the United States; Chambers of Commerce; Junior Chambers of Commerce; OEA Senior Citizen's, Inc.; the Nebraska Council of Home Extension Clubs; Nebraska State Chapter of the P.E.O. Sisterhood; American Province of the Order of Servants of Mary; and Great Plains, Inc., together with each and every subordinate or auxiliary lodge, encampment, tribe, company, council, post, corps, department, society, or other designated organization or body within this state, under its properly designated or chartered name as has been or may be established and chartered within or for Nebraska by its respective state, grand, supreme, national, or other governing body, and working under a charter or charters from its respective state, grand, supreme, or national lodge, organization, or other governing body, be and the same are hereby made and declared corporations within the state under the name and title designated in the respective charters or constitutions by which name they shall be capable of suing, being sued, pleading, and being impleaded in the several courts of this state, the same as natural persons.

Source:Laws 1869, § 1, p. 64; Laws 1885, c. 30, § 1, p. 203; Laws 1889, c. 39, § 1, p. 403; Laws 1891, c. 17, § 1, p. 218; Laws 1905, c. 41, § 1, p. 282; Laws 1907, c. 31, § 1, p. 160; Laws 1909, c. 26, § 1, p. 202; R.S.1913, § 610; Laws 1917, c. 11, § 1, p. 69; Laws 1919, c. 156, § 1, p. 351; Laws 1921, c. 147, § 1, p. 622; Laws 1921, c. 174, § 1, p. 670; C.S.1922, § 504; Laws 1923, c. 34, § 1, p. 144; Laws 1925, c. 148, § 1, p. 383; Laws 1929, c. 57, § 1, p. 222; C.S.1929, § 24-607; Laws 1935, c. 46, § 1, p. 168; Laws 1937, c. 52, § 1, p. 216; C.S.Supp.,1941, § 24-607; R.S.1943, § 21-608; Laws 1949, c. 30, § 1, p. 114; Laws 1953, c. 44, § 1, p. 161; Laws 1959, c. 73, § 1, p. 309; Laws 1961, c. 72, § 1, p. 277; Laws 1971, LB 8, § 1; Laws 1975, LB 149, § 1; Laws 1979, LB 102, § 1; Laws 1980, LB 748, § 1; Laws 1983, LB 262, § 1; Laws 1986, LB 762, § 1; Laws 1990, LB 1102, § 1.

Annotations

A labor union is not a corporation under this section. Hurley v. Brotherhood of Railroad Trainmen, 147 Neb. 781, 25 N.W.2d 29 (1946).

Legislature, by this section, provided for the incorporation of Grand Lodge, Free and Accepted Masons, and its subordinate bodies, without any precise definition of the terms benevolent and charitable. Ancient and Accepted Scottish Rite of Freemasonry v. Board of County Commissioners of Lancaster County, 122 Neb. 586, 241 N.W. 93 (1932), 81 A.L.R. 1166 (1932).

Where Nebraska Supreme Court held certain type of certificate issued by Nebraska fraternal beneficiary association to be ultra vires, refusal of Missouri courts to so hold violated full faith and credit clause of federal Constitution. Sovereign Camp W.O.W. v. Bolin, 305 U.S. 66 (1938), 119 A.L.R. 478 (1938).

This section constitutes as bodies corporate the organizations described therein, and filing of charter is merely a condition precedent to right to hold title to real estate in own name. Collins v. Russell, 114 F.2d 334 (8th Cir. 1940).

21-609. Societies declared to be corporations; power to acquire and hold property; charter, constitution; filing of copy required.

Each of said organizations, lodges or societies shall have power to receive bequests of real and personal property, to hold and convey both real and personal property, to lease property and to do all other things usually done by corporations for the purpose for which organized. In order to own, hold and convey real estate, each organization mentioned in section 21-608, shall file with the Secretary of State, for itself, a certified copy of the charter of the state organization, if there be one, or if there be no state organization then of the supreme or national organization, duly certified as a true copy thereof by the secretary or other like officer of such state organization, or supreme or national organization, as the case may be, under the official seal thereof; Provided, that if such state organization shall not exist under or by virtue of a charter from any grand, supreme or national governing body, but is working under and by virtue of its own constitution, then such organization shall file with the Secretary of State a correct copy of such constitution certified to by its secretary or other like officer, as a true copy of such constitution under the official seal of such state organization. Each of the subordinate organizations mentioned in section 21-608, and working under a charter from a state, supreme, or national organization shall, for itself, file with the clerk of the county in which such subordinate organization is located, a copy of the charter or constitution under which it is working, duly certified as a true copy thereof, by the secretary or other like officer thereof, under the official seal thereof, and such societies shall be thereafter entitled to all the privileges and rights incident to bodies corporate so long as they retain their respective organization and charters aforesaid.

Source:Laws 1869, § 2, p. 64; Laws 1885, c. 30, § 2, p. 204; Laws 1889, c. 39, § 1, p. 404; Laws 1891, c. 17, § 1, p. 220; Laws 1905, c. 42, § 1, p. 282; Laws 1907, c. 31, § 1, p. 161; Laws 1909, c. 26, § 1, p. 203; R.S.1913, § 610; Laws 1917, c. 11, § 1, p. 70; Laws 1919, c. 156, § 1, p. 352; Laws 1921, c. 147, § 1, p. 623; Laws 1921, c. 174, § 1, p. 671; C.S.1922, § 504; Laws 1923, c. 34, § 1, p. 145; Laws 1925, c. 148, § 1, p. 385; Laws 1929, c. 57, § 1, p. 224; C.S.1929, § 24-607; Laws 1935, c. 46, § 1, p. 170; Laws 1937, c. 52, § 1, p. 218; C.S.Supp.,1941, § 24-607; R.S.1943, § 21-609.

Annotations

Filing of copy of charter of subordinate fraternal society is merely a condition precedent to right to hold real estate in its own name. Bejot v. Ainsworth Lodge No. 130, I.O.O.F., 128 Neb. 631, 259 N.W. 745 (1935).

21-610. Societies declared to be corporations; power to act as administrator, executor, guardian, or trustee.

When any such organization has established in this state an institution for the care of children or persons who are incapacitated in any manner and such institution has been incorporated under the laws of Nebraska, such corporation shall have power to act either by itself or jointly with any natural person or persons (1) as administrator of the estate of any deceased person whose domicile was within the county in which the corporation is located or whose domicile was outside the State of Nebraska, (2) as executor under a last will and testament or as guardian of the property of any infant, person with an intellectual disability, person with a mental disorder, or person under other disability, or (3) as trustee for any person or of the estate of any deceased person under the appointment of any court of record having jurisdiction of the estate of such person.

Source:Laws 1917, c. 11, § 1, p. 70; Laws 1919, c. 156, § 1, p. 353; Laws 1921, c. 147, § 1, p. 624; Laws 1921, c. 174, § 1, p. 672; C.S.1922, § 504; Laws 1923, c. 34, § 1, p. 146; Laws 1925, c. 148, § 1, p. 386; Laws 1929, c. 57, § 1, p. 225; C.S.1929, § 24-607; Laws 1935, c. 46, § 1, p. 171; Laws 1937, c. 52, § 1, p. 218; C.S.Supp.,1941, § 24-607; R.S.1943, § 21-610; Laws 1986, LB 1177, § 3; Laws 2013, LB23, § 1.

21-611. Corporate acts; how attested.

The act or acts of such corporations for all legal purposes shall be attested by the principal officer and the secretary under the seal of such corporation.

Source:Laws 1897, c. 20, § 4, p. 186; R.S.1913, § 611; C.S.1922, § 505; C.S.1929, § 24-608; R.S.1943, § 21-611.

21-612. Subordinate organizations; operation of orphanages and other homes; incorporation; acquisition of property; use and investment of funds; power to borrow.

Fraternal, benevolent and charitable organizations in this state which have or may hereafter be duly incorporated by the laws of the state, are hereby authorized by and through their respective grand bodies issuing charters to their subordinates, to organize and create within their respective organizations, bodies corporate for the purpose of establishing and maintaining homes in this state for the care and maintenance of orphans, widows, aged and indigent persons, or for the care of such persons, under such rules, regulations and bylaws as such organization may provide; and to acquire and receive by donation, bequest, assessment and purchase and other legitimate means, property and funds for such purpose and to hold and invest all such property and funds thus acquired; to borrow money on its real estate and other property; to acquire, invest or reinvest its funds for the endowment of such homes, or its charges or inmates; to invest, reinvest or exchange its endowment funds upon such securities as its trustees may deem safe; to take and hold mortgages upon real estate and other securities therefor, to exchange the same, and to do all things necessary for the purposes and objects of charitable, benevolent and fraternal care of orphans, widows, aged and indigent persons who need such care. But no funds or other property thus acquired by any such fraternal, benevolent or charitable association shall ever be diverted from the objects and purposes herein stated.

Source:Laws 1907, c. 30, § 1, p. 157; R.S.1913, § 612; C.S.1922, § 506; C.S.1929, § 24-609; R.S.1943, § 21-612.

21-613. Grand organizations; operation of orphanages and other homes; acquisition of property; use and investment of funds.

Any and all fraternal, benevolent and charitable grand bodies issuing charters to subordinates in this state, which grand bodies have been or may hereafter be incorporated by the laws of this state, may instead of forming an auxiliary corporation within their respective organizations for the purpose of carrying out the objects of section 21-612, proceed to acquire in the name of such grand body all necessary funds and property by donation, gift, bequests, purchase and other legitimate means, funds and property for the establishment and maintenance of homes for widows, orphans, aged and indigent persons within this state. Such grand bodies may hold, invest, reinvest and use all such funds and property in their respective names, and provide by bylaws the number of trustees or directors who shall have the supervision of such funds, property and home together with the tenure of office of such trustees or directors, and such grand body may make such rules and regulations for the government and maintenance and control of such homes or funds as may be necessary to promote the fraternal, benevolent, and charitable objects of the same for the care and maintenance of widows, orphans, aged and indigent persons.

Source:Laws 1907, c. 30, § 2, p. 158; R.S.1913, § 613; C.S.1922, § 507; C.S.1929, § 24-610; R.S.1943, § 21-613.

21-614. Orphanages and other homes; books, inspection by Auditor of Public Accounts; diversion of property and funds; powers of Attorney General.

The books, records, and files pertaining to any such home shall be subject to the inspection of the Auditor of Public Accounts of this state, or any deputy or clerk authorized by him to inspect the same. Any organization maintaining such a home or funds is hereby required, at the request of the Auditor of Public Accounts, to report to his office in detail all matters required by him to be reported concerning the business of such funds, home or homes. In case of any diversion of the funds or other property acquired by any such organization from the object and purposes of such home or homes, or funds therefor, the Attorney General is hereby authorized to bring suit in any court having general jurisdiction in equity matters in the state, to restrain and prevent any diversion of such funds or property, and to adjust any and all wrongs concerning the same.

Source:Laws 1907, c. 30, § 3, p. 158; R.S.1913, § 614; C.S.1922, § 508; C.S.1929, § 24-611; R.S.1943, § 21-614.

21-615. Orphanages and other homes; establishment; certified copy of charter to be filed.

Fraternal, benevolent and charitable organizations in this state which may adopt the provisions of sections 21-612 to 21-614, and which shall establish homes, or funds therefor, in accordance therewith, shall, in the case where a grand lodge or grand body desires to hold the property of such home or its funds in its own name, file with the Secretary of State a certified copy of its charter together with a statement of the number of trustees or directors authorized by it to transact the business pertaining to such home or homes or funds. In case a grand body mentioned in section 21-613 shall organize an auxiliary corporation for such purpose as provided in section 21-612, then and in such case such auxiliary corporation shall file with the Secretary of State a copy of its articles of association, duly certified by the secretary of such association.

Source:Laws 1907, c. 30, § 4, p. 159; R.S.1913, § 615; C.S.1922, § 509; C.S.1929, § 24-612; R.S.1943, § 21-615.

21-616. Orphanages and other homes; establishment under other laws.

Sections 21-612 to 21-615 shall not be considered to prohibit the formation of corporations under other corporation laws of this state.

Source:Laws 1907, c. 30, § 5, p. 159; R.S.1913, § 616; C.S.1922, § 510; C.S.1929, § 24-613; R.S.1943, § 21-616.

21-617. Society names and emblems; registration.

Any association, lodge, order, fraternal society, beneficial association, or fraternal and beneficial society or association, historical, military, or veterans organization, labor union, foundation, federation, or any other society, organization or association, degree, branch, subordinate lodge, or auxiliary thereof, whether incorporated or unincorporated, the principles and activities of which are not repugnant to the Constitution and laws of the United States or this state, may register, in the office of the Secretary of State, a facsimile, duplicate or description of its name, badge, motto, button, decoration, charm, emblem, rosette or other insignia, and may, by reregistration alter or cancel the same.

Source:Laws 1929, c. 140, § 1, p. 496; C.S.1929, § 24-614; R.S.1943, § 21-617.

21-618. Society names and emblems; registration; procedure; effect.

Application for such registration, alteration or cancellation shall be made by the chief officer or officers of said association, lodge, order, fraternal society, beneficial association, or fraternal and beneficial society or association, historical, military, or veterans organization, labor union, foundation, federation, or any other society, organization, or association, degree, branch, subordinate lodge, or auxiliary thereof, upon blanks to be provided by the Secretary of State; and such registration shall be for the use, benefit, and on behalf of all associations, degrees, branches, subordinate lodges, and auxiliaries of said association, lodge, order, fraternal society, beneficial association, or fraternal and beneficial society or association, historical, military, or veterans organization, labor union, foundation, federation, or any other society, organization or association, degree, branch, subordinate lodge, or auxiliary thereof, and the individual members and those hereafter to become members thereof, throughout this state.

Source:Laws 1929, c. 140, § 2, p. 496; C.S.1929, § 24-615; R.S.1943, § 21-618.

21-619. Society names and emblems; registration; record.

The Secretary of State shall keep a properly indexed record of the registration provided for by sections 21-617 and 21-618, which record shall also show any altered or canceled registration.

Source:Laws 1929, c. 140, § 3, p. 497; C.S.1929, § 24-616; R.S.1943, § 21-619.

21-620. Society names and emblems; similarity; registration not granted, when.

No registration shall be granted or alteration permitted to any association, lodge, order, fraternal society, beneficial association, or fraternal and beneficial society or association, historical, military, or veterans organization, labor union, foundation, federation, or any other society, organization or association, degree, branch, subordinate lodge, or auxiliary thereof, having a name, badge, motto, button, decoration, charm, emblem, rosette, or other insignia, similar to, imitating, or so nearly resembling as to be calculated to deceive, any other name, badge, button, decoration, charm, emblem, rosette, or other insignia whatsoever, already registered pursuant to the provisions of sections 21-617 to 21-619.

Source:Laws 1929, c. 140, § 4, p. 497; C.S.1929, § 24-617; R.S.1943, § 21-620.

21-621. Society names and emblems; registration; certificate to issue.

Upon granting registration as aforesaid, the Secretary of State shall issue his certificate to the petitioners, setting forth the fact of such registration.

Source:Laws 1929, c. 140, § 5, p. 497; C.S.1929, § 24-618; R.S.1943, § 21-621.

21-622. Society emblems; unlawful use; penalty.

Any person who shall willfully wear, exhibit, display, print or use, for any purpose, the badge, motto, button, decoration, charm, emblem, rosette, or other insignia of any such association or organization mentioned in section 21-617, duly registered hereunder, unless he or she shall be entitled to use and wear the same under the constitution and bylaws, rules and regulations of such association or organization, shall be guilty of a Class III misdemeanor.

Source:Laws 1929, c. 140, § 6, p. 497; C.S.1929, § 24-619; R.S.1943, § 21-622; Laws 1977, LB 40, § 77.

21-623. Society names and emblems; registration; fees.

The fees of the Secretary of State for registration, alteration, cancellation, searches made by him, and certificates issued by him, pursuant to sections 21-617 to 21-622, shall be as follows: One dollar and fifty cents for each registration, alteration, cancellation, search or reregistration; for the certificate contemplated in section 21-621, one dollar plus ten cents for each hundred words, or fraction thereof, set forth in said certificate issued. The fees collected under sections 21-617 to 21-624 shall be paid by the Secretary of State into the state treasury.

Source:Laws 1929, c. 140, § 7, p. 498; C.S.1929, § 24-620; R.S.1943, § 21-623.

21-624. Society names and emblems; registration; organizations not affected.

The provisions of sections 21-617 to 21-623 shall not apply to or in any way affect any fraternal society, club, organization, or association connected with and recognized by any university, college, parochial school, high school, or other educational institution in the State of Nebraska.

Source:Laws 1929, c. 140, § 8, p. 498; C.S.1929, § 24-621; R.S.1943, § 21-624; Laws 1987, LB 31, § 1.

21-701. Repealed. Laws 1961, c. 73, § 1.

21-702. Repealed. Laws 1961, c. 73, § 1.

21-703. Repealed. Laws 1961, c. 73, § 1.

21-704. Repealed. Laws 1961, c. 73, § 1.

21-705. Repealed. Laws 1961, c. 73, § 1.

21-706. Repealed. Laws 1961, c. 73, § 1.

21-707. Repealed. Laws 1961, c. 73, § 1.

21-708. Repealed. Laws 1961, c. 73, § 1.

21-709. Repealed. Laws 1961, c. 73, § 1.

21-710. Repealed. Laws 1961, c. 73, § 1.

21-711. Repealed. Laws 1961, c. 73, § 1.

21-712. Repealed. Laws 1961, c. 73, § 1.

21-713. Repealed. Laws 1961, c. 73, § 1.

21-714. Repealed. Laws 1961, c. 73, § 1.

21-715. Repealed. Laws 1961, c. 73, § 1.

21-716. Repealed. Laws 1961, c. 73, § 1.

21-717. Repealed. Laws 1961, c. 73, § 1.

21-718. Repealed. Laws 1961, c. 73, § 1.

21-719. Repealed. Laws 1961, c. 73, § 1.

21-720. Repealed. Laws 1961, c. 73, § 1.

21-721. Repealed. Laws 1961, c. 73, § 1.

21-722. Repealed. Laws 1961, c. 73, § 1.

21-723. Repealed. Laws 1961, c. 73, § 1.

21-724. Repealed. Laws 1961, c. 73, § 1.

21-725. Repealed. Laws 1961, c. 73, § 1.

21-726. Repealed. Laws 1961, c. 73, § 1.

21-727. Repealed. Laws 1961, c. 73, § 1.

21-728. Repealed. Laws 1961, c. 73, § 1.

21-729. Repealed. Laws 1961, c. 73, § 1.

21-730. Repealed. Laws 1961, c. 73, § 1.

21-731. Repealed. Laws 1961, c. 73, § 1.

21-801. Repealed. Laws 1967, c. 102, § 1.

21-802. Repealed. Laws 1967, c. 102, § 1.

21-803. Repealed. Laws 1967, c. 102, § 1.

21-804. Repealed. Laws 1967, c. 102, § 1.

21-805. Repealed. Laws 1967, c. 102, § 1.

21-806. Repealed. Laws 1967, c. 102, § 1.

21-807. Repealed. Laws 1967, c. 102, § 1.

21-808. Repealed. Laws 1967, c. 102, § 1.

21-809. Repealed. Laws 1967, c. 102, § 1.

21-810. Repealed. Laws 1967, c. 102, § 1.

21-811. Repealed. Laws 1967, c. 102, § 1.

21-812. Repealed. Laws 1967, c. 102, § 1.

21-813. Repealed. Laws 1967, c. 102, § 1.

21-814. Repealed. Laws 1967, c. 102, § 1.

21-815. Repealed. Laws 1967, c. 102, § 1.

21-816. Repealed. Laws 1967, c. 102, § 1.

21-817. Repealed. Laws 1967, c. 102, § 1.

21-818. Repealed. Laws 1967, c. 102, § 1.

21-819. Repealed. Laws 1967, c. 102, § 1.

21-820. Repealed. Laws 1967, c. 102, § 1.

21-821. Repealed. Laws 1967, c. 102, § 1.

21-822. Repealed. Laws 1967, c. 102, § 1.

21-823. Repealed. Laws 1967, c. 102, § 1.

21-824. Repealed. Laws 1967, c. 102, § 1.

21-825. Repealed. Laws 1967, c. 102, § 1.

21-826. Repealed. Laws 1967, c. 102, § 1.

21-827. Repealed. Laws 1967, c. 102, § 1.

21-828. Repealed. Laws 1967, c. 102, § 1.

21-829. Repealed. Laws 1967, c. 102, § 1.

21-830. Repealed. Laws 1967, c. 102, § 1.

21-831. Repealed. Laws 1967, c. 102, § 1.

21-832. Repealed. Laws 1967, c. 102, § 1.

21-833. Repealed. Laws 1967, c. 102, § 1.

21-834. Repealed. Laws 1967, c. 102, § 1.

21-834.01. Repealed. Laws 1967, c. 102, § 1.

21-835. Repealed. Laws 1967, c. 102, § 1.

21-836. Repealed. Laws 1967, c. 102, § 1.

21-837. Repealed. Laws 1967, c. 102, § 1.

21-838. Repealed. Laws 1967, c. 102, § 1.

21-839. Repealed. Laws 1967, c. 102, § 1.

21-840. Repealed. Laws 1967, c. 102, § 1.

21-841. Repealed. Laws 1967, c. 102, § 1.

21-842. Repealed. Laws 1967, c. 102, § 1.

21-842.01. Repealed. Laws 1967, c. 102, § 1.

21-842.02. Repealed. Laws 1967, c. 102, § 1.

21-843. Repealed. Laws 1967, c. 102, § 1.

21-844. Repealed. Laws 1967, c. 102, § 1.

21-845. Repealed. Laws 1967, c. 102, § 1.

21-846. Repealed. Laws 1967, c. 102, § 1.

21-847. Repealed. Laws 1967, c. 102, § 1.

21-848. Repealed. Laws 1967, c. 102, § 1.

21-849. Repealed. Laws 1967, c. 102, § 1.

21-850. Repealed. Laws 1967, c. 102, § 1.

21-851. Repealed. Laws 1967, c. 102, § 1.

21-852. Repealed. Laws 1967, c. 102, § 1.

21-853. Repealed. Laws 1967, c. 102, § 1.

21-854. Repealed. Laws 1967, c. 102, § 1.

21-901. Repealed. Laws 1961, c. 76, § 1.

21-902. Repealed. Laws 1961, c. 76, § 1.

21-903. Repealed. Laws 1961, c. 76, § 1.

21-904. Repealed. Laws 1961, c. 76, § 1.

21-905. Repealed. Laws 1961, c. 76, § 1.

21-906. Repealed. Laws 1961, c. 76, § 1.

21-907. Repealed. Laws 1961, c. 76, § 1.

21-908. Repealed. Laws 1961, c. 76, § 1.

21-909. Repealed. Laws 1961, c. 76, § 1.

21-910. Repealed. Laws 1961, c. 76, § 1.

21-911. Repealed. Laws 1961, c. 76, § 1.

21-912. Repealed. Laws 1961, c. 76, § 1.

21-913. Repealed. Laws 1961, c. 76, § 1.

21-914. Repealed. Laws 1961, c. 76, § 1.

21-1001. Repealed. Laws 1967, c. 102, § 1.

21-1002. Repealed. Laws 1967, c. 102, § 1.

21-1003. Repealed. Laws 1967, c. 102, § 1.

21-1004. Repealed. Laws 1967, c. 102, § 1.

21-1005. Repealed. Laws 1967, c. 102, § 1.

21-1006. Repealed. Laws 1967, c. 102, § 1.

21-1007. Repealed. Laws 1967, c. 102, § 1.

21-1008. Repealed. Laws 1967, c. 102, § 1.

21-1009. Repealed. Laws 1967, c. 102, § 1.

21-1010. Repealed. Laws 1967, c. 102, § 1.

21-1011. Repealed. Laws 1967, c. 102, § 1.

21-1012. Repealed. Laws 1967, c. 102, § 1.

21-1013. Repealed. Laws 1967, c. 102, § 1.

21-1014. Repealed. Laws 1967, c. 102, § 1.

21-1015. Repealed. Laws 1967, c. 102, § 1.

21-1016. Repealed. Laws 1967, c. 102, § 1.

21-1017. Repealed. Laws 1967, c. 102, § 1.

21-1101. Legislative grant of charter; reservation of power to change.

Fontenelle Forest Association is hereby authorized to organize as a corporation not for profit under the provisions of the Nebraska Nonprofit Corporation Act. Upon so organizing, it shall have all of the powers and immunities provided for by such act and shall in all respects be subject to the provisions of such act, and for all purposes shall be deemed the successor to Fontenelle Forest Association as now organized and constituted.

Source:Laws 1913, c. 176, § 1, p. 531; R.S.1913, § 714; C.S.1922, § 623; C.S.1929, § 24-1101; R.S.1943, § 21-1101; Laws 1969, c. 125, § 1, p. 576; Laws 1996, LB 681, § 179.

Cross References

Nebraska Nonprofit Corporation Act, see section 21-1901.

21-1102. Repealed. Laws 1969, c. 125, § 2.

21-1103. Repealed. Laws 1969, c. 125, § 2.

21-1104. Repealed. Laws 1969, c. 125, § 2.

21-1105. Repealed. Laws 1969, c. 125, § 2.

21-1106. Repealed. Laws 1969, c. 125, § 2.

21-1107. Repealed. Laws 1969, c. 125, § 2.

21-1108. Repealed. Laws 1969, c. 125, § 2.

21-1109. Repealed. Laws 1969, c. 125, § 2.

21-1110. Repealed. Laws 1969, c. 125, § 2.

21-1111. Repealed. Laws 1969, c. 125, § 2.

21-1201. Repealed. Laws 1963, c. 98, § 135.

21-1202. Repealed. Laws 1963, c. 98, § 135.

21-1203. Repealed. Laws 1963, c. 98, § 135.

21-1204. Repealed. Laws 1963, c. 98, § 135.

21-1205. Repealed. Laws 1963, c. 98, § 135.

21-1206. Repealed. Laws 1963, c. 98, § 135.

21-1207. Repealed. Laws 1963, c. 98, § 135.

21-1208. Repealed. Laws 1963, c. 98, § 135.

21-1209. Repealed. Laws 1963, c. 98, § 135.

21-1209.01. Repealed. Laws 1963, c. 98, § 135.

21-1210. Repealed. Laws 1963, c. 98, § 135.

21-1211. Repealed. Laws 1963, c. 98, § 135.

21-1212. Repealed. Laws 1963, c. 98, § 135.

21-1213. Repealed. Laws 1963, c. 98, § 135.

21-1214. Repealed. Laws 1963, c. 98, § 135.

21-1215. Repealed. Laws 1963, c. 98, § 135.

21-1216. Repealed. Laws 1963, c. 98, § 135.

21-1217. Repealed. Laws 1963, c. 98, § 135.

21-1301. Cooperative corporation; formation; general purposes and powers; exceptions; action by cooperative corporation; vote required.

Any number of persons, not less than ten, or one or more cooperative companies, may form and organize a cooperative corporation for the transaction of any lawful business by the adoption of articles of incorporation in the same manner and with like powers and duties as is required of other corporations except as provided in sections 21-1301 to 21-1306. Nothing in sections 21-1301 and 21-1303 shall be deemed to apply to electrical cooperatives or electric member associations. If the Nebraska Model Business Corporation Act requires an affirmative vote of a specified percentage of stockholders before action can be taken by a corporation, such percentage for a cooperative corporation shall be of the votes cast on the matter at the stockholders' meeting at which the same shall be voted upon.

Source:Laws 1911, c. 32, § 2, p. 196; R.S.1913, § 734; Laws 1919, c. 197, § 3, p. 879; Laws 1921, c. 28, § 1, p. 161; C.S.1922, § 642; Laws 1925, c. 79, § 1, p. 243; C.S.1929, § 24-1301; R.S.1943, § 21-1301; Laws 1963, c. 102, § 1, p. 422; Laws 1975, LB 156, § 1; Laws 1995, LB 109, § 203; Laws 2014, LB749, § 262.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

Transactions exempt from Securities Act of Nebraska, see section 8-1111.

Annotations

Organization of cooperative association as a corporation is authorized. Schmeckpeper v. Panhandle Coop. Assn., 180 Neb. 352, 143 N.W.2d 113 (1966).

Farmers' cooperative company organized under this article is not necessarily exempt from federal income tax. Farmers Union Co-op. Co. of Guide Rock v. Commissioner of Internal Revenue, 90 F.2d 488 (8th Cir. 1937).

21-1302. Cooperative corporation; articles of incorporation; contents.

Every such cooperative company shall provide in its articles of incorporation:

(1) That the word cooperative shall be included in its corporate name and that it proposes to organize as a cooperative corporation;

(2) That dividends on the capital stock shall be fixed but shall not exceed eight percent per annum of the amount actually paid thereon;

(3) That the net earnings or savings of the company remaining after making the distribution provided in subdivision (2) of this section, if any, shall be distributed on the basis of or in proportion to the amount or value of property bought from or sold to members, or members and other patrons, or of labor performed or other services rendered to the corporation. This subdivision shall not be so interpreted as to prevent a cooperative company from declaring patronage dividends at different rates upon different classes or kinds or varieties of goods handled. This subdivision and subdivision (2) of this section shall not be so interpreted as to prevent a company from appropriating funds for the promotion of cooperation and improvement in agriculture;

(4) That the articles of incorporation or the bylaws of the company shall give a detailed statement of the method followed in distributing earnings or savings;

(5) The registered office and street address of such registered office;

(6) The current registered agent and the name and street address of such registered agent. A post office box number may be provided in addition to the street address; and

(7) The name and street address of each incorporator.

Source:Laws 1921, c. 28, § 2, p. 161; C.S.1922, § 643; Laws 1925, c. 79, § 2, p. 243; C.S.1929, § 24-1302; R.S.1943, § 21-1302; Laws 1963, c. 102, § 2, p. 423; Laws 1967, c. 103, § 1, p. 318; Laws 2008, LB379, § 5.

Annotations

The requirement of the accumulation of a surplus equal to twenty percent does not restrict the corporation from providing a greater amount. Schmeckpeper v. Panhandle Coop. Assn., 180 Neb. 352, 143 N.W.2d 113 (1966).

21-1303. Cooperative corporation; additional powers; stockholder vote; conditions; adoption of articles and bylaws.

Every cooperative company which shall organize under sections 21-1301 and 21-1302 shall have power (1) to regulate and limit the right of stockholders to transfer their stock, (2) to restrict stock ownership to producers of agricultural products and, if such restriction is adopted, to provide an equitable procedure for redeeming the stock of any holder who is determined not to be a producer of agricultural products, (3) to provide that each individual holder of common stock may be limited to one vote per person, regardless of the number of shares of stock which he or she may own, at any stockholders' meeting and that such vote may be cast only in person, or by a signed, written vote if the stockholder has been previously notified in writing of the exact motion or resolution on which the vote is taken, (4) to limit the amount of capital stock that any one person or corporation may own either directly or indirectly, (5) to prohibit or to limit the amount or percentage of the total business which may be transacted with nonmembers, (6) to set aside each year to a surplus fund a portion of the savings of the company over and above all expenses and dividends or interest upon capital stock which surplus may be used for conducting the business of the corporation, and (7) to adopt articles and bylaws for the management and regulation of the affairs of the company which shall set the number of directors, the terms of such directors, including any provisions for the staggering of such terms, the number or percentage of stockholders or shares of stock required to be present, in person or by proxy, in order to constitute a quorum at each stockholders' meeting, which number or percentage shall not be less than ten percent of the stockholders but never more than fifty nor less than five stockholders. Members represented by signed, written vote may be counted in computing a quorum only on those questions as to which the signed, written vote is taken.

Source:Laws 1911, c. 32, § 3, p. 196; R.S.1913, § 735; Laws 1919, c. 57, § 1, p. 161; Laws 1921, c. 28, § 3, p. 162; C.S.1922, § 644; Laws 1925, c. 79, § 3, p. 244; C.S.1929, § 24-1303; R.S.1943, § 21-1303; Laws 1961, c. 79, § 1, p. 288; Laws 1963, c. 102, § 3, p. 423; Laws 1965, c. 89, § 1, p. 356; Laws 1975, LB 156, § 2; Laws 1981, LB 283, § 1.

Annotations

Cooperative associations are given power to engage in enterprises requiring capital. Schmeckpeper v. Panhandle Coop. Assn., 180 Neb. 352, 143 N.W.2d 113 (1966).

21-1304. Cooperative corporation; contracts with members; provisions; damages for breach.

The contracts mentioned in section 21-1303 may require the members to sell, for any period of time not over five years, all or a stipulated part of their specifically enumerated products through the association or to buy specifically enumerated supplies exclusively through the association, but in such case a reasonable period during each year after the first two years of the contract shall be specified during which any member, by giving notice in prescribed form, may be released from such obligation thereafter. In order to protect itself in the necessary outlay, which it may make for the maintenance of its services, and likewise to reimburse the association for any loss or damage which it or its members may sustain through a member's failure to deliver his products to, or to procure his supplies from the association, the association may stipulate that some regular charge shall be paid by the members for each unit of goods covered by such contract, whether actually handled by the association or not. In case it is difficult or impracticable to determine the actual amount of damage suffered by the association or its members through such failure to comply with the terms of such contract, the association and the members may agree upon a sum to be paid as liquidated damages for the breach of the contract, the amount to be stated in the contract.

Source:Laws 1925, c. 79, § 3, p. 245; C.S.1929, § 24-1303; R.S.1943, § 21-1304.

21-1305. Cooperative corporation; fees, filings, and reports.

The fees for the incorporation of cooperative companies shall be the same as those required by law of other corporations. Such cooperative corporations shall be required to make the same reports and filings as is required of other corporations.

Source:Laws 1911, c. 32, § 5, p. 197; R.S.1913, § 737; Laws 1921, c. 28, § 4, p. 162; C.S.1922, § 645; C.S.1929, § 24-1304; R.S.1943, § 21-1305.

21-1306. Cooperative; use of word restricted; penalty for violation.

No corporation, company, firm or association which shall not be incorporated as a cooperative corporation shall adopt or use the words cooperative or any abbreviation thereof as a part of its name. Any person or company violating the provisions of this section shall be guilty of a Class V misdemeanor for each day's continuance of the offense.

Source:Laws 1921, c. 28, § 5, p. 162; C.S.1922, § 646; C.S.1929, § 24-1305; R.S.1943, § 21-1306; Laws 1977, LB 40, § 78.

21-1307. Repealed. Laws 1963, c. 102, § 4.

21-1308. Repealed. Laws 2002, LB 1094, § 19.

21-1309. Repealed. Laws 2002, LB 1094, § 19.

21-1310. Repealed. Laws 2002, LB 1094, § 19.

21-1311. Repealed. Laws 2002, LB 1094, § 19.

21-1312. Repealed. Laws 2002, LB 1094, § 19.

21-1313. Repealed. Laws 2002, LB 1094, § 19.

21-1314. Repealed. Laws 2002, LB 1094, § 19.

21-1315. Repealed. Laws 2002, LB 1094, § 19.

21-1316. Repealed. Laws 2002, LB 1094, § 19.

21-1316.01. Repealed. Laws 2002, LB 1094, § 19.

21-1317. Repealed. Laws 2002, LB 1094, § 19.

21-1318. Repealed. Laws 2002, LB 1094, § 19.

21-1319. Repealed. Laws 2002, LB 1094, § 19.

21-1320. Repealed. Laws 2002, LB 1094, § 19.

21-1320.01. Repealed. Laws 2002, LB 1094, § 19.

21-1321. Repealed. Laws 2002, LB 1094, § 19.

21-1322. Repealed. Laws 2002, LB 1094, § 19.

21-1323. Repealed. Laws 2002, LB 1094, § 19.

21-1324. Repealed. Laws 2002, LB 1094, § 19.

21-1325. Repealed. Laws 2002, LB 1094, § 19.

21-1326. Repealed. Laws 2002, LB 1094, § 19.

21-1326.01. Repealed. Laws 2002, LB 1094, § 19.

21-1327. Repealed. Laws 2002, LB 1094, § 19.

21-1327.01. Repealed. Laws 2002, LB 1094, § 19.

21-1328. Repealed. Laws 2002, LB 1094, § 19.

21-1329. Repealed. Laws 2002, LB 1094, § 19.

21-1330. Repealed. Laws 2002, LB 1094, § 19.

21-1331. Repealed. Laws 2002, LB 1094, § 19.

21-1331.01. Repealed. Laws 2002, LB 1094, § 19.

21-1332. Repealed. Laws 2002, LB 1094, § 19.

21-1333. Cooperative farm land company; incorporation; purposes; general powers.

Any number of persons, not less than five, may form and organize a cooperative farm land company, with or without capital stock, for the purpose of facilitating the acquisition of agricultural and grazing lands by farmers and stock raisers, by the adoption of articles of incorporation in the same manner and with like powers and duties as other corporations, except as herein provided.

Source:Laws 1941, c. 38, § 1, p. 153; C.S.Supp.,1941, § 24-2101; R.S.1943, § 21-1333.

21-1334. Cooperative farm land company; articles of incorporation; contents; new members.

Every such cooperative farm land company shall provide in its articles of incorporation (1) that the word cooperative shall be included in its corporate name and that it proposes to organize as a cooperative farm land company; (2) if organized with capital stock, that no one person shall own either directly or indirectly more than five percent of the capital stock of the company; (3) if organized without capital stock, whether the property rights and interest of each member shall be equal or unequal; and if unequal, the general rule or rules applicable to all members by which the property rights and interests, respectively, of each member may and shall be determined and fixed; and the association shall have the power to admit new members who shall be entitled to share in the property of the association with the old members, in accordance with such general rule or rules; and (4) that dividends on the capital stock shall be fixed by the company, but shall in no event exceed six percent per annum of the amount actually paid thereon.

Source:Laws 1941, c. 38, § 2, p. 153; C.S.Supp.,1941, § 24-2102; R.S.1943, § 21-1334.

21-1335. Cooperative farm land company; corporate powers.

Every cooperative corporation that shall organize under sections 21-1333 to 21-1339 shall have power (1) to have succession by its corporate name, (2) to sue and be sued, (3) to make and use a common seal and alter the same at its pleasure, (4) to regulate and limit the right of stockholders to transfer their stock, (5) to appoint such subordinate officers and agents as the business of the corporation shall require and to allow them suitable compensation, (6) to adopt bylaws for the management and regulation of the affairs of the company, (7) to purchase, hold, sell, assign, or transfer the shares of the capital stock of other cooperative companies which it may own, and while owner of such stock to exercise all the rights, powers, and privileges of ownership, including the right to vote thereon, (8) to provide that each individual stockholder may be limited to one vote per person regardless of the number of shares of stock which he or she may own, (9) to prohibit proxy voting and to permit voting by mail under such regulations as shall be provided for in the bylaws, (10) to engage in any activity in connection with the purchase, lease or acquisition of agricultural and grazing lands and to improve or develop such land and to mortgage, or otherwise encumber the same, (11) to contract with its members and with other cooperative organizations organized hereunder for the sale, purchase or lease of such lands with such provisions for periodical payments, reserves, reamortization, supervision of the use of the lands, crop programming, and other factors as shall be agreed upon by such contracting parties, (12) to make contracts with the United States or the State of Nebraska, or any agency thereof, for the purpose of effectuating any plan for rural rehabilitation or with any nonprofit corporation organized for such purpose, (13) to provide that continued membership in such cooperative farm land company shall be dependent upon the performance by members of contracts entered into between themselves and said cooperative farm land company, (14) to purchase, own, sell, lease, mortgage, or otherwise acquire and convey real or personal property or any interest therein, (15) to borrow money necessary or convenient to the accomplishment of the purposes of this corporation and to secure the payment thereof by mortgage, pledge or conveyance in trust, of the whole or any part of the property of the corporation, and (16) to do each and everything necessary, suitable or proper for the accomplishment of any one of the purposes or the attainment of any one or more of the objects herein enumerated and to contract accordingly, and in addition to exercise and possess all powers, rights, and privileges granted by the laws of this state to ordinary corporations and to corporations organized under sections 21-1301 to 21-1306 and 21-1401 to 21-1414, and any amendments thereto.

Source:Laws 1941, c. 38, § 3, p. 153; C.S.Supp.,1941, § 24-2103; R.S.1943, § 21-1335; Laws 2002, LB 1094, § 10.

21-1336. Cooperative farm land company; annual report; contents; fee.

(1) Each cooperative farm land company organized hereunder shall make a report in writing to the Secretary of State annually during the month of November in such form as the secretary may prescribe for the reports of nonprofit corporations. The report shall be signed and sworn to, before an officer authorized to administer oaths, by the president, vice president, secretary or other chief officer of the corporation, and forwarded to the Secretary of State.

(2) Such report shall show (a) the name of the corporation, (b) the location of its principal office, (c) the names of the president, secretary-treasurer, and members of the board of trustees or directors, with post office address of each, (d) the date of the annual election of such corporation, and (e) the object or purpose which such corporation is engaged in carrying out.

(3) Upon the filing of such report as provided in subdivisions (1) and (2) of this section, the Secretary of State shall charge and collect a fee of one dollar on or before the first of January next following, which fee shall be in lieu of occupation tax fees.

Source:Laws 1941, c. 38, § 4, p. 154; C.S.Supp.,1941, § 24-2104; R.S.1943, § 21-1336.

21-1337. Cooperative farm land company; certificate of compliance; occupation tax laws inapplicable.

Upon the filing of the report and the payment of the fee provided for in section 21-1336, the Secretary of State shall make out and deliver to such corporation a certificate witnessing the compliance by such corporation with section 21-1336 and the payment of the annual fee therein provided for. No further compliance with sections 21-301 to 21-325 shall be required of such cooperative farm land companies.

Source:Laws 1941, c. 38, § 5, p. 155; C.S.Supp.,1941, § 24-2105; R.S.1943, § 21-1337; Laws 1988, LB 800, § 6.

21-1338. Cooperative farm land company; fees; disposition.

Annual fees collected under section 21-1336 shall be reported by the Secretary of State to the Tax Commissioner, and shall be paid by the secretary into the state treasury and credited to the General Fund.

Source:Laws 1941, c. 38, § 6, p. 155; C.S.Supp.,1941, § 24-2106; R.S.1943, § 21-1338.

21-1339. Cooperative farm land company; investment in purchase-money mortgages by insurance companies, authorized.

Obligations of a cooperative farm land company secured by a first mortgage on agricultural lands purchased by a cooperative farm land company shall be a lawful investment for funds of any insurance company which has conveyed real estate to the company to the full extent of the purchase price.

Source:Laws 1941, c. 38, § 7, p. 155; C.S.Supp.,1941, § 24-2107; R.S.1943, § 21-1339; Laws 1991, LB 237, § 55.

21-1401. Terms, defined; act, how cited.

(1) For purposes of the Nonstock Cooperative Marketing Act, unless the context otherwise requires: (a) The term association means any corporation formed hereunder; (b) the term member means a person who owns a certificate of membership in an association formed without capital stock; (c) the term person means an individual, a partnership, a limited liability company, a corporation, an association, or two or more persons having a joint or common interest; (d) the term agricultural products or products means field crops, horticultural, viticultural, forestry, nut, dairy, livestock, poultry, bee and farm products, and the byproducts derived from any of them; and (e) the words used to import the singular may be applied to the plural as the context may demand.

(2) Associations organized hereunder shall be deemed nonprofit, inasmuch as they are not organized to make profits for themselves as such or for their members as such but only for their members as producers.

(3) Sections 21-1401 to 21-1414 shall be known and may be cited as the Nonstock Cooperative Marketing Act.

Source:Laws 1925, c. 80, § 1, p. 247; C.S.1929, § 24-1401; R.S.1943, § 21-1401; Laws 1993, LB 121, § 150.

Cross References

Transactions exempt from Securities Act of Nebraska, see section 8-1111.

Annotations

A nonstock cooperative corporation formed pursuant to this section is not a "non-profit corporation" as that term is used in Neb. Const. art. XII, section 8(1)(B), because it exists and operates for the economic benefit of its members. Pig Pro Nonstock Co-op v. Moore, 253 Neb. 72, 568 N.W.2d 217 (1997).

Statutory definition of "agricultural products" used herein was adopted by court as applicable to hauling by contract carrier. Rodgers v. Nebraska State Railway Commission, 134 Neb. 832, 279 N.W. 800 (1938).

Common membership in nonstock cooperative association did not authorize injunction against prosecution of suits against individual members on note given for membership. Epp v. Federal Trust Company, 123 Neb. 375, 242 N.W. 922 (1932).

21-1402. Formation; purposes.

Any number of persons, not less than five, engaged in the production of agricultural products or two or more nonprofit cooperative companies, stock or nonstock, may form a cooperative association without capital stock for the transaction of any lawful business by the adoption of articles of incorporation, as set forth in Chapter 21, article 14.

Source:Laws 1925, c. 80, § 2, p. 248; C.S.1929, § 24-1402; R.S.1943, § 21-1402; Laws 1951, c. 40, § 1, p. 146; Laws 1981, LB 283, § 2.

21-1403. Articles of incorporation; contents.

Every nonstock cooperative association organized under the provisions of Chapter 21, article 14, shall provide in its articles of incorporation: (1) That the words nonstock cooperative shall be included in its corporate name and that it proposes to organize as a cooperative association; (2) the objects or purposes for which it is formed; (3) that the net earnings or savings of the association, if any, shall be distributed on the basis of, or in proportion to, the amount or value of property bought from or sold to members, or members and other patrons, or of labor performed or other services rendered to the corporation, except that this subdivision shall not be so interpreted as to prevent a cooperative company from declaring patronage dividends at different rates upon different classes or kinds or varieties of goods handled; (4) that the articles of incorporation or the bylaws of the company shall give a detailed statement of the method followed in distributing earnings or savings; (5) the registered office and street address of such registered office; (6) the current registered agent and the name and street address of such registered agent. A post office box number may be provided in addition to the street address; and (7) the name and street address of each incorporator.

Source:Laws 1925, c. 80, § 3, p. 248; C.S.1929, § 24-1403; R.S.1943, § 21-1403; Laws 1967, c. 104, § 1, p. 320; Laws 1981, LB 283, § 3; Laws 2008, LB379, § 6.

21-1404. Articles of incorporation; filing; certified copy as evidence; fees.

The articles of incorporation and amendments thereof shall be filed in accordance with the general corporation laws of this state and when so filed the said articles of incorporation and amendments thereof or certified copies thereof shall be received in all the courts of this state as prima facie evidence of the facts contained therein and of the due incorporation of such association. The fees for the incorporation of nonstock cooperative associations shall be the same as those required by law of other nonprofit corporations.

Source:Laws 1925, c. 80, § 4, p. 249; C.S.1929, § 24-1404; R.S.1943, § 21-1404; Laws 1981, LB 283, § 4.

21-1405. Powers.

Each association incorporated hereunder shall have the following powers: (1) To enter into contracts with its members for periods not over five years, requiring them to sell or market all or a specified part of their livestock or other products to or through the association, or to buy all, or a specified part, of their farm supplies from or through the association; (2) to act as agent or representative of any member or members or of nonmembers in carrying out the objects of the association; (3) to set aside each year to a surplus fund a portion of the savings of the company which surplus may be used for conducting the business of the corporation; and (4) to adopt articles and bylaws for the management of the association which shall also set the number or percentage of members required to be present in order to constitute a quorum at each members' meeting, which number or percentage shall not be less than ten percent of the members, but not more than fifty members, nor less than five members, except when the total membership is ten or less.

Source:Laws 1925, c. 80, § 5, p. 249; C.S.1929, § 24-1405; R.S.1943, § 21-1405; Laws 1977, LB 155, § 1; Laws 1981, LB 283, § 5.

21-1406. Members; eligibility; suspension or withdrawal; voting; liability for corporate debts; certificate of membership.

Only persons engaged in the production of the agricultural products, including lessees and landlords receiving such products as rent except as otherwise provided herein, or cooperative associations of such producers, shall be eligible to membership therein, subject to the terms and conditions prescribed in its articles of incorporation or bylaws consistent herewith. Only members of an association shall have the right to vote, and no member shall be entitled to more than one vote upon any question or matter affecting the association or relating to its affairs. Articles of incorporation hereunder may provide that no voting by proxy shall be permitted and such articles or bylaws adopted thereunder may further provide that a written vote received by mail from any absent member, and signed by him or her, may be read and counted at any regular or special meeting of the association, provided that the secretary shall notify all members in writing of the exact motion or resolution upon which such vote is to be taken, and a copy of same shall be forwarded with and attached to the vote so mailed by the member, and elections may be carried out in a similar manner. No member of an association shall be liable for its debts or obligations beyond the unpaid amount, if any, due by him or her on his or her membership dues. Every association formed hereunder shall issue a certificate of membership to each member which, unless otherwise provided in its articles of incorporation or bylaws, shall be nontransferable. Following the ascertainment through procedure set forth in its bylaws that a member has ceased to be eligible to membership in an association, his or her rights therein may be suspended. In the event of the death, withdrawal or expulsion of a member, the board of directors shall within a reasonable time thereafter equitably and conclusively ascertain the value of such member's membership, if any, which shall be paid him or her or his or her legal representatives by the association within a reasonable time after such ascertainment.

Source:Laws 1925, c. 80, § 6, p. 250; C.S.1929, § 24-1406; R.S.1943, § 21-1406; Laws 1977, LB 155, § 2; Laws 1981, LB 283, § 6.

21-1407. Bylaws.

Each association incorporated hereunder shall make such provision as it may desire for the adoption of its board of directors of a code of bylaws for the government and management of its business consistent herewith.

Source:Laws 1925, c. 80, § 7, p. 251; C.S.1929, § 24-1407; R.S.1943, § 21-1407.

21-1408. Directors; duties and powers; annual and special meetings; notice.

In its bylaws, each association shall provide for one or more regular meetings annually. The board of directors shall have the right to call a special meeting at any time; and ten percent of the members may file a petition stating the specific business to be brought before the association and demand a special meeting at any time. Such meeting must thereupon be called by the directors. Notice of all meetings, together with a statement of the purposes thereof, shall be mailed to each member at least ten days prior to the meeting; Provided, however, that the bylaws may require instead that such notice may be given by publication in a newspaper or newspapers of general circulation, in the territory in which the association has its membership.

Source:Laws 1925, c. 80, § 8, p. 251; C.S.1929, § 24-1408; R.S.1943, § 21-1408.

21-1409. Repealed. Laws 1981, LB 283, § 7.

21-1410. Marketing contracts; breach; rights of association.

The marketing contract of any association formed hereunder may fix as liquidated damages, specific, reasonable sums to be paid by a member to the association upon the breach by him of any of the provisions of the marketing contract regarding the sale or delivery or withholding of products, and may further provide that the member will pay all costs, premium for bonds, expenses and fees in case any action is brought upon the contract by the association, and any such provision shall be valid and enforceable in the courts of this state and shall not be construed as a penalty. In the event of a breach or threatened breach of such marketing contract by a member, the association shall be entitled to an injunction to prevent the further breach of the contract, and to a decree for the specific performance hereof. Pending the adjudication of such an action and upon filing a sufficient bond, the association shall be entitled to a temporary restraining order and preliminary injunction against the member.

Source:Laws 1925, c. 80, § 10, p. 252; C.S.1929, § 24-1410; R.S.1943, § 21-1410.

21-1411. Federation of associations; acquisition of stock or membership; agreements.

To effectuate the formation of federations of nonprofit associations of producers, any such association of producers whether formed hereunder or not is hereby authorized to acquire membership or stock in any other such association of producers, and any such association is hereby authorized to grant such membership or sell such stock to such associations, and any association may, upon resolution adopted by its board of directors, enter into all necessary and proper contracts and agreements, and make all necessary and proper stipulations, agreements and contracts with any other cooperative corporation, association, or associations, formed in this or in any other state, for the cooperative and more economical carrying out of its business, or any part thereof. Any two or more associations may, by agreement between them, unite in employing and using or may separately employ and use the same methods, means, and agencies for carrying on and conducting their respective business.

Source:Laws 1925, c. 80, § 11, p. 252; C.S.1929, § 24-1411; R.S.1943, § 21-1411.

21-1412. Cooperative; use of term restricted.

No association, corporation, or organization shall use the term cooperative as a part of its name unless it is in fact operating on a cooperative basis.

Source:Laws 1925, c. 80, § 12, p. 253; C.S.1929, § 24-1412; R.S.1943, § 21-1412.

21-1413. Repealed. Laws 1981, LB 283, § 7.

21-1414. Application of general corporation laws.

The provisions of the general corporation laws of this state, and all powers and rights thereunder, shall apply to the associations organized hereunder, except where such provisions are in conflict with or inconsistent with the express provisions of sections 21-1401 to 21-1414; Provided, that wherever such general corporation laws require an affirmative vote of a specified percentage of stockholders to authorize action by the corporation, such percentage for a nonstock cooperative association shall be that percentage of the votes cast on the matter at the members' meeting at which the same shall be voted upon. Any provision of law which is in conflict therewith shall not be construed as applying to any association herein provided for.

Source:Laws 1925, c. 80, § 14, p. 253; C.S.1929, § 24-1414; R.S.1943, § 21-1414; Laws 1977, LB 155, § 3.

21-1501. Repealed. Laws 1959, c. 80, § 93.

21-1502. Repealed. Laws 1959, c. 80, § 93.

21-1503. Repealed. Laws 1959, c. 80, § 93.

21-1504. Repealed. Laws 1959, c. 80, § 93.

21-1505. Repealed. Laws 1959, c. 80, § 93.

21-1506. Repealed. Laws 1959, c. 80, § 93.

21-1507. Repealed. Laws 1959, c. 80, § 93.

21-1508. Repealed. Laws 1959, c. 80, § 93.

21-1509. Repealed. Laws 1989, LB 92, § 278.

21-1509.01. Repealed. Laws 1989, LB 92, § 278.

21-1510. Repealed. Laws 1989, LB 92, § 278.

21-1511. Repealed. Laws 1972, LB 1156, § 1.

21-1512. Repealed. Laws 1989, LB 92, § 278.

21-1513. Repealed. Laws 1989, LB 92, § 278.

21-1514. Repealed. Laws 1989, LB 92, § 278.

21-1515. Repealed. Laws 1989, LB 92, § 278.

21-1516. Repealed. Laws 1989, LB 92, § 278.

21-1517. Repealed. Laws 1957, c. 57, § 2.

21-1518. Repealed. Laws 1989, LB 92, § 278.

21-1519. Repealed. Laws 1989, LB 92, § 278.

21-1520. Repealed. Laws 1989, LB 92, § 278.

21-1521. Repealed. Laws 1989, LB 92, § 278.

21-1522. Repealed. Laws 1951, c. 41, § 3.

21-1523. Repealed. Laws 1959, c. 80, § 93.

21-1524. Repealed. Laws 1959, c. 80, § 93.

21-1525. Repealed. Laws 1959, c. 80, § 93.

21-1526. Repealed. Laws 1959, c. 80, § 93.

21-1527. Repealed. Laws 1959, c. 80, § 93.

21-1528. Repealed. Laws 1959, c. 80, § 93.

21-1529. Repealed. Laws 1959, c. 264, § 1.

21-1601. Repealed. Laws 1961, c. 80, § 1.

21-1602. Repealed. Laws 1961, c. 80, § 1.

21-1603. Repealed. Laws 1961, c. 80, § 1.

21-1604. Repealed. Laws 1961, c. 80, § 1.

21-1605. Repealed. Laws 1961, c. 80, § 1.

21-1701. Act, how cited.

Sections 21-1701 to 21-17,115 shall be known and may be cited as the Credit Union Act.

Source:Laws 1996, LB 948, § 1; Laws 2000, LB 932, § 23; Laws 2002, LB 957, § 15; Laws 2017, LB375, § 1; Laws 2024, LB1074, § 61.
Operative Date: July 19, 2024

21-1702. Definitions, where found.

For purposes of the Credit Union Act, the definitions found in sections 21-1702.01 to 21-1722 shall be used.

Source:Laws 1996, LB 948, § 2; Laws 2024, LB1074, § 62.
Operative Date: July 19, 2024

21-1702.01. Associate director, defined.

Associate director shall mean an individual appointed by a credit union board to the position described in section 21-1768.01.

Source:Laws 2024, LB1074, § 63.
Operative Date: July 19, 2024

21-1703. Capital, defined.

Capital shall mean share accounts, membership shares, reserve accounts, and undivided earnings.

Source:Laws 1996, LB 948, § 3.

21-1704. Corporate central credit union, defined.

Corporate central credit union shall mean a credit union the members of which consist primarily of other credit unions.

Source:Laws 1996, LB 948, § 4.

21-1705. Credit union, defined.

Credit union shall mean a cooperative, not-for-profit corporation organized under the Credit Union Act for purposes of educating and encouraging its members in the concept of thrift, creating a source of credit for provident and productive purposes, and carrying on such collateral activities as are set forth in the act.

Source:Laws 1996, LB 948, § 5; Laws 2024, LB1074, § 64.
Operative Date: July 19, 2024

21-1706. Department, defined.

Department shall mean the Department of Banking and Finance.

Source:Laws 1996, LB 948, § 6.

21-1707. Director, defined.

Director shall mean the Director of Banking and Finance.

Source:Laws 1996, LB 948, § 7.

21-1708. Employee, defined.

Employee shall mean a person who works full-time or part-time for and is compensated by a credit union.

Source:Laws 1996, LB 948, § 8.

21-1708.01. Financial institution, defined.

Financial institution shall mean a bank, savings bank, building and loan association, savings and loan association, or credit union, whether chartered by the United States, the department, or a foreign state agency; any other similar organization which is covered by federal deposit insurance; or a trust company.

Source:Laws 2017, LB375, § 2.

21-1709. Fixed asset, defined.

Fixed asset shall mean assets as prescribed in generally accepted accounting principles.

Source:Laws 1996, LB 948, § 9; Laws 2017, LB375, § 3.

21-1710. Immediate family, defined.

Immediate family shall include any person related to a member by blood or marriage, including foster and adopted children.

Source:Laws 1996, LB 948, § 10.

21-1711. Individual, defined.

Individual shall mean a natural person.

Source:Laws 1996, LB 948, § 11.

21-1712. Insolvent, defined.

Insolvent shall mean a condition in which (1) the actual cash market value of the assets of a credit union is insufficient to pay its liabilities to its members, (2) a credit union is unable to meet the demands of its creditors in the usual and customary manner, (3) a credit union, after demand in writing by the director, fails to make good any deficiency in its reserves as required by law, or (4) a credit union, after written demand by the director, fails to make good an impairment of its capital or surplus.

Source:Laws 1996, LB 948, § 12.

21-1713. Line of credit, defined.

Line of credit shall mean a loan in which amounts are advanced to the borrower upon his or her request from time to time, pursuant to a preexisting contract and conditional or unconditional credit approval, and in which principal amounts repaid automatically replenish the funds available under the contract.

Source:Laws 1996, LB 948, § 13.

21-1714. Loan, defined.

Loan shall mean any extension of credit pursuant to a contract.

Source:Laws 1996, LB 948, § 14.

21-1715. Membership officer, defined.

Membership officer shall mean any member appointed by the board of directors of a credit union whose primary function is to act on applications for membership under the conditions the board and bylaws have prescribed.

Source:Laws 1996, LB 948, § 15.

21-1716. Membership shares, defined.

Membership shares shall mean a balance held by a credit union and established by a member in accordance with standards specified by the credit union. Each member may own only one membership share. Ownership of a membership share shall represent an interest in the capital of the credit union upon dissolution or conversion to another type of institution.

Source:Laws 1996, LB 948, § 16.

21-1717. Official, defined.

Official shall mean a member of the board of directors of a credit union, an officer of a credit union, a member of the credit committee of a credit union, if any, or a member of the supervisory committee of a credit union.

Source:Laws 1996, LB 948, § 17.

21-1718. Organization, defined.

Organization shall mean any corporation, association, limited liability company, partnership, society, firm, syndicate, trust, or other legal entity.

Source:Laws 1996, LB 948, § 18.

21-1719. Person, defined.

Person shall mean an individual, partnership, limited liability company, corporation, association, cooperative organization, or any other legal entity treated as a person under the laws of this state.

Source:Laws 1996, LB 948, § 19.

21-1720. Reserves, defined.

Reserves shall mean an allocation of retained income and shall include regular and special reserves, except for any allowance for loan or investment losses.

Source:Laws 1996, LB 948, § 20.

21-1721. Risk assets, defined.

Risk assets shall mean all assets except the following:

(1) Cash on hand;

(2) Deposits or shares in federally insured or state-insured banks, savings and loan associations, and credit unions that have a remaining maturity of five years or less;

(3) Assets that have a remaining maturity of five years or less and which are insured by, fully guaranteed as to principal and interest by, or due from the United States Government, its agencies, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Government National Mortgage Association. Collateralized mortgage obligations that are comprised of government-guaranteed mortgage loans shall be included in this asset category;

(4) Loans to other credit unions that have a remaining maturity of five years or less;

(5) Student loans insured under Title IV, Part B, of the federal Higher Education Act of 1965, 20 U.S.C. 1071 et seq., or similar state insurance programs that have a remaining maturity of five years or less;

(6) Loans that have a remaining maturity of five years or less and are fully insured or guaranteed by the federal government, a state government, or any agency thereof;

(7) Share accounts or deposit accounts in a corporate central credit union that have a remaining maturity of five years or less or, if the maturity is greater than five years, an asset that is being carried on the credit union's records at the lower of cost or market value or is being marked to market value monthly;

(8) Common trust investments, including mutual funds, which deal exclusively in investments authorized by the Credit Union Act or the Federal Credit Union Act that are either carried on the credit union's records at the lower of cost or market value or are being marked to market value monthly;

(9) Prepaid expenses;

(10) Accrued interest on nonrisk investments;

(11) Loans fully secured by a pledge of share accounts in the lending credit union which are equal to and maintained to at least the amount of each loan outstanding;

(12) Loans which are purchased from liquidating credit unions and guaranteed by the National Credit Union Administration;

(13) National Credit Union Share Insurance Fund Guaranty Accounts established by the National Credit Union Administration pursuant to 12 U.S.C. 1783 of the Federal Credit Union Act;

(14) Investments in shares of the National Credit Union Administration Central Liquidity Facility, 12 U.S.C. 1795;

(15) Assets included in subdivisions (2) through (7) of this section with maturities greater than five years if each asset is being carried on the credit union's records at the lower of cost or market value or is being marked to market value monthly;

(16) Assets included in subdivisions (2) through (7) of this section with remaining maturities greater than five years if each asset meets the following criteria, irrespective of whether or not each asset is being carried on the credit union's records at the lower of cost or market value or is being marked to market value monthly:

(a) The interest rate of the asset is reset at least annually;

(b) The interest rate of the asset is less than the maximum allowable interest rate for the asset on the date of the required reserve transfer; and

(c) The interest rate of the asset varies directly, not inversely, with the index upon which it is based and is not reset as a multiple of the change in the related index;

(17) Fixed assets; and

(18) A deposit in the National Credit Union Share Insurance Fund, 12 U.S.C. 1783, representing a federally insured credit union's capitalization account balance of one percent of insured shares.

Source:Laws 1996, LB 948, § 21.

21-1722. Share account, defined.

Share account shall mean a balance held by a credit union and established by a member in accordance with standards specified by the credit union, including balances designated as shares, share certificates, share draft accounts, or other names. Share account shall not include membership shares.

Source:Laws 1996, LB 948, § 22.

21-1723. Ownership of a share account; rights.

Ownership of a share account shall confer membership and voting rights and shall represent an interest in the capital of the credit union upon dissolution or conversion to another type of institution.

Source:Laws 1996, LB 948, § 23.

21-1724. Organization; procedure; hearing.

(1) Any nine or more individuals residing in the State of Nebraska who are nineteen years of age or older and who have a common bond pursuant to section 21-1743 may apply to the department on forms prescribed by the department for permission to organize a credit union and to become charter members and subscribers of the credit union.

(2) The subscribers shall execute in duplicate articles of association and shall agree to the terms of the articles of association. The terms shall state:

(a) The name, which shall include the words "credit union" and shall not be the same as the name of any other credit union in this state, whether or not organized under the Credit Union Act, and the location where the proposed credit union will have its principal place of business;

(b) The names and addresses of the subscribers to the articles of association and the number of shares subscribed by each;

(c) The par value of the shares of the credit union which shall be established by its board of directors. A credit union may have more than one class of shares;

(d) The common bond of members of the credit union; and

(e) That the existence of the credit union shall be perpetual.

(3) The subscribers shall prepare and adopt bylaws for the governance of the credit union. The bylaws shall be consistent with the Credit Union Act and shall be executed in duplicate.

(4) The subscribers shall select at least five qualified individuals to serve on the board of directors of the credit union, at least three qualified individuals to serve on the supervisory committee of the credit union, and at least three qualified individuals to serve on the credit committee of the credit union, if any. Such individuals shall execute a signed agreement to serve in these capacities until the first annual meeting or until the election of their successors, whichever is later.

(5) The articles of association and the bylaws, both executed in duplicate, shall be forwarded by the subscribers along with the required fee, if any, to the director, as an application for a certificate of approval.

(6) The director shall within one hundred twenty calendar days after receipt of the articles of association and the bylaws: (a) Act upon the application to determine whether the articles of association conform with this section and whether or not the character of the applicants and the conditions existing are favorable for the success of the credit union; and (b) notify the applicants of his or her decision.

(7) If the decision is favorable, the director shall issue a certificate of approval to the credit union. The certificate of approval shall be attached to the duplicate articles of association and returned, with the duplicate bylaws, to such subscribers.

(8) The subscribers shall file the certificate of approval with the articles of association attached in the office of the county clerk of the county in which the credit union is to locate its principal place of business. The county clerk shall accept and record the documents if they are accompanied by the proper fee and, after indexing, forward to the department proper documentation that the certificate of approval with the articles of association attached have been properly filed and recorded. When the documents are so recorded, the credit union shall be organized in accordance with the Credit Union Act and may begin transacting business.

(9) If the director's decision on the application is unfavorable, he or she shall notify the subscribers of the reasons for the decision. The subscribers may then request a public hearing if no such hearing was held at the time the application was submitted for consideration.

(10) The request for a public hearing shall be made in writing to the director not more than thirty calendar days after his or her decision. The director, within ten calendar days after receipt of a request for a hearing, shall set a date for the hearing at a time and place convenient to the director and the subscribers, but no longer than sixty calendar days after receipt of such request. The director may request a stenographic record of the hearing.

Source:Laws 1996, LB 948, § 24; Laws 2017, LB375, § 4.

21-1725. Repealed. Laws 2017, LB375, § 10.

21-1725.01. New credit union; branch credit union; application; procedure; hearing.

(1) Upon receiving an application to establish a new credit union, a public hearing shall be held on each application. Notice of the filing of the application shall be published by the department for three weeks in a legal newspaper published in or of general circulation in the county where the applicant proposes to operate the credit union. The date for hearing the application shall be not less than thirty days after the last publication of notice of hearing and not more than ninety days after filing the application unless the applicant agrees to a later date. Notice of the filing of the application shall be sent by the department to all financial institutions located in the county where the applicant proposes to operate.

(2) When application is made to establish a branch of a credit union, the director shall hold a hearing on the matter if he or she determines, in his or her discretion, that the condition of the applicant credit union warrants a hearing. If the director determines that the condition of the credit union does not warrant a hearing, the director shall publish a notice of the filing of the application in a newspaper of general circulation in the county where the proposed branch would be located. If the director receives any substantive objection to the proposed credit union branch within fifteen days after publication of such notice, he or she shall hold a hearing on the application. Notice of a hearing held pursuant to this subsection shall be published for two consecutive weeks in a newspaper of general circulation in the county where the proposed branch would be located. The date for hearing the application shall be not less than thirty days after the last publication of notice of hearing and not more than ninety days after the filing of the application unless the applicant agrees to a later date.

(3) The director may, in his or her discretion, hold a public hearing on amendments to a credit union's articles of association or bylaws which are brought before the department.

(4) The expense of any publication required by this section shall be paid by the applicant but payment shall not be a condition precedent to approval by the director.

Source:Laws 2002, LB 957, § 17; Laws 2003, LB 217, § 30; Laws 2005, LB 533, § 30; Laws 2010, LB890, § 13; Laws 2016, LB751, § 7.

21-1726. Forms of articles and bylaws.

In order to simplify the organization of credit unions, the director shall cause to be prepared an approved form of articles of association and a suggested form of bylaws, consistent with the Credit Union Act, which may be used by credit union subscribers as a guide. Upon written application of any nine individuals residing in the state, the director shall supply such individuals, without charge, one approved form of the articles of association and one suggested form of bylaws.

Source:Laws 1996, LB 948, § 26.

21-1727. Articles and bylaws; amendments.

(1) The articles of association may be amended at any regular or special meeting at which a quorum of the members as provided in the bylaws is present if the notice of the meeting contained a copy of the proposed amendment. An amendment shall not become effective until it has been filed with and approved in writing by the department and the fee prescribed by section 8-602 has been paid. One copy of an amendment or amendments to the articles of association shall be filed in the office of the county clerk of the county where the credit union has its principal place of business, for which a fee of fifty cents shall be charged.

(2) Except as provided in subsection (3) of this section, the bylaws may be amended at any regular or special meeting of the board of directors by a majority of the total directors if the notice of the meeting contained a copy of the proposed amendment. An amendment shall not become effective until it has been filed with and approved in writing by the department and the fee prescribed by section 8-602 has been paid.

(3)(a) The board of directors may adopt by resolution standard bylaw amendments adopted and promulgated by the department from time to time. The standard amendments may include two or more alternatives that the board of directors may elect. The standard bylaw amendments may also include companion amendments which shall be adopted as a unit.

(b) The board of directors may adopt any standard bylaw amendment without prior approval of the department as long as the standard bylaw amendment is adopted without any change in wording and a Certificate of Resolution adopting such amendment is submitted to the department containing the adopted language within ten days after the adoption of such amendment. Certificate of Resolution forms shall be furnished by the department upon request. The fee prescribed by section 8-602 shall not be charged when standard bylaw amendments are adopted.

Source:Laws 1996, LB 948, § 27.

21-1728. Use of name exclusive; violation; penalty; injunction.

(1) No person, corporation, limited liability company, partnership, or association other than a credit union organized under the Credit Union Act or the Federal Credit Union Act or the voluntary association of credit unions, shall use a name or title containing the phrase "credit union" or any derivation thereof, represent itself as a credit union, or conduct business as a credit union.

(2) Any violation of this section shall be a Class V misdemeanor.

(3) The director may petition a court of competent jurisdiction to enjoin any violation of this section.

Source:Laws 1996, LB 948, § 28.

21-1729. Place of business.

(1) A credit union may change its principal place of business within this state upon written notice to, and approval by, the director. The written notice may be delivered to the department in person or sent by regular or electronic mail.

(2) A credit union may maintain automatic teller machines and point-of-sale terminals at locations other than its principal office pursuant to section 8-157.01.

Source:Laws 1996, LB 948, § 29; Laws 1999, LB 396, § 20; Laws 2024, LB1074, § 65.
Operative Date: July 19, 2024

21-1730. Fiscal year.

The fiscal year of each credit union organized under the Credit Union Act shall end on December 31.

Source:Laws 1996, LB 948, § 30.

21-1731. Department; general powers.

The department shall have general supervision and control of credit unions as provided by the Credit Union Act, section 8-102, and any other applicable laws of this state.

Source:Laws 1996, LB 948, § 32.

21-1732. Director; powers and duties.

(1) The director may adopt and promulgate rules and regulations to carry out the Credit Union Act.

(2) The director may issue a cease and desist order when (a) the director has determined from competent and substantial evidence that a credit union is engaged in or has engaged in an unsafe or unsound practice or is violating or has violated a material provision of any law, rule, regulation, or any condition imposed in writing by the director or any written agreement made with the director or (b) the director has reasonable cause to believe a credit union is about to engage in an unsafe or unsound practice or is violating or has violated a material provision of any law, rule, regulation, or any condition imposed in writing by the director or any written agreement made with the director or the director has reasonable cause to believe a credit union is about to violate a material provision of any law, rule, regulation, or any condition imposed in writing by the director or any written agreement made with the director.

(3) The director may restrict the making of loans by a credit union and the withdrawal from and the deposit to share accounts of a credit union when he or she finds circumstances that make such restriction necessary for the protection of the shareholders.

(4) The director may suspend from office and prohibit from further participation in any manner in the conduct of the affairs of a credit union any official who has committed any violation of a law, rule, regulation, or cease and desist order, who has engaged in or participated in any unsafe or unsound practice in connection with a credit union, or who has committed or engaged in any act, omission, or practice which constitutes a breach of that person's fiduciary duty as an official, when the director has determined that such action or actions have resulted or will result in substantial financial loss or other damage that will seriously prejudice the interest of the credit union members.

(5) The director shall consider applications brought before the department pursuant to section 21-1725.01.

(6) The director may subpoena witnesses, compel their attendance, require the production of evidence, administer oaths, and examine any person under oath in connection with any subject relating to a duty upon or a power vested in the director.

Source:Laws 1996, LB 948, § 33; Laws 2002, LB 957, § 16.

21-1733. Order; appeal; procedure.

Any order or decision of the director may be appealed. The appeal shall be in accordance with the Administrative Procedure Act.

Source:Laws 1996, LB 948, § 31.

Cross References

Administrative Procedure Act, see section 84-920.

21-1734. Corrective measures; receivership proceedings.

(1) If it appears that any credit union is bankrupt or insolvent, that it has willfully violated the Credit Union Act, or that it is operating in an unsafe or unsound manner, the director may require such corrective measures in accordance with sections 8-1,134 to 8-1,139 as he or she may deem necessary or take possession of the property and business of such credit union and retain possession thereof until such time as he or she determines either to permit the credit union to resume business or to order its dissolution. In the event the director orders its dissolution, the credit union shall be liquidated in receivership proceedings in the same manner, as nearly as may be possible, as provided by the laws governing the liquidation of state banks.

(2) Pursuant to section 21-1735, the director may appoint the National Credit Union Administration Board as receiver or liquidator of the assets and liabilities of any credit union in the possession of the director. The appointment shall be subject to the approval of the district court of the judicial district in which the credit union has its principal place of business.

Source:Laws 1996, LB 948, § 34.

Cross References

Liquidation of state banks, see sections 8-194 to 8-1,118.

21-1735. National Credit Union Administration Board; appointment as receiver or liquidator.

(1) The National Credit Union Administration Board, as created by 12 U.S.C. 1752(a), shall be authorized to accept the appointment by the director as receiver or liquidator, without bond, of any credit union in the possession of the department and whose shares are to any extent insured by the National Credit Union Administration under section 201 et seq. of the Federal Credit Union Act, 12 U.S.C. 1781 et seq. Any credit union which fails to maintain such insurance may be voluntarily dissolved or liquidated by the board of directors of such credit union or may be taken in possession by the director and involuntarily liquidated as in the case of insolvency.

(2) Whenever the director takes possession of a credit union subject to the jurisdiction of the department, the director may tender to the National Credit Union Administration Board the appointment as receiver or liquidator of such credit union. If the board accepts such appointment, it shall have and possess all the powers and privileges provided by the laws of this state with respect to a receiver or liquidator of a credit union and its shareholders and other creditors and shall be subject to all the duties of such receiver or liquidator, except insofar as such powers, privileges, or duties are in conflict with the Federal Credit Union Act, 12 U.S.C. 1781 et seq.

(3) Whenever the National Credit Union Administration Board has been appointed as receiver or liquidator of a credit union pursuant to this section, it shall be subrogated to all the rights and interests against such credit union of all the shareholders or other creditors of the credit union to the full extent of such rights and interests in the credit union. The rights of shareholders or other creditors of the credit union shall be determined in accordance with the laws of this state.

(4) Upon acceptance by the National Credit Union Administration Board of the appointment as receiver or liquidator of a credit union from the director and subject to the approval of the district court of the judicial district in which the credit union has its principal place of business, the possession of and title to all the assets, business, and property of every kind and nature of the credit union shall pass to and vest in the board without the execution of any instrument of conveyance, assignment, transfer, or endorsement.

(5) In addition to its powers and duties as receiver or liquidator, the National Credit Union Administration Board shall have the right and authority upon the order of any court of record of competent jurisdiction to enforce the individual liability of the members of the board of directors of any credit union.

Source:Laws 1996, LB 948, § 35.

21-1736. Examinations.

(1) The director shall examine or cause to be examined each credit union as often as deemed necessary. Each credit union and all of its officials and agents shall give the director or any of the examiners appointed by him or her free and full access to all books, papers, securities, and other sources of information relative to such credit union. For purposes of the examination, the director may subpoena witnesses, administer oaths, compel the giving of testimony, and require the submission of documents.

(2) The department shall forward a report of the examination to the chief executive officer, president, or manager of the credit union within ninety calendar days after completion. The report shall contain comments relative to the management of the affairs of the credit union and the general condition of its assets. Within ninety calendar days after the receipt of such report, the members of the board of directors and the members of the supervisory committee and credit committee, if any, shall meet to consider the matters contained in the report.

(3) The director may require special examinations of and special financial reports from a credit union or a credit union service organization in which a credit union loans, invests, or delegates substantially all managerial duties and responsibilities when he or she determines that such examinations and reports are necessary to enable the director to determine the safety of a credit union's operations or its solvency. The cost to the department of such special examinations shall be borne by the credit union being examined.

(4) The director may accept, in lieu of any examination of a credit union authorized by the laws of this state, a report of an examination made of a credit union by the National Credit Union Administration or may examine any such credit union jointly with such federal agency. The director may make available to the National Credit Union Administration copies of reports of any examination or any information furnished to or obtained by the director in any examination.

Source:Laws 1996, LB 948, § 36; Laws 2002, LB 957, § 18; Laws 2017, LB375, § 5; Laws 2024, LB1074, § 66.
Operative Date: April 18, 2024

21-1737. Records.

(1) A credit union shall maintain all books, records, accounting systems, and procedures in accordance with the rules and regulations as the director from time to time may prescribe.

(2) Credit unions shall preserve or keep their records or files, or photographic or microphotographic copies thereof, for a period of not less than six years after the first day of January of the year following the time of the making or filing of such records or files except as provided in subsection (3) of this section.

(3)(a) Ledger sheets showing unpaid balances in favor of members of credit unions shall not be destroyed unless the credit union has remitted such unpaid balances to the State Treasurer in accordance with the Uniform Disposition of Unclaimed Property Act. Credit unions shall retain a record of every such remittance for ten years following the date of such remittance.

(b) Corporate records that relate to the corporation or the corporate existence of the credit union shall not be destroyed.

(4) A credit union shall not be liable for destroying records after the expiration of the record retention period provided in this section except for records involved in an official investigation or examination about which the credit union has received notice.

(5) A reproduction of any credit union records shall be admissible as evidence of transactions with the credit union as provided in section 25-12,112.

Source:Laws 1996, LB 948, § 37; Laws 1999, LB 396, § 21.

Cross References

Uniform Disposition of Unclaimed Property Act, see section 69-1329.

21-1738. Reports.

A credit union shall report to the department annually on or before the first day of February on forms supplied by the department for that purpose. The chairperson of the board of directors and the president of the credit union shall sign the report or reports certifying that such report or reports are correct according to their best knowledge and belief. The director may require additional reports as he or she deems appropriate and necessary. An additional fee of fifty dollars shall be levied for each day a credit union fails to provide a required report unless the delay is excused for cause.

Source:Laws 1996, LB 948, § 38; Laws 1997, LB 137, § 11.

21-1739. Repealed. Laws 2007, LB 124, § 78.

21-1740. Credit union; powers.

(1) A credit union shall have all the powers specified in this section and all the powers specified by any other provision of the Credit Union Act.

(2) A credit union may make contracts.

(3) A credit union may sue and be sued.

(4) A credit union may adopt a seal and alter the same.

(5) A credit union may individually or jointly with other credit unions purchase, lease, or otherwise acquire and hold tangible personal property necessary or incidental to its operations. A credit union shall depreciate or appreciate such personal property in the manner and at the rates the director may prescribe by rule or order from time to time.

(6) A credit union may, in whole or part, sell, lease, assign, pledge, hypothecate, or otherwise dispose of its tangible personal property, including such property obtained as a result of defaults under obligations owing to it.

(7) A credit union may incur and pay necessary and incidental operating expenses.

(8) A credit union may receive, from a member, from another credit union, from an officer, or from an employee, payments representing equity on (a) share accounts which may be issued at varying dividend rates, (b) share account certificates which may be issued at varying dividend rates and maturities, and (c) share draft accounts, subject to such terms, rates, and conditions as may be established by the board of directors, within limitations prescribed by the department. A credit union shall provide for the transfer and withdrawal of funds from accounts by the means and through the payment system that the board of directors determines best serves the convenience and needs of members.

(9) A credit union may lend its funds to its members as provided in the Credit Union Act.

(10) A credit union may borrow from any source in an amount not exceeding fifty percent of its capital and deposits.

(11) A credit union may provide debt counseling and other financial counseling services to its members.

(12) A credit union may, in whole or in part, discount, sell, assign, pledge, hypothecate, or otherwise dispose of its intangible personal property. The approval of the director shall be required before a credit union may discount, sell, assign, pledge, hypothecate, or otherwise dispose of twenty percent or more of its intangible personal property within one month unless the credit union is in liquidation.

(13) A credit union may purchase any of the assets of another financial institution or assume any of the liabilities of another financial institution with the approval of the director. A credit union may also purchase any of the assets of a financial institution which is in liquidation or receivership.

(14) A credit union may make deposits in or loans to banks, savings banks, savings and loan associations, and trust companies, purchase shares in mutual savings and loan associations, and make deposits in or loans to or purchase shares of other credit unions, including corporate central credit unions, if such institutions are either insured by an agency of the federal government or are eligible under the laws of the United States to apply for such insurance and invest funds as otherwise provided in sections 21-17,100 to 21-17,102.

(15) A credit union may make deposits in, make loans to, or purchase shares of any federal reserve bank or central liquidity facility established under state or federal law.

(16) A credit union may hold membership in associations and organizations controlled by or fostering the interests of credit unions, including a central liquidity facility organized under state or federal law.

(17) A credit union may engage in activities and programs of the federal government, any state, or any agency or political subdivision thereof when approved by the board of directors and not inconsistent with the Credit Union Act.

(18) A credit union may receive funds either as shares or deposits from other credit unions.

(19) A credit union may lease tangible personal property to its members if the credit union acquires no interest in the property prior to its selection by the member.

(20) A credit union may, in whole or in part, purchase, sell, pledge, discount, or otherwise acquire and dispose of obligations of its members in accordance with the rules and regulations promulgated by the director. This subsection shall not apply to participation loans originated pursuant to section 21-1794.

(21) A credit union may, at its own expense, purchase insurance for its members in connection with its members' shares, loans, and other accounts.

(22) A credit union may establish, operate, participate in, and hold membership in systems that allow the transfer of credit union funds and funds of its members by electronic or other means, including, but not limited to, clearinghouse associations, data processing and other electronic networks, the federal reserve system, or any other government payment or liquidity program.

(23) A credit union may issue credit cards and debit cards to allow members to obtain access to their shares and extensions of credit if such issuance is not inconsistent with the rules of the department. The department may by rule or regulation allow the use of devices similar to credit cards and debit cards to allow members to access their shares and extensions of credit.

(24) A credit union may service the loans it sells, in whole or in part, to a third party.

(25) In addition to loan and investment powers otherwise authorized by the Credit Union Act, a credit union may organize, invest in, and make loans to corporations or other organizations (a) which engage in activities incidental to the conduct of a credit union or in activities which further or facilitate the purposes of a credit union or (b) which furnish services to credit unions. The director shall determine by rule, regulation, or order the activities and services which fall within the meaning of this subsection. A credit union shall notify the director of any such investment or loan if it would cause the aggregate of such investments and loans to exceed two percent of the credit union's capital and deposits. Such investments and loans may not, in the aggregate, exceed five percent of the capital and deposits of the credit union.

(26) A credit union may purchase, lease, construct, or otherwise acquire and hold land and buildings for the purpose of providing adequate facilities for the transaction of present and potential future business. A credit union may use such land and buildings for the principal office functions, service facilities, and any other activity in which it engages. A credit union may rent excess space as a source of income. A credit union shall depreciate or appreciate such buildings owned by it in the manner and at the rates the director may prescribe by rule, regulation, or order from time to time. A credit union's investment and contractual obligations, direct, indirect, or contingent, in land and buildings under this subsection shall not exceed seven percent of its capital and deposits without prior approval of the director. This subsection shall not affect the legality of investments in land and buildings made prior to October 1, 1996.

(27) A credit union may, in whole or in part, sell, lease, assign, mortgage, pledge, hypothecate, or otherwise dispose of its land and buildings, including land and buildings obtained as a result of defaults under obligations owing to it.

Source:Laws 1996, LB 948, § 40; Laws 1997, LB 137, § 13; Laws 2017, LB375, § 6.

21-1741. Safe deposit box service.

A credit union, by action of its board of directors, may, to the same extent as a bank organized under the laws of this state, operate a safe deposit box service for its members pursuant to sections 8-501 and 8-502.

Source:Laws 1996, LB 948, § 41; Laws 1997, LB 137, § 14; Laws 2017, LB375, § 7.

21-1742. Incidental powers.

A credit union may exercise all incidental powers that are suitable and necessary to enable it to carry out its purpose.

Source:Laws 1996, LB 948, § 42.

21-1743. Membership; requirements.

(1) The membership of a credit union shall consist of the subscribers to the articles of association and such persons, societies, associations, partnerships, and corporations as have been duly elected, members who have subscribed for one share, have paid for such share in whole or in part, have paid the entrance fee provided in the bylaws, and have complied with such other requirements as the articles of association and bylaws may specify. For purposes of obtaining a loan and to vote at membership meetings, a member, to be in good standing, must own one fully paid share. Credit union organization shall be limited to groups of both large and small membership having a common bond of occupation or association, including religious, social, or educational groups, employees of a common employer, or members of a fraternal, religious, labor, farm, or educational organization and the members of the immediate families of such persons.

(2) A person having been duly admitted to membership, having complied with the Credit Union Act, the articles of association, and the bylaws, having paid the entrance fee, and having paid for one share, shall retain full rights and privileges of membership for life unless that membership is terminated by withdrawal or expulsion in the manner provided by the act.

Source:Laws 1996, LB 948, § 43; Laws 2024, LB1074, § 67.
Operative Date: July 19, 2024

21-1744. Fees.

A credit union may charge an entrance fee as determined by its board of directors. A credit union may also charge periodic membership fees as determined by its board of directors.

Source:Laws 1996, LB 948, § 44.

21-1745. Retention of membership; when.

Members who cease to be eligible or who leave the field of membership may be permitted to retain their membership in the credit union under reasonable standards established by the board of directors unless terminated by withdrawal or expulsion.

Source:Laws 1996, LB 948, § 45.

21-1746. Liability of members.

The members of the credit union shall not be personally or individually liable for the payment of its debts solely by virtue of holding membership in the credit union.

Source:Laws 1996, LB 948, § 46.

21-1747. Expulsion of members.

(1) Any member may be expelled by a two-thirds vote of the members present at any regular meeting or a special meeting called to consider the matter, but only after an opportunity has been given to the member to be heard.

(2) The board of directors may expel a member pursuant to a written policy adopted by it. All members shall be given written notice of the terms of any such policy. Any person expelled by the board shall have the right, within thirty calendar days, to request a hearing before it to reconsider the expulsion. The board of directors shall schedule the requested hearing within sixty calendar days after the request.

Source:Laws 1996, LB 948, § 47.

21-1748. Termination of members.

(1) A member may voluntarily terminate his or her membership at any time in the way and manner provided in the bylaws.

(2) Termination of membership shall not serve to relieve a person from any liability to the credit union nor shall it be the basis for accelerating any obligation not in default. A terminated member shall be paid all sums in any of his or her share accounts without maturity dates within thirty calendar days. Sums in any share account with a maturity date shall not be paid prior to maturity unless the member specifically requests the funds. The credit union shall not be required to pay any funds from a share account to the extent that they secure loans and other obligations owing to the credit union.

Source:Laws 1996, LB 948, § 48.

21-1749. Meetings.

The annual meeting and any special meeting of the members of the credit union shall be held in accordance with the bylaws. A special meeting of the members of the credit union may be called by the members or by the board of directors as provided in the bylaws. A credit union shall give notice of the time and place or virtual conferencing platform by which members can participate and interact for any meeting of its members. In the case of a special meeting, the notice of such special meeting shall state the purpose of the meeting and the notice shall be given at least ten calendar days prior to the date of such special meeting.

Source:Laws 1996, LB 948, § 49; Laws 2024, LB1074, § 68.
Operative Date: July 19, 2024

21-1750. Voting rights.

(1) In any election or other membership vote, a member shall have only one vote, irrespective of the member's shareholdings. No member may vote by proxy, but a member other than an individual may vote through an agent designated for that purpose. Members may also vote by absentee ballot, mail, or other method if the bylaws of the credit union so provide.

(2) The board of directors may establish a minimum age of not greater than eighteen years as a qualification of eligibility to vote at meetings of members of the credit union, to hold office, or both.

(3) An organization having membership in the credit union may be represented and have its vote cast by one of its members or shareholders if such person has been so authorized by the organization's governing body.

(4) In elections when more than one office of the same type is being filled, the member shall have as many votes as there are offices being filled, but the member shall not cast more than one of these votes for any one candidate.

Source:Laws 1996, LB 948, § 50.

21-1751. Special meeting.

The supervisory committee, by a majority vote, may call a special meeting of the members of the credit union as provided in section 21-1749 to consider any violation of the Credit Union Act, any violation of the credit union's articles of association or bylaws, or any practice of the credit union deemed by the board of directors or supervisory committee to be unsafe or unauthorized.

Source:Laws 1996, LB 948, § 51.

21-1752. Central credit union; membership.

Credit unions organized and existing under the Credit Union Act may organize and have membership in a central credit union to which federal credit unions organized and operating in this state may belong and in which officials of both such credit unions may have membership. Organizations which are organized for the purpose of furthering credit union activities and their employees may have membership in such credit union. Small employee groups of fifty or more employees having a common bond of occupation whose probability of a successful operation would be limited because of the lack of adequate membership may join as a group in the central credit union and become members of that credit union with all the rights existing under the act.

Source:Laws 1996, LB 948, § 52.

21-1753. Central credit union; board of directors; credit committee.

At the first annual meeting of a central credit union, the members shall elect a board of directors of not less than nine members and a credit committee of not less than three members. No member of the board shall be a member of the credit committee and no credit union small employee group or affiliated organization shall be represented by more than one member on the board of directors, one member on the credit committee, and one member on the supervisory committee.

Source:Laws 1996, LB 948, § 53.

21-1754. Central credit union; board of directors; officers; supervisory committee.

At the first meeting of each fiscal year, the board of directors of a central credit union shall elect from its number a president, vice president, secretary, and treasurer. The offices of secretary and treasurer may be held by one person if the bylaws so provide. Officers shall hold office for one year or until their successors are chosen and duly qualified. At the first meeting of each fiscal year, the board of directors shall elect a supervisory committee of not less than five members, none of whom shall be a member of the board of directors or the credit committee.

Source:Laws 1996, LB 948, § 54.

21-1755. Central credit union; purchase of credit union.

With the approval of the department, a central credit union established under section 21-1752 may purchase the assets, assume the liabilities, and accept the membership of a credit union. Such purchase shall be approved by at least a two-thirds majority of the board of directors or the duly appointed trustees of the credit union to be sold.

Source:Laws 1996, LB 948, § 55; Laws 2002, LB 1094, § 11.

21-1756. Central credit union; loans and investments; limitations.

All member credit unions may borrow and invest up to an amount specified by the board of directors of the central credit union in accordance with the limitation of section 21-1791. The central credit union may purchase all or any part of a loan originated by a member credit union to one of its individual members, who does not need to be a member of the central credit union.

Source:Laws 1996, LB 948, § 56.

21-1757. Direction of credit union affairs.

The credit union shall be under the direction of a board of directors, a supervisory committee, and when provided by the bylaws, a credit committee.

Source:Laws 1996, LB 948, § 57.

21-1758. Election or appointment of board and committees.

(1) The board of directors of any credit union shall consist of an odd number of directors, at least five in number, to be elected by and from the members. Elections shall be held at the annual meeting or in such other manner as provided by the bylaws. All members of the board of directors shall hold office for such terms as provided by the bylaws, except that the terms of the board members shall be staggered so that an approximately equal number of terms expire each year.

(2) The supervisory committee shall have at least three members. The members shall be appointed by the board of directors or elected by the credit union members in such numbers and for terms as provided in the bylaws. No member of the supervisory committee shall be a director, officer, loan officer, credit committee member, or employee of the credit union while serving on the supervisory committee.

(3) If the bylaws provide for a credit committee, the committee shall have at least three members. The members shall be appointed by the board of directors or elected by the credit union members in such number and for such terms as provided in the bylaws. The credit committee shall have and perform the duties as provided in the bylaws. If the bylaws do not provide for a credit committee, the board of directors shall have and perform the duties of the credit committee or delegate the duties as it so chooses.

Source:Laws 1996, LB 948, § 58.

21-1759. Record of board and committee membership.

The credit union shall file within thirty calendar days after the credit union's annual meeting, a record of the names and addresses of (1) the members of its board of directors, (2) the members of its supervisory and credit committees, and (3) its officers, as required by the department. Such filing shall be made on forms approved and provided by the department.

Source:Laws 1996, LB 948, § 59.

21-1760. Vacancies.

The board of directors shall fill any vacancies occurring on the board. An individual appointed to fill a vacancy on the board shall serve the remainder of the unexpired term, except that he or she shall cease to serve immediately if he or she replaced a director who was suspended or removed by the board or the supervisory committee and the credit union membership reversed such suspension or removal. Vacancies in the credit or supervisory committees shall be filled as provided in the bylaws.

Source:Laws 1996, LB 948, § 60.

21-1761. Compensation; expenses.

No officer, director, or committee member, jointly or severally, shall receive any compensation, directly or indirectly, for services performed for the credit union as such officer, director, or committee member, except that the treasurer may be compensated for his or her services in the amount, way, and manner provided for by the board of directors. However, providing life, health, accident, and similar insurance protection in reasonable amounts for a director or committee member shall not be considered compensation. Officials, while on credit union business, may be reimbursed for their necessary expenses incidental to the performance of credit union business.

Source:Laws 1996, LB 948, § 61; Laws 1999, LB 107, § 3.

21-1762. Conflicts of interest.

No official, agent, or employee of a credit union shall in any manner, directly or indirectly, participate in the deliberation upon the determination of any question affecting that person's pecuniary interest or the pecuniary interest of any corporation, partnership, or association, other than the credit union, in which that person is directly or indirectly interested.

Source:Laws 1996, LB 948, § 62.

21-1763. Indemnification.

A credit union may indemnify any or all of its officials and employees or former officials or employees against expenses actually and necessarily incurred by them in connection with the defense or settlement of any action, suit, or proceeding in which they, or any of them, are made a party or parties thereto by reason of being or having been an official or employee of the credit union. A credit union may not indemnify any or all of its officials and employees or former officials or employees against expenses actually and necessarily incurred by them in relation to matters as to which any such official or employee shall be adjudged in such action, suit, or proceeding to be liable for willful misconduct in the performance of duty and to such matters as are settled by agreement predicated on the existence of such liability.

Source:Laws 1996, LB 948, § 63.

21-1764. Officers; duties.

(1) The members of the board of directors shall elect from their own number a chairperson, one or more vice-chairpersons, a treasurer, and a secretary, at the organizational meeting held as provided in the bylaws. The board shall fill vacancies in the positions described in this subsection as they occur. The treasurer and the secretary may be the same individual. The board shall also elect any other officers that are specified in the bylaws.

(2) The terms of the chairperson, vice-chairperson, treasurer, and secretary shall be for one year or until their successors are chosen and have been duly qualified. If the chairperson, a vice-chairperson, the treasurer, or the secretary is suspended, is removed, or has resigned as a board member, his or her position shall be deemed vacant.

(3) The duties of the officers shall be prescribed in the bylaws.

(4) The board of directors shall appoint a president to act as the chief executive officer of the credit union and to be in active charge of the credit union's operations.

(5) Notwithstanding any other provision of the Credit Union Act, a credit union may use any titles it so chooses for the officials holding the positions described in this section, as long as such titles are not misleading.

Source:Laws 1996, LB 948, § 64.

21-1765. Board of directors; authority.

The board of directors shall direct the business affairs, funds, and records of the credit union.

Source:Laws 1996, LB 948, § 65.

21-1766. Executive committee.

The board of directors may appoint from its own number an executive committee, consisting of not less than three directors, which may be authorized to act for the board in all respects, subject to any conditions or limitations prescribed by the board.

Source:Laws 1996, LB 948, § 66.

21-1767. Meetings of directors.

(1) The board of directors shall have regular meetings as often as necessary but not less frequently than six meetings annually with at least one meeting in each calendar quarter. A new credit union shall have regular meetings as often as necessary but not less frequently than once each month for the first five years of the existence of the credit union. Special meetings of the board may be called as provided in the bylaws.

(2) Unless the articles of association or bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means shall be deemed to be present in person at the meeting.

(3) If the Director of Banking and Finance deems it expedient, he or she may call a meeting of the board of directors of any credit union, for any purpose, by giving notice to the directors of the time, place, and purpose thereof at least three business days prior to the meeting, either by personal service or by registered or certified mail sent to their last-known addresses as shown on the credit union books.

(4) A full and complete record of the proceedings and business of all meetings of the board of directors shall be recorded in the minutes of the meeting.

Source:Laws 1996, LB 948, § 67; Laws 2000, LB 932, § 24; Laws 2024, LB1074, § 69.
Operative Date: July 19, 2024

21-1767.01. Bond.

The department shall require each credit union to obtain a fidelity bond, naming the credit union as obligee, in an amount to be determined by the department. The bond shall be issued by an authorized insurer and shall be conditioned to protect and indemnify the credit union from loss which it may sustain of money or other personal property, including that for which the credit union is responsible through or by reason of the fraud, dishonesty, forgery, theft, embezzlement, wrongful abstraction, misapplication, misappropriation, or any other dishonest or criminal act of or by any of its officers, directors, supervisory committee members, credit committee members, or employees. Such bond may contain a deductible clause in an amount to be approved by the director. An executed copy of the bond shall be filed with and approved by the director and shall remain a part of the records of the department. If the premium of the bond is not paid, the bond shall not be canceled or subject to cancellation unless at least ten days' advance notice, in writing, is filed with the department by the insurer. No bond which is current with respect to premium payments shall be canceled or subject to cancellation unless at least forty-five days' advance notice, in writing, is filed with the department by the insurer. The bond shall always be open to public inspection during the office hours of the department. In the event a bond is canceled, the department may take whatever action it deems appropriate in connection with the continued operation of the credit union involved.

Source:Laws 2000, LB 932, § 25.

21-1768. Duties of directors.

In addition to the duties found elsewhere in the Credit Union Act, the board of directors shall:

(1) Act upon applications for membership or appoint one or more membership officers to act on applications for membership under such conditions as prescribed by the board. A person denied membership by a membership officer may appeal the denial in writing to the board;

(2) Purchase adequate bond coverage as required by section 21-1767.01;

(3) Report to the department all bond claims within thirty calendar days after filing and all frauds and embezzlements involving officials or employees within thirty calendar days after discovery;

(4) Determine from time to time the interest rate or rates, consistent with the Credit Union Act, to be charged on loans, or under such conditions as prescribed by the board, delegate the authority to make such determinations and to authorize any interest refunds on such classes of loans and under such conditions as the board prescribes;

(5) Establish the policies of the credit union with respect to (a) shares, share drafts, and share certificates and (b) the granting of loans and the extending of lines of credit, including, subject to the limitations contained in section 21-1791, the maximum amount which may be loaned to any one member;

(6) Declare dividends on shares or delegate the authority to declare dividends under such conditions as prescribed by the board;

(7) Have charge of investment of funds, except that the board may appoint an investment committee of not less than three directors or an investment officer who is either a member of the board of directors or an employee of the credit union to make investments under conditions and policies established by the board and to make monthly reports to the board;

(8) Establish written policies for investments, including deposits and loans other than those to individuals, which address, at a minimum, investment objectives, investment responsibility, portfolio composition, diversification, and the financial condition of the investment obligor;

(9) Authorize the employment of such persons necessary to carry on the business of the credit union and fix the compensation, if any, of the chief executive officer;

(10) Approve an annual operating budget for the credit union which includes provisions for the compensation of employees;

(11) Designate a depository or depositories for the funds of the credit union;

(12) Suspend or remove any or all members of the credit committee, if any, for failure to perform their duties;

(13) Appoint any special committee deemed necessary;

(14) Adopt and enforce the overall policies for the operation of the credit union; and

(15) Perform such other duties as directed by the members of the credit union from time to time and perform or authorize any action not inconsistent with the Credit Union Act and not specifically reserved by the bylaws for the members of the credit union.

Source:Laws 1996, LB 948, § 68; Laws 2000, LB 932, § 26.

21-1768.01. Associate directors.

(1) The board of directors of a credit union may, in its discretion, appoint one or more associate directors to serve in an advisory capacity. The board shall prescribe the duties of an associate director and the manner in which associate directors are appointed and removed. The board shall not delegate to associate directors any of the duties or responsibilities prescribed by the Credit Union Act or other applicable law to be performed by the directors duly elected by the members. An associate director shall not be deemed or considered to be a director for any purpose under the act.

(2) Before appointing an associate director, the board shall confirm that the person meets all of the requirements to serve as a director.

(3) An associate director may participate in meetings of the board but may not vote or otherwise act as a director. With respect to any issue that comes before the board for deliberation, the board may request that any associate director in attendance leave the meeting of the board and any associate director in attendance shall immediately comply with the request.

(4) The board shall require each associate director to sign a confidentiality or nondisclosure agreement to ensure that information concerning the credit union remains confidential.

Source:Laws 2024, LB1074, § 70.
Operative Date: July 19, 2024

21-1769. Credit committee; credit manager; loan officers; powers and duties.

(1) The credit committee shall have the general supervision of all loans to members and may approve or disapprove those loans subject to written policies established by the board of directors.

(2) A credit manager having the same authority as a credit committee may be appointed in lieu of a credit committee as prescribed in the bylaws. The president may serve as the credit manager.

(3) The board of directors may appoint one or more loan officers and necessary assistants.

(4) The loan officers shall act under the direction of the president or the president's designee.

(5) The loan officer or credit manager may approve or disapprove loans, lines of credit, or advances from lines of credit and approve withdrawals of obligated members only as prescribed in writing by the board of directors.

(6) All loans approved by the loan officer shall be reviewed by the credit committee during one of its regular meetings.

(7) If the board of directors appoints a credit manager in lieu of a credit committee, all such loans approved by loan officers shall be reviewed by the credit manager.

(8) Other duties and responsibilities of the credit committee or credit manager may be prescribed in the bylaws.

Source:Laws 1996, LB 948, § 69.

21-1770. Loan officer license; opt out.

The chief executive officer or the credit committee may apply to the department on forms supplied by the department for the licensing of one or more loan officers in order to delegate to such loan officers the power to approve loans and disburse loan funds up to the limits and according to policies established by the credit committee, if any, and in the absence of a credit committee, the board of directors. Such application shall include information deemed necessary by the department and shall be signed by the entire credit committee, if any, and in the absence of a credit committee, the entire board of directors, as well as the new loan officer seeking a license. No person shall act in the capacity of loan officer for more than thirty days until approved by the department unless the credit union has elected to opt out of licensing loan officers on forms supplied by the department.

Source:Laws 1996, LB 948, § 70; Laws 1999, LB 107, § 4; Laws 2017, LB140, § 148.

21-1771. Supervisory committee; duties; audit.

(1) Unless the credit union has been audited by a certified public accountant, the supervisory committee shall make or cause to be made a comprehensive annual audit of the books and affairs of the credit union. It shall submit a report of each annual audit to the board of directors and a summary of that report to the members at the next annual meeting of the credit union.

(2) The supervisory committee shall make or cause to be made such supplementary audits, examinations, and verifications of members' accounts as it deems necessary or as are required by the director or the board of directors and shall submit reports of these supplementary audits to the board of directors.

(3) Nothing in this section shall prohibit the department for cause from requiring a credit union to obtain a qualified opinion audit conducted by a certified public accountant and paid for by the credit union.

Source:Laws 1996, LB 948, § 71.

21-1772. Suspension and removal of officials.

(1) The supervisory committee may, by a unanimous vote of the entire committee, suspend any member of the credit committee and shall report such action to the board of directors for appropriate action. The board shall meet not less than seven nor more than twenty-one calendar days after such suspension. The suspended person shall have the right to appear and be heard at such meeting of the board.

(2) The supervisory committee may, by a unanimous vote of the entire committee, suspend any officer or member of the board of directors. Upon the request of the suspended director made fifteen calendar days after the suspension and supported by ten percent of the membership, the credit union shall call a special members' meeting which shall be held not less than seven nor more than twenty-one calendar days after such request. At such meeting the members shall decide whether to sustain or reverse the action of the supervisory committee.

(3) The board of directors may suspend or remove any member of the supervisory committee for cause by a two-thirds vote of the total board membership for failure to perform his or her duties in accordance with the Credit Union Act, the articles of association, or the bylaws.

(4) The board of directors may, by majority vote, suspend or remove any officer from his or her duties.

(5) The members of the credit union may remove any official of the credit union from office but only at a special meeting of the members called for that purpose.

Source:Laws 1996, LB 948, § 72.

21-1773. Share insurance.

No credit union organized under the Credit Union Act shall establish share accounts for any person other than a subscriber before the credit union has received a certificate of federal share insurance issued by the National Credit Union Administration under section 201 et seq. of the Federal Credit Union Act, 12 U.S.C. 1781 et seq.

Source:Laws 1996, LB 948, § 73.

21-1774. Shares.

(1) Share accounts and membership shares, if any, may be subscribed to, paid for, and transferred in such manner as the bylaws may prescribe. A credit union may have more than one class of share accounts subject to such terms, rates, and conditions as the board of directors establishes or as provided for in the underlying contract. All classes of share accounts shall be treated equally in the event of liquidation of the credit union.

(2) A credit union may require its members to subscribe to and make payments on membership shares.

(3) The par value of share accounts and membership shares shall be as prescribed in the bylaws.

(4) Membership shares may not be pledged as security on any loan.

Source:Laws 1996, LB 948, § 74.

21-1775. Special purpose share accounts.

Christmas clubs, vacation clubs, and other special purpose share accounts may be established and offered to members under the conditions and restrictions established by the board of directors if provided for in and consistent with the bylaws.

Source:Laws 1996, LB 948, § 75.

21-1776. Dividends.

(1) The board of directors may periodically authorize and declare dividends to be paid on share accounts and membership shares, if any, from the credit union's undivided earnings after provisions have been made for the required reserves. Share accounts within the same class and of different classes may be paid dividends at differing rates depending on the amounts in the account or the contractual terms applicable to the account.

(2) Dividends shall not be declared or paid at a time when the credit union is insolvent or when payment thereof would render the credit union insolvent.

Source:Laws 1996, LB 948, § 76.

21-1777. Accounting for interest and dividend expenses.

A credit union shall accrue, as an expense on a monthly basis, all dividends on any type of share account whether or not the rates involved have been specified or contracted for in advance. This section shall not be interpreted to permit a credit union to pay a dividend, except as provided in section 21-1776. Reasonable estimates may be used for the expense accrual required by this section except at the end of a dividend period.

Source:Laws 1996, LB 948, § 77.

21-1778. Maximum share account.

A credit union may, by action of the board of directors, establish a maximum amount that a member may have in any given type of share account. Any such action shall not affect any contract entered into by the credit union prior to the time of such action.

Source:Laws 1996, LB 948, § 78.

21-1779. Withdrawals.

(1) Shares may be withdrawn for payment to the account holder or to third parties in the manner and in accordance with procedures established by the board of directors subject to any rules and regulations prescribed by the department.

(2) Share accounts shall be subject to any withdrawal notice requirement specified in the contract creating the account. In addition, a credit union may impose a thirty-day withdrawal notice on all accounts when it has not specifically waived this right if it notifies the department of such imposition and the reasons therefor.

(3) A membership share may not be redeemed or withdrawn except upon termination of membership in the credit union.

Source:Laws 1996, LB 948, § 79.

21-1780. Fees related to member accounts.

(1) A credit union may collect reasonable fees and charges with respect to member accounts. The fees may be for:

(a) Additional copies of periodic statements;

(b) Various types of transactions on a per-transaction basis;

(c) A check or draft returned to the credit union by another financial institution because it was drawn against a closed account or an account with insufficient funds or for any other reason;

(d) Stop-payment orders;

(e) Any form of members' initiated withdrawal requests which the credit union rejects for any justifiable reason; and

(f) Any other service or activity relating to member share accounts.

(2) No credit union shall impose or increase any fee after October 1, 1996, until thirty calendar days after notification has been provided or made available to credit union members.

Source:Laws 1996, LB 948, § 80.

21-1781. Minor accounts.

A share account may be issued to and deposits received from a member less than nineteen years of age who may withdraw funds from such account, including the dividends thereon. Payments on a share account by such individual and withdrawals on a share account by such individual shall be valid in all respects.

Source:Laws 1996, LB 948, § 81.

21-1782. Joint accounts.

(1) A credit union member may designate any person or persons to own a share account with the member in joint tenancy with right of survivorship, as a tenant in common, or under any other form of joint ownership permitted by law and allowed by the credit union.

(2) Payment may be made, in whole or in part, to any of the joint owners if an agreement permitting such payment was signed and dated by all persons when the shares were issued or thereafter. Payment made pursuant to this section discharges the credit union from all claims for amounts paid, whether or not the payment is consistent with the beneficial ownership of the account.

(3) If more than one joint owner seeks credit union membership through a joint account, each prospective member must meet any membership requirements described in the credit union's bylaws.

Source:Laws 1996, LB 948, § 82; Laws 2017, LB375, § 8.

21-1783. Trust accounts.

(1) Share accounts may be owned by a member in trust for a beneficiary.

(2) A beneficiary may be a minor, but no beneficiary, unless a member in his or her own right, shall be permitted to vote, obtain loans, or hold office or be required to pay a membership fee.

(3) Payment of part or all of such trust account to the party in whose name the account is held shall, to the extent of such payment, discharge the liability of the credit union to that party and to the beneficiary, and the credit union shall be under no obligation to see to the application of such payment.

(4) In the event of the death of the party who owns the trust account, the account funds and any dividends thereon shall be paid to the beneficiary if the credit union has not been given any other written notice of the existence or terms of any other trust and has not received a court order as to the disposition of the account.

Source:Laws 1996, LB 948, § 83.

21-1784. Liens.

A credit union shall have a lien on the share accounts from which a member may withdraw funds for his or her own use for (1) any loan or other obligation on which the member is an obligor or guarantor and (2) any other liability at the time owing to the credit union, unless the lien has been contractually waived, would cause the loss of a tax benefit for the member, or is prohibited by law. Such a lien shall not apply to an account in which the member may act solely on behalf of another person, nor shall it apply to an account in which the consent of a person not obligated on the loan or other obligation is required for a withdrawal. A credit union may exercise the lien up to the full amount of the account by offsetting funds in the account against any sums past due under such an obligation or, in the case of an obligation which has been accelerated, against the entire amount of the obligation.

Source:Laws 1996, LB 948, § 84.

21-1785. Dormant accounts.

If there has been no activity in a share account for one year, except for the posting of dividends, a credit union may impose a reasonable maintenance fee as provided in the bylaws.

Source:Laws 1996, LB 948, § 85.

21-1786. Reduction in shares.

Whenever the losses of a credit union, resulting from a depreciation in value of its loans or investments or otherwise, exceed its undivided earnings and reserves so that the estimated value of its assets is less than the total amount of share accounts and membership shares and the board of directors determines that the credit union may be subject to involuntary liquidation, the board may propose a reduction in shares. The credit union may, by a majority vote of those voting on the proposition, with the approval of the department, order a reduction in the membership shares and share accounts of each of its shareholders to divide the loss in proportion to the shareholdings held by shareholders in their respective share accounts with such terms as the department may prescribe.

Source:Laws 1996, LB 948, § 86.

21-1787. Purpose and conditions of loans.

Subject to the restrictions contained in the Credit Union Act, a credit union may make loans to its members for provident or productive purposes upon such terms and conditions and upon such security, real or personal, or on an unsecured basis as prescribed in its bylaws or written lending policy.

Source:Laws 1996, LB 948, § 87.

21-1788. Interest rate.

The interest rates on loans shall be determined by the board of directors, except that the rate shall not exceed eighteen percent per annum on the unpaid balance of the loan. The board may also authorize any refund of interest on such classes of loans under such conditions as it prescribes.

Source:Laws 1996, LB 948, § 88.

21-1789. Other charges related to loans.

(1) In addition to interest charged on loans, a credit union may charge members all reasonable expenses in connection with the making, closing, disbursing, extending, collecting, or renewing of loans.

(2) A credit union may assess charges to members, in accordance with its bylaws, for failure to meet their obligations to the credit union in a timely manner.

Source:Laws 1996, LB 948, § 89.

21-1790. Loan documentation.

Except as provided in section 21-1793, every application for a loan shall be made in writing upon a form prescribed by the credit union. All loan obligations shall be evidenced by a written document.

Source:Laws 1996, LB 948, § 90.

21-1791. Loan limit.

The aggregate of loans to any one member shall be limited to ten percent of a credit union's share accounts, undivided earnings, and reserves. This limit shall not apply to loans which are fully secured by assignment of share accounts in the credit union.

Source:Laws 1996, LB 948, § 91.

21-1792. Installments.

A member may receive a loan in installments or in one sum and may prepay the whole or any part of the loan without penalty on any day on which the credit union is open for business. On a first or second mortgage a credit union may require that any partial prepayment (1) be made on the date monthly installments are due and (2) be in the amount of that part of one or more monthly installments that would be applicable to principal.

Source:Laws 1996, LB 948, § 92.

21-1793. Line of credit.

(1) Upon application by a member, the credit union may approve a self-replenishing line of credit, either on an unsecured basis or secured by real or personal property, and loan advances may be granted to the member within the limit of such line of credit. When a line of credit has been approved, no additional credit application shall be required as long as the aggregate indebtedness of the line of credit with the credit union does not exceed the approved limit. The credit union may, at its option, require reapplication for a line of credit either periodically or as circumstances warrant.

(2) A line of credit shall be subject to a periodic review by the credit union in accordance with the written policies of the board of directors.

Source:Laws 1996, LB 948, § 93.

21-1794. Participation loans.

A credit union may participate in loans to credit union members jointly with other credit unions, credit union organizations, or other organizations pursuant to written policies established by the board of directors. A credit union which originates such a loan shall retain an interest of at least ten percent of the face amount of the loan.

Source:Laws 1996, LB 948, § 94.

21-1795. Other loan programs.

(1) A credit union may participate in any guaranteed loan program of the federal or state government under the terms and conditions specified in the law under which such a program is provided.

(2) A credit union may purchase the conditional sales contracts, notes, and similar instruments of its members.

Source:Laws 1996, LB 948, § 95.

21-1796. Loans to officials.

(1) A credit union may, if permitted by its bylaws, make loans to its officials, employees, and loan officers if the loan complies with all lawful requirements under the Credit Union Act with respect to other members and is not on terms more favorable than those extended to other members.

(2) If permitted in its bylaws, a credit union may permit its officials, employees, and loan officers to act as comakers, guarantors, or endorsers of loans to members of their immediate families, but not otherwise.

(3) No loan applicant may pass on his or her own loan. In the case of a loan to the chief executive officer, the loan must be approved by the board of directors, an executive committee, or the credit committee, if the credit union has a credit committee, as specified in the bylaws.

(4) The board of directors shall establish a policy on loans to officials and employees of a credit union if such loans are permitted in the bylaws.

Source:Laws 1996, LB 948, § 96.

21-1797. Liability insurance.

A credit union may purchase and maintain insurance on behalf of any person who is or was an official, employee, or agent of the credit union or who is or was serving at the request of the credit union as an official, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against any liability asserted against such person and incurred by such person in any such capacity or arising out of such person's status as such, whether or not the credit union would have the power to indemnify such person against such liability.

Source:Laws 1996, LB 948, § 97.

21-1798. Money-type instruments.

A credit union may collect, receive, and disburse money in connection with the providing of negotiable checks, money orders, traveler's checks, and other money-type instruments, for the providing of services through automatic teller machines, and for such other purposes as may provide benefit or convenience to its members. A credit union may charge fees for such services.

Source:Laws 1996, LB 948, § 98.

21-1799. Federally authorized plans; powers; treatment.

(1) All credit unions chartered under the laws of Nebraska shall be qualified to act as a trustee or custodian within the provisions of the federal Self-Employed Individuals Tax Retirement Act of 1962 or under the terms and provisions of section 408(a) of the Internal Revenue Code if the provisions of such retirement plan require the funds of such trust or custodianship to be invested exclusively in shares or accounts in the credit union or other credit unions.

(2) All credit unions chartered under the laws of Nebraska are qualified to act as trustee or custodian of a medical savings account created within the provisions of section 220 of the Internal Revenue Code and a health savings account created within the provisions of section 223 of the Internal Revenue Code. Except for judgments against the medical savings account holder or health savings account holder or his or her dependents for qualified medical expenses as defined under section 223(d)(2) of the Internal Revenue Code, funds credited to a medical savings account or health savings account below twenty-five thousand dollars are not susceptible to levy, execution, judgment, or other operation of law, garnishment, or other judicial enforcement and are not an asset or property of the account holder for purposes of bankruptcy law.

(3) All credit unions chartered under the laws of Nebraska are qualified to act as trustee or custodian of an education individual retirement account created within the provisions of section 530 of the Internal Revenue Code.

(4) All credit unions chartered under the laws of Nebraska are qualified to act as trustee or custodian of a Roth IRA created within the provisions of section 408A of the Internal Revenue Code.

(5) If any such plan, in the judgment of the credit union, constitutes a qualified plan under the federal Self-Employed Individuals Tax Retirement Act of 1962, or under the terms and provisions of section 220, 223, 408(a), 408A, or 530 of the Internal Revenue Code, and the regulations promulgated thereunder at the time the trust was established and accepted by the credit union is subsequently determined not to be such a qualified plan, or subsequently ceases to be such a qualified plan, in whole or in part, the credit union may continue to act as trustee of any deposits which have been made under such plan and to dispose of such deposits in accordance with the directions of the member and beneficiaries thereof.

(6) No credit union, with respect to savings made under this section, shall be required to segregate such savings from other assets of the credit union, but the credit union shall keep appropriate records showing in detail all transactions engaged in pursuant to this section.

Source:Laws 1996, LB 948, § 99; Laws 1999, LB 107, § 5; Laws 2005, LB 465, § 2.

21-17,100. Investment of funds.

The board of directors shall have charge of the investment of funds, except that the board may designate an investment committee or investment officer to make investments on its behalf under written investment policies established by the board.

Source:Laws 1996, LB 948, § 100.

21-17,101. Deposit of funds.

The board of directors shall designate a depository or depositories for the funds of the credit union.

Source:Laws 1996, LB 948, § 101.

21-17,102. Authorized investments.

(1) Funds not used in loans to members may be invested:

(a) In securities, obligations, or other instruments of or issued by or fully guaranteed as to principal and interest by the United States of America or any agency or instrumentality thereof or in any trust or trusts established for investing directly or collectively in the same;

(b) In securities, obligations, or other instruments of any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and the several territories organized by Congress or any political subdivision thereof;

(d) In loans to or in share accounts of other credit unions or corporate central credit unions;

(e) In obligations issued by banks for cooperatives, federal land banks, federal intermediate credit banks, federal home loan banks, the Federal Home Loan Bank Board, or any corporation designated in 31 U.S.C. 9101 as a wholly owned government corporation; in obligations, participation certificates, or other instruments of or insured by or fully guaranteed as to principal and interest by the Federal National Mortgage Association or the Government National Mortgage Association; in mortgages, obligations, or other securities which are or ever have been sold by the Federal Home Loan Mortgage Corporation pursuant to section 305 or section 306 of the Federal Home Loan Mortgage Corporation Act, 12 U.S.C. 1454 et seq.; in obligations or other instruments or securities of the Student Loan Marketing Association; or in obligations, participation, securities, or other instruments of or issued by or fully guaranteed as to principal and interest by any other agency of the United States. A state credit union may issue and sell securities which are guaranteed pursuant to section 306(g) of the National Housing Act, 12 U.S.C. 1721(g);

(f) In participation certificates evidencing a beneficial interest in obligations or in a right to receive interest and principal collections therefrom, which obligations have been subjected by one or more government agencies to a trust or trusts for which any executive department, agency, or instrumentality of the United States or administrator thereof has been named to act as trustee;

(g) In share accounts or deposit accounts of any corporate central credit union in which such investments are specifically authorized by the board of directors of the credit union making the investment;

(h) In the shares, stock, or other obligations of any other organization, not to exceed ten percent of the credit union's capital and not to exceed five percent of the credit union's capital in any one corporation's stock, bonds, or other obligations, unless otherwise approved by the director. Such authority shall not include the power to acquire control, directly or indirectly, of another financial institution, nor invest in shares, stocks, or obligations of any insurance company or trade association except as otherwise expressly provided for or approved by the director;

(i) In the capital stock of the National Credit Union Administration Central Liquidity Facility;

(j) In obligations of or issued by any state or political subdivision thereof, including any agency, corporation, or instrumentality of a state or political subdivision, except that no credit union may invest more than ten percent of its capital in the obligations of any one issuer, exclusive of general obligations of the issuer;

(k) In securities issued pursuant to the Nebraska Business Development Corporation Act;

(l) In participation loans with other credit unions, credit union organizations, or other organizations; and

(m) In insurance policies and other investment products to fund employee benefit plans for its employees, not to exceed fifteen percent of the net worth of a credit union from a single issuer or twenty-five percent of the net worth of a credit union in aggregate. Employee benefit plan has the same meaning as in 29 U.S.C. 1002(3), as such section existed on January 1, 2024. If the employee benefits arrangement does not present a risk to the safety and soundness of the domestic credit union as determined by the director, the purchase of those investment products is not subject to the limitations of the Credit Union Act.

(2) In addition to investments expressly permitted by the Credit Union Act, a credit union may make any other type of investment approved by the department by rule, regulation, or order.

Source:Laws 1996, LB 948, § 102; Laws 1997, LB 137, § 15; Laws 2003, LB 217, § 31; Laws 2005, LB 533, § 31; Laws 2024, LB1074, § 71.
Operative Date: July 19, 2024

Cross References

Nebraska Business Development Corporation Act, see section 21-2101.

21-17,103. Transfer to regular reserve account.

(1) Immediately before the payment of each dividend, the gross earnings of the credit union shall be determined. From this amount there shall be set aside as a regular reserve account for contingencies an amount as set forth in 12 C.F.R. 702.

(2) The director may at any time require the credit union to increase the amount set aside in a regular reserve account pursuant to subsection (1) of this section or to establish a special reserve account if, in the judgment of the director, the financial condition of the credit union warrants such action.

Source:Laws 1996, LB 948, § 103; Laws 2001, LB 53, § 25.

21-17,104. Allowance-for-loan-losses account.

(1) A credit union shall establish an allowance-for-loan-losses account based upon reasonably foreseeable loan losses.

(2) For purposes of calculating required transfers of income to the regular reserve account pursuant to sections 21-17,103 to 21-17,107, any balance in the allowance-for-loan-losses account may be included with the balance in the regular reserve account.

Source:Laws 1996, LB 948, § 104.

21-17,105. Use of regular reserve account.

The regular reserve account shall belong to the credit union and shall be used to meet losses on risk assets and to meet such other classes of losses as are approved by the director. The regular reserve account shall not be distributed except on liquidation of the credit union or in accordance with a plan approved by the director.

Source:Laws 1996, LB 948, § 105.

21-17,106. Special reserve account.

In addition to the regular reserve account, a special reserve account to protect the interest of the members shall be established when required by rule or regulation or when found by the board of directors of the credit union or by the director, in any special case, to be necessary for that purpose.

Source:Laws 1996, LB 948, § 106; Laws 1997, LB 137, § 16.

21-17,107. Waiver of reserve requirements.

The director may waive, in whole or in part, and on a general or case-by-case basis, the reserving requirements of sections 21-17,103 to 21-17,107 when, in his or her opinion, such a waiver is necessary or desirable to protect the public interest and fulfill the purpose of the Credit Union Act.

Source:Laws 1996, LB 948, § 107.

21-17,108. Liquidation.

(1) A credit union may elect to dissolve voluntarily and liquidate its affairs in the manner prescribed in this section.

(2) If the board of directors decides to begin dissolution procedures, the board shall adopt a resolution recommending that the credit union be dissolved voluntarily and directing that the question of liquidation be submitted to the credit union members.

(3) Within ten days after the board of directors decides to submit the question of liquidation to the members, the president shall notify the department and the National Credit Union Administration in writing of such decision and setting forth the reasons for the proposed liquidation. Within ten days after the members act on the question of liquidation, the president shall notify the department and the National Credit Union Administration in writing as to the action of the members on the proposal.

(4) As soon as the board of directors decides to submit the question of liquidation to the members, payments on, withdrawal of, and making any transfer of share accounts to loans and interest, making investments of any kind, and granting of loans may be restricted or suspended pending action by the members on the proposal to dissolve. Upon approval by the members of the question of liquidation, all business transactions shall be permanently discontinued. Necessary expenses of operation shall continue to be paid upon the authorization of the board or the liquidating agent during the period of liquidation.

(5) For a credit union to enter voluntary liquidation, approval by a majority of the members in writing or by a two-thirds majority of the members present at a regular or special meeting of the members shall be required. When authorization for liquidation is to be obtained at a meeting of the members, notice in writing shall be given to each member, by first-class mail, at least ten days prior to such meeting.

(6) A liquidating credit union shall continue in existence for the purpose of discharging its debts, collecting on loans and distributing its assets, and doing all acts required in order to conclude its business and may sue and be sued for the purpose of enforcing such debts and obligations until its affairs are fully concluded.

(7) The board of directors or the liquidating agent shall distribute the assets of the credit union or the proceeds of any disposition of the assets pursuant to section 21-1734.

(8) As soon as the board of directors or the liquidating agent determines that all assets from which there is a reasonable expectancy of realization have been liquidated and distributed pursuant to section 21-1734, the board or the liquidating agent shall execute a certificate of dissolution on a form prescribed by the department and shall file the same, together with all pertinent books and records of the liquidating credit union, with the department and the credit union shall be dissolved.

Source:Laws 1996, LB 948, § 108.

21-17,109. Merger or consolidation.

(1) Any credit union organized under the Credit Union Act may, with the approval of the department, merge or consolidate with one or more other credit unions organized under the act or under the laws of the United States, if the credit unions merging or consolidating possess coinciding common bonds of association.

(2) When two or more credit unions merge or consolidate, one shall be designated as the continuing credit union or a totally new credit union shall be organized. If the latter procedure is followed, the new credit union shall be organized under the Credit Union Act or under the laws of the United States. All participating credit unions other than the continuing or new credit union shall be designated as merging credit unions.

(3) Any merger or consolidation of credit unions shall be done according to a plan of merger or consolidation. After approval by the boards of directors of all participating credit unions, the plan shall be submitted to the department for preliminary approval. If the plan includes the organization of a new credit union, all documents required pursuant to section 21-1724 shall be submitted as a part of the plan. In addition, each participating credit union shall submit the following information:

(a) The time and place of the meeting of the boards of directors at which the plan of merger or consolidation was agreed upon;

(b) The vote of the directors in favor of the adoption of the plan; and

The department shall grant preliminary approval if the plan has been approved properly by the boards of directors and if the documentation required to organize a new credit union, if any, complies with section 21-1724. The director, in his or her discretion, may order a hearing be held if he or she determines that the condition of the acquiring credit union warrants a hearing or that the plan of merger would be unfair to the merging credit union.

(4) After the department grants preliminary approval, each merging credit union, except the continuing credit union, shall, unless waived by the department, conduct a membership vote on its participation in the plan. The vote shall be conducted either at a special meeting called for that purpose or by mail ballot. If a majority of the members voting approve the plan, the credit union shall submit a record of that fact to the department indicating the vote by which the members approved the plan and either the time and place of the membership meeting or the mailing date and closing date of the mail ballot.

(5) The department may waive any voting requirements described in the Credit Union Act for any credit union upon the determination that it is in the best interests of the membership or that the credit union is insolvent or in imminent danger of becoming insolvent.

(6) The director shall grant final approval of the plan of merger or consolidation after determining that the requirements of subsections (1) through (4) of this section have been met in the case of each merging credit union. If the plan of merger or consolidation includes the organization of a new credit union, the department must approve the organization of the new credit union under section 21-1724 as part of the approval of the plan of merger or consolidation. The department shall notify all participating credit unions of the plan.

(7) Upon final approval of the plan by the department, all property, property rights, and members' interests in each merging credit union shall vest in the continuing or new credit union as applicable without deed, obligations, and other instruments of transfer, and all debts, obligations, and liabilities of each merging credit union shall be deemed to have been assumed by the continuing or new credit union. The rights and privileges of the members of each participating credit union shall remain intact. If a person is a member of more than one of the participating credit unions, the person shall be entitled to only a single set of membership rights in the continuing or new credit union.

(8) Notwithstanding any other provision of law, the department may authorize a merger or consolidation of a credit union which is insolvent or which is in danger of insolvency with any other credit union or may authorize a credit union to purchase any of the assets of or assume any of the liabilities of any other credit union which is insolvent or which is in danger of insolvency, if the department is satisfied that:

(a) An emergency requiring expeditious action exists with respect to such credit union;

(b) Other alternatives for such credit union are not reasonably available; and

(9) Notwithstanding any other provision of law, the director may authorize an institution, the deposits or accounts of which are insured by the Federal Deposit Insurance Corporation or any derivative thereof, to purchase any assets of or assume any liabilities of a credit union which is insolvent or in danger of insolvency, except that prior to exercising this authority the director shall attempt to effect a merger or consolidation with, or purchase or assumption by, another credit union as provided in subsection (8) of this section.

(10) For purposes of the authority contained in subsection (9) of this section, insured share accounts of each credit union may, upon consummation of the purchase or assumption, be converted to insured deposits or other comparable accounts in the acquiring institution, and the department and the National Credit Union Share Insurance Fund shall be absolved of any liability to the credit union's members with respect to those accounts.

Source:Laws 1996, LB 948, § 109; Laws 1997, LB 137, § 17; Laws 2002, LB 957, § 19; Laws 2024, LB1074, § 72.
Operative Date: July 19, 2024

21-17,110. Conversion.

(1) A credit union incorporated under the laws of this state may be converted into a federal credit union organized under the laws of the United States as prescribed in section 21-17,111.

(2) A federal credit union organized under the laws of the United States may be converted into a credit union organized under the laws of this state as prescribed in section 21-17,112.

Source:Laws 1996, LB 948, § 110.

21-17,111. Conversion from state to federal credit union.

(1) Any credit union organized under the Credit Union Act may, with the approval of the department and with the approval of a majority of the credit union members attending an annual or special meeting of the credit union, be converted into a federal credit union. The conversion shall not release the state-organized credit union from its obligations to pay or discharge all liabilities created by law or incurred by it before the conversion, from any tax imposed by the laws of this state up to the day of the conversion in proportion to the time which has elapsed since the last preceding payment on such obligations or liabilities, or from any assessment, penalty, or forfeiture imposed or incurred under the laws of this state up to the date of the conversion. Conversion shall be made pursuant to a conversion plan approved by the department and shall not be made (a) to defeat or defraud any of the creditors of the credit union or (b) to avoid the requirements of any law of this state designed to protect consumers. The conversion plan shall address required notices and disclosures of information concerning advantages and disadvantages to the credit union and its members of the proposed conversion. Certified copies of all proceedings had by the board of directors and by the members of the credit union shall be filed by the board of directors with the department, and in addition, the credit union shall furnish to the department a certified copy of consent or approval of the National Credit Union Administration if such consent is required by the laws of the United States. Two copies of the proceedings shall be filed with the department. The department shall certify and forward by registered mail one copy of the proceedings to the county clerk of the county in which the credit union is located.

(2) When conversion becomes effective, all property of the credit union, including all rights, title, and interest in and to all kinds of property, whether real, personal, or mixed, and things in action, and every right, privilege, interest, and asset of any conceivable value or benefit then existing, belonging, or pertaining to it, or which would inure to it, shall immediately by act of law and without any conveyance or transfer, and without any further act or deed, be vested in and remain the property of the converted credit union, which shall have, hold, and enjoy the property in its own right as fully and to the same extent as the property was possessed, held, and enjoyed prior to the conversion. The converted credit union shall be deemed to be a continuation of the same entity. All the rights, obligations, and relations of the credit union to or in respect to any person, estate, creditor, member, trust, trustee, or beneficiary of any trust or fiduciary function shall remain unimpaired. The credit union shall continue to hold all the rights, obligations, relations, and trusts, and the duties and liabilities connected therewith, and shall execute and perform every trust and relation in the same manner as if the credit union had not converted.

Source:Laws 1996, LB 948, § 111.

21-17,112. Conversion from federal to state credit union.

(1) A federal credit union organized under the Federal Credit Union Act, 12 U.S.C. 1753 et seq., and meeting all the requirements to become a state credit union organized under the Credit Union Act may, with the approval of the department and in compliance with the applicable law under which it was organized, be converted into a state credit union organized under the Credit Union Act. The required articles of association may be executed by a majority of the board of directors of the converting credit union and presented to the department for appropriate examination and approval. A majority of the directors, after executing the articles of association in duplicate, may execute all other papers, including the adoption of bylaws for the general government of the credit union consistent with the Credit Union Act, and do whatever may be required to complete its conversion.

(2) The board of directors of the converting credit union may continue to be directors of the credit union. If the director approves the articles of association as presented by the board of directors, the director shall notify the board of directors of his or her decision and shall immediately issue a certificate of approval attached to the duplicate articles of association and return it to the credit union. The certificate shall indicate that the laws of this state have been complied with and that the credit union and all its members, officials, and employees shall have the same rights, powers, and privileges and shall be subject to the same duties, liabilities, and obligations in all respects, as shall be applicable to credit unions originally organized under the Credit Union Act.

(3) The approval of the department shall be based on an examination of the credit union and the proceedings had by its board of directors and members with respect to conversion. A conversion shall not be made to defeat or defraud any of the creditors of the credit union. The expenses of an examination, which shall be computed in accordance with sections 8-605 and 8-606, shall be paid by the credit union.

(4) When the conversion becomes effective, all property of the converted credit union, including all its right, title, and interest in and to all property of whatsoever kind, whether real, personal, or mixed, and things in action, and every right, privilege, interest, and asset of any conceivable value or benefit then existing, belonging, or pertaining to it, or which would inure to it, shall immediately by act of law and without any conveyance or transfer, and without any further act or deed, be vested in and remain the property of the converted credit union, which shall have, hold, and enjoy the property in its own right as fully and to the same extent as the property was previously possessed, held, and enjoyed by it. The converted credit union shall be deemed to be a continuation of the same entity. All the rights, obligations, and relations of the credit union to or in respect to any person, estate, creditor, member, trustee, or beneficiary of any trust or fiduciary function shall remain unimpaired. The credit union shall continue to hold all the rights, obligations, relations, and trusts, and the duties and liabilities connected therewith, and shall execute and perform every trust and relation in the same manner as if it had after the conversion assumed the trust or relation and obligation and liabilities connected with the trust or relation.

Source:Laws 1996, LB 948, § 112; Laws 1997, LB 137, § 18; Laws 2007, LB124, § 20.

21-17,113. Property taxation and collection.

The property of a credit union shall be subject to taxation in the same manner as provided by law in the case of corporations or individuals. Nothing in this section shall prevent holdings in any credit union organized under the Credit Union Act from being included in the valuation of the personal property of the owners or holders of such holdings in assessing taxes imposed by the authority of the state or any political subdivision thereof in which the credit union is located. The duty of collecting or enforcing the payment of such tax shall not be imposed upon any credit union.

Source:Laws 1996, LB 948, § 113.

21-17,114. Credit Union Act Fund; created; use; investment.

There is hereby created the Credit Union Act Fund. All funds available from the National Credit Union Share Insurance Fund shall be collected by the department and remitted to the State Treasurer for credit to the Credit Union Act Fund. The fund shall be administered by the department and used only for offsetting costs associated with the examination and supervision of federally insured, state-organized credit unions. Any money in the fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

Source:Laws 1996, LB 948, § 114.

Cross References

Nebraska Capital Expansion Act, see section 72-1269.

Nebraska State Funds Investment Act, see section 72-1260.

21-17,115. Credit union organized under laws of Nebraska; rights, powers, privileges, and immunities of federal credit union; exception.

Notwithstanding any of the other provisions of the Credit Union Act or any other Nebraska statute, any credit union incorporated under the laws of the State of Nebraska and organized under the provisions of the act shall have all the rights, powers, privileges, benefits, and immunities which may be exercised as of January 1, 2024, by a federal credit union doing business in Nebraska on the condition that such rights, powers, privileges, benefits, and immunities shall not relieve such credit union from payment of state taxes assessed under any applicable laws of this state.

Source:Laws 1977, LB 246, § 5; Laws 1978, LB 772, § 1; Laws 1979, LB 307, § 1; Laws 1980, LB 793, § 1; Laws 1981, LB 60, § 1; Laws 1982, LB 775, § 2; Laws 1983, LB 143, § 1; Laws 1984, LB 643, § 1; Laws 1985, LB 430, § 1; Laws 1986, LB 963, § 1; Laws 1987, LB 197, § 1; Laws 1988, LB 957, § 1; Laws 1989, LB 126, § 1; Laws 1990, LB 1017, § 1; Laws 1991, LB 97, § 1; Laws 1992, LB 984, § 1; Laws 1993, LB 122, § 1; Laws 1994, LB 878, § 1; Laws 1995, LB 76, § 1; R.S.Supp.,1995, § 21-17,120.01; Laws 1996, LB 948, § 115; Laws 1997, LB 152, § 1; Laws 1998, LB 1321, § 75; Laws 1999, LB 278, § 1; Laws 2000, LB 932, § 27; Laws 2001, LB 53, § 26; Laws 2002, LB 957, § 20; Laws 2003, LB 217, § 32; Laws 2004, LB 999, § 21; Laws 2005, LB 533, § 32; Laws 2006, LB 876, § 24; Laws 2007, LB124, § 21; Laws 2008, LB851, § 17; Laws 2009, LB327, § 15; Laws 2010, LB890, § 14; Laws 2011, LB74, § 5; Laws 2012, LB963, § 22; Laws 2013, LB213, § 13; Laws 2014, LB712, § 3; Laws 2015, LB286, § 3; Laws 2016, LB676, § 3; Laws 2017, LB140, § 149; Laws 2018, LB812, § 9; Laws 2019, LB258, § 13; Laws 2020, LB909, § 21; Laws 2021, LB363, § 24; Laws 2022, LB707, § 31; Laws 2023, LB92, § 50; Laws 2024, LB1074, § 73.
Operative Date: April 18, 2024

21-17,116. Repealed. Laws 2017, LB375, § 10.

21-17,117. Repealed. Laws 1996, LB 948, § 130.

21-17,117.01. Repealed. Laws 1996, LB 948, § 130.

21-17,117.02. Repealed. Laws 1996, LB 948, § 130.

21-17,117.03. Repealed. Laws 1996, LB 948, § 130.

21-17,117.04. Repealed. Laws 1996, LB 948, § 130.

21-17,117.05. Repealed. Laws 1996, LB 948, § 130.

21-17,118. Repealed. Laws 1996, LB 948, § 130.

21-17,119. Repealed. Laws 1988, LB 795, § 8.

21-17,120. Repealed. Laws 1996, LB 948, § 130.

21-17,120.01. Transferred to section 21-17,115.

21-17,120.02. Repealed. Laws 1996, LB 948, § 130.

21-17,121. Repealed. Laws 1996, LB 948, § 130.

21-17,122. Repealed. Laws 1996, LB 948, § 130.

21-17,123. Repealed. Laws 1996, LB 948, § 130.

21-17,124. Repealed. Laws 1996, LB 948, § 130.

21-17,125. Repealed. Laws 1996, LB 948, § 130.

21-17,126. Repealed. Laws 1996, LB 948, § 130.

21-17,127. Repealed. Laws 2003, LB 131, § 40.

21-17,128. Repealed. Laws 2003, LB 131, § 40.

21-17,129. Repealed. Laws 2003, LB 131, § 40.

21-17,130. Repealed. Laws 2003, LB 131, § 40.

21-17,131. Repealed. Laws 2003, LB 131, § 40.

21-17,132. Repealed. Laws 2003, LB 131, § 40.

21-17,133. Repealed. Laws 2003, LB 131, § 40.

21-17,134. Repealed. Laws 2003, LB 131, § 40.

21-17,135. Repealed. Laws 2003, LB 131, § 40.

21-17,136. Repealed. Laws 2003, LB 131, § 40.

21-17,137. Repealed. Laws 2003, LB 131, § 40.

21-17,138. Repealed. Laws 2003, LB 131, § 40.

21-17,139. Repealed. Laws 2003, LB 131, § 40.

21-17,140. Repealed. Laws 2003, LB 131, § 40.

21-17,141. Repealed. Laws 2003, LB 131, § 40.

21-17,142. Repealed. Laws 2003, LB 131, § 40.

21-17,143. Repealed. Laws 2003, LB 131, § 40.

21-17,144. Repealed. Laws 2003, LB 131, § 40.

21-17,145. Repealed. Laws 2003, LB 131, § 40.

21-1801. Repealed. Laws 1973, LB 157, § 6.

21-1802. Repealed. Laws 1973, LB 157, § 6.

21-1803. Repealed. Laws 1973, LB 157, § 6.

21-1804. Repealed. Laws 1973, LB 157, § 6.

21-1901. Act, how cited.

Sections 21-1901 to 21-19,177 shall be known and may be cited as the Nebraska Nonprofit Corporation Act.

Source:Laws 1996, LB 681, § 1.

21-1902. Legislative power.

The Legislature shall have the power to amend or repeal all or part of the Nebraska Nonprofit Corporation Act at any time and all domestic and foreign corporations subject to the act are governed by the amendment or repeal.

Source:Laws 1996, LB 681, § 2.

21-1903. Filing requirements.

(a) A document must satisfy the requirements of this section, and of any other section that adds to or varies these requirements, to be entitled to filing by the Secretary of State.

(b) The Nebraska Nonprofit Corporation Act must require or permit filing the document in the office of the Secretary of State.

(d) The document must be typewritten or printed.

(e) The document must be in the English language. However, a corporate name need not be in English if written in English letters or Arabic or Roman numerals, and the certificate of existence required of foreign corporations need not be in English if accompanied by a reasonably authenticated English translation.

(f) The document must be executed:

(1) By the presiding officer of its board of directors of a domestic or foreign corporation, by its president, or by another of its officers;

(2) If directors have not been selected or the corporation has not been formed, by an incorporator; or

(3) If the corporation is in the hands of a receiver, trustee, or other court-appointed fiduciary, by that fiduciary.

(g) The person executing a document shall sign it and state beneath or opposite the signature his or her name and the capacity in which he or she signs. The document may, but need not, contain:

(1) The corporate seal;

(2) An attestation by the secretary or an assistant secretary; or

(3) An acknowledgment, verification, or proof.

(h) If the Secretary of State has prescribed a mandatory form for a document under section 21-1904, the document must be in or on the prescribed form.

(i) The document must be delivered to the office of the Secretary of State for filing and must be accompanied by one exact or conformed copy (except as provided in sections 21-1936 and 21-19,154), the correct filing fee, and any tax, license fee, or penalty required by the Nebraska Nonprofit Corporation Act or other law.

Source:Laws 1996, LB 681, § 3.

21-1904. Forms.

(a) The Secretary of State may prescribe and furnish, on request, forms for: (1) An application for a certificate of existence; (2) a foreign corporation's application for a certificate of authority to transact business in this state; (3) a foreign corporation's application for a certificate of withdrawal; and (4) the biennial report. If the Secretary of State so requires, use of these forms is mandatory.

(b) The Secretary of State may prescribe and furnish, on request, forms for other documents required or permitted to be filed by the Nebraska Nonprofit Corporation Act but their use is not mandatory.

Source:Laws 1996, LB 681, § 4.

21-1905. Fees.

(a) The Secretary of State shall collect the following fees when the documents described in this subsection are delivered for filing:

(1)(i) Articles of incorporation or (ii) documents relating to domestication:

(A) If the filing is submitted in writing, the fee shall be $30; and

(B) If the filing is submitted electronically pursuant to section 84-511, the fee shall be $25;

(2) Agent's statement of change of registered office for each affected corporation...$25.00 (not to exceed a total of $1,000)

(3) Agent's statement of resignation...no fee

(4) Certificate of administrative dissolution...no fee

(5) Application for reinstatement more than five years after the effective date of an administrative dissolution or administrative revocation...$500.00

(6) Certificate of reinstatement...no fee

(7) Certificate of judicial dissolution...no fee

(8) Certificate of authority:

(i) If the filing is submitted in writing, the fee shall be $30; and

(ii) If the filing is submitted electronically pursuant to section 84-511, the fee shall be $25;

(9) Certificate of revocation of authority to transact business...no fee

(10) Application for certificate of good standing...$10.00

(11) Any other document required or permitted to be filed by the Nebraska Nonprofit Corporation Act:

(i) If the filing is submitted in writing, the fee shall be $30; and

(ii) If the filing is submitted electronically pursuant to section 84-511, the fee shall be $25.

(b) The Secretary of State shall collect the following fees for copying and certifying the copy of any filed document relating to a domestic or foreign corporation:

(1) $1.00 per page; and

(2) $10.00 for the certificate.

Source:Laws 1996, LB 681, § 5; Laws 2008, LB907, § 1; Laws 2015, LB279, § 9; Laws 2018, LB749, § 1; Laws 2020, LB910, § 7.

21-1906. Effective date of document.

(a) Except as provided in subsection (b) of this section, a document is effective:

(1) At the time of filing on the date it is filed, as evidenced by the Secretary of State's endorsement on the original document; or

(2) At the time specified in the document as its effective time on the date it is filed.

Source:Laws 1996, LB 681, § 6.

21-1907. Correcting filed document.

(a) A domestic or foreign corporation may correct a document filed by the Secretary of State if the document: (1) Contains an incorrect statement or (2) was defectively executed, attested to, sealed, verified, or acknowledged.

(b) A document is corrected:

(1) By preparing articles of correction that (i) describe the document (including its filing date) or attach a copy of it to the articles, (ii) specify the incorrect statement and the reason it is incorrect or the manner in which the execution was defective, and (iii) correct the incorrect statement or defective execution; and

(2) By delivering the articles of correction to the Secretary of State.

(c) Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and who are adversely affected by the correction. As to those persons, articles of correction are effective when filed.

Source:Laws 1996, LB 681, § 7.

21-1908. Secretary of State; duties.

(a) If a document delivered to the office of the Secretary of State for filing satisfies the requirements of section 21-1903, the Secretary of State shall file it.

(b) The Secretary of State files a document by stamping or otherwise endorsing "Filed," together with the Secretary of State's name and official title and the date and the time of receipt, on both the original and the document copy. After filing a document, except as provided in sections 21-1936 and 21-19,154, the Secretary of State shall deliver the document copy, with the acknowledgment of receipt of the filing fee, if a fee is required, to the domestic or foreign corporation or its representative.

(c) Upon refusing to file a document, the Secretary of State shall return it to the domestic or foreign corporation or its representative within five days after the document was delivered, together with a brief, written explanation of the reason or reasons for the refusal.

(d) The Secretary of State's duty to file documents under this section is ministerial. Filing or refusing to file a document does not:

(1) Affect the validity or invalidity of the document in whole or in part;

(2) Relate to the correctness or incorrectness of information contained in the document; or

(3) Create a presumption that the document is valid or invalid or that information contained in the document is correct or incorrect.

Source:Laws 1996, LB 681, § 8.

21-1909. Refusal to file document; appeal.

(a) If the Secretary of State refuses to file a document delivered for filing to the Secretary of State's office, the domestic or foreign corporation may appeal the refusal to the district court of Lancaster County. The appeal is commenced by petitioning the court to compel filing the document and by attaching to the petition the document and the Secretary of State's explanation for the refusal to file.

(b) The district court may summarily order the Secretary of State to file the document or take other action the court considers appropriate.

Source:Laws 1996, LB 681, § 9.

21-1910. Filed document; evidentiary effect.

A certificate attached to a copy of a document bearing the Secretary of State's signature (which may be in facsimile) and the seal of this state is conclusive evidence that the original document is on file with the Secretary of State.

Source:Laws 1996, LB 681, § 10.

21-1911. Certificate of existence.

(a) Any person may apply to the Secretary of State to furnish a certificate of existence for a domestic or foreign corporation.

(b) The certificate of existence shall set forth:

(1) The domestic corporation's corporate name or the foreign corporation's corporate name used in this state;

(2) That (i) the domestic corporation is duly incorporated under the law of this state, the date of its incorporation, and the period of its duration if less than perpetual or (ii) the foreign corporation is authorized to transact business in this state;

(3) That all fees, taxes, and penalties owed to this state have been paid, if (i) payment is reflected in the records of the Secretary of State and (ii) nonpayment affects the good standing of the domestic or foreign corporation;

(4) That its most recent biennial report required by section 21-19,172 has been delivered to the Secretary of State; and

(5) That articles of dissolution have not been filed.

(c) Subject to any qualification stated in the certificate, a certificate of existence issued by the Secretary of State may be relied upon as conclusive evidence that the domestic or foreign corporation is in good standing in this state.

Source:Laws 1996, LB 681, § 11.

21-1912. Signing false document; penalty.

(a) A person commits an offense by signing a document such person knows is false in any material respect with intent that the document be delivered to the Secretary of State for filing.

(b) Any person who violates this section is guilty of a Class I misdemeanor.

Source:Laws 1996, LB 681, § 12.

21-1913. Secretary of State; powers.

The Secretary of State has the power reasonably necessary to perform the duties required of his or her office by the Nebraska Nonprofit Corporation Act.

Source:Laws 1996, LB 681, § 13.

21-1914. Terms, defined.

For purposes of the Nebraska Nonprofit Corporation Act, unless the context otherwise requires:

(1) Approved by (or approval by) the members means approved or ratified by the affirmative vote of a majority of the votes represented and voting at a duly held meeting at which a quorum is present (which affirmative votes also constitute a majority of the required quorum) or by a written ballot, or written consent in conformity with the act or by the affirmative vote, written ballot, or written consent of such greater proportion, including the votes of all the members of any class, unit, or grouping as may be provided in the articles, bylaws, or the act for any specified member action;

(2) Articles of incorporation or articles include amended and restated articles of incorporation and articles of merger;

(3) Board or board of directors means the board of directors except that no person or group of persons are the board of directors because of powers delegated to that person or group pursuant to section 21-1968;

(4) Bylaws means the code or codes of rules (other than the articles) adopted pursuant to the act for the regulation or management of the affairs of the corporation irrespective of the name or names by which such rules are designated;

(5) Class means a group of memberships which have the same rights with respect to voting, dissolution, redemption, and transfer. For purposes of this section, rights shall be considered the same if they are determined by a formula applied uniformly;

(6) Corporation means a public benefit, a mutual benefit, or a religious corporation;

(7) Delegate means a person elected or appointed to vote in a representative assembly for the election of a director or directors or on other matters;

(8) Deliver includes mail;

(9) Director means an individual, designated in the articles or bylaws or elected by the incorporators, and his or her successor and an individual elected or appointed by any other name or title to act as a member of the board;

(10) Distribution means the payment of a dividend or any part of the income or profit of a corporation to its members, directors, or officers;

(11) Domestic corporation means a corporation;

(12) Effective date of notice has the same meaning as in section 21-1915;

(13) Electronic transmission or electronically transmitted means any process of communication not directly involving the physical transfer of paper that is suitable for the retention, retrieval, and reproduction of information by the recipient;

(14) Employee does not include an officer or director who is not otherwise employed by the corporation;

(15) Entity includes corporation and foreign corporation; business corporation and foreign business corporation; profit and nonprofit unincorporated association; corporation sole; business trust, estate, partnership, limited liability company, registered limited liability partnership, trust, and two or more persons having a joint or common economic interest; state or the United States; and foreign government;

(16) File, filed, or filing means filed in the office of the Secretary of State;

(17) Foreign corporation means a corporation organized under a law other than the law of this state which would be a nonprofit corporation if formed under the laws of this state;

(18) Governmental subdivision includes authority, county, district, and municipality;

(19) Individual includes the estate of an incompetent individual;

(20) Member means (without regard to what a person is called in the articles or bylaws) any person or persons who on more than one occasion, pursuant to a provision of a corporation's articles or bylaws, have the right to vote for the election of a director or directors. The definition of member does not apply to a corporation created for the collection of assessments under federally mandated programs if the articles of such corporation provide that the corporation shall not have members. A person is not a member by virtue of any of the following:

(i) Any rights such person has as a delegate;

(ii) Any rights such person has to designate a director or directors; or

(iii) Any rights such person has as a director;

(21) Membership means the rights and obligations a member or members have pursuant to a corporation's articles, bylaws, and the act;

(22) Mutual benefit corporation means a domestic corporation which is formed as a mutual benefit corporation pursuant to sections 21-1920 to 21-1926 or is required to be a mutual benefit corporation pursuant to section 21-19,177;

(23) Notice has the same meaning as in section 21-1915;

(24) Person includes any individual or entity;

(25) Principal office means the office (in or out of this state) so designated in the biennial report filed pursuant to section 21-19,172 where the principal offices of a domestic or foreign corporation is located;

(26) Proceeding includes civil, criminal, administrative, and investigatory actions;

(27) Public benefit corporation means a domestic corporation which is formed as a public benefit corporation pursuant to sections 21-1920 to 21-1926 or is required to be a public benefit corporation pursuant to section 21-19,177;

(28) Record date means the date established under sections 21-1938 to 21-1950 or 21-1951 to 21-1967 on which a corporation determines the identity of its members for the purposes of the act;

(29) Religious corporation means a domestic corporation which is formed as a religious corporation pursuant to sections 21-1920 to 21-1926 or is required to be a religious corporation pursuant to section 21-19,177;

(30) Secretary means the corporate officer to whom the board of directors has delegated responsibility under subsection (b) of section 21-1990 for custody of the minutes of the directors' and members' meetings and for authenticating the records of the corporation;

(31) State, when referring to a part of the United States, includes a state and commonwealth (and their agencies and governmental subdivisions) and a territory and insular possession (and their agencies and governmental subdivisions) of the United States;

(32) United States includes district, authority, bureau, commission, department, and any other agency of the United States;

(33) Vote includes authorization by written ballot and written consent; and

(34) Voting power means the total number of votes entitled to be cast for the election of directors at the time the determination of voting power is made, excluding a vote which is contingent upon the happening of a condition or event that has not occurred at the time. Where a class is entitled to vote as a class for directors, the determination of voting power of the class shall be based on the percentage of the number of directors the class is entitled to elect out of the total number of authorized directors.

Source:Laws 1996, LB 681, § 14; Laws 1997, LB 285, § 1; Laws 2012, LB890, § 1.

21-1915. Notice.

(a) Notice may be oral or written.

(b) Notice may be communicated in person, by mail or other method of delivery, or by telephone or other electronic means. If these forms of personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area where published, by radio, by television, or by other form of public broadcast communication.

(d) Written notice, if in a comprehensible form, is effective at the earliest of the following:

(1) When received;

(2) Five days after its deposit in the United States mail, as evidenced by the postmark, if mailed correctly addressed and with first-class postage affixed;

(3) On the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee; or

(4) Thirty days after its deposit in the United States mail, as evidenced by the postmark, if mailed correctly addressed and with other than first class, registered or certified postage affixed.

(e) Written notice is correctly addressed to a member of a domestic or foreign corporation if addressed to the member's address shown in the corporation's current list of members.

(f) A written notice or report delivered as part of a newsletter, magazine, or other publication regularly sent to members shall constitute a written notice or report (1) if addressed or delivered to the member's address shown in the corporation's current list of members, (2) in the case of members who are residents of the same household and who have the same address in the corporation's current list of members, if addressed or delivered to one of such members at the address appearing on the current list of members, or (3) if electronically transmitted to a member in a manner authorized by the member.

(g) Written notice is correctly addressed to a domestic or foreign corporation (authorized to transact business in this state), other than in its capacity as a member, if addressed to its registered agent or to its secretary at its principal office shown in its most recent biennial report or, in the case of a foreign corporation that has not yet delivered a biennial report, in its application for a certificate of authority.

(h) If any other provision of the Nebraska Nonprofit Corporation Act prescribes notice requirements for particular circumstances, such as subsection (b) of section 21-1955, those requirements govern. If articles or bylaws prescribe notice requirements not inconsistent with this section or other provisions of the Nebraska Nonprofit Corporation Act, those requirements govern.

Source:Laws 1996, LB 681, § 15; Laws 2012, LB890, § 2.

21-1916. Private foundations; requirements.

Except when otherwise determined by a court of competent jurisdiction, a corporation that is a private foundation as defined in section 509(a) of the Internal Revenue Code:

(a) Shall distribute such amounts for each taxable year at such time and in such manner as not to subject the corporation to tax under section 4942 of the Internal Revenue Code;

(b) Shall not engage in any act of self-dealing as defined in section 4941(d) of the Internal Revenue Code;

(d) Shall not make any investments subjecting it to taxation under section 4944 of the Internal Revenue Code; and

(e) Shall not make any taxable expenditures as defined in section 4945(d) of the Internal Revenue Code.

Source:Laws 1996, LB 681, § 16; Laws 1998, LB 1015, § 1.

21-1917. Meetings and votes; court order.

(a) If for any reason it is impractical or impossible for any corporation to call or conduct a meeting of its members, delegates, or directors, or otherwise obtain their consent, in the manner prescribed by its articles, bylaws, or the Nebraska Nonprofit Corporation Act, then upon petition of a director, officer, delegate, member, or the Attorney General, the district court may order that such a meeting be called or that a written ballot or other form of obtaining the vote of members, delegates, or directors be authorized in such a manner it finds fair and equitable under the circumstances.

(b) The district court shall, in an order issued pursuant to this section, provide for a method of notice reasonably designed to give actual notice to all persons who would be entitled to notice of a meeting held pursuant to the articles, bylaws and the act, whether or not the method results in actual notice to all such persons or conforms to the notice requirements that would otherwise apply. In a proceeding under this section the district court may determine who the members or directors are.

(c) The order issued pursuant to this section may dispense with any requirement relating to the holding of or voting at meetings or obtaining votes, including any requirement as to quorums or as to the number or percentage of votes needed for approval, that would otherwise be imposed by the articles, bylaws, or the act.

(d) Whenever practical, any order issued pursuant to this section shall limit the subject matter of meetings or other forms of consent authorized to items, including amendments to the articles or bylaws, the resolution of which will or may enable the corporation to continue managing its affairs without further resort to this section. An order under this section may also authorize the obtaining of whatever votes and approvals are necessary for the dissolution, merger, or sale of assets.

(e) Any meeting or other method of obtaining the vote of members, delegates, or directors conducted pursuant to an order issued under this section, and that complies with all the provisions of such order, is for all purposes a valid meeting or vote, as the case may be, and shall have the same force and effect as if it complied with every requirement imposed by the articles, bylaws, and the act.

Source:Laws 1996, LB 681, § 17.

Annotations

This section does not independently authorize a district court to appoint new members to the board of a nonprofit corporation. In re Stueven Charitable Foundation, 304 Neb. 140, 933 N.W.2d 554 (2019).

21-1918. Attorney General; notice; powers.

(a) The Attorney General shall be given notice of the commencement of any proceeding that the Nebraska Nonprofit Corporation Act authorizes him or her to bring but that has been commenced by another person.

(b) Whenever any provision of the act requires that notice be given to the Attorney General before or after commencing a proceeding or permits him or her to commence a proceeding:

(1) If no proceeding has been commenced, the Attorney General may take appropriate action including, but not limited to, seeking injunctive relief; or

(2) If a proceeding has been commenced by a person other than the Attorney General, the Attorney General, as of right, may intervene in such proceeding.

Source:Laws 1996, LB 681, § 18.

21-1919. Religious corporations; constitutional protections.

If religious doctrine governing the affairs of a religious corporation is inconsistent with the provisions of the Nebraska Nonprofit Corporation Act on the same subject, the religious doctrine shall control to the extent required by the Constitution of the United States or the Constitution of the State of Nebraska or both.

Source:Laws 1996, LB 681, § 19.

21-1920. Incorporators.

One or more persons may act as the incorporator or incorporators of a corporation by delivering articles of incorporation to the Secretary of State for filing.

Source:Laws 1996, LB 681, § 20.

21-1921. Articles of incorporation.

(a) The articles of incorporation shall set forth:

(1) A corporate name for the corporation that satisfies the requirements of section 21-1931;

(2) One of the following statements:

(i) This corporation is a public benefit corporation;

(ii) This corporation is a mutual benefit corporation; or

(iii) This corporation is a religious corporation;

(4) The name and street address of each incorporator;

(5) Whether or not the corporation will have members; and

(6) Provisions not inconsistent with law regarding the distribution of assets on dissolution.

(b) The articles of incorporation may set forth:

(1) The purpose or purposes for which the corporation is organized, which may be, either alone or in combination with other purposes, the transaction of any lawful activity;

(2) The names and street addresses of the individuals who are to serve as the initial directors;

(3) Provisions not inconsistent with law regarding:

(i) Managing and regulating the affairs of the corporation;

(ii) Defining, limiting, and regulating the powers of the corporation, its board of directors, and members (or any class of members); and

(iii) The characteristics, qualifications, rights, limitations, and obligations attaching to each or any class of members.

(4) Any provision that under the Nebraska Nonprofit Corporation Act is required or permitted to be set forth in the bylaws.

(d) The articles of incorporation need not set forth any of the corporate powers enumerated in the act.

Source:Laws 1996, LB 681, § 21; Laws 2008, LB379, § 7.

21-1922. Incorporation.

(a) Unless a delayed effective date is specified, the corporate existence begins when the articles of incorporation are filed.

Source:Laws 1996, LB 681, § 22.

21-1923. Liability for preincorporation transactions.

All persons purporting to act as or on behalf of a corporation, knowing there was no incorporation under the Nebraska Nonprofit Corporation Act, are jointly and severally liable for all liabilities created while so acting.

Source:Laws 1996, LB 681, § 23.

21-1924. Organization of corporation.

(a) After incorporation:

(2) If initial directors are not named in the articles, the incorporator or incorporators shall hold an organizational meeting at the call of a majority of the incorporators:

(i) To elect directors and complete the organization of the corporation; or

(ii) To elect a board of directors who shall complete the organization of the corporation.

(b) Action required or permitted by the Nebraska Nonprofit Corporation Act to be taken by incorporators at an organizational meeting may be taken without a meeting if the action taken is evidenced by one or more written consents describing the action taken and signed by each incorporator.

Source:Laws 1996, LB 681, § 24.

21-1925. Bylaws.

(a) The incorporators or board of directors of a corporation shall adopt bylaws for the corporation.

(b) The bylaws may contain any provision for regulating and managing the affairs of the corporation that is not inconsistent with law or the articles of incorporation.

Source:Laws 1996, LB 681, § 25.

21-1926. Emergency bylaws and powers.

(a) Unless the articles provide otherwise the directors of a corporation may adopt, amend, or repeal bylaws to be effective only in an emergency defined in subsection (d) of this section. The emergency bylaws, which are subject to amendment or repeal by the members, may provide special procedures necessary for managing the corporation during the emergency, including:

(1) How to call a meeting of the board;

(2) Quorum requirements for the meeting; and

(3) Designation of additional or substitute directors.

(b) All provisions of the regular bylaws consistent with the emergency bylaws remain effective during the emergency. The emergency bylaws are not effective after the emergency ends.

(1) Binds the corporation; and

(2) May not be used to impose liability on a corporate director, officer, employee, or agent.

(d) An emergency exists for purposes of this section if a quorum of the corporation's directors cannot readily be assembled because of some catastrophic event.

Source:Laws 1996, LB 681, § 26.

21-1927. Purposes.

(a)(1) Every corporation incorporated under the Nebraska Nonprofit Corporation Act has the purpose of engaging in any lawful activity unless a more limited purpose is set forth in the articles of incorporation.

(2) A corporation engaging in an activity that is subject to regulation under another statute of this state may incorporate under the act only if incorporation under the act is not prohibited by the other statute. The corporation shall be subject to all limitations of the other statute.

(b) Corporations may be incorporated under the Nebraska Nonprofit Corporation Act for any one or more of, but not limited to, the following lawful purposes: Charitable; benevolent; eleemosynary; educational; civic; patriotic; political; religious; social; fraternal; literary; cultural; athletic; scientific; agricultural; horticultural; animal husbandry; and professional, commercial, industrial, or trade association. Corporations may also be incorporated under the act for the purpose of providing for, erecting, owning, leasing, furnishing, and managing any building, hall, dormitory or apartments, lands, or grounds for the use or benefit in whole or in part of any governmental, religious, social, educational, scientific, fraternal, or charitable society or societies, body or bodies, institution or institutions, incorporated or unincorporated, or for the purpose of holding property of any nature in trust for such society, body, or institution or for the purpose of assisting any governmental body in obtaining grants from the federal government, the performance of any requirements necessary to obtain a federal grant, or carrying out the purpose for which a federal grant is obtained.

Source:Laws 1996, LB 681, § 27; Laws 1999, LB 271, § 1.

21-1928. General powers.

Unless its articles of incorporation provide otherwise, every corporation has perpetual duration and succession in its corporate name and has the same powers as an individual to do all things necessary or convenient to carry out its affairs including, without limitation, the power:

(1) To sue and be sued, complain, and defend in its corporate name;

(2) To have a corporate seal, which may be altered at will, and to use it, or a facsimile of it, by impressing or affixing or in any other manner reproducing it;

(3) To make and amend bylaws not inconsistent with its articles of incorporation or with the laws of this state, for regulating and managing the affairs of the corporation;

(4) To purchase, receive, lease, or otherwise acquire, and own, hold, improve, use, and otherwise deal with, real or personal property, or any legal or equitable interest in property, wherever located;

(5) To sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property;

(6) To purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with, shares or other interests in, or obligations of, any entity;

(7) To make contracts and guaranties, incur liabilities, borrow money, issue notes, bonds, and other obligations, and secure any of its obligations by mortgage or pledge of any of its property, franchises, or income;

(8) To lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment, except as limited by section 21-1988;

(9) To be a promoter, partner, member, associate, or manager of any partnership, joint venture, trust, or other entity;

(10) To conduct its activities, locate offices, and exercise the powers granted by the Nebraska Nonprofit Corporation Act within or without this state;

(11) To elect or appoint directors, officers, employees, and agents of the corporation, define their duties, and fix their compensation;

(12) To pay pensions and establish pension plans, pension trusts, and other benefit and incentive plans for any or all of its current or former directors, officers, employees, and agents;

(13) To make donations not inconsistent with law for the public welfare or for charitable, religious, scientific, or educational purposes and for other purposes that further the corporate interest;

(14) To impose dues, assessments, admission, and transfer fees upon its members;

(15) To establish conditions for admission of members, admit members, and issue memberships;

(16) To carry on a business; and

(17) To do all things necessary or convenient, not inconsistent with law, to further the activities and affairs of the corporation.

Source:Laws 1996, LB 681, § 28.

21-1929. Emergency powers.

(a) In anticipation of or during an emergency defined in subsection (d) of this section, the board of directors of a corporation may:

(1) Modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent; and

(2) Relocate the principal office, designate alternative principal offices or regional offices, or authorize the officer to do so.

(b) During an emergency defined in subsection (d) of this section, unless emergency bylaws provide otherwise:

(1) Notice of a meeting of the board of directors need be given only to those directors it is practicable to reach and may be given in any practicable manner, including by publication and radio; and

(c) Corporate action taken in good faith during an emergency under this section to further the ordinary affairs of the corporation:

(1) Binds the corporation; and

(2) May not be used to impose liability on a corporate director, officer, employee, or agent.

(d) An emergency exists for purposes of this section if a quorum of the corporation's directors cannot readily be assembled because of some catastrophic event.

Source:Laws 1996, LB 681, § 29.

21-1930. Ultra vires.

(a) Except as provided in subsection (b) of this section, the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.

(b) A corporation's power to act may be challenged in a proceeding against the corporation to enjoin an act when a third party has not acquired rights. The proceeding may be brought by the Attorney General, a director, or by a member or members in a derivative proceeding.

(c) A corporation's power to act may be challenged in a proceeding against an incumbent or former director, officer, employee, or agent of the corporation. The proceeding may be brought by a director, the corporation (directly, derivatively, or through a receiver, a trustee, or other legal representative), or in the case of a public benefit corporation, by the Attorney General.

Source:Laws 1996, LB 681, § 30.

21-1931. Corporate name.

(a) A corporate name may not contain language stating or implying that the corporation is organized for a purpose other than that permitted by section 21-1927 and its articles of incorporation.

(b) Except as authorized by subsections (c) and (d) of this section, a corporate name shall not be the same as or deceptively similar to, upon the records of the Secretary of State, any of the names referenced in subdivisions (b)(1) through (5) of this section:

(1) The corporate name of a nonprofit or business corporation incorporated or authorized to do business in this state;

(2) A corporate name reserved or registered under section 21-231, 21-232, 21-1932, or 21-1933;

(3) The fictitious name of a foreign business or nonprofit corporation authorized to transact business in this state because its real name is unavailable;

(4) A trade name registered in this state pursuant to sections 87-208 to 87-219.01; and

(5) Any other business entity name registered or filed with the Secretary of State pursuant to Nebraska law.

(c) A corporation may apply to the Secretary of State for authorization to use a name that is deceptively similar to, upon the Secretary of State's records, one or more of the names described in subsection (b) of this section. The Secretary of State shall authorize use of the name applied for if:

(1) The other corporation or business entity consents to the use in writing; or

(d) A corporation may use the name (including the fictitious name) of another domestic or foreign business or nonprofit corporation or business entity that is used in this state if the other corporation or business entity is incorporated or authorized to do business in this state and the proposed user corporation:

(1) Has merged with the other corporation or business entity;

(2) Has been formed by reorganization of the other corporation or business entity; or

(3) Has acquired all or substantially all of the assets, including the name, of the other corporation or business entity.

(e) The Nebraska Nonprofit Corporation Act does not control the use of fictitious names.

Source:Laws 1996, LB 681, § 31; Laws 1997, LB 44, § 2; Laws 1997, LB 453, § 1; Laws 2003, LB 464, § 1; Laws 2011, LB462, § 1; Laws 2014, LB749, § 263.

21-1932. Reserved name.

(a) A person may reserve the exclusive use of a corporate name, including a fictitious name for a foreign corporation whose corporate name is not available, by delivering an application to the Secretary of State for filing. Upon finding that the corporate name applied for is available, the Secretary of State shall reserve the name for the applicant's exclusive use for a nonrenewable one-hundred-twenty-day period.

Source:Laws 1996, LB 681, § 32.

21-1933. Registered name.

(a) A foreign corporation may register its corporate name, or its corporate name with any change required by section 21-19,151, if the name is not the same as or deceptively similar to, upon the records of the Secretary of State:

(1) The corporate name of a nonprofit or business corporation incorporated or authorized to do business in this state;

(2) A corporate name reserved under section 21-231 or 21-1932 or registered under this section; and

(3) Any other business entity name registered or filed with the Secretary of State pursuant to Nebraska law.

(b) A foreign corporation registers its corporate name, or its corporate name with any change required by section 21-19,151, by delivering to the Secretary of State an application:

(1) Setting forth its corporate name, or its corporate name with any change required by section 21-19,151, the state or country and date of its incorporation, and a brief description of the nature of the activities in which it is engaged; and

(2) Accompanied by a certificate of existence (or a document of similar import) from the state or country of incorporation. Such certificate or document shall not bear a date of more than sixty days prior to the date the application is filed in this state.

(d) A foreign corporation whose registration is effective may renew it for successive years by delivering to the Secretary of State for filing a renewal application, which complies with the requirements of subsection (b) of this section, between October 1 and December 31 of the preceding year. The renewal application renews the registration for the following calendar year.

(e) A foreign corporation whose registration is effective may thereafter qualify as a foreign corporation under that name or consent in writing to the use of that name by a corporation or other business entity thereafter incorporated under the Nebraska Nonprofit Corporation Act or authorized to transact business in this state or by another foreign corporation or business entity thereafter authorized to transact business in this state. The registration terminates when the domestic corporation is incorporated or the foreign corporation or business entity qualifies or consents to the qualification of another foreign corporation or business entity under the registered name.

Source:Laws 1996, LB 681, § 33; Laws 1997, LB 44, § 3; Laws 2003, LB 464, § 2; Laws 2014, LB749, § 264.

21-1934. Registered office; registered agent.

Each corporation must continuously maintain in this state:

(1) A registered office with the same street address as that of the registered agent. A post office box number may be provided in addition to the street address of the registered agent; and

(2) A registered agent, who may be:

(i) An individual who resides in this state and whose office is identical with the registered office;

(ii) A domestic business or nonprofit corporation whose office is identical with the registered office; or

(iii) A foreign business or nonprofit corporation authorized to transact business in this state whose office is identical with the registered office.

Source:Laws 1996, LB 681, § 34; Laws 2008, LB379, § 8.

21-1935. Change of registered office or registered agent.

(a) A corporation may change its registered office or registered agent by delivering to the Secretary of State for filing a statement of change that sets forth:

(1) The name of the corporation;

(2) The street address of its current registered office;

(3) If the current registered office is to be changed, the street address of the new registered office;

(4) The name and street address of its current registered agent. A post office box number may be provided in addition to the street address;

(5) If the current registered agent is to be changed, the name of the new registered agent and the new agent's written consent (either on the statement or attached to it) to the appointment; and

(6) That after the change or changes are made, the addresses of its registered office and the office of its registered agent will be identical.

(b) If the street address or post office box number of a registered agent's office is changed, the registered agent may change the street address, or, if one exists, the post office box number, of the registered office of any corporation for which the registered agent is the registered agent by notifying the corporation in writing of the change and by signing (either manually or in facsimile) and delivering to the Secretary of State for filing a statement that complies with the requirements of subsection (a) of this section and recites that the corporation has been notified of the change.

Source:Laws 1996, LB 681, § 35; Laws 2008, LB379, § 9.

21-1936. Resignation of registered agent.

(a) A registered agent may resign as the registered agent by signing and delivering to the Secretary of State the original and two exact or conformed copies of a statement of resignation. The statement may include a statement that the registered office is also discontinued.

(b) After filing the statement the Secretary of State shall mail one copy to the registered office (if not discontinued) and the other copy to the corporation at its principal office as shown in the most recent biennial report filed pursuant to section 21-19,172.

(c) The agency appointment is terminated, and the registered office discontinued if so provided, on the thirty-first day after the date on which the statement was filed.

Source:Laws 1996, LB 681, § 36.

21-1937. Service on corporation.

(a) A corporation's registered agent is the corporation's agent for service of process, notice, or demand required or permitted by law to be served on the corporation.

(b) If a corporation has no registered agent, or the agent cannot with reasonable diligence be served, the corporation may be served by registered or certified mail, return receipt requested, addressed to the secretary of the corporation at its principal office shown in the most recent biennial report filed pursuant to section 21-19,172. Service is perfected under this subsection on the earliest of:

(1) The date the corporation receives the mail;

(2) The date shown on the return receipt, if signed on behalf of the corporation; or

(3) Five days after its deposit in the United States mail, if mailed and correctly addressed with first-class postage affixed.

Source:Laws 1996, LB 681, § 37.

21-1938. Admission of members.

(a) The articles or bylaws may establish criteria or procedures for admission of members.

(b) No person shall be admitted as a member without his or her consent.

Source:Laws 1996, LB 681, § 38.

21-1939. Consideration.

Except as provided in its articles or bylaws, a corporation may admit members for no consideration or for such consideration as is determined by the board.

Source:Laws 1996, LB 681, § 39.

21-1940. No requirement of members.

A corporation is not required to have members.

Source:Laws 1996, LB 681, § 40.

21-1941. Differences in rights and obligations.

All members shall have the same rights and obligations with respect to voting, dissolution, redemption, and transfer, unless the articles or bylaws establish classes of membership with different rights or obligations. All members shall have the same rights and obligations with respect to any other matters, except as set forth in or authorized by the articles or bylaws.

Source:Laws 1996, LB 681, § 41.

21-1942. Transfers.

(a) Except as set forth in or authorized by the articles or bylaws, no member of a mutual benefit corporation may transfer a membership or any right arising therefrom.

(b) No member of a public benefit or religious corporation may transfer a membership or any right arising therefrom.

(c) When transfer rights have been provided, no restriction on them shall be binding with respect to a member holding a membership issued prior to the adoption of the restriction unless the restriction is approved by the members and the affected member.

Source:Laws 1996, LB 681, § 42.

21-1943. Member's liability to third parties.

A member of a corporation is not, as such, personally liable for the acts, debts, liabilities, or obligations of the corporation.

Source:Laws 1996, LB 681, § 43.

21-1944. Member's liability for dues, assessments, and fees.

A member may become liable to the corporation for dues, assessments, or fees. However, an article or bylaw provision or a resolution adopted by the board authorizing or imposing dues, assessments, or fees does not, of itself, create liability.

Source:Laws 1996, LB 681, § 44.

21-1945. Creditor's action against member.

(a) No proceeding may be brought by a creditor to reach the liability, if any, of a member to the corporation unless final judgment has been rendered in favor of the creditor against the corporation and execution has been returned unsatisfied in whole or in part or unless such proceeding would be useless.

(b) All creditors of the corporation, with or without reducing their claims to judgment, may intervene in any creditor's proceeding brought under subsection (a) of this section to reach and apply unpaid amounts due the corporation. Any or all members who owe amounts to the corporation may be joined in such proceeding.

Source:Laws 1996, LB 681, § 45.

21-1946. Resignation.

(a) A member may resign at any time.

(b) The resignation of a member does not relieve the member from any obligations the member may have to the corporation as a result of obligations incurred or commitments made prior to resignation.

Source:Laws 1996, LB 681, § 46.

21-1947. Termination, expulsion, and suspension.

(a) No member of a public benefit or mutual benefit corporation may be expelled or suspended, and no membership or memberships in such corporations may be terminated or suspended except pursuant to a procedure that is fair and reasonable and is carried out in good faith.

(b) A procedure is fair and reasonable when either:

(1) The articles or bylaws set forth a procedure that provides:

(i) Not less than fifteen days' prior written notice of the expulsion, suspension, or termination and the reasons therefor; and

(ii) An opportunity for the member to be heard, orally or in writing, not less than five days before the effective date of the expulsion, suspension, or termination by a person or persons authorized to decide that the proposed expulsion, suspension, or termination not take place; or

(2) It is fair and reasonable taking into consideration all of the relevant facts and circumstances.

(c) Any written notice given by mail must be given by first-class or certified mail sent to the last-known address of the member shown on the corporation's records.

(d) Any proceeding challenging an expulsion, suspension, or termination, including a proceeding in which defective notice is alleged, must be commenced within one year after the effective date of the expulsion, suspension, or termination.

(e) A member who has been expelled or suspended may be liable to the corporation for dues, assessments, or fees as a result of obligations incurred or commitments made prior to expulsion or suspension.

Source:Laws 1996, LB 681, § 47.

21-1948. Purchase of memberships.

(a) A public benefit or religious corporation may not purchase any of its memberships or any right arising therefrom.

(b) A mutual benefit corporation may purchase the membership of a member who resigns or whose membership is terminated for the amount and pursuant to the conditions set forth in or authorized by its articles or bylaws, but no payment shall be made in violation of sections 21-19,127 and 21-19,128.

Source:Laws 1996, LB 681, § 48.

21-1949. Derivative suits.

(a) A proceeding may be brought in the right of a domestic or foreign corporation to procure a judgment in its favor by: (i) Any member or members having five percent or more of the voting power or by fifty members, whichever is less; or (ii) any director.

(b) In any such proceeding, each complainant shall be a member or director at the time of bringing the proceeding.

(c) A complaint in a proceeding brought in the right of a corporation must be verified and allege with particularity the demand made, if any, to obtain action by the directors and either why the complainants could not obtain the action or why they did not make the demand. If a demand for action was made and the corporation's investigation of the demand is in progress when the proceeding is filed, the district court may stay the proceeding until the investigation is completed.

(d) On termination of the proceeding the district court may require the complainants to pay any defendant's reasonable expenses (including counsel fees) incurred in defending the suit if it finds that the proceeding was commenced frivolously or in bad faith.

(e) If the proceeding on behalf of the corporation results in the corporation taking some action requested by the complainants or otherwise was successful, in whole or in part, or if anything was received by the complainants as the result of a judgment, compromise, or settlement of an action or claim, the district court may award the complainants reasonable expenses (including counsel fees).

(f) The complainants shall notify the Attorney General within ten days after commencing any proceeding under this section if the proceeding involves a public benefit corporation or assets held in charitable trust by a mutual benefit corporation.

Source:Laws 1996, LB 681, § 49.

Annotations

Notice to the Attorney General as an interested party is an essential prerequisite to proceeding in an action involving a public benefit corporation, but once the notice is given, failure to provide such notice within 10 days of the filing of the original complaint does not constitute a jurisdictional defect foreclosing further action. Gilbert & Martha Hitchcock Found. v. Kountze, 275 Neb. 978, 751 N.W.2d 129 (2008).

Effective notice to the Attorney General is an essential prerequisite to proceeding in any action involving a public benefit corporation for which such notice is required. Hitchcock Foundation v. Kountze, 272 Neb. 251, 720 N.W.2d 31 (2006).

21-1950. Delegates.

(a) A corporation may provide in its articles or bylaws for delegates having some or all of the authority of members.

(b) The articles or bylaws may set forth provisions relating to:

(1) The characteristics, qualifications, rights, limitations, and obligations of delegates including their selection and removal;

(2) Calling, noticing, holding, and conducting meetings of delegates; and

(3) Carrying on corporate activities during and between meetings of delegates.

Source:Laws 1996, LB 681, § 50.

21-1951. Annual and regular meetings.

(a) A corporation with members shall hold a membership meeting annually at a time stated in or fixed in accordance with the bylaws.

(b) A corporation with members may hold regular membership meetings at the times stated in or fixed in accordance with the bylaws.

(c) Annual and regular membership meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated in or fixed in accordance with the bylaws, annual and regular meetings shall be held at the corporation's principal office. Unless the articles or bylaws provide otherwise, members may participate in an annual or regular meeting of the members or conduct the meeting through the use of any means of communication by which all members participating may simultaneously hear each other during the meeting. A member participating in a meeting by this means is deemed to be present at the meeting.

(d) At the annual meeting:

(1) The president and chief financial officer shall report on the activities and financial condition of the corporation; and

(2) The members shall consider and act upon such other matters as may be raised consistent with the notice requirements of section 21-1955 and subsection (b) of section 21-1962.

(e) At regular meetings the members shall consider and act upon such matters as may be raised consistent with (i) the notice requirements of section 21-1955 and (ii) subsection (b) of section 21-1962.

(f) The failure to hold an annual or regular meeting at a time stated in or fixed in accordance with a corporation's bylaws does not affect the validity of any corporate action.

Source:Laws 1996, LB 681, § 51.

21-1952. Special meeting.

(a) A corporation with members shall hold a special meeting of members:

(1) On call of its board or the person or persons authorized to do so by the articles or bylaws; or

(2) Except as provided in the articles or bylaws of a religious corporation if the holders of at least five percent of the voting power of any corporation sign, date, and deliver to any corporate officer one or more written demands for the meeting describing the purpose or purposes for which it is to be held.

(b) The close of business on the thirtieth day before delivery of the demand or demands for a special meeting to any corporate officer is the record date for the purpose of determining whether the five percent requirement of subsection (a) of this section has been met.

(c) If a notice for a special meeting demanded under subdivision (a)(2) of this section is not given pursuant to section 21-1955 within thirty days after the date the written demand or demands are delivered to a corporate officer, regardless of the requirements of subsection (d) of this section, a person signing the demand or demands may set the time and place of the meeting and give notice pursuant to section 21-1955.

(d) Special meetings of members may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated or fixed in accordance with the bylaws, special meetings shall be held at the corporation's principal office. Unless the articles or bylaws provide otherwise, members may participate in a special meeting of the members or conduct the meeting through the use of any means of communication by which all members participating may simultaneously hear each other during the meeting. A member participating in a meeting by this means is deemed to be present at the meeting.

(e) Only those matters that are within the purpose or purposes described in the meeting notice required by section 21-1955 may be conducted at a special meeting of members.

Source:Laws 1996, LB 681, § 52.

21-1953. Court-ordered meeting.

(a) The district court of the county where a corporation's principal office (or, if none in this state, its registered office) is located may summarily order a meeting to be held:

(1) On application of any member or other person entitled to participate in an annual or regular meeting, and in the case of a public benefit corporation, the Attorney General, if an annual meeting was not held within the earlier of six months after the end of the corporation's fiscal year or fifteen months after its last annual meeting; or

(2) On application of any member or other person entitled to participate in a regular meeting, and in the case of a public benefit corporation, the Attorney General, if a regular meeting is not held within forty days after the date it was required to be held; or

(3) On application of a member who signed a demand for a special meeting valid under section 21-1952, a person or persons entitled to call a special meeting, and, in the case of a public benefit corporation, the Attorney General, if:

(i) Notice of the special meeting was not given within thirty days after the date the demand was delivered to a corporate officer; or

(ii) The special meeting was not held in accordance with the notice.

(b) The district court may fix the time and place of the meeting, specify a record date for determining members entitled to notice of and to vote at the meeting, prescribe the form and content of the meeting notice, fix the quorum required for specific matters to be considered at the meeting (or direct that the votes represented at the meeting constitute a quorum for action on those matters), and enter other orders necessary to accomplish the purpose or purposes of the meeting.

(c) If the district court orders a meeting, it may also order the corporation to pay the member's costs (including reasonable counsel fees) incurred to obtain the order.

Source:Laws 1996, LB 681, § 53.

21-1954. Action by written consent.

(a) Unless limited or prohibited by the articles or bylaws, action required or permitted by the Nebraska Nonprofit Corporation Act to be approved by the members may be approved without a meeting of members if the action is approved by members holding at least eighty percent of the voting power. The action must be evidenced by one or more written consents describing the action taken, signed by those members representing at least eighty percent of the voting power, and delivered to the corporation for inclusion in the minutes or filing with the corporate records.

(b) If not otherwise determined under section 21-1953 or 21-1957, the record date for determining members entitled to take action without a meeting is the date the first member signs the consent under subsection (a) of this section.

(c) A consent signed under this section has the effect of a meeting vote and may be described as such in any document filed with the Secretary of State.

(d) Written notice of member approval pursuant to this section shall be given to all members who have not signed the written consent. If written notice is required, member approval pursuant to this section shall be effective ten days after such written notice is given.

Source:Laws 1996, LB 681, § 54.

21-1955. Notice of meeting.

(a) A corporation shall give notice consistent with its bylaws of meetings of members in a fair and reasonable manner.

(b) Any notice that conforms to the requirements of subsection (c) of this section is fair and reasonable, but other means of giving notice may also be fair and reasonable when all the circumstances are considered. Notice of matters referred to in subdivision (c)(2) of this section, however, must be given as provided in subsection (c) of this section.

(1) The corporation notifies its members of the place, date, and time of each annual, regular, and special meeting of members no fewer than ten (or if notice is mailed by other than first-class or registered mail, thirty) nor more than sixty days before the meeting date;

(2) Notice of an annual or regular meeting includes a description of any matter or matters that must be approved by the members under section 21-1987, 21-19,102, 21-19,107, 21-19,114, 21-19,121, 21-19,126, 21-19,129, or 21-19,130; and

(3) Notice of a special meeting includes a description of the matter or matters for which the meeting is called.

(d) Unless the bylaws require otherwise, if an annual, regular, or special meeting of members is adjourned to a different date, time, or place, notice need not be given of the new date, time, or place, if the new date, time or place is announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed under section 21-1957, however, notice of the adjourned meeting must be given under this section to the members of record as of the new record date.

(e) When giving notice of an annual, regular, or special meeting of members, a corporation shall give notice of a matter a member intends to raise at the meeting if: (1) Requested in writing to do so by a person entitled to call a special meeting; and (2) the request is received by the secretary or president of the corporation at least ten days before the corporation gives notice of the meeting.

Source:Laws 1996, LB 681, § 55.

21-1956. Waiver of notice.

(a) A member may waive any notice required by the Nebraska Nonprofit Corporation Act, the articles, or bylaws before or after the date and time stated in the notice. The waiver must be in writing, be signed by the member entitled to the notice, and be delivered to the corporation for inclusion in the minutes or filing with the corporate records.

(b) A member's attendance at a meeting:

(1) Waives objection to lack of notice or defective notice of the meeting, unless the member at the beginning of the meeting objects to holding the meeting or transacting business at the meeting;

(2) Waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the member objects to considering the matter when it is presented.

Source:Laws 1996, LB 681, § 56.

21-1957. Record date; determining members entitled to notice and vote.

(a) The bylaws of a corporation may fix or provide the manner of fixing a date as the record date for determining the members entitled to notice of a members' meeting. If the bylaws do not fix or provide for fixing such a record date, the board may fix a future date as such a record date. If no such record date is fixed, members at the close of business on the business day preceding the day on which notice is given, or if notice is waived, at the close of business on the business day preceding the day on which the meeting is held, are entitled to notice of the meeting.

(b) The bylaws of a corporation may fix or provide the manner of fixing a date as the record date for determining the members entitled to vote at a members' meeting. If the bylaws do not fix or provide for fixing such a record date, the board may fix a future date as such a record date. If no such record date is fixed, members on the date of the meeting who are otherwise eligible to vote are entitled to vote at the meeting.

(c) The bylaws may fix or provide the manner for determining a date as the record date for the purpose of determining the members entitled to exercise any rights in respect of any other lawful action. If the bylaws do not fix or provide for fixing such a record date, the board may fix in advance such a record date. If no such record date is fixed, members at the close of business on the day on which the board adopts the resolution relating thereto, or the sixtieth day prior to the date of such other action, whichever is later, are entitled to exercise such rights.

(d) A record date fixed under this section may not be more than seventy days before the meeting or action requiring a determination of members occurs.

(e) A determination of members entitled to notice of or to vote at a membership meeting is effective for any adjournment of the meeting unless the board fixes a new date for determining the right to notice or the right to vote, which it must do if the meeting is adjourned to a date more than seventy days after the record date for determining members entitled to notice of the original meeting.

(f) If the district court orders a meeting adjourned to a date more than one hundred twenty days after the date fixed for the original meeting, it may provide that the original record date for notice or voting continues in effect or it may fix a new record date for notice or voting.

Source:Laws 1996, LB 681, § 57.

21-1958. Action by written ballot.

(a) Unless prohibited or limited by the articles or bylaws, any action that may be taken at any annual, regular, or special meeting of members may be taken without a meeting if the corporation delivers a written ballot to every member entitled to vote on the matter.

(b) A written ballot shall:

(1) Set forth each proposed action; and

(2) Provide an opportunity to vote for or against each proposed action.

(c) Approval by written ballot pursuant to this section shall be valid only when the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot.

(d) All solicitations for votes by written ballot shall:

(1) Indicate the number of responses needed to meet the quorum requirements;

(2) State the percentage of approvals necessary to approve each matter other than election of directors; and

(3) Specify the time by which a ballot must be received by the corporation in order to be counted.

(e) Except as otherwise provided in the articles or bylaws, a written ballot may not be revoked.

Source:Laws 1996, LB 681, § 58.

21-1959. Members' list for meeting.

(a) After fixing a record date for a notice of a meeting, a corporation shall prepare an alphabetical list of the names of all its members who are entitled to notice of the meeting. The list must show the address and number of votes each member is entitled to vote at the meeting. The corporation shall prepare on a current basis through the time of the membership meeting a list of members, if any, who are entitled to vote at the meeting, but who are not entitled to notice of the meeting. This list shall be prepared on the same basis as and be part of the list of members.

(b) The list of members must be available for inspection by any member for the purpose of communication with other members concerning the meeting, beginning two business days after notice is given of the meeting for which the list was prepared and continuing through the meeting, at the corporation's principal office or at a reasonable place identified in the meeting notice in the city where the meeting will be held. A member, a member's agent, or attorney is entitled on written demand to inspect and, subject to the limitations of subsection (c) of section 21-19,166 and section 21-19,169, to copy the list, at a reasonable time and at the member's expense, during the period it is available for inspection.

(c) The corporation shall make the list of members available at the meeting, and any member, a member's agent, or a member's attorney is entitled to inspect the list at any time during the meeting or upon adjournment.

(d) If the corporation refuses to allow a member, a member's agent, or a member's attorney to inspect the list of members before or at the meeting (or copy the list as permitted by subsection (b) of this section), the district court of the county where a corporation's principal office (or if none in this state, its registered office) is located, on application of the member, may summarily order the inspection or copying at the corporation's expense and may postpone the meeting for which the list was prepared until the inspection or copying is complete and may order the corporation to pay the member's costs (including reasonable counsel fees) incurred to obtain the order.

(e) Unless a written demand to inspect and copy a membership list has been made under subsection (b) of this section prior to the membership meeting and a corporation improperly refuses to comply with the demand, refusal or failure to comply with this section does not affect the validity of action taken at the meeting.

(f) The articles or bylaws of a religious corporation may limit or abolish the rights of a member under this section to inspect and copy any corporate record.

Source:Laws 1996, LB 681, § 59.

21-1960. Voting entitlement generally.

(a) Unless the articles or bylaws provide otherwise, each member is entitled to one vote on each matter voted on by the members.

(b) Unless the articles or bylaws provide otherwise, if a membership stands of record in the names of two or more persons, their acts with respect to voting shall have the following effect:

(1) If only one votes, such act binds all; and

(2) If more than one votes, the vote shall be divided on a pro rata basis.

Source:Laws 1996, LB 681, § 60.

21-1961. Quorum requirements.

(a) Unless the Nebraska Nonprofit Corporation Act, the articles, or bylaws provide for a higher or lower quorum, ten percent of the votes entitled to be cast on a matter must be represented at a meeting of members to constitute a quorum on that matter.

(b) A bylaw amendment to decrease the quorum for any member action may be approved by the members or, unless prohibited by the bylaws, by the board.

(d) Unless one-third or more of the voting power is present in person or by proxy, the only matters that may be voted upon at an annual or regular meeting of members are those matters that are described in the meeting notice.

Source:Laws 1996, LB 681, § 61.

21-1962. Voting requirements.

(a) Unless the Nebraska Nonprofit Corporation Act, the articles, or the bylaws require a greater vote or voting by class, if a quorum is present, the affirmative vote of the votes represented and voting (which affirmative votes also constitute a majority of the required quorum) is the act of the members.

(b) A bylaw amendment to increase or decrease the vote required for any member action must be approved by the members.

Source:Laws 1996, LB 681, § 62.

21-1963. Proxies.

(a) Unless the articles or bylaws prohibit or limit proxy voting, a member may appoint a proxy to vote or otherwise act for the member by signing an appointment form either personally or by an attorney in fact.

(b) An appointment of a proxy is effective when received by the secretary or other officer or agent authorized to tabulate votes. An appointment is valid for eleven months unless a different period is expressly provided in the appointment form. No proxy shall be valid for more than three years from its date of execution.

(d) The death or incapacity of the member appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises authority under the appointment.

(e) Appointment of a proxy is revoked by the person appointing the proxy:

(1) Attending any meeting and voting in person; or

(2) Signing and delivering to the secretary or other officer or agent authorized to tabulate proxy votes either a writing stating that the appointment of the proxy is revoked or a subsequent appointment form.

(f) Subject to section 21-1966 and any express limitation on the proxy's authority appearing on the face of the appointment form, a corporation is entitled to accept the proxy's vote or other action as that of the member making the appointment.

Source:Laws 1996, LB 681, § 63.

21-1964. Cumulative voting for directors.

(a) If the articles or bylaws provide for cumulative voting by members, members may so vote, by multiplying the number of votes the members are entitled to cast by the number of directors for whom they are entitled to vote, and cast the product for a single candidate or distribute the product among two or more candidates.

(b) Cumulative voting is not authorized at a particular meeting unless:

(1) The meeting notice or statement accompanying the notice states that cumulative voting will take place; or

(2) A member gives notice during the meeting and before the vote is taken of the member's intent to cumulate votes, and if one member gives this notice all other members participating in the election are entitled to cumulate their votes without giving further notice.

(c) A director elected by cumulative voting may be removed by the members without cause if the requirements of section 21-1975 are met unless the votes cast against removal, or not consenting in writing to such removal, would be sufficient to elect such director if voted cumulatively at an election at which the same total number of votes were cast (or, if such action is taken by written ballot, all memberships entitled to vote were voted) and the entire number of directors authorized at the time of the director's most recent election were then being elected.

(d) Members may not cumulatively vote if the directors and members are identical.

Source:Laws 1996, LB 681, § 64.

Cross References

Cumulative voting for directors, see Article XII, section 1, Constitution of Nebraska.

21-1965. Other methods of electing directors.

A corporation may provide in its articles or bylaws for the election of directors by members or delegates (1) on the basis of chapter or other organizational unit, (2) by region or other geographic unit, (3) by preferential voting, or (4) by any other reasonable method.

Source:Laws 1996, LB 681, § 65.

Cross References

Cumulative voting for directors, see Article XII, section 1, Constitution of Nebraska.

21-1966. Corporation's acceptance of votes.

(a) If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a member, the corporation, if acting in good faith, is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the member.

(b) If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the record name of a member, the corporation, if acting in good faith, is nevertheless entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the member if:

(1) The member is an entity and the name signed purports to be that of an officer or agent of the entity;

(2) The name signed purports to be that of an attorney in fact of the member and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the member has been presented with respect to the vote, consent, waiver, or proxy appointment;

(3) Two or more persons hold the membership as cotenants or fiduciaries and the name signed purports to be the name of at least one of the coholders and the person signing appears to be acting on behalf of all the coholders; and

(4) In the case of a mutual benefit corporation:

(i) The name signed purports to be that of an administrator, executor, guardian, or conservator representing the member and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment; or

(ii) The name signed purports to be that of a receiver or trustee in bankruptcy of the member and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment.

(c) The corporation is entitled to reject a vote, consent, waiver, or proxy appointment if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the member.

(d) The corporation and its officer or agent who accepts or rejects a vote, consent, waiver, or proxy appointment in good faith and in accordance with the standards of this section are not liable in damages to the member for the consequences of the acceptance or rejection.

(e) Corporate action based on the acceptance or rejection of a vote, consent, waiver, or proxy appointment under this section is valid unless a court of competent jurisdiction determines otherwise.

Source:Laws 1996, LB 681, § 66.

21-1967. Voting agreements.

(a) Two or more members may provide for the manner in which they will vote by signing an agreement for that purpose. Such agreements may be valid for a period of up to ten years. For public benefit corporations such agreements must have a reasonable purpose not inconsistent with the corporation's public or charitable purposes.

(b) A voting agreement created under this section is specifically enforceable.

Source:Laws 1996, LB 681, § 67.

21-1968. Requirement for and duties of board of directors.

(a) Each corporation must have a board of directors.

(b) Except as provided in the Nebraska Nonprofit Corporation Act or subsection (c) of this section, all corporate powers shall be exercised by or under the authority of, and the affairs of the corporation managed under the direction of, its board.

(c) The articles may authorize a person or persons to exercise some or all of the powers which would otherwise be exercised by a board. To the extent so authorized any such person or persons shall have the duties and responsibilities of the directors, and the directors shall be relieved to that extent from such duties and responsibilities.

Source:Laws 1996, LB 681, § 68.

21-1969. Qualifications of directors.

All directors must be individuals. The articles or bylaws may prescribe other qualifications for directors.

Source:Laws 1996, LB 681, § 69.

21-1970. Number of directors.

(a) A board of directors must consist of three or more individuals, with the number specified in or fixed in accordance with the articles or bylaws.

(b) The number of directors may be increased or decreased (but to no fewer than three) from time to time by amendment to or in the manner prescribed in the articles or bylaws.

Source:Laws 1996, LB 681, § 70.

21-1971. Election, designation, and appointment of directors.

(a) If the corporation has members, all the directors (except the initial directors) shall be elected at the first annual meeting of members, and at each annual meeting thereafter, unless the articles or bylaws provide some other time or method of election or provide that some of the directors are appointed by some other person or designated.

(b) If the corporation does not have members, all the directors (except the initial directors) shall be elected, appointed, or designated as provided in the articles or bylaws. If no method of designation or appointment is set forth in the articles or bylaws, the directors (other than the initial directors) shall be elected by the board.

Source:Laws 1996, LB 681, § 71.

21-1972. Terms of directors generally.

(a) The articles or bylaws must specify the terms of directors. Except for designated or appointed directors, the terms of directors may not exceed five years. In the absence of any term specified in the articles or bylaws, the term of each director shall be one year. Directors may be elected for successive terms.

(b) A decrease in the number of directors or term of office does not shorten an incumbent director's term.

(1) The term of a director filling a vacancy in the office of a director elected by members expires at the next election of directors by members; and

(2) The term of a director filling any other vacancy expires at the end of the unexpired term that such director is filling.

(d) Despite the expiration of a director's term, the director continues to serve until the director's successor is elected, designated, or appointed and qualifies, or until there is a decrease in the number of directors.

Source:Laws 1996, LB 681, § 72.

21-1973. Staggered terms for directors.

The articles or bylaws may provide for staggering the terms of directors by dividing the total number of directors into groups. The terms of office of the several groups need not be uniform.

Source:Laws 1996, LB 681, § 73.

21-1974. Resignation of directors.

(a) A director may resign at any time by delivering written notice to the board of directors, its presiding officer, or to the president or secretary.

(b) A resignation is effective when the notice is effective unless the notice specifies a later effective date. If a resignation is made effective at a later date, the board may fill the pending vacancy before the effective date if the board provides that the successor does not take office until the effective date.

Source:Laws 1996, LB 681, § 74.

21-1975. Removal of directors elected by members or directors.

(a) The members may remove one or more directors elected by them without cause.

(b) If a director is elected by a class, chapter, or other organizational unit or by region or other geographic grouping, the director may be removed only by the members of that class, chapter, unit, or grouping.

(c) Except as provided in subsection (i) of this section, a director may be removed under subsection (a) or (b) of this section only if the number of votes cast to remove the director would be sufficient to elect the director at a meeting to elect directors.

(d) If cumulative voting is authorized, a director may not be removed if the number of votes (or if the director was elected by a class, chapter, unit, or grouping of members, the number of votes of that class, chapter, unit, or grouping) sufficient to elect the director under cumulative voting is voted against the director's removal.

(e) A director elected by members may be removed by the members only at a meeting called for the purpose of removing the director. The meeting notice must state that the purpose, or one of the purposes, of the meeting is removal of the director.

(f) In computing whether a director is protected from removal under subsections (b) through (d) of this section, it should be assumed that the votes against removal are cast in an election for the number of directors of the class to which the director to be removed belonged on the date of that director's election.

(g) An entire board of directors may be removed under subsections (a) through (e) of this section.

(h) A director elected by the board may be removed without cause by the vote of two-thirds of the directors then in office or such greater number as is set forth in the articles or bylaws. A director elected by the board to fill the vacancy of a director elected by the members may be removed without cause by the members, but not the board.

(i) If, at the beginning of a director's term on the board, the articles or bylaws provide that the director may be removed for missing a specified number of board meetings, the board may remove the director for failing to attend the specified number of meetings. The director may be removed only if a majority of the directors then in office vote for the removal.

(j) The articles or bylaws of a religious corporation may:

(1) Limit the application of this section; and

(2) Set forth the vote and procedures by which the board or any person may remove with or without cause a director elected by the members or the board.

Source:Laws 1996, LB 681, § 75.

21-1976. Removal of designated or appointed directors.

(a) A designated director may be removed by an amendment to the articles or bylaws deleting or changing the designation.

(b)(1) An appointed director may be removed without cause by the person appointing the director except as otherwise provided in the articles or bylaws;

(2) The person removing the appointed director shall do so by giving written notice of the removal to the appointed director and either the presiding officer of the board or the corporation's president or secretary; and

(3) A removal of an appointed director is effective when the notice is effective unless the notice specifies a future effective date.

Source:Laws 1996, LB 681, § 76.

21-1977. Removal of directors by judicial proceeding.

(a) The district court of the county where a corporation's principal office (or, if none in this state, its registered office) is located may remove any director of the corporation from office in a proceeding commenced either by the corporation, its members holding at least ten percent of the voting power of any class, or the Attorney General in the case of a public benefit corporation, if it finds that (1)(i) the director engaged in fraudulent or dishonest conduct, (ii) the director engaged in a gross abuse of authority or discretion, with respect to the corporation, or (iii) a final judgment has been entered finding that the director has violated a duty set forth in sections 21-1986 to 21-1989 and (2) removal is in the best interest of the corporation.

(b) The district court may bar the removed director from serving on the board for a period prescribed by the court.

(c) If members or the Attorney General commence a proceeding under subsection (a) of this section the corporation shall be made a party defendant.

(d) If a public benefit corporation or its members commence a proceeding under subsection (a) of this section, they shall give the Attorney General written notice of the proceeding.

(e) The articles or bylaws of a religious corporation may limit or prohibit the application of this section.

Source:Laws 1996, LB 681, § 77.

Annotations

21-1978. Vacancy on board.

(a) Unless the articles or bylaws provide otherwise, and except as provided in subsections (b) and (c) of this section, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors:

(1) The members, if any, may fill the vacancy. If the vacant office was held by a director elected by a class, chapter, or other organizational unit or by region or other geographic grouping, only members of the class, chapter, unit, or grouping are entitled to vote to fill the vacancy if it is filled by the members;

(2) The board of directors may fill the vacancy; or

(3) If the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.

(b) Unless the articles or bylaws provide otherwise, if a vacant office was held by an appointed director, only the person who appointed the director may fill the vacancy.

(c) If a vacant office was held by a designated director, the vacancy shall be filled as provided in the articles or bylaws. In the absence of an applicable article or bylaw provision, the vacancy may not be filled by the board.

(d) A vacancy that will occur at a specific later date (by reason of a resignation effective at a later date under subsection (b) of section 21-1974 or otherwise) may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.

Source:Laws 1996, LB 681, § 78.

21-1979. Compensation of directors.

Unless the articles or bylaws provide otherwise, a board of directors may fix the compensation of directors.

Source:Laws 1996, LB 681, § 79.

21-1980. Regular and special meetings.

(a) If the time and place of a directors' meeting is fixed by the bylaws or the board, the meeting is a regular meeting. All other meetings are special meetings.

(b) A board of directors may hold regular or special meetings in or out of this state.

(c) Unless the articles or bylaws provide otherwise, members of the board of directors may participate in a regular or special meeting of the board or conduct the meeting through the use of any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.

Source:Laws 1996, LB 681, § 80.

21-1981. Action without meeting.

(a) Unless the articles or bylaws provide otherwise, action required or permitted by the Nebraska Nonprofit Corporation Act to be taken at a board of directors' meeting may be taken without a meeting if the action is taken by all members of the board. The action must be evidenced by one or more written consents describing the action taken, signed by each director, and included in the minutes filed with the corporate records reflecting the action taken.

(b) Action taken under this section is effective when the last director signs the consent, unless the consent specifies a different effective date.

Source:Laws 1996, LB 681, § 81.

21-1982. Call and notice of meeting.

(a) Unless the articles, bylaws, or subsection (c) of this section provide otherwise, regular meetings of the board may be held without notice.

(b) Unless the articles, bylaws, or subsection (c) of this section provide otherwise, special meetings of the board must be preceded by at least two days' notice to each director of the date, time, and place, but not the purpose, of the meeting.

(c) In corporations without members, any board action to remove a director or to approve a matter that would require approval by the members if the corporation had members shall not be valid unless each director is given at least seven days' written notice that the matter will be voted upon at a directors' meeting or unless notice is waived pursuant to section 21-1983.

(d) Unless the articles or bylaws provide otherwise, the presiding officer of the board, the president, or twenty percent of the directors then in office may call and give notice of a meeting of the board.

Source:Laws 1996, LB 681, § 82.

21-1983. Waiver of notice.

(a) A director may at any time waive any notice required by the Nebraska Nonprofit Corporation Act, the articles, or bylaws. Except as provided in subsection (b) of this section, the waiver must be in writing, signed by the director entitled to the notice, and filed with the minutes or the corporate records.

(b) A director's attendance at or participation in a meeting waives any required notice of the meeting unless the director, upon arriving at the meeting or prior to the vote on a matter not noticed in conformity with the act, the articles, or bylaws, objects to lack of notice and does not thereafter vote for or assent to the objected to action.

Source:Laws 1996, LB 681, § 83.

21-1984. Quorum; voting.

(a) Except as otherwise provided in the Nebraska Nonprofit Corporation Act, the articles, or bylaws, a quorum of a board of directors consists of a majority of the directors in office immediately before a meeting begins. In no event may the articles or bylaws authorize a quorum of fewer than the greater of one-third of the number of directors in office or two directors.

(b) If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the board unless the act, the articles, or bylaws require the vote of a greater number of directors.

Source:Laws 1996, LB 681, § 84.

21-1985. Committees of the board.

(a) Unless prohibited or limited by the articles or bylaws, a board of directors may create one or more committees of the board and appoint members of the board to serve on them. Each committee shall have two or more directors who serve at the pleasure of the board.

(b) The creation of a committee and appointment of members to it must be approved by the greater of:

(1) A majority of all the directors in office when the action is taken; or

(2) The number of directors required by the articles or bylaws to take action under section 21-1984.

(c) Sections 21-1980 to 21-1984, which govern meetings, action without meetings, notice and waiver of notice, and quorum and voting requirements of the board, shall apply to committees of the board and their members. Unless the articles or bylaws provide otherwise, members of a committee may participate in a meeting of the committee or conduct the meeting through the use of any means of communication by which all members participating may simultaneously hear each other during the meeting. A member participating in a meeting by this means is deemed to be present at the meeting.

(d) To the extent specified by the board of directors or in the articles or bylaws, each committee of the board may exercise the board's authority under section 21-1968.

(e) A committee of the board may not:

(1) Authorize distributions;

(2) Approve or recommend to members the dissolution, the merger, or the sale, pledge, or transfer of all or substantially all of the corporation's assets;

(3) Elect, appoint, or remove directors or fill vacancies on the board or on any of its committees; or

(4) Adopt, amend, or repeal the articles or bylaws.

(f) The creation of, delegation of authority to, or action by a committee does not alone constitute compliance by a director with the standards of conduct described in section 21-1986.

Source:Laws 1996, LB 681, § 85.

21-1986. General standards for directors.

(a) A director shall discharge his or her duties as a director, including his or her duties as a member of a committee:

(1) In good faith;

(2) With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and

(3) In a manner he or she reasonably believes to be in the best interests of the corporation.

(b) In discharging his or her duties, a director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:

(1) One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented;

(2) Legal counsel, public accountants, or other persons as to matters the director reasonably believes are within the person's professional or expert competence;

(3) A committee of the board of which the director is not a member as to matters within its jurisdiction if the director reasonably believes the committee merits confidence; or

(4) In the case of religious corporations, religious authorities and ministers, priests, rabbis, or other persons whose position or duties in the religious organization the director believes justify reliance and confidence and whom the director believes to be reliable and competent in the matters presented.

(c) A director is not acting in good faith if the director has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (b) of this section unwarranted.

(d) A director is not liable to the corporation, any member, or any other person for any action taken or not taken as a director, if the director acted in compliance with this section.

(e) A director shall not be deemed to be a trustee with respect to the corporation or with respect to any property held or administered by the corporation, including without limit, property that may be subject to restrictions imposed by the donor or transferor of such property.

Source:Laws 1996, LB 681, § 86.

21-1987. Director; conflict of interest.

(a) A conflict of interest transaction is a transaction with the corporation in which a director of the corporation has a direct or indirect interest. A conflict of interest transaction is not voidable or the basis for imposing liability on the director if the transaction was fair at the time it was entered into or is approved as provided in subsection (b) or (c) of this section.

(b) A transaction in which a director of a public benefit or religious corporation has a conflict of interest may be approved:

(1) In advance by the vote of the board of directors or a committee of the board if:

(i) The material facts of the transaction and the director's interest are disclosed or known to the board or committee of the board; and

(ii) The directors approving the transaction in good faith reasonably believe that the transaction is fair to the corporation; or

(2) Before or after it is consummated by obtaining approval of the:

(i) Attorney General; or

(ii) The district court in an action in which the Attorney General is joined as a party.

(1) The material facts of the transaction and the director's interest were disclosed or known to the board of directors or a committee of the board and the board or committee of the board authorized, approved, or ratified the transaction; or

(2) The material facts of the transaction and the director's interest were disclosed or known to the members and they authorized, approved, or ratified the transaction.

(d) For purposes of this section, a director of the corporation has an indirect interest in a transaction if (1) another entity in which the director has a material interest or in which the director is a general partner is a party to the transaction or (2) another entity of which the director is a director, officer, or trustee is a party to the transaction.

(e) For purposes of subsections (b) and (c) of this section, a conflict of interest transaction is authorized, approved, or ratified if it receives the affirmative vote of a majority of the directors on the board or on the committee who have no direct or indirect interest in the transaction, but a transaction may not be authorized, approved, or ratified under this section by a single director. If a majority of the directors on the board who have no direct or indirect interest in the transaction vote to authorize, approve, or ratify the transaction, a quorum is present for the purpose of taking action under this section. The presence of, or a vote cast by, a director with a direct or indirect interest in the transaction does not affect the validity of any action taken under subdivision (b)(1) or (c)(1) of this section if the transaction is otherwise approved as provided in subsection (b) or (c) of this section.

(f) For purposes of subdivision (c)(2) of this section, a conflict of interest transaction is authorized, approved, or ratified by the members if it receives a majority of the votes entitled to be counted under this subsection. Votes cast by or voted under the control of a director who has a direct or indirect interest in the transaction and votes cast by or voted under the control of an entity described in subdivision (d)(1) of this section may not be counted in a vote of members to determine whether to authorize, approve, or ratify a conflict of interest transaction under subdivision (c)(2) of this section. The vote of these members, however, is counted in determining whether the transaction is approved under other sections of the Nebraska Nonprofit Corporation Act. A majority of the voting power, whether or not present, that are entitled to be counted in a vote on the transaction under this subsection constitutes a quorum for the purpose of taking action under this section.

(g) The articles, bylaws, or a resolution of the board may impose additional requirements on conflict of interest transactions.

Source:Laws 1996, LB 681, § 87.

Annotations

The term "transaction" generally connotes negotiations or a consensual bilateral arrangement between the corporation and another party or parties that concern their respective and differing economic rights or interests — not simply a unilateral action by the corporation, but, rather, a "deal." Glad Tidings v. Nebraska Dist. Council, 273 Neb. 960, 734 N.W.2d 731 (2007).

21-1988. Loans to or guaranties for directors and officers.

(a) A corporation may not lend money to or guaranty the obligation of a director or officer of the corporation.

(b) The fact that a loan or guaranty is made in violation of this section does not affect the borrower's liability on the loan.

Source:Laws 1996, LB 681, § 88.

21-1989. Liability for unlawful distributions.

(a) Unless a director complies with the applicable standards of conduct described in section 21-1986, a director who votes for or assents to a distribution made in violation of the Nebraska Nonprofit Corporation Act is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating the act.

(b) A director held liable for an unlawful distribution under subsection (a) of this section is entitled to contribution:

(1) From every other director who voted for or assented to the distribution without complying with the applicable standards of conduct described in section 21-1986; and

(2) From each person who received an unlawful distribution for the amount of the distribution whether or not the person receiving the distribution knew it was made in violation of the act.

Source:Laws 1996, LB 681, § 89.

21-1990. Required officers.

(a) Unless otherwise provided in the articles or bylaws, a corporation shall have a president, a secretary, a treasurer, and such other officers as are appointed by the board.

(b) The bylaws or the board shall delegate to one of the officers responsibility for preparing minutes of the directors' and members' meetings and for authenticating records of the corporation.

Source:Laws 1996, LB 681, § 90.

21-1991. Duties and authority of officers.

Each officer has the authority and shall perform the duties set forth in the bylaws or, to the extent consistent with the bylaws, the duties and authority prescribed in a resolution of the board or by direction of an officer authorized by the board to prescribe the duties and authority of other officers.

Source:Laws 1996, LB 681, § 91.

21-1992. Standards of conduct for officers.

(a) An officer with discretionary authority shall discharge his or her duties under that authority:

(1) In good faith;

(2) With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and

(3) In a manner the officer reasonably believes to be in the best interests of the corporation and its members, if any.

(b) In discharging his or her duties an officer is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:

(1) One or more officers or employees of the corporation who the officer reasonably believes to be reliable and competent in the matters presented;

(2) Legal counsel, public accountants, or other persons as to matters the officer reasonably believes are within the person's professional or expert competence; or

(3) In the case of religious corporations, religious authorities and ministers, priests, rabbis, or other persons whose position or duties in the religious organization the officer believes justify reliance and confidence and who the officer believes to be reliable and competent in the matters presented.

(c) An officer is not acting in good faith if the officer has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (b) of this section unwarranted.

(d) An officer is not liable to the corporation, any member, or other person for any action taken or not taken as an officer, if the officer acted in compliance with this section.

Source:Laws 1996, LB 681, § 92.

21-1993. Resignation and removal of officers.

(a) An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is effective unless the notice specifies a future effective date. If a resignation is made effective at a future date and the corporation accepts the future effective date, its board of directors may fill the pending vacancy before the effective date if the board provides that the successor does not take office until the effective date.

(b) A board may remove any officer at any time with or without cause.

Source:Laws 1996, LB 681, § 93.

21-1994. Contract rights of officers.

(a) The appointment of an officer does not itself create contract rights.

Source:Laws 1996, LB 681, § 94.

21-1995. Officers' authority to execute documents.

Any contract or other instrument in writing executed or entered into between a corporation and any other person is not invalidated as to the corporation by any lack of authority of the signing officers in the absence of actual knowledge on the part of the other person that the signing officers had no authority to execute the contract or other instrument if it is signed by any two officers in Category 1 or by one officer in Category 1 and one officer in Category 2. Category 1 and Category 2 are defined as:

Category 1 - The presiding officer of the board and the president; and

Category 2 - A vice president, the secretary, treasurer and executive director.

Source:Laws 1996, LB 681, § 95.

21-1996. Terms, defined.

For purposes of sections 21-1996 to 21-19,104:

(1) Corporation includes any domestic or foreign predecessor entity of a corporation in a merger or other transaction in which the predecessor's existence ceased upon consummation of the transaction;

(2) Director means an individual who is or was a director of a corporation or an individual who, while a director of a corporation, is or was serving at the corporation's request as a director, officer, partner, trustee, employee, or agent of another foreign or domestic business or nonprofit corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise. A director is considered to be serving an employee benefit plan at the corporation's request if the director's duties to the corporation also impose duties on, or otherwise involve services by, the director to the plan or to participants in or beneficiaries of the plan. Director includes, unless the context requires otherwise, the estate or personal representative of a director;

(3) Expenses include counsel fees;

(4) Liability means the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan), or reasonable expenses actually incurred with respect to a proceeding;

(5) Official capacity means: (i) When used with respect to a director, the office of director in a corporation; and (ii) when used with respect to an individual other than a director, as contemplated in section 21-19,102, the office in a corporation held by the officer or the employment or agency relationship undertaken by the employee or agent on behalf of the corporation. Official capacity does not include service for any other foreign or domestic business or nonprofit corporation or any partnership, joint venture, trust, employee benefit plan, or other enterprise;

(6) Party includes an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding; and

(7) Proceeding means any threatened, pending, or completed action, suit, or proceeding whether civil, criminal, administrative, or investigative and whether formal or informal.

Source:Laws 1996, LB 681, § 96.

21-1997. Authority to indemnify.

(a) Except as provided in subsection (d) of this section a corporation may indemnify an individual made a party to a proceeding because the individual is or was a director against liability incurred in the proceeding if the individual:

(1) Conducted himself or herself in good faith; and

(2) Reasonably believed:

(i) In the case of conduct in his or her official capacity with the corporation, that his or her conduct was in its best interests; and

(ii) In all other cases, that his or her conduct was at least not opposed to its best interests; and

(3) In the case of any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful.

(b) A director's conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the best interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirements of subdivision (a)(2)(ii) of this section.

(c) The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this section.

(d) A corporation may not indemnify a director under this section:

(1) In connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation; or

(2) In connection with any other proceeding charging improper personal benefit to the director, whether or not involving action in his or her official capacity, in which the director was adjudged liable on the basis that personal benefit was improperly received by the director.

(e) Indemnification permitted under this section in connection with a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in connection with the proceeding.

Source:Laws 1996, LB 681, § 97.

21-1998. Mandatory indemnification.

Unless limited by its articles of incorporation, a corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because he or she is or was a director of the corporation against reasonable expenses actually incurred by the director in connection with the proceeding.

Source:Laws 1996, LB 681, § 98.

21-1999. Advance for expenses.

(a) A corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if:

(1) The director furnishes the corporation a written affirmation of his or her good faith belief that he or she has met the standard of conduct described in section 21-1997;

(2) The director furnishes the corporation a written undertaking, executed personally or on the director's behalf, to repay the advance if it is ultimately determined that the director did not meet the standard of conduct; and

(3) A determination is made that the facts then known to those making the determination would not preclude indemnification under sections 21-1996 to 21-19,104.

(b) The undertaking required by subdivision (a)(2) of this section must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.

(c) Determinations and authorizations of payments under this section shall be made in the manner specified in section 21-19,101.

Source:Laws 1996, LB 681, § 99.

21-19,100. Court-ordered indemnification.

Unless limited by a corporation's articles of incorporation, a director of the corporation who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the district court, after giving any notice it considers necessary, may order indemnification in the amount it considers proper if it determines:

(1) The director is entitled to mandatory indemnification under section 21-1998, in which case the district court shall also order the corporation to pay the director's reasonable expenses incurred to obtain court-ordered indemnification; or

(2) The director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director met the standard of conduct set forth in subsection (a) of section 21-1997 or was adjudged liable as described in subsection (d) of section 21-1997, but if the director was adjudged so liable indemnification is limited to reasonable expenses incurred.

Source:Laws 1996, LB 681, § 100.

21-19,101. Determination and authorization of indemnification.

(a) A corporation may not indemnify a director under section 21-1997 unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set forth in section 21-1997.

(b) The determination shall be made:

(1) By the board of directors by majority vote of a quorum consisting of directors not at the time parties to the proceeding;

(2) If a quorum cannot be obtained under subdivision (1) of this subsection by majority vote of a committee duly designated by the board of directors (in which designation directors who are parties may participate) consisting solely of two or more directors not at the time parties to the proceeding;

(3) By special legal counsel:

(i) Selected by the board of directors or its committee in the manner prescribed in subdivision (1) or (2) of this subsection; or

(ii) If a quorum of the board cannot be obtained under subdivision (1) of this subsection and a committee cannot be designated under subdivision (2) of this subsection, selected by majority vote of the full board (in which selection directors who are parties may participate); or

(4) By the members of a mutual benefit corporation, but directors who are at the time parties to the proceeding may not vote on the determination.

(c) Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under subdivision (b)(3) of this section to select counsel.

(d) A director of a public benefit corporation may not be indemnified until twenty days after the effective date of written notice to the Attorney General of the proposed indemnification.

Source:Laws 1996, LB 681, § 101.

21-19,102. Indemnification of officers, employees, and agents.

Unless limited by a corporation's articles of incorporation:

(1) An officer of a corporation who is not a director is entitled to mandatory indemnification under section 21-1998, and is entitled to apply for court-ordered indemnification under section 21-19,100 in each case, to the same extent as a director;

(2) The corporation may indemnify and advance expenses under sections 21-1996 to 21-19,104 to an officer, employee, or agent of the corporation who is not a director to the same extent as to a director; and

(3) A corporation may also indemnify and advance expenses to an officer, employee, or agent who is not a director to the extent, consistent with public policy, that may be provided by its articles of incorporation, bylaws, general or specific action of its board of directors, or contract.

Source:Laws 1996, LB 681, § 102.

21-19,103. Insurance.

A corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the corporation or who, while a director, officer, employee, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic business or nonprofit corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, against liability asserted against or incurred by him or her in that capacity or arising from his or her status as a director, officer, employee, or agent, whether or not the corporation would have power to indemnify the person against the same liability under section 21-1997 or 21-1998.

Source:Laws 1996, LB 681, § 103.

21-19,104. Applicability of sections.

(a) A provision treating a corporation's indemnification of or advance for expenses to directors that is contained in its articles of incorporation, bylaws, a resolution of its members or board of directors, or in a contract or otherwise, is valid only if and to the extent the provision is consistent with the provisions of sections 21-1996 to 21-19,104. If articles of incorporation limit indemnification or advance for expenses, indemnification and advance for expenses are valid only to the extent consistent with the articles.

(b) Sections 21-1996 to 21-19,104 do not limit a corporation's power to pay or reimburse expenses incurred by a director in connection with appearing as a witness in a proceeding at a time when the director has not been made a named defendant or respondent to the proceeding.

Source:Laws 1996, LB 681, § 104.

21-19,105. Authority to amend.

A corporation may amend its articles of incorporation at any time to add or change a provision that is required or permitted in the articles or to delete a provision not required in the articles. Whether a provision is required or permitted in the articles is determined as of the effective date of the amendment.

Source:Laws 1996, LB 681, § 105.

21-19,106. Amendment of articles of incorporation by directors.

(a) Unless the articles provide otherwise, a corporation's board of directors may adopt one or more amendments to the corporation's articles without member approval:

(1) To extend the duration of the corporation if it was incorporated at a time when limited duration was required by law;

(2) To delete the names and addresses of the initial directors;

(3) To delete the name and address of the initial registered agent or registered office, if a statement of change is on file with the Secretary of State;

(4) To change the corporate name by substituting the word "corporation," "incorporated," "company," "limited," or the abbreviation "corp.," "inc.," "co.," or "ltd." for a similar word or abbreviation in the name, or by adding, deleting, or changing a geographical attribution to the name; or

(5) To make any other change expressly permitted by the Nebraska Nonprofit Corporation Act to be made by director action.

(b) If a corporation has no members, its incorporators, until directors have been chosen, and thereafter its board of directors, may adopt one or more amendments to the corporation's articles subject to any approval required pursuant to section 21-19,116. The corporation shall provide notice of any meeting at which an amendment is to be voted upon. The notice shall be in accordance with subsection (c) of section 21-1982. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider a proposed amendment to the articles and contain or be accompanied by a copy or summary of the amendment or state the general nature of the amendment. The amendment must be approved by a majority of the directors in office at the time the amendment is adopted.

Source:Laws 1996, LB 681, § 106.

21-19,107. Amendment of articles of incorporation by directors and members.

(a) Unless the Nebraska Nonprofit Corporation Act, the articles, bylaws, the members (acting pursuant to subsection (b) of this section), or the board of directors (acting pursuant to subsection (c) of this section) require a greater vote or voting by class, an amendment to a corporation's articles to be adopted must be approved:

(1) By the board if the corporation is a public benefit or religious corporation and the amendment does not relate to the number of directors, the composition of the board, the term of office of directors, or the method or way in which directors are elected or selected;

(2) Except as provided in subsection (a) of section 21-19,106, by the members by two-thirds of the votes cast or a majority of the voting power, whichever is less; and

(3) In writing by any person or persons whose approval is required by a provision of the articles authorized by section 21-19,116.

(b) The members may condition the amendment's adoption on receipt of a higher percentage of affirmative votes or on any other basis.

(c) If the board initiates an amendment to the articles or board approval is required by subsection (a) of this section to adopt an amendment to the articles, the board may condition the amendment's adoption on receipt of a higher percentage of affirmative votes or any other basis.

(d) If the board or the members seek to have the amendment approved by the members at a membership meeting, the corporation shall give notice to its members of the proposed membership meeting in writing in accordance with section 21-1955. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the proposed amendment and contain or be accompanied by a copy or summary of the amendment.

(e) If the board or the members seek to have the amendment approved by the members by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of the amendment.

Source:Laws 1996, LB 681, § 107.

21-19,108. Class voting by members on amendments.

(a) The members of a class in a public benefit corporation are entitled to vote as a class on a proposed amendment to the articles if the amendment would change the rights of that class as to voting in a manner different than such amendment affects another class or members of another class.

(b) The members of a class in a mutual benefit corporation are entitled to vote as a class on a proposed amendment to the articles if the amendment would:

(1) Affect the rights, privileges, preferences, restrictions, or conditions of that class as to voting, dissolution, redemption, or transfer of memberships in a manner different than such amendment would affect another class;

(2) Change the rights, privileges, preferences, restrictions, or conditions of that class as to voting, dissolution, redemption, or transfer by changing the rights, privileges, preferences, restrictions, or conditions of another class;

(3) Increase or decrease the number of memberships authorized for that class;

(4) Increase the number of memberships authorized for another class;

(5) Effect an exchange, reclassification, or termination of the memberships of that class; or

(6) Authorize a new class of memberships.

(c) The members of a class of a religious corporation are entitled to vote as a class on a proposed amendment to the articles only if a class vote is provided for in the articles or bylaws.

(d) If a class is to be divided into two or more classes as a result of an amendment to the articles of a public benefit or mutual benefit corporation, the amendment must be approved by the members of each class that would be created by the amendment.

(e) Except as provided in the articles or bylaws of a religious corporation, if a class vote is required to approve an amendment to the articles of a corporation, the amendment must be approved by the members of the class by two-thirds of the votes cast by the class or a majority of the voting power of the class, whichever is less.

(f) A class of members of a public benefit or mutual benefit corporation is entitled to the voting rights granted by this section although the articles and bylaws provide that the class may not vote on the proposed amendment.

Source:Laws 1996, LB 681, § 108.

21-19,109. Articles of amendment.

A corporation amending its articles shall deliver to the Secretary of State articles of amendment setting forth:

(1) The name of the corporation;

(2) The text of each amendment adopted;

(3) The date of each amendment's adoption;

(4) If approval of members was not required, a statement to that effect and a statement that the amendment was approved by a sufficient vote of the board of directors or incorporators;

(5) If approval by members was required:

(i) The designation, number of memberships outstanding, number of votes entitled to be cast by each class entitled to vote separately on the amendment, and number of votes of each class indisputably voting on the amendment; and

(ii) Either the total number of votes cast for and against the amendment by each class entitled to vote separately on the amendment or the total number of undisputed votes cast for the amendment by each class and a statement that the number cast for the amendment by each class was sufficient for approval by that class; and

(6) If approval of the amendment by some person or persons other than the members, the board, or the incorporators is required pursuant to section 21-19,116, a statement that the approval was obtained.

Source:Laws 1996, LB 681, § 109.

21-19,110. Restated articles of incorporation.

(a) A corporation's board of directors may restate its articles of incorporation at any time with or without approval by members or any other person.

(b) The restatement may include one or more amendments to the articles. If the restatement includes an amendment requiring approval by the members or any other person, it must be adopted as provided in section 21-19,107.

(c) If the restatement includes an amendment requiring approval by members, the board must submit the restatement to the members for their approval.

(d) If the board seeks to have the restatement approved by the members at a membership meeting, the corporation shall notify each of its members of the proposed membership meeting in writing in accordance with section 21-1955. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the proposed restatement and contain or be accompanied by a copy or summary of the restatement that identifies any amendments or other change it would make in the articles.

(e) If the board seeks to have the restatement approved by the members by written ballot or written consent, the material soliciting the approval shall contain or be accompanied by a copy or summary of the restatement that identifies any amendments or other change it would make in the articles.

(f) A restatement requiring approval by the members must be approved by the same vote as an amendment to articles under section 21-19,107.

(g) If the restatement includes an amendment requiring approval pursuant to section 21-19,116, the board must submit the restatement for such approval.

(h) A corporation restating its articles shall deliver to the Secretary of State articles of restatement setting forth the name of the corporation and the text of the restated articles of incorporation together with a certificate setting forth:

(1) Whether the restatement contains an amendment to the articles requiring approval by the members or any other person other than the board of directors and, if it does not, that the board of directors adopted the restatement; or

(2) If the restatement contains an amendment to the articles requiring approval by the members, the information required by section 21-19,109; and

(3) If the restatement contains an amendment to the articles requiring approval by a person whose approval is required pursuant to section 21-19,116, a statement that such approval was obtained.

(i) Duly adopted restated articles of incorporation supersede the original articles of incorporation and all amendments to them.

(j) The Secretary of State may certify restated articles of incorporation as the articles of incorporation currently in effect without including the certificate information required by subsection (h) of this section.

Source:Laws 1996, LB 681, § 110.

21-19,111. Amendment pursuant to judicial reorganization.

(a) A corporation's articles may be amended without board approval or approval by the members or approval required pursuant to section 21-19,116 to carry out a plan of reorganization ordered or decreed by a court of competent jurisdiction under federal statute if the articles after amendment contain only provisions required or permitted by section 21-1921.

(b) The individual or individuals designated by the court shall deliver to the Secretary of State articles of amendment setting forth:

(1) The name of the corporation;

(2) The text of each amendment approved by the court;

(3) The date of the court's order or decree approving the articles of amendment;

(4) The title of the reorganization proceeding in which the order or decree was entered; and

(5) A statement that the court had jurisdiction of the proceeding under federal statute.

Source:Laws 1996, LB 681, § 111.

21-19,112. Effect of amendment and restatement.

An amendment to articles of incorporation does not affect a cause of action existing against or in favor of the corporation, a proceeding to which the corporation is a party, any requirement or limitation imposed upon the corporation, or any property held by it by virtue of any trust upon which such property is held by the corporation, or the existing rights of persons other than members of the corporation. An amendment changing a corporation's name does not abate a proceeding brought by or against the corporation in its former name.

Source:Laws 1996, LB 681, § 112.

21-19,113. Amendment to bylaws by directors.

If a corporation has no members, its incorporators, until directors have been chosen, and thereafter its board of directors, may adopt one or more amendments to the corporation's bylaws subject to any approval required pursuant to section 21-19,116. The corporation shall provide notice of any meeting of directors at which an amendment is to be approved. The notice shall be in accordance with subsection (c) of section 21-1982. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider a proposed amendment to the bylaws and contain or be accompanied by a copy or summary of the amendment or state the general nature of the amendment. The amendment must be approved by a majority of the directors in office at the time the amendment is adopted.

Source:Laws 1996, LB 681, § 113.

21-19,114. Amendment to bylaws by directors and members.

(a) Unless the Nebraska Nonprofit Corporation Act, the articles, bylaws, the members (acting pursuant to subsection (b) of this section), or the board of directors (acting pursuant to subsection (c) of this section) require a greater vote or voting class, an amendment to a corporation's bylaws to be adopted must be approved:

(1)(i) By the board if the corporation is a public benefit or religious corporation and the amendment does not relate to the number of directors, the composition of the board, the term of office of the directors, or the method or way in which directors are elected or selected;

(ii) By the members by two-thirds of the votes cast or a majority of the voting power, whichever is less; and

(iii) In writing by any person or persons whose approval is required by a provision of the articles authorized by section 21-19,116; or

(2) If the articles authorize:

(i)(A) By the board if the amendment does not relate to the number of directors, the composition of the board, the term of office of the directors, or the method or way in which directors are elected or selected; or

(B) By the members by two-thirds of the votes cast or a majority of the voting power, whichever is less; and

(ii) In writing by any person or persons whose approval is required by a provision of the articles authorized by section 21-19,116.

(b) The members may condition the amendment's adoption on its receipt of a higher percentage of affirmative votes or on any other basis.

(c) If the board initiates an amendment to the bylaws or board approval is required or authorized by subsection (a) of this section to adopt an amendment to the bylaws, the board may condition the amendment's adoption on receipt of a higher percentage of affirmative votes or on any other basis.

(d) If the board or the members seek to have the amendment approved by the members at a membership meeting, the corporation shall give notice to its members of the proposed membership meeting in writing in accordance with section 21-1955. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the proposed amendment and contain or be accompanied by a copy or summary of the amendment.

Source:Laws 1996, LB 681, § 114; Laws 1999, LB 422, § 1.

21-19,115. Class voting by members on amendments.

(a) The members of a class in a public benefit corporation are entitled to vote as a class on a proposed amendment to the bylaws if the amendment would change the rights of that class as to voting in a manner different than such amendment affects another class or members of another class.

(b) The members of a class in a mutual benefit corporation are entitled to vote as a class on a proposed amendment to the bylaws if the amendment would:

(3) Increase or decrease the number of memberships authorized for that class;

(4) Increase the number of memberships authorized for another class;

(5) Effect an exchange, reclassification, or termination of all or part of the memberships of that class; or

(6) Authorize a new class of memberships.

(c) The members of a class of a religious corporation are entitled to vote as a class on a proposed amendment to the bylaws only if a class vote is provided for in the articles or bylaws.

(d) If a class is to be divided into two or more classes as a result of an amendment to the bylaws, the amendment must be approved by the members of each class that would be created by the amendment; and

(e) If a class vote is required to approve an amendment to the bylaws, the amendment must be approved by the members of the class by two-thirds of the votes cast by the class or a majority of the voting power of the class, whichever is less.

(f) A class of members is entitled to the voting rights granted by this section although the articles and bylaws provide that the class may not vote on the proposed amendment.

Source:Laws 1996, LB 681, § 115.

21-19,116. Approval by third persons.

The articles may require an amendment to the articles or bylaws to be approved in writing by a specified person or persons other than the board. Such an article provision may only be amended with the approval in writing of such person or persons.

Source:Laws 1996, LB 681, § 116.

21-19,117. Amendment terminating members or redeeming or canceling memberships.

(a) Any amendment to the articles or bylaws of a public benefit or mutual benefit corporation that would terminate all members or any class of members or redeem or cancel all memberships or any class of memberships must meet the requirements of the Nebraska Nonprofit Corporation Act and this section.

(b) Before adopting a resolution proposing such an amendment, the board of a mutual benefit corporation shall give notice of the general nature of the amendment to the members.

(c) After adopting a resolution proposing such an amendment, the notice to members proposing such amendment shall include one statement of up to five hundred words opposing the proposed amendment if such statement is submitted by any five members or members having three percent or more of the voting power, whichever is less, not later than twenty days after the board has voted to submit such amendment to the members for their approval. In public benefit corporations the production and mailing costs shall be paid by the requesting members. In mutual benefit corporations the production and mailing costs shall be paid by the corporation.

(d) Any such amendment shall be approved by the members by two-thirds of the votes cast by each class.

(e) The provisions of section 21-1947 shall not apply to any amendment meeting the requirements of the act and this section.

Source:Laws 1996, LB 681, § 117.

21-19,118. Approval of plan of merger.

(a) Subject to the limitations set forth in section 21-19,119, one or more nonprofit corporations may merge into a business or nonprofit corporation, if the plan of merger is approved as provided in section 21-19,120.

(b) The plan of merger must set forth:

(1) The name of each corporation planning to merge and the name of the surviving corporation into which each plans to merge;

(2) The terms and conditions of the planned merger;

(3) The manner and basis, if any, of converting the memberships of each public benefit or religious corporation into memberships of the surviving corporation; and

(4) If the merger involves a mutual benefit corporation, the manner and basis, if any, of converting memberships of each merging corporation into memberships, obligations, or securities of the surviving or any other corporation or into cash or other property in whole or in part.

(1) Any amendments to the articles of incorporation or bylaws of the surviving corporation to be effected by the planned merger; and

(2) Other provisions relating to the planned merger.

Source:Laws 1996, LB 681, § 118.

21-19,119. Mergers by public benefit or religious corporations; procedure.

(a)(1) Without the prior approval of the district court in a proceeding in which the Attorney General has been given written notice, a public benefit or religious corporation may merge only with:

(i) A public benefit or religious corporation;

(ii) A foreign corporation that would qualify under the Nebraska Nonprofit Corporation Act as a public benefit or religious corporation;

(iii) A wholly-owned foreign or domestic business or mutual benefit corporation, provided the public benefit or religious corporation is the surviving corporation and continues to be a public benefit or religious corporation after the merger; or

(iv) A business or mutual benefit corporation, if: (A) On or prior to the effective date of the merger, assets with a value equal to the greater of the fair market value of the net tangible and intangible assets (including goodwill) of the public benefit corporation or the fair market value of the public benefit corporation if it were to be operated as a business concern, are transferred or conveyed to one or more persons who would have received its assets under subdivisions (a)(5) and (6) of section 21-19,134 had it dissolved; (B) it shall return, transfer, or convey any assets held by it upon condition requiring return, transfer, or conveyance, which condition occurs by reason of the merger, in accordance with such condition; and (C) the merger is approved by a majority of directors of the public benefit or religious corporation who are not and will not become members or shareholders in or officers, employees, agents, or consultants of the surviving corporation.

(2) An application for prior approval of a merger for which prior approval is required by this subsection shall be made jointly by all corporations planning to merge and shall set forth by affidavit:

(i) The plan of merger;

(ii) If approval by the members was not required, a statement to that effect and a statement that the plan was approved by a sufficient vote of the board of directors;

(iii) If approval by members was required:

(A) The designation, number of memberships outstanding, number of votes entitled to be cast by each class entitled to vote separately on the plan, and the number of votes of each class indisputably voting on the plan; and

(B) Either the total number of votes cast for and against the plan by each class entitled to vote separately on the plan or the total number of undisputed votes cast for the plan by each class and a statement that the number cast for the plan by each class was sufficient for approval by that class; and

(iv) If approval of the plan by some person or persons other than the members or the board is required pursuant to subdivision (a)(3) of section 21-19,120, a statement that the approval was obtained.

(3) Upon the filing of the application, the district court shall fix a time for hearing thereon and shall direct that written notice thereof be given to the Attorney General. If it shall appear to the satisfaction of the district court that the provisions of this subsection have been complied with and the interests of the corporations planning to merge and the public interest will not be adversely affected by the merger, the district court shall issue an order approving the merger upon such terms and conditions as it may prescribe.

(b) At least twenty days before consummation of any merger of a public benefit corporation or a religious corporation pursuant to subdivision (a)(1)(iv) of this section, notice, including a copy of the proposed plan of merger, must be delivered to the Attorney General.

(c) Without the prior written consent of the Attorney General or of the district court in a proceeding in which the Attorney General has been given notice, no member of a public benefit or religious corporation may receive or keep anything as a result of a merger other than a membership or membership in the surviving public benefit or religious corporation. If it shall appear to the satisfaction of the district court that the interests of the corporations planning to merge and the public interest will not be adversely affected by the transaction, the district court shall issue an order approving the transaction upon such terms and conditions as it may prescribe.

(d) Venue for a proceeding to obtain prior approval of a merger for which prior approval is required by subsection (a) of this section and for a proceeding to obtain prior written consent of a transaction for which prior written consent is required by subsection (c) of this section lies in the district court in the county where the surviving corporation's principal office, or, if none in this state, its registered office, is located or where one of the corporations planning to merge is located.

Source:Laws 1996, LB 681, § 119; Laws 1997, LB 121, § 1.

21-19,120. Action on plan by board, members, and third persons.

(a) Unless the Nebraska Nonprofit Corporation Act, the articles, the bylaws, or the board of directors or members (acting pursuant to subsection (c) of this section) require a greater vote or voting by class, a plan of merger to be adopted must be approved:

(1) By the board;

(2) By the members, if any, by two-thirds of the votes cast or a majority of the voting power, whichever is less; and

(3) In writing by any person or persons whose approval is required by a provision of the articles authorized by section 21-19,116 for an amendment to the articles or bylaws.

(b) If the corporation does not have members, the merger must be approved by a majority of the directors in office at the time the merger is approved. In addition the corporation shall provide notice of any directors' meeting at which such approval is to be obtained in accordance with subsection (c) of section 21-1982. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the proposed merger.

(c) The board may condition its submission of the proposed merger, and the members may condition their approval of the merger, on receipt of a higher percentage of affirmative votes or on any other basis.

(d) If the board seeks to have the plan approved by the members at a membership meeting, the corporation shall give notice to its members of the proposed membership meeting in accordance with section 21-1955. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the plan of merger and contain or be accompanied by a copy or summary of the plan. The copy or summary of the plan for members of the surviving corporation shall include any provision that, if contained in a proposed amendment to the articles of incorporation or bylaws, would entitle members to vote on the provision. The copy or summary of the plan for members of the merging corporation shall include a copy or summary of the articles and bylaws that will be in effect immediately after the merger takes effect.

(e) If the board seeks to have the plan approved by the members by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of the plan. The copy or summary of the plan for members of the surviving corporation shall include any provisions that, if contained in a proposed amendment to the articles of incorporation or bylaws, would entitle members to vote on the provision. The copy or summary of the plan for members of the disappearing corporation shall include a copy or summary of the articles and bylaws that will be in effect immediately after the merger takes effect.

(f) Voting by a class of members is required on a plan of merger if the plan contains a provision that, if contained in a proposed amendment to articles of incorporation or bylaws, would entitle the class of members to vote as a class on the proposed amendment under section 21-19,108 or 21-19,115. The plan is approved by a class of members by two-thirds of the votes cast by the class or a majority of the voting power of the class, whichever is less.

(g) After a merger is adopted, and at any time before articles of merger are filed, the planned merger may be abandoned (subject to any contractual rights) without further action by members or other persons who approved the plan in accordance with the procedure set forth in the plan of merger or, if none is set forth, in the manner determined by the board of directors.

Source:Laws 1996, LB 681, § 120.

21-19,121. Articles of merger.

After a plan of merger is approved by the board of directors, and if required by section 21-19,119 or 21-19,120, by the district court or the members and any other persons, the surviving corporation shall deliver to the Secretary of State articles of merger setting forth:

(1) The plan of merger;

(2) If approval by the members was not required, a statement to that effect and a statement that the plan was approved by a sufficient vote of the board of directors;

(3) If approval by members was required:

(i) The designation, number of memberships outstanding, number of votes entitled to be cast by each class entitled to vote separately on the plan, and number of votes of each class indisputably voting on the plan; and

(ii) Either the total number of votes cast for and against the plan by each class entitled to vote separately on the plan or the total number of undisputed votes cast for the plan by each class and a statement that the number cast for the plan by each class was sufficient for approval by that class;

(4) If approval of the plan by some person or persons other than the members or the board is required pursuant to subdivision (a)(3) of section 21-19,120, a statement that the approval was obtained; and

(5) If prior approval of the district court is required pursuant to section 21-19,119, a certified copy of the order of the district court.

Source:Laws 1996, LB 681, § 121; Laws 1997, LB 121, § 2.

21-19,122. Effect of merger.

When a merger takes effect:

(1) Every other corporation party to the merger merges into the surviving corporation and the separate existence of every corporation except the surviving corporation ceases;

(2) The title to all real estate and other property owned by each corporation party to the merger is vested in the surviving corporation without reversion or impairment subject to any and all conditions to which the property was subject prior to the merger;

(3) The surviving corporation has all liabilities and obligations of each corporation party to the merger;

(4) A proceeding pending against any corporation party to the merger may be continued as if the merger did not occur or the surviving corporation may be substituted in the proceeding for the corporation whose existence ceased; and

(5) The articles of incorporation and bylaws of the surviving corporation are amended to the extent provided in the plan of merger.

Source:Laws 1996, LB 681, § 122.

21-19,123. Merger with foreign corporation.

(a) Except as provided in section 21-19,119, one or more foreign business or nonprofit corporations may merge with one or more domestic nonprofit corporations if:

(1) The merger is permitted by the law of the state or country under whose law each foreign corporation is incorporated and each foreign corporation complies with that law in effecting the merger;

(2) The foreign corporation complies with section 21-19,121 if it is the surviving corporation of the merger; and

(3) Each domestic nonprofit corporation complies with the provisions of sections 21-19,118 to 21-19,120 and, if it is the surviving corporation of the merger, with section 21-19,121.

(b) Upon the merger taking effect, the surviving foreign business or nonprofit corporation is deemed to agree that it may be served with process within or without this state in any proceeding in the courts of this state brought against it.

Source:Laws 1996, LB 681, § 123.

21-19,124. Bequests, devises, and gifts.

Any bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance that is made to a constituent corporation and that takes effect or remains payable after the merger, inures to the surviving corporation unless the will or other instrument otherwise specifically provides.

Source:Laws 1996, LB 681, § 124.

21-19,125. Sale of assets in regular course of activities and mortgage of assets.

(a) A corporation may on the terms and conditions and for the consideration determined by the board of directors:

(1) Sell, lease, exchange, or otherwise dispose of all or substantially all of its property in the usual and regular course of its activities; or

(2) Mortgage, pledge, dedicate to the repayment of indebtedness (whether with or without recourse), or otherwise encumber any or all of its property whether or not in the usual and regular course of its activities.

(b) Unless the articles require it, approval of the members or any other person of a transaction described in subsection (a) of this section is not required.

Source:Laws 1996, LB 681, § 125.

21-19,126. Sale of assets other than in regular course of activities.

(a) A corporation may sell, lease, exchange, or otherwise dispose of all or substantially all of its property (with or without the goodwill) other than in the usual and regular course of its activities on the terms and conditions and for the consideration determined by the corporation's board if the proposed transaction is authorized by subsection (b) of this section.

(b) Unless the Nebraska Nonprofit Corporation Act, the articles, or bylaws or the board of directors or members (acting pursuant to subsection (d) of this section) require a greater vote or voting by class, the proposed transaction to be authorized must be approved:

(1) By the board;

(2) By the members by two-thirds of the votes cast or a majority of the voting power, whichever is less; and

(3) In writing by any person or persons whose approval is required by a provision of the articles authorized by section 21-19,116 for an amendment to the articles or bylaws.

(c) If the corporation does not have members the transaction must be approved by a vote of a majority of the directors in office at the time the transaction is approved. In addition the corporation shall provide notice of any directors' meeting at which such approval is to be obtained in accordance with subsection (c) of section 21-1982. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the sale, lease, exchange, or other disposition of all or substantially all of the property or assets of the corporation and contain or be accompanied by a copy or summary of a description of the transaction.

(d) The board may condition its submission of the proposed transaction and the members may condition their approval of the transaction on receipt of a higher percentage of affirmative votes or on any other basis.

(e) If the corporation seeks to have the transaction approved by the members at a membership meeting, the corporation shall give notice to its members of the proposed membership meeting in accordance with section 21-1955. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the sale, lease, exchange, or other disposition of all or substantially all of the property or assets of the corporation and contain or be accompanied by a copy or summary of a description of the transaction.

(f) If the board needs to have the transaction approved by the members by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of a description of the transaction.

(g) A public benefit or religious corporation must give written notice to the Attorney General twenty days before it sells, leases, exchanges, or otherwise disposes of all or substantially all of its property if the transaction is not in the usual and regular course of its activities unless the Attorney General has given the corporation a written waiver of this subsection.

(h) After a sale, lease, exchange, or other disposition of property is authorized, the transaction may be abandoned (subject to any contractual rights) without further action by the members or any other person who approved the transaction in accordance with the procedure set forth in the resolution proposing the transaction or, if none is set forth, in the manner determined by the board of directors.

Source:Laws 1996, LB 681, § 126.

21-19,127. Prohibited distributions.

Except as authorized by section 21-19,128, a corporation shall not make any distributions.

Source:Laws 1996, LB 681, § 127.

21-19,128. Authorized distributions.

(a) A mutual benefit corporation may purchase its memberships if after the purchase is completed:

(1) The corporation would be able to pay its debts as they become due in the usual course of its activities; and

(2) The corporation's total assets would at least equal the sum of its total liabilities.

(b) Corporations may make distributions upon dissolution in conformity with sections 21-19,129 to 21-19,145.

Source:Laws 1996, LB 681, § 128.

21-19,129. Dissolution by incorporators or directors; notice of dissolution; plan.

(a) A majority of the incorporators or directors of a corporation that has no members may, subject to any approval required by the articles or bylaws, dissolve the corporation by delivering to the Secretary of State articles of dissolution.

(b) The corporation shall give notice of any meeting at which dissolution will be approved. The notice shall be in accordance with subsection (c) of section 21-1982. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolution of the corporation.

(c) The incorporators or directors in approving dissolution shall adopt a plan of dissolution indicating to whom the assets owned or held by the corporation will be distributed after all creditors have been paid.

Source:Laws 1996, LB 681, § 129.

21-19,130. Dissolution by directors, members, and third persons; plan.

(a) Unless the Nebraska Nonprofit Corporation Act, the articles, or bylaws or the board of directors or members (acting pursuant to subsection (c) of this section) require a greater vote or voting by class, dissolution is authorized if it is approved:

(1) By the board;

(2) By the members, if any, by two-thirds of the votes cast or a majority of the voting power, whichever is less; and

(3) In writing by any person or persons whose approval is required by a provision of the articles authorized by section 21-19,116 for an amendment to the articles or bylaws.

(b) If the corporation does not have members, dissolution must be approved by a vote of a majority of the directors in office at the time the transaction is approved. In addition, the corporation shall provide notice of any directors' meeting at which such approval is to be obtained in accordance with subsection (c) of section 21-1982. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolution of the corporation and contain or be accompanied by a copy or summary of the plan of dissolution.

(c) The board may condition its submission of the proposed dissolution, and the members may condition their approval of the dissolution, on receipt of a higher percentage of affirmative votes or on any other basis.

(d) If the board seeks to have dissolution approved by the members at a membership meeting, the corporation shall give notice to its members of the proposed membership meeting in accordance with section 21-1955. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolving the corporation and contain or be accompanied by a copy or summary of the plan of dissolution.

(e) If the board seeks to have dissolution approved by the members by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of the plan of dissolution.

(f) The plan of dissolution shall indicate to whom the assets owned or held by the corporation will be distributed after all creditors have been paid.

Source:Laws 1996, LB 681, § 130.

21-19,131. Notice to the Attorney General.

(a) A public benefit or religious corporation shall give the Attorney General written notice that it intends to dissolve at or before the time it delivers articles of dissolution to the Secretary of State. The notice shall include a copy or summary of the plan of dissolution.

(b) No assets shall be transferred or conveyed by a public benefit or religious corporation as part of the dissolution process until twenty days after it has given the written notice required by subsection (a) of this section to the Attorney General or until the Attorney General has consented in writing to the dissolution or indicated in writing that he or she will take no action with respect to the transfer or conveyance, whichever is earlier.

(c) When all or substantially all of the assets of a public benefit corporation have been transferred or conveyed following approval of dissolution, the board shall deliver to the Attorney General a list showing those (other than creditors) to whom the assets were transferred or conveyed. The list shall indicate the addresses of each person (other than creditors) who received assets and indicate what assets each received.

Source:Laws 1996, LB 681, § 131.

21-19,132. Articles of dissolution.

(a) At any time after dissolution is authorized, the corporation may dissolve by delivering to the Secretary of State articles of dissolution setting forth:

(1) The name of the corporation;

(2) The date dissolution was authorized;

(3) A statement that dissolution was approved by a sufficient vote of the board;

(4) If approval of members was not required, a statement to that effect and a statement that dissolution was approved by a sufficient vote of the board of directors or incorporators;

(5) If approval by members was required:

(i) The designation, number of memberships outstanding, number of votes entitled to be cast by each class entitled to vote separately on dissolution, and number of votes of each class indisputably voting on dissolution; and

(ii) Either the total number of votes cast for and against dissolution by each class entitled to vote separately on dissolution or the total number of undisputed votes cast for dissolution by each class and a statement that the number cast for dissolution by each class was sufficient for approval by that class;

(6) If approval of dissolution by some person or persons other than the members, the board, or the incorporators is required pursuant to subdivision (a)(3) of section 21-19,130, a statement that the approval was obtained; and

(7) If the corporation is a public benefit or religious corporation, that the notice to the Attorney General required by subsection (a) of section 21-19,131 has been given.

(b) A corporation is dissolved upon the effective date of its articles of dissolution.

Source:Laws 1996, LB 681, § 132.

21-19,133. Revocation of dissolution.

(a) A corporation may revoke its dissolution within one hundred twenty days after its effective date.

(1) The name of the corporation;

(2) The effective date of the dissolution that was revoked;

(3) The date that the revocation of dissolution was authorized;

(4) If the corporation's board of directors (or incorporators) revoked the dissolution, a statement to that effect;

(5) If the corporation's board of directors revoked a dissolution authorized by the members alone or in conjunction with another person or persons, a statement that revocation was permitted by action by the board of directors alone pursuant to that authorization; and

(6) If member or third person action was required to revoke the dissolution, the information required by subdivisions (a)(5) and (6) of section 21-19,132.

(d) Revocation of dissolution is effective upon the effective date of the articles of revocation of dissolution.

(e) When the revocation of dissolution is effective, it relates back to and takes effect as of the effective date of the dissolution and the corporation resumes carrying on its activities as if dissolution had never occurred.

Source:Laws 1996, LB 681, § 133.

21-19,134. Effect of dissolution.

(a) A dissolved corporation continues its corporate existence but may not carry on any activities except those appropriate to wind up and liquidate its affairs, including:

(1) Preserving and protecting its assets and minimizing its liabilities;

(2) Discharging or making provision for discharging its liabilities and obligations;

(3) Disposing of its properties that will not be distributed in kind;

(4) Returning, transferring, or conveying assets held by the corporation upon a condition requiring return, transfer, or conveyance, which condition occurs by reason of the dissolution, in accordance with such condition;

(5) Transferring, subject to any contractual or legal requirements, its assets as provided in or authorized by its articles of incorporation or bylaws;

(6) If the corporation is a public benefit or religious corporation and no provision has been made in its articles or bylaws for the distribution of assets on dissolution, transferring, subject to any contractual or legal requirement, its assets: (i) To one or more persons described in section 501(c)(3) of the Internal Revenue Code engaged in activities substantially similar to those of the dissolved corporation; or (ii) if the dissolved corporation is not described in section 501(c)(3) of the Internal Revenue Code, to one or more public benefit or religious corporations;

(7) If the corporation is a mutual benefit corporation and no provision has been made in its articles or bylaws for distribution of assets on dissolution, transferring its assets to its members or, if it has no members, to those persons to whom the corporation holds itself out as benefiting or serving; and

(8) Doing every other act necessary to wind up and liquidate its assets and affairs.

(b) Dissolution of a corporation does not:

(1) Transfer title of the corporation's property;

(2) Subject its directors or officers to standards of conduct different from those prescribed in sections 21-1968 to 21-19,104;

(3) Change quorum or voting requirements for its board or members, change provisions for selection, resignation, or removal of its directors or officers or both, or change provisions for amending its bylaws;

(4) Prevent commencement of a proceeding by or against the corporation in its corporate name;

(5) Abate or suspend a proceeding pending by or against the corporation on the effective date of dissolution; or

(6) Terminate the authority of the registered agent.

Source:Laws 1996, LB 681, § 134.

21-19,135. Known claims against dissolved corporations; notice.

(a) A dissolved corporation may dispose of the known claims against it by following the procedure described in this section.

(b) The dissolved corporation shall notify its known claimants in writing of the dissolution at any time after its effective date. The written notice must:

(1) Describe information that must be included in a claim;

(2) Provide a mailing address where a claim may be sent;

(3) State the deadline, which may not be fewer than one hundred twenty days from the effective date of the written notice, by which the dissolved corporation must receive the claim; and

(4) State that the claim will be barred if not received by the deadline.

(1) If a claimant who was given written notice under subsection (b) of this section does not deliver the claim to the dissolved corporation by the deadline;

(2) If a claimant whose claim was rejected by the dissolved corporation does not commence a proceeding to enforce the claim within ninety days from the effective date of the rejection notice.

(d) For purposes of this section, claim does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution.

Source:Laws 1996, LB 681, § 135.

21-19,136. Unknown claims against dissolved corporation; notice.

(a) A dissolved corporation may also publish notice of its dissolution and request that persons with claims against the corporation present them in accordance with the notice.

(b) The notice must:

(1) Be published one time in a newspaper of general circulation in the county where the dissolved corporation's principal office (or, if none in this state, its registered office) is or was last located;

(2) Describe the information that must be included in a claim and provide a mailing address where the claim may be sent; and

(3) State that a claim against the corporation will be barred unless a proceeding to enforce the claim is commenced within five years after publication of the notice.

(c) If the dissolved corporation publishes a newspaper notice in accordance with subsection (b) of this section, the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the dissolved corporation within five years after the publication date of the newspaper notice:

(1) A claimant who did not receive written notice under section 21-19,135;

(2) A claimant whose claim was timely sent to the dissolved corporation but not acted on; and

(3) A claimant whose claim is contingent or based on an event occurring after the effective date of dissolution.

(d) A claim may be enforced under this section:

(1) Against the dissolved corporation, to the extent of its undistributed assets; or

(2) If the assets have been distributed in liquidation, against any person, other than a creditor of the corporation, to whom the corporation distributed its property to the extent of the distributee's pro rata share of the claim or the corporate assets distributed to such person in liquidation, whichever is less, but the distributee's total liability for all claims under this section may not exceed the total amount of assets distributed to the distributee.

Source:Laws 1996, LB 681, § 136.

21-19,137. Grounds for administrative dissolution.

The Secretary of State may commence a proceeding under section 21-19,138 to administratively dissolve a corporation if:

(1) The corporation does not pay any fees, taxes, or penalties imposed by the Nebraska Nonprofit Corporation Act or other law when they are due;

(2) The corporation does not deliver its biennial report to the Secretary of State when it is due;

(3) The corporation is without a registered agent or registered office in this state for sixty days or more;

(4) The corporation does not notify the Secretary of State that its registered agent or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued within one hundred twenty days; or

(5) The corporation's period of duration, if any, stated in its articles of incorporation expires.

Source:Laws 1996, LB 681, § 137.

21-19,138. Procedure for and effect of administrative dissolution.

(a) Upon determining that one or more grounds exist under section 21-19,137 for dissolving a corporation, the Secretary of State shall serve the corporation with written notice of that determination under section 21-1937, and in the case of a public benefit corporation shall notify the Attorney General in writing.

(b) If the corporation does not, within sixty days after service of the notice is perfected under section 21-1937, correct each ground for dissolution or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist, the Secretary of State may administratively dissolve the corporation by signing a certificate of dissolution that recites the ground or grounds for dissolution and its effective date. The Secretary of State shall file the original of the certificate and serve a copy on the corporation under section 21-1937 and in the case of a public benefit corporation shall notify the Attorney General in writing.

(c) A corporation administratively dissolved continues its corporate existence but may not carry on any activities except those necessary to wind up and liquidate its affairs under section 21-19,134 and notify its claimants under sections 21-19,135 and 21-19,136.

(d) The administrative dissolution of a corporation does not terminate the authority of its registered agent.

Source:Laws 1996, LB 681, § 138.

21-19,139. Reinstatement following administrative dissolution.

(a) A corporation administratively dissolved under section 21-19,138 may apply to the Secretary of State for reinstatement within five years after the effective date of its administrative dissolution. The application must:

(1) Recite the name of the corporation and the effective date of its administrative dissolution;

(2) State that the ground or grounds for dissolution either did not exist or have been eliminated; and

(3) State that the corporation's name satisfies the requirements of section 21-1931.

(b) If the Secretary of State determines that the application for reinstatement contains the information required by subsection (a) of this section and that the information is correct, the Secretary of State shall cancel the certificate of dissolution and prepare a certificate of reinstatement reciting that determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the corporation under section 21-1937.

(c) A corporation that has been administratively dissolved under section 21-19,138 for more than five years may apply to the Secretary of State for late reinstatement. The application, along with the fee set forth in section 21-1905, must:

(1) Recite the name of the corporation and the effective date of its administrative dissolution;

(2) State that the ground or grounds for dissolution either did not exist or have been eliminated;

(3) State that the corporation's name satisfies the requirements of section 21-1931;

(4) State that a legitimate reason exists for reinstatement and what such legitimate reason is; and

(5) State that such reinstatement does not constitute fraud on the public.

(d) If the Secretary of State determines that the application for late reinstatement contains the information required by subsection (c) of this section and that the information is correct, the Secretary of State shall cancel the certificate of dissolution and prepare a certificate of late reinstatement reciting that determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the corporation under section 21-1937.

(e) When reinstatement is effective, it relates back to and takes effect as of the effective date of the administrative dissolution and the corporation shall resume carrying on its activities as if the administrative dissolution had never occurred.

Source:Laws 1996, LB 681, § 139; Laws 2012, LB854, § 4; Laws 2015, LB279, § 10.

21-19,140. Appeal from denial of reinstatement.

(a) The Secretary of State, upon denying a corporation's application for reinstatement following administrative dissolution, shall serve the corporation under section 21-1937 with a written notice that explains the reason or reasons for denial.

(b) The corporation may appeal the denial of reinstatement to the district court of Lancaster County within ninety days after service of the notice of denial is perfected. The corporation appeals by petitioning the district court to set aside the dissolution and attaching to the petition copies of the Secretary of State's certificate of dissolution, the corporation's application for reinstatement, and the Secretary of State's notice of denial.

(c) The district court may summarily order the Secretary of State to reinstate the dissolved corporation or may take other action the court considers appropriate.

(d) The district court's final decision may be appealed as in other civil proceedings.

Source:Laws 1996, LB 681, § 140.

21-19,141. Grounds for judicial dissolution.

(a) The district court may dissolve a corporation:

(1) In a proceeding by the Attorney General if it is established that:

(i) The corporation obtained its articles of incorporation through fraud;

(ii) The corporation has continued to exceed or abuse the authority conferred upon it by law;

(iii) The corporation is a public benefit corporation and the corporate assets are being misapplied or wasted; or

(iv) The corporation is a public benefit corporation and is no longer able to carry out its purposes;

(2) Except as provided in the articles or bylaws of a religious corporation, in a proceeding by fifty members or members holding five percent of the voting power, whichever is less, or by a director or any person specified in the articles, if it is established that:

(i) The directors are deadlocked in the management of the corporate affairs, and the members, if any, are unable to breach the deadlock;

(ii) The directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent;

(iii) The members are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have, or would otherwise have, expired;

(iv) The corporate assets are being misapplied or wasted; or

(v) The corporation is a public benefit or religious corporation and is no longer able to carry out its purposes;

(3) In a proceeding by a creditor if it is established that:

(i) The creditor's claim has been reduced to judgment, the execution on the judgment returned unsatisfied, and the corporation is insolvent; or

(ii) The corporation has admitted in writing that the creditor's claim is due and owing and the corporation is insolvent; or

(4) In a proceeding by the corporation to have its voluntary dissolution continued under court supervision.

(b) Prior to dissolving a corporation, the district court shall consider whether:

(1) There are reasonable alternatives to dissolution;

(2) Dissolution is in the public interest, if the corporation is a public benefit corporation; and

(3) Dissolution is the best way of protecting the interests of members if the corporation is a mutual benefit corporation.

Source:Laws 1996, LB 681, § 141.

21-19,142. Procedure for judicial dissolution.

(a) Venue for a proceeding by the Attorney General to dissolve a corporation lies in the district court in the county where a corporation's principal office (or, if none in this state, its registered office) is or was last located or the district court of Lancaster County. Venue for a proceeding brought by any other party named in section 21-19,141 lies in the county where a corporation's principal office (or, if none in this state, its registered office) is or was last located.

(b) It is not necessary to make directors or members parties to a proceeding to dissolve a corporation unless relief is sought against them individually.

(c) The district court in a proceeding brought to dissolve a corporation may issue injunctions, appoint a receiver or custodian pendente lite with all powers and duties the court directs, take other action required to preserve the corporate assets wherever located, and carry on the activities of the corporation until a full hearing can be held.

(d) A person other than the Attorney General who brings an involuntary dissolution proceeding for a public benefit or religious corporation shall forthwith give written notice of the proceeding to the Attorney General who may intervene.

Source:Laws 1996, LB 681, § 142.

21-19,143. Receivership or custodianship.

(a) The district court in a proceeding brought to dissolve a public benefit or mutual benefit corporation may appoint one or more receivers to wind up and liquidate, or one or more custodians to manage, the affairs of the corporation. The court shall hold a hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a receiver or custodian. The district court appointing a receiver or custodian has exclusive jurisdiction over the corporation and all of its property wherever located.

(b) The district court may appoint an individual or a domestic or foreign business or nonprofit corporation (authorized to transact business in this state) as a receiver or custodian. The court may require the receiver or custodian to post bond, with or without sureties, in an amount the court directs.

(c) The district court shall describe the powers and duties of the receiver or custodian in its appointing order, which order may be amended from time to time. Among other powers:

(1) The receiver (i) may dispose of all or any part of the assets of the corporation wherever located, at a public or private sale, if authorized by the district court. The receiver's power to dispose of the assets of the corporation is subject to any trust and any other restrictions that would be applicable to the corporation; and (ii) may sue and defend in the receiver's or custodian's name as receiver or custodian of the corporation in all courts of this state;

(2) The custodian may exercise all of the powers of the corporation, through or in place of its board of directors or officers, to the extent necessary to manage the affairs of the corporation in the best interests of its members and creditors.

(d) The district court during a receivership may redesignate the receiver as a custodian, and during a custodianship may redesignate the custodian as a receiver, if doing so is in the best interests of the corporation, its members, and creditors.

(e) The district court from time to time during the receivership or custodianship may order compensation paid and expense disbursements or reimbursements made to the receiver or custodian and the receiver or custodian's counsel from the assets of the corporation or proceeds from the sale of the assets.

Source:Laws 1996, LB 681, § 143.

21-19,144. Decree of dissolution.

(a) If after a hearing the district court determines that one or more grounds for judicial dissolution described in section 21-19,141 exist, it may enter a decree dissolving the corporation and specifying the effective date of the dissolution, and the clerk of the district court shall deliver a certified copy of the decree to the Secretary of State, who shall file it.

(b) After entering the decree of dissolution, the district court shall direct the winding up and liquidation of the corporation's affairs in accordance with section 21-19,134 and the notification of its claimants in accordance with sections 21-19,135 and 21-19,136.

Source:Laws 1996, LB 681, § 144.

21-19,145. Assets; deposit with State Treasurer; when.

Assets of a dissolved corporation that should be transferred to a creditor, claimant, or member of the corporation who cannot be found or who is not competent to receive them, shall be reduced to cash, subject to known trust restrictions, and deposited with the State Treasurer for safekeeping in accordance with the Uniform Disposition of Unclaimed Property Act. In the State Treasurer's discretion the property may be received and held in kind. When the creditor, claimant, or member furnishes satisfactory proof of entitlement to the amount deposited or property held in kind, the State Treasurer shall deliver to the creditor, claimant, or member, or his or her representative, that amount or property in accordance with the act.

Source:Laws 1996, LB 681, § 145.

Cross References

Uniform Disposition of Unclaimed Property Act, see section 69-1329.

21-19,146. Foreign corporation; authority to transact business required.

(a) A foreign corporation may not transact business in this state until it obtains a certificate of authority from the Secretary of State.

(b) The following activities, among others, do not constitute transacting business within the meaning of subsection (a) of this section:

(1) Maintaining, defending, or settling any proceeding;

(2) Holding meetings of the board of directors or members or carrying on other activities concerning internal corporate affairs;

(3) Maintaining bank accounts;

(4) Maintaining offices or agencies for the transfer, exchange, and registration of memberships or securities or maintaining trustees or depositaries with respect to those securities;

(5) Selling through independent contractors;

(6) Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;

(7) Creating or acquiring indebtedness, mortgages, and security interests in real or personal property;

(8) Securing or collecting debts or enforcing mortgages and security interests in property securing the debts;

(9) Owning, without more, real or personal property;

(10) Conducting an isolated transaction which is completed within thirty days and which is not one in the course of repeated transactions of a like nature; or

(11) Transacting business in interstate commerce.

Source:Laws 1996, LB 681, § 146.

21-19,147. Foreign corporation; transacting business without authority; consequences; civil penalty.

(a) A foreign corporation transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority.

(b) The successor to a foreign corporation that transacted business in this state without a certificate of authority and the assignee of a cause of action arising out of that business may not maintain a proceeding on that cause of action in any court in this state until the foreign corporation or its successor obtains a certificate of authority.

(d) A foreign corporation is liable for a civil penalty of five hundred dollars for each day, but not to exceed a total of ten thousand dollars for each year, it transacts business in this state without a certificate of authority. The Attorney General may collect all penalties due under this subsection. All civil penalties collected under this subsection shall be remitted by the Attorney General for credit to the permanent school fund.

Source:Laws 1996, LB 681, § 147.

21-19,148. Foreign corporation; application for certificate of authority.

(a) A foreign corporation may apply for a certificate of authority to transact business in this state by delivering an application to the Secretary of State. The application must set forth:

(1) The name of the foreign corporation or, if its name is unavailable for use in this state, a corporate name that satisfies the requirements of section 21-19,151;

(2) The name of the state or country under whose law it is incorporated;

(3) The date of incorporation and period of duration;

(4) The street address of its principal office;

(5) The street address of its registered office in this state and the name of its current registered agent at that office. A post office box number may be provided in addition to the street address;

(6) The names and street addresses of its current directors and officers;

(7) Whether the foreign corporation has members; and

(8) Whether the corporation, if it had been incorporated in this state, would be a public benefit, mutual benefit, or religious corporation.

(b) The foreign corporation shall deliver with the completed application a certificate of existence (or a document of similar import) duly authenticated by the Secretary of State or other official having custody of corporate records in the state or country under whose law it is incorporated. Such certificate or document shall not bear a date of more than sixty days prior to the date the application is filed in this state.

Source:Laws 1996, LB 681, § 148; Laws 2008, LB379, § 10.

21-19,149. Foreign corporation; amended certificate of authority.

(a) A foreign corporation authorized to transact business in this state must obtain an amended certificate of authority from the Secretary of State if it changes:

(1) Its corporate name;

(2) The period of its duration; or

(3) The state or country of its incorporation.

(b) The requirements of section 21-19,148 for obtaining an original certificate of authority apply to obtaining an amended certificate under this section.

Source:Laws 1996, LB 681, § 149.

21-19,150. Foreign corporation; effect of certificate of authority.

(a) A certificate of authority authorizes the foreign corporation to which it is issued to transact business in this state subject, however, to the right of the state to revoke the certificate as provided in the Nebraska Nonprofit Corporation Act.

(b) A foreign corporation with a valid certificate of authority has the same rights and enjoys the same privileges as a domestic corporation of like character. A foreign corporation is also, except as otherwise provided by the act, subject to the same duties, restrictions, penalties, and liabilities now or later imposed on a domestic corporation of like character.

(c) The act does not authorize this state to regulate the organization or internal affairs of a foreign corporation authorized to transact business in this state.

Source:Laws 1996, LB 681, § 150.

21-19,151. Foreign corporation; corporate name.

(a) If the corporate name of a foreign corporation does not satisfy the requirements of section 21-1931, the foreign corporation, to obtain or maintain a certificate of authority to transact business in this state, may use a fictitious name to transact business in this state if its real name is unavailable and it delivers to the Secretary of State for filing a copy of the resolution of its board of directors, certified by its secretary, adopting the fictitious name.

(b) Except as authorized by subsections (c) and (d) of this section, the corporate name (including a fictitious name) of a foreign corporation shall not be the same as or deceptively similar to, upon the records of the Secretary of State, any of the names referenced in subdivisions (b)(1) through (5) of this section:

(1) The corporate name of a nonprofit or business corporation incorporated or authorized to transact business in this state;

(2) A corporate name reserved or registered under section 21-231, 21-232, 21-1932, or 21-1933;

(3) The fictitious name of another foreign business or nonprofit corporation authorized to transact business in this state;

(4) A trade name registered in this state pursuant to sections 87-208 to 87-219.01; and

(5) Any other business entity name registered or filed with the Secretary of State pursuant to Nebraska law.

(c) A foreign corporation may apply to the Secretary of State for authorization to use in this state the name of another corporation or business entity (incorporated or authorized to transact business in this state) that is deceptively similar to, upon the records of the Secretary of State, the name applied for. The Secretary of State shall authorize use of the name applied for if:

(1) The other corporation or business entity consents in writing to the use; or

(2) The applying corporation delivers to the Secretary of State a certified copy of a final judgment of a court of competent jurisdiction establishing its right to use the name applied for in this state.

(d) A foreign corporation may use in this state the name (including the fictitious name) of another domestic or foreign business or nonprofit corporation or business entity that is used in this state if the other corporation or business entity is incorporated or authorized to transact business in this state and the foreign corporation:

(1) Has merged with the other corporation or business entity;

(2) Has been formed by a reorganization of the other corporation or business entity; or

(3) Has acquired all or substantially all of the assets, including the name, of the other corporation or business entity.

(e) If a foreign corporation authorized to transact business in this state changes its corporate name to one that does not satisfy the requirements of section 21-1931, it shall not transact business in this state under the changed name until it adopts a name satisfying the requirements of section 21-1931 and obtains an amended certificate of authority under section 21-19,149.

Source:Laws 1996, LB 681, § 151; Laws 1997, LB 44, § 4; Laws 1997, LB 453, § 2; Laws 2003, LB 464, § 3; Laws 2011, LB462, § 2; Laws 2014, LB749, § 265.

21-19,152. Foreign corporation; registered office; registered agent.

Each foreign corporation authorized to transact business in this state must continuously maintain in this state:

(1) A registered office with the same address as that of its current registered agent. A post office box number may be provided in addition to the street address of the registered agent; and

(2) A registered agent, who may be:

(i) An individual who resides in this state and whose office is identical with the registered office;

(ii) A domestic business or nonprofit corporation whose office is identical with the registered office; or

(iii) A foreign business or nonprofit corporation authorized to transact business in this state whose office is identical with the registered office.

Source:Laws 1996, LB 681, § 152; Laws 2008, LB379, § 11.

Annotations

A corporation's registration under this section does not provide an independent basis for the exercise of general jurisdiction. Lanham v. BNSF Railway Co., 305 Neb. 124, 939 N.W.2d 363 (2020).

21-19,153. Foreign corporation; change of registered office or registered agent.

(a) A foreign corporation authorized to transact business in this state may change its registered office or registered agent by delivering to the Secretary of State for filing a statement of change that sets forth:

(1) Its name;

(2) The street address of its current registered office;

(3) If the current registered office is to be changed, the street address of its new registered office;

(4) The name and street address of its current registered agent. A post office box number may be provided in addition to the street address;

(5) If the current registered agent is to be changed, the name of its new registered agent and the new agent's written consent (either on the statement or attached to it) to the appointment; and

(6) That after the change or changes are made, the street addresses of its registered office and the office of its registered agent will be identical.

(b) If a registered agent changes the street address of its business office, the agent may change the address of the registered office of any foreign corporation for which the agent is the registered agent by notifying the corporation in writing of the change and signing (either manually or in facsimile) and delivering to the Secretary of State for filing a statement of change that complies with the requirements of subsection (a) of this section and recites that the corporation has been notified of the change.

Source:Laws 1996, LB 681, § 153; Laws 2008, LB379, § 12.

21-19,154. Foreign corporation; resignation of registered agent.

(a) The registered agent of a foreign corporation may resign as agent by signing and delivering to the Secretary of State for filing the original and two exact or conformed copies of a statement of resignation. The statement of resignation may include a statement that the registered office is also discontinued.

(c) The agency is terminated, and the registered office discontinued if so provided, on the thirty-first day after the date on which the statement was filed.

Source:Laws 1996, LB 681, § 154.

21-19,155. Foreign corporation; service.

(a) The registered agent of a foreign corporation authorized to transact business in this state is the corporation's agent for service of process, notice, or demand required or permitted by law to be served on the foreign corporation.

(b) A foreign corporation may be served by registered or certified mail, return receipt requested, addressed to the secretary of the foreign corporation at its principal office shown in its application for a certificate of authority or in its most recent biennial report filed under section 21-19,172 if the foreign corporation:

(1) Has no registered agent or its registered agent cannot with reasonable diligence be served;

(2) Has withdrawn from transacting business in this state under section 21-19,156; or

(3) Has had its certificate of authority revoked under section 21-19,158.

(1) The date the foreign corporation receives the mail;

(2) The date shown on the return receipt, if signed on behalf of the foreign corporation; or

(3) Five days after its deposit in the United States mail, as evidenced by the postmark if mailed postpaid and correctly addressed.

(d) This section does not prescribe the only means, or necessarily the required means, of serving a foreign corporation.

Source:Laws 1996, LB 681, § 155.

21-19,156. Foreign corporation; withdrawal.

(a) A foreign corporation authorized to transact business in this state may not withdraw from this state until it obtains a certificate of withdrawal from the Secretary of State.

(1) The name of the foreign corporation and the name of the state or country under whose law it is incorporated;

(2) That it is not transacting business in this state and that it surrenders its authority to transact business in this state;

(3) That it revokes the authority of its registered agent to accept service on its behalf and consents that service of process in any proceeding based on a cause of action arising during the time it was authorized to do business in this state may thereafter be made on such corporation outside this state; and

(4) A mailing address at which process against the corporation may be served.

Source:Laws 1996, LB 681, § 156.

21-19,157. Foreign corporation; grounds for revocation of certificate of authority.

(a) The Secretary of State may commence a proceeding under section 21-19,158 to revoke the certificate of authority of a foreign corporation authorized to transact business in this state if:

(1) The foreign corporation does not deliver the biennial report to the Secretary of State when it is due;

(2) The foreign corporation does not pay any fees, taxes, or penalties imposed by the Nebraska Nonprofit Corporation Act or other law when they are due;

(3) The foreign corporation is without a registered agent or registered office in this state for sixty days or more;

(4) The foreign corporation does not inform the Secretary of State under section 21-19,153 or 21-19,154 that its registered agent or registered office has changed, that its registered agent has resigned, or that its registered office has been discontinued within ninety days after the change, resignation, or discontinuance;

(5) An incorporator, director, officer, or agent of the foreign corporation signed a document such person knew was false in any material respect with intent that the document be delivered to the Secretary of State for filing; or

(6) The Secretary of State receives a duly authenticated certificate from the Secretary of State or other official having custody of corporate records in the state or country under whose law the foreign corporation is incorporated stating that it has been dissolved or has disappeared as the result of a merger.

(b) The Attorney General may commence a proceeding under section 21-19,158 to revoke the certificate of authority of a foreign corporation authorized to transact business in this state if:

(1) The corporation has continued to exceed or abuse the authority conferred upon it by law;

(2) The corporation would have been a public benefit corporation had it been incorporated in this state and that its corporate assets in this state are being misapplied or wasted; or

(3) The corporation would have been a public benefit corporation had it been incorporated in this state and it is no longer able to carry out its purposes.

Source:Laws 1996, LB 681, § 157.

21-19,158. Foreign corporation; procedure and effect of revocation.

(a) The Secretary of State upon determining that one or more grounds exist under section 21-19,157 for revocation of a certificate of authority shall serve the foreign corporation with written notice of that determination under section 21-19,155.

(b) The Attorney General, upon determining that one or more grounds exist under subsection (b) of section 21-19,157 for revocation of a certificate of authority, shall request the Secretary of State to serve, and the Secretary of State shall serve the foreign corporation with written notice of that determination under section 21-19,155.

(c) If the foreign corporation does not, within sixty days after service of the notice is perfected under section 21-19,155, correct each ground for revocation or demonstrate to the reasonable satisfaction of the Secretary of State or Attorney General that each ground for revocation determined by the Secretary of State or Attorney General does not exist, the Secretary of State may revoke the foreign corporation's certificate of authority by signing a certificate of revocation that recites the ground or grounds for revocation and its effective date. The Secretary of State shall file the original of the certificate of revocation and serve a copy on the foreign corporation under section 21-19,155.

(d) The authority of a foreign corporation to transact business in this state ceases on the date shown on the certificate of revocation revoking its certificate of authority.

(e) Revocation of a foreign corporation's certificate of authority does not terminate the authority of the registered agent of the corporation.

Source:Laws 1996, LB 681, § 158.

21-19,159. Foreign corporation; revoked certificate; application for reinstatement.

(a) A foreign corporation the certificate of authority of which has been revoked under section 21-19,158 may apply to the Secretary of State for reinstatement within five years after the effective date of the revocation. The application must:

(1) Recite the name of the foreign corporation and the effective date of the revocation;

(2) State that the ground or grounds for revocation either did not exist or have been eliminated; and

(3) State that the foreign corporation's name satisfies the requirements of section 21-19,151.

(b) If the Secretary of State determines that the application for reinstatement contains the information required by subsection (a) of this section and that the information is correct, the Secretary of State shall cancel the certificate of revocation and prepare a certificate of reinstatement reciting that determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the foreign corporation under section 21-19,155.

(c) A foreign corporation, the certificate of authority of which has been revoked under section 21-19,158 for more than five years, may apply to the Secretary of State for late reinstatement. The application, along with the fee set forth in section 21-1905, must:

(1) Recite the name of the foreign corporation and the effective date of the revocation;

(2) State that the ground or grounds for revocation either did not exist or have been eliminated;

(3) State that the foreign corporation's name satisfies the requirements of section 21-19,151;

(4) State that a legitimate reason exists for reinstatement and what such legitimate reason is; and

(5) State that such reinstatement does not constitute fraud on the public.

(d) If the Secretary of State determines that the application for late reinstatement contains the information required by subsection (c) of this section and that the information is correct, the Secretary of State shall cancel the certificate of revocation and prepare a certificate of late reinstatement reciting that determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the foreign corporation under section 21-19,155.

(e) When reinstatement is effective, it relates back to and takes effect as of the effective date of the revocation and the foreign corporation shall resume carrying on its activities as if the revocation had never occurred.

Source:Laws 1996, LB 681, § 159; Laws 2012, LB854, § 5; Laws 2015, LB279, § 11.

21-19,160. Foreign corporation; denial of reinstatement; appeal.

(a) The Secretary of State, upon denying a foreign corporation's application for reinstatement following revocation of its certificate of authority, shall serve the foreign corporation under section 21-19,155 with a written notice that explains the reason or reasons for denial.

(b) The foreign corporation may appeal the denial of reinstatement to the district court of Lancaster County within thirty days after the service of the notice of denial is perfected under section 21-19,155. The foreign corporation appeals by petitioning the district court to set aside the revocation and attaching to the petition copies of the Secretary of State's certificate of revocation, the foreign corporation's application for reinstatement, and the Secretary of State's notice of denial.

(c) The district court may summarily order the Secretary of State to reinstate the certificate of authority or may take any other action it considers appropriate.

(d) The district court's final decision may be appealed as in other civil proceedings.

Source:Laws 1996, LB 681, § 160.

21-19,161. Foreign corporation; domestication procedure.

In lieu of compliance with section 21-19,146, relating to the authorization of foreign corporations to transact business in this state, any corporation organized under the laws of any other state or states, which has heretofore filed, or which may hereafter file, with the Secretary of State of this state, a copy certified by the Secretary of State or other proper officer of the state or country under the laws of which such foreign corporation is formed, of its charter or articles of association or incorporation, together with all amendments to such date and the street address of its registered office in this state and the name and street address and, if one exists, a post office box number, of its current registered agent at that office, on filing with the Secretary of State a certified copy of a resolution adopted by its board of directors, including the date the resolution was adopted, accepting and agreeing to be bound by the provisions of the Nebraska Nonprofit Corporation Act, with respect to its property and business operations within this state, shall become and be a body corporate of this state.

Source:Laws 1996, LB 681, § 161; Laws 2008, LB379, § 13.

21-19,162. Foreign corporation; renouncing domestication.

Any foreign corporation, which has domesticated pursuant to section 21-19,161, may cease to be a domesticated corporation by filing with the Secretary of State a certified copy of a resolution adopted by its board of directors, renouncing its domestication and withdrawing its acceptance and agreement provided for in section 21-19,161.

Source:Laws 1996, LB 681, § 162.

21-19,163. Foreign corporation; domestication; procedure; effect.

If a foreign corporation, which has domesticated pursuant to section 21-19,161, surrenders its foreign corporate charter and files, records, and publishes notice of amended articles of incorporation in the manner, time, and places required by sections 21-1920, 21-1921, and 21-19,173, such foreign corporation shall thereupon become and be a domestic corporation organized under the Nebraska Nonprofit Corporation Act. The original incorporation date of a foreign corporation which has domesticated in Nebraska shall not be affected by such domestication. The domesticated corporation shall be the same corporation as the one that existed under the laws of the state in which the corporation was previously domiciled. Upon domesticating in Nebraska, the corporation shall continue to exist without interruption and shall maintain its same liabilities and obligations.

Source:Laws 1996, LB 681, § 163; Laws 2017, LB476, § 1.

21-19,164. Foreign corporation organized prior to January 1, 1997; status.

Any corporation organized under the laws of any other state or territory which had become, in accordance with section 21-1966.01, as such section existed prior to January 1, 1997, a body corporate of this state, shall retain such status for all purposes notwithstanding the repeal of such section.

Source:Laws 1996, LB 681, § 164.

21-19,165. Corporate records.

(a) A corporation shall keep as permanent records minutes of all meetings of its members and board of directors, a record of all actions taken by the members or directors without a meeting, and a record of all actions taken by committees of the board of directors as authorized by subsection (d) of section 21-1985.

(b) A corporation shall maintain appropriate accounting records.

(c) A corporation or its agent shall maintain a record of its members in a form that permits preparation of a list of the names and addresses of all members, in alphabetical order by class, showing the number of votes each member is entitled to cast.

(d) A corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time.

(e) A corporation shall keep a copy of the following records at its principal office:

(1) Its articles or restated articles of incorporation and all amendments to them currently in effect;

(2) Its bylaws or restated bylaws and all amendments to them currently in effect;

(3) Resolutions adopted by its board of directors relating to the characteristics, qualifications, rights, limitations, and obligations of members or any class or category of members;

(4) The minutes of all meetings of members and records of all actions approved by the members for the past three years;

(5) All written communications to members generally within the past three years, including the financial statements furnished for the past three years under section 21-19,170;

(6) A list of the names and business or home addresses of its current directors and officers; and

(7) Its most recent biennial report delivered to the Secretary of State under section 21-19,172.

Source:Laws 1996, LB 681, § 165.

Annotations

Pursuant to subsection (a) of section 21-19,166, a member is permitted to inspect and copy, without conditions, those records described in subsection (e) of this section, which include financial statements that include a balance sheet as of the end of the fiscal year and a statement of operations for that year. Dunbar v. Twin Towers Condo. Assn., 26 Neb. App. 354, 920 N.W.2d 1 (2018).

21-19,166. Inspection of records by members.

(a) Subject to subsection (e) of this section and subsection (c) of section 21-19,167, a member is entitled to inspect and copy, at a reasonable time and location specified by the corporation, any of the records of the corporation described in subsection (e) of section 21-19,165 if the member gives the corporation written notice or a written demand at least five business days before the date on which the member wishes to inspect and copy.

(b) Subject to subsection (e) of this section, a member is entitled to inspect and copy, at a reasonable time and reasonable location specified by the corporation, any of the following records of the corporation if the member meets the requirements of subsection (c) of this section and gives the corporation written notice at least five business days before the date on which the member wishes to inspect and copy:

(1) Excerpts from any records required to be maintained under subsection (a) of section 21-19,165, to the extent not subject to inspection under subsection (a) of this section;

(2) Accounting records of the corporation; and

(3) Subject to section 21-19,169, the membership list.

(1) The member's demand is made in good faith and for a proper purpose;

(2) The member describes with reasonable particularity the purpose and the records the member desires to inspect; and

(3) The records are directly connected with this purpose.

(d) This section does not affect:

(1) The right of a member to inspect records under section 21-1959 or, if the member is in litigation with the corporation, to the same extent as any other litigant; or

(2) The power of a court, independent of the Nebraska Nonprofit Corporation Act, to compel the production of corporate records for examination.

(e) The articles or bylaws of a religious corporation may limit or abolish the right of a member under this section to inspect and copy any corporate record.

Source:Laws 1996, LB 681, § 166.

Annotations

Pursuant to subsection (a) of this section, a member is permitted to inspect and copy, without conditions, those records described in subsection (e) of section 21-19,165, which include financial statements that include a balance sheet as of the end of the fiscal year and a statement of operations for that year. Dunbar v. Twin Towers Condo. Assn., 26 Neb. App. 354, 920 N.W.2d 1 (2018).

The Nebraska Nonprofit Corporation Act applies broadly to all nonprofit corporations, whereas the Nebraska Condominium Act applies only to condominium regimes and condominium owners. To the extent that there is conflict between two statutes on the same subject, the specific statute controls over the general statute. Dunbar v. Twin Towers Condo. Assn., 26 Neb. App. 354, 920 N.W.2d 1 (2018).

21-19,167. Scope of inspection rights.

(a) A member's agent or attorney has the same inspection and copying rights as the member the agent or attorney represents.

(b) The right to copy records under section 21-19,166 includes, if reasonable, the right to receive copies made by photographic, xerographic, or other means.

(c) The corporation may impose a reasonable charge, covering the costs of labor and material, for copies of any documents provided to the member. The charge may not exceed the estimated cost of production or reproduction of the records.

(d) The corporation may comply with a member's demand to inspect the record of members under subdivision (b)(3) of section 21-19,166 by providing the member with a list of its members that was compiled no earlier than the date of the member's demand.

Source:Laws 1996, LB 681, § 167.

21-19,168. Court-ordered inspection.

(a) If a corporation does not allow a member who complies with subsection (a) of section 21-19,166 to inspect and copy any records required by that subsection to be available for inspection, the district court in the county where the corporation's principal office (or, if none in this state, its registered office) is located may summarily order inspection and copying of the records demanded at the corporation's expense upon application of the member.

(b) If a corporation does not within a reasonable time allow a member to inspect and copy any other record, the member who complies with subsections (b) and (c) of section 21-19,166 may apply to the district court in the county where the corporation's principal office (or, if none in this state, its registered office) is located for an order to permit inspection and copying of the records demanded. The district court shall dispose of an application under this subsection on an expedited basis.

(c) If the district court orders inspection and copying of the records demanded, it shall also order the corporation to pay the member's costs (including reasonable counsel fees) incurred to obtain the order unless the corporation proves that it refused inspection in good faith because it had a reasonable basis for doubt about the right of the member to inspect the records demanded.

(d) If the district court orders inspection and copying of the records demanded, it may impose reasonable restrictions on the use or distribution of the records by the demanding member.

Source:Laws 1996, LB 681, § 168.

21-19,169. Limitations on use of membership list.

Without consent of the board, a membership list or any part thereof may not be obtained or used by any person for any purpose unrelated to a member's interest as a member. Without limiting the generality of the foregoing, without the consent of the board a membership list or any part thereof may not be:

(1) Used to solicit money or property unless such money or property will be used solely to solicit the votes of the members in an election to be held by the corporation;

(2) Used for any commercial purpose; or

(3) Sold to or purchased by any person.

Source:Laws 1996, LB 681, § 169.

21-19,170. Financial statements for members.

(a) Except as provided in the articles or bylaws of a religious corporation, a corporation, upon written demand from a member, shall furnish that member its latest annual financial statements, which may be consolidated or combined statements of the corporation and one or more of its subsidiaries or affiliates, as appropriate, that include a balance sheet as of the end of the fiscal year and a statement of operations for that year. If financial statements are prepared for the corporation on the basis of generally accepted accounting principles, the annual financial statements must also be prepared on that basis.

(b) If annual financial statements are reported upon by a public accountant, the accountant's report must accompany the statements. If not, the statements must be accompanied by a statement of the president or the person responsible for the corporation's financial accounting records:

(1) Stating the president's or other person's reasonable belief as to whether the statements were prepared on the basis of generally accepted accounting principles and, if not, describing the basis of preparation; and

(2) Describing any respects in which the statements were not prepared on a basis of accounting consistent with the statements prepared for the preceding year.

Source:Laws 1996, LB 681, § 170.

21-19,171. Report of indemnification to members.

If a corporation indemnifies or advances expenses to a director under section 21-1997, 21-1998, 21-1999, or 21-19,100 in connection with a proceeding by or in the right of the corporation, the corporation shall report the indemnification or advance in writing to the members with or before the notice of the next meeting of members.

Source:Laws 1996, LB 681, § 171.

21-19,172. Biennial report; contents.

(a) Commencing in 1999 and each odd-numbered year thereafter, each domestic corporation, and each foreign corporation authorized to transact business in this state, shall deliver to the Secretary of State a biennial report on a form prescribed and furnished by the Secretary of State that sets forth:

(1) The name of the corporation and the state or country under whose law it is incorporated;

(2) The street address of its registered office and the name of its current registered agent at the office in this state. A post office box number may be provided in addition to the street address;

(3) The street address of its principal office;

(4) The names and business or residence addresses of its directors and principal officers;

(5) A brief description of the nature of its activities;

(6) Whether or not it has members;

(7) If it is a domestic corporation, whether it is a public benefit, mutual benefit, or religious corporation; and

(8) If it is a foreign corporation, whether it would be a public benefit, mutual benefit, or religious corporation had it been incorporated in this state.

(b) The information in the biennial report must be current on the date the biennial report is executed on behalf of the corporation.

(c) The first biennial report must be delivered to the Secretary of State between January 1 and April 1 of the odd-numbered year following the calendar year in which a domestic corporation was incorporated or a foreign corporation was authorized to transact business. Subsequent biennial reports must be delivered to the Secretary of State between January 1 and April 1 of the following odd-numbered years. For purposes of the Nebraska Nonprofit Corporation Act, the biennial report is due on April 1 of the odd-numbered year in which it must be delivered to the Secretary of State as required by this section.

(d) If a biennial report does not contain the information required by this section, the Secretary of State shall promptly notify the reporting domestic or foreign corporation in writing and return the report to it for correction. If the report is corrected to contain the information required by this section and delivered to the Secretary of State within thirty days after the effective date of notice, it is deemed to be timely filed.

(e) Upon the delivery of the biennial report as provided in this section, the Secretary of State shall charge and collect a fee as prescribed in section 21-1905. For purposes of the Nebraska Nonprofit Corporation Act, the fee is due on April 1 of the odd-numbered year in which the biennial report must be delivered to the Secretary of State as required by this section.

(f) Biennial reports shall be filed in 1997 pursuant to sections 21-1981 and 21-1982 (Reissue 1991) as if such sections had not been repealed by Laws 1996, LB 681. Fees, including penalties, due or delinquent prior to 1999 shall be paid pursuant to section 21-1982 (Reissue 1991) as if such section had not been repealed by Laws 1996, LB 681.

(g) A correction or an amendment to the biennial report may be delivered to the Secretary of State for filing at any time.

Source:Laws 1996, LB 681, § 172; Laws 2008, LB379, § 14; Laws 2014, LB774, § 3.

21-19,173. Notice of incorporation, amendment, merger, or dissolution; publication.

(a) Notice of incorporation, amendment, or merger of a domestic corporation subject to the Nebraska Nonprofit Corporation Act shall be published for three successive weeks in some legal newspaper of general circulation in the county where the corporation's principal office or, if none in this state, its registered office is located.

A notice of incorporation shall show (1) the corporate name of the corporation, (2) whether the corporation is a public benefit, mutual benefit, or religious corporation, (3) the street address of the corporation's initial registered office and the name of its initial registered agent at that office, (4) the name and street address of each incorporator, and (5) whether or not the corporation will have members.

A brief resume of any amendment or merger of the corporation shall be published in the same manner for the same period of time as a notice of incorporation is required to be published.

(b) Notice of dissolution of a domestic corporation shall be published for three successive weeks in some legal newspaper of general circulation in the county where the corporation's principal office or, if none in this state, its registered office is located. A notice of dissolution shall show (1) the terms and conditions of such dissolution, (2) the names of the persons who are to wind up and liquidate its affairs and their official titles, and (3) a statement of assets and liabilities of the corporation.

(c) Proof of publication of any of the notices required to be published under this section shall be filed in the office of the Secretary of State. In the event any notice required to be given pursuant to this section is not given, but is subsequently published for the required time, and proof of the subsequent publication thereof is filed in the office of the Secretary of State, the acts of such corporation prior to, as well as after, such publication shall be valid.

Source:Laws 1996, LB 681, § 173.

21-19,174. Applicability of act.

The Nebraska Nonprofit Corporation Act applies to all domestic corporations in existence on January 1, 1997, that were incorporated under Chapter 21, article 19 and to any not-for-profit corporations in existence on January 1, 1997, that were heretofore organized under any laws repealed by Laws 1959, LB 349.

Source:Laws 1996, LB 681, § 174.

21-19,175. Foreign corporation; subject to act; effect.

A foreign corporation authorized to transact business in this state on January 1, 1997, is subject to the Nebraska Nonprofit Corporation Act, but is not required to obtain a new certificate of authority to transact business under the act.

Source:Laws 1996, LB 681, § 175.

21-19,176. Repeal of former law; effect.

(a) Except as provided in subsection (b) of this section, the repeal of a statute by Laws 1996, LB 681, shall not affect:

(1) The operation of the statute or any action taken under it before its repeal;

(2) Any ratification, right, remedy, privilege, obligation, or liability acquired, accrued, or incurred under the statute before its repeal;

(3) Any violation of the statute or any penalty, forfeiture, or punishment incurred because of the violation, before its repeal;

(5) Any meeting of members or directors or action by written consent noticed or any action taken before its repeal as a result of a meeting of members or directors or action by written consent.

(b) If a penalty or punishment imposed for violation of a statute repealed by Laws 1996, LB 681, is reduced by the Nebraska Nonprofit Corporation Act, the penalty or punishment, if not already imposed, shall be imposed in accordance with the act.

Source:Laws 1996, LB 681, § 176.

21-19,177. Public benefit, mutual benefit, and religious corporation; designation.

Each domestic corporation existing on January 1, 1997, that is or becomes subject to the Nebraska Nonprofit Corporation Act shall be designated as a public benefit, mutual benefit, or religious corporation as follows:

(1) Any corporation designated by statute as a public benefit corporation, a mutual benefit corporation, or a religious corporation is the type of corporation designated by statute;

(2) Any corporation that does not come within subdivision (1) of this section, but is organized primarily or exclusively for religious purposes, is a religious corporation;

(3) Any corporation that does not come within subdivision (1) or (2) of this section, but is recognized as exempt under section 501(c)(3) of the Internal Revenue Code, or any successor section, is a public benefit corporation;

(4) Any corporation that does not come within subdivision (1), (2), or (3) of this section, but is organized for a public or charitable purpose, and upon dissolution must distribute its assets to a public benefit corporation, the United States, a state, or a person recognized as exempt under section 501(c)(3) of the Internal Revenue Code, or any successor section, is a public benefit corporation; and

(5) Any corporation that does not come within subdivision (1), (2), (3), or (4) of this section is a mutual benefit corporation.

Source:Laws 1996, LB 681, § 177.

21-2001. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2002. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2003. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2004. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2005. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10; Laws 2015, LB279, § 19.

21-2006. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2007. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2008. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2009. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2010. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2011. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2012. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2013. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2014. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2015. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2016. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2017. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2018. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2019. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2020. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2021. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2022. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2023. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2024. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2025. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2026. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2027. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2028. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2029. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2030. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2031. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2032. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2033. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2034. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2035. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2036. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2037. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2038. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2039. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2040. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2041. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2042. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2043. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2044. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2045. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2046. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2047. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2048. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2049. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2050. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2051. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2052. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2053. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2054. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2055. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2056. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2057. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2058. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2059. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2060. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2061. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2062. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2063. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2064. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2065. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2066. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2067. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2068. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2069. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2070. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2071. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2072. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2073. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2074. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2075. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2076. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2077. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2078. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2079. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2080. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2081. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2082. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2083. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2084. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2085. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2086. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2087. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2088. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2089. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2090. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2091. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2092. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2093. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2094. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2095. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2096. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2097. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2098. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2099. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,100. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,101. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,102. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,103. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,104. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,105. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,106. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,107. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,108. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,109. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,110. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,111. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,112. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,113. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,114. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,115. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,116. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,117. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,118. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,119. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,120. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,121. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,122. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,123. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,124. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,125. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,126. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,127. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,128. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,129. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,130. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,131. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,132. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,133. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,134. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,135. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,135.01. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,136. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,137. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,138. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,139. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,140. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,141. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,142. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,143. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,144. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,145. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,146. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,147. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,148. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,149. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,150. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,151. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,152. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,153. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,154. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,155. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,156. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,157. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,158. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,159. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,160. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10; Laws 2015, LB279, § 19.

21-20,161. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,162. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,163. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,164. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,165. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,166. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,167. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,168. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,169. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,170. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,171. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,172. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,173. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,174. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,175. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,176. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,177. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10; Laws 2015, LB294, § 25.

21-20,178. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,179. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,180. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,180.01. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10; Laws 2015, LB279, § 19.

21-20,181. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,181.01. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,181.02. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,181.03. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,182. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,183. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,184. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,185. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,186. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,187. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,188. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,189. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,190. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,191. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,192. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,193. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,194. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,195. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,196. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-20,197. Repealed. Laws 2014, LB749, § 298; Laws 2015, LB157, § 10.

21-2101. Act, how cited.

Sections 21-2101 to 21-2117 shall be known and may be cited as the Nebraska Business Development Corporation Act.

Source:Laws 1967, c. 100, § 1, p. 302.

21-2102. Terms, defined.

For purposes of the Nebraska Business Development Corporation Act, unless the context otherwise requires:

(1) Development corporation or corporation shall mean any corporation organized pursuant to the act for the purpose of developing business, industry, and enterprise in the State of Nebraska by the lending of money thereto and otherwise organizing for the purposes set forth in section 21-2104;

(2) Financial institution shall mean any banking institution, insurance company or related corporation, savings and loan association, partnership, limited liability company, credit union, foundation, trust, licensee under the Small Business Investment Act of 1958, 15 U.S.C. 661 et seq., as the act existed on September 1, 2001, or other entity engaged in lending or investing funds and authorized to do business in the State of Nebraska, including the United States Small Business Administration;

(3) Member shall mean any financial institution which undertakes to lend money to a development corporation upon its call and in accordance with section 21-2109;

(4) Board of directors shall mean members of the board of directors of a development corporation in office from time to time; and

(5) Loan limit shall mean, for any member, the maximum account permitted to be outstanding at any one time on loans made by any such member to a development corporation, as determined under the Nebraska Business Development Corporation Act.

Source:Laws 1967, c. 100, § 2, p. 302; Laws 1990, LB 1241, § 4; Laws 1993, LB 121, § 156; Laws 2001, LB 300, § 5.

21-2103. Business development corporations; incorporation.

One or more business development corporations may be incorporated in this state pursuant to the Nebraska Model Business Corporation Act not in conflict with or inconsistent with the provisions of the Nebraska Business Development Corporation Act.

Source:Laws 1967, c. 100, § 3, p. 303; Laws 1995, LB 109, § 204; Laws 2014, LB749, § 266.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

21-2104. Business development corporation; purposes.

The purposes of a business development corporation shall be only: (1) To promote, stimulate, develop, and advance the business prosperity and economic welfare of the State of Nebraska and its citizens; (2) to encourage and assist through loans, investments, or other business transactions the location of new business and industry in the state; (3) to rehabilitate and assist existing business and industry in this state; (4) to stimulate and assist in the expansion of any kind of business activity which would tend to promote business development and maintain the economic stability in this state, provide maximum opportunities for employment, encourage thrift, and improve the standard of living of the citizens of this state; (5) to cooperate and act in conjunction with other organizations, public or private, including the United States Small Business Administration, in the promotion and advancement of industrial, commercial, agricultural, and recreational development in this state; and (6) to provide financing for the promotion, development, and conduct of all kinds of business activity in this state.

Source:Laws 1967, c. 100, § 4, p. 303; Laws 1973, LB 56, § 1; Laws 1990, LB 1241, § 5; Laws 2001, LB 300, § 6.

21-2105. Powers.

(1) A development corporation shall have all the powers granted to corporations organized under the Nebraska Model Business Corporation Act, except that it shall not give security for any loan made to it by members unless all loans to it by members are secured ratably in proportion to unpaid balances due.

(2) The restriction in subsection (1) of this section shall in no manner be construed so as to prohibit a development corporation from making unsecured borrowings from the federal Small Business Administration.

Source:Laws 1967, c. 100, § 5, p. 304; Laws 1995, LB 109, § 205; Laws 2014, LB749, § 267.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

21-2106. Name.

Every corporation created under the provisions of sections 21-2101 to 21-2117 shall have as a part of its corporate name or title the words business development.

Source:Laws 1967, c. 100, § 6, p. 304.

21-2107. Offices; location.

A development corporation may maintain an office or offices in such place or places within the State of Nebraska as may be fixed by the board of directors.

Source:Laws 1967, c. 100, § 7, p. 304.

21-2108. Shares; acquire, sell, assign, or mortgage.

Notwithstanding any other provisions of law, any person, partnership, limited liability company, or corporation may acquire, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of the shares of capital stock of a development corporation created under the Nebraska Business Development Corporation Act, except that insurance companies, reciprocal exchanges, and fraternal benefit societies shall not invest therein other than as provided in the Insurers Investment Act.

Source:Laws 1967, c. 100, § 8, p. 304; Laws 1991, LB 237, § 56; Laws 1993, LB 121, § 157.

Cross References

Insurers Investment Act, see section 44-5101.

21-2109. Membership; investment.

(1) Notwithstanding any other provision of law, any financial institution is authorized to become a member of and to invest in a development corporation by making application to the board of directors on such form and in such manner as the board of directors may require, and membership shall become effective upon acceptance of such application by such board. Membership shall be for the duration of the corporation, except that upon written notice given to the corporation two years in advance, a member may withdraw from membership at the expiration date of such notice and shall not, after the expiration date of such notice, be obligated to make any loans to the corporation. No financial institution shall become a member of more than one development corporation.

(2) Each such member shall make loans to the corporation as and when called upon to do so, upon such terms and conditions as approved from time to time by the board of directors, subject to the following conditions:

(a) All loans shall be evidenced by negotiable instruments of the corporation and shall bear interest at the rate determined by the board of directors to be the prime rate on unsecured commercial loans as of the date of the loan;

(b) All loan limits shall be established at the thousand dollar amount nearest the amount computed in accordance with this section;

(c) The total amount outstanding at any one time on loans to a development corporation made by any member, other than an insurance company, reciprocal exchange, or fraternal benefit society, shall not exceed the following limit, to be determined as of the time such member becomes a member, on the basis of figures contained in the most recent year-end statement prior to its application for membership:

(i) Banking associations, three percent of the paid-in capital and surplus;

(ii) Savings and loan associations, three percent of the general reserve account and surplus; and

(iii) Other financial institutions, such limits as may be approved from time to time by the board of directors of the development corporation;

(d) In the case of an insurance company, reciprocal exchange, and fraternal benefit society, the total amount outstanding at any time on loans to a development corporation shall be limited as follows: (i) For stock life insurance companies, one percent of capital and unassigned surplus, which amount loaned shall be included in and be a part of those investments authorized for stock life insurance companies under section 44-5153; (ii) for mutual life insurance companies or fraternal benefit societies, one percent of unassigned surplus, which amount loaned shall be included in and be a part of those investments authorized under such section; and (iii) for other insurance companies or reciprocal exchanges, one-tenth of one percent of admitted assets, which amount loaned shall be included in and be a part of those investments authorized under such section; and

(e) Each call for loans made by the corporation shall be prorated among the members of the corporation in substantially the same proportion that the loan limit of each member bears to the aggregate loan limits of all members.

Source:Laws 1967, c. 100, § 9, p. 305; Laws 1990, LB 1241, § 6; Laws 1991, LB 237, § 57; Laws 2001, LB 300, § 7.

21-2110. Shares; par value; authorized capital.

(1) Each share of stock of the corporation shall have a par value of not less than ten dollars per share, as fixed by its articles of incorporation, and shall be issued only for lawful money of the United States. At least two hundred thousand dollars shall be paid into the treasury for capital stock before a corporation shall be authorized to transact any business other than such business as relates to its organization.

(2) Each shareholder shall be entitled to one vote, in person or by proxy, for each share of capital stock held, and each member shall be entitled to one vote, in person or by proxy, as such member.

(3) The rights given by the Nebraska Model Business Corporation Act to shareholders to attend meetings and to receive notice thereof and to exercise voting rights shall apply to members as well as to shareholders of a corporation created under the Nebraska Business Development Corporation Act. The voting rights of the members shall be the same as if they were a separate class of shareholders, and shareholders and members shall in all cases vote separately by classes. A quorum at a shareholders' meeting shall require the presence in person or by proxy of a majority of the holders of the voting rights of each class.

Source:Laws 1967, c. 100, § 10, p. 306; Laws 1995, LB 109, § 206; Laws 2014, LB749, § 268.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

21-2111. Board of directors; election; vacancy.

The business and affairs of the corporation shall be conducted by a board of directors. The number of directors shall at all times be a multiple of three. Two-thirds of the directors shall be elected by the members and one-third shall be elected by the shareholders. Any vacancy in the office of a director elected by members shall be filled by the directors elected by the members, and any vacancy in the office of a director elected by the shareholders shall be filled by the directors elected by the shareholders.

Source:Laws 1967, c. 100, § 11, p. 307.

Cross References

Cumulative voting for directors, see Article XII, section 1, Constitution of Nebraska.

21-2112. Articles of incorporation; amendment.

No amendment to the articles of incorporation shall be made which increases the obligation of a member to make loans to the corporation or which makes any change in a principal amount, interest rate, maturity date, or in the security or credit position of any outstanding loan made by a member to the corporation or which affects the right of a member to withdraw from membership or the voting rights of such member without the consent of eighty percent of the members who would be affected by such amendment; Provided, that this section shall not be construed to authorize amendments of the articles of incorporation so as to give greater rights or powers to the corporation or lesser rights or powers to the members than are set forth in sections 21-2101 to 21-2117.

Source:Laws 1967, c. 100, § 12, p. 307.

21-2113. Reserves; amount.

Each year the corporation shall set apart, as a reserve against losses and contingencies, not less than ten percent of its net earnings for the preceding fiscal year until such reserve shall be equal in value to one-half of the amount paid in on the capital stock then outstanding. Whenever the amount of such reserve so evidenced shall become impaired, it shall be built up again to the required amount in the manner provided for its original accumulation.

Source:Laws 1967, c. 100, § 13, p. 307.

21-2114. Funds; deposit.

No corporation organized under the provisions of sections 21-2101 to 21-2117 shall at any time be authorized to receive money on deposit. The corporation shall not deposit any of its funds in any banking institution unless such institution has been designated as a depository by a vote of a majority of the directors present at an authorized meeting of the board of directors, exclusive of any director who is an officer or director of the depository so designated.

Source:Laws 1967, c. 100, § 14, p. 308.

21-2115. Books and records.

A corporation shall keep, in addition to the books and records required by the Nebraska Model Business Corporation Act, a record showing the names and addresses of all members of the corporation and the current status of loans made by each to the corporation. Members shall have the same rights with respect to all books and records as are given to shareholders in the Nebraska Model Business Corporation Act.

Source:Laws 1967, c. 100, § 15, p. 308; Laws 1995, LB 109, § 207; Laws 2014, LB749, § 269.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

21-2116. Shares; exempt from registration.

The shares of capital stock of the corporation and the documents representing the indebtedness of the corporation to its members, and any offering of the above, shall be exempt from registration under the Securities Act of Nebraska. A corporation making any such offering, and the officers and employees thereof, shall also be exempt from registration and qualification as dealers and salesmen under the Securities Act of Nebraska.

Source:Laws 1967, c. 100, § 16, p. 308.

Cross References

Securities Act of Nebraska, see section 8-1123.

21-2117. Credit of state not pledged.

Under no circumstances is the credit of the State of Nebraska, or any political subdivision thereof, pledged by the provisions of sections 21-2101 to 21-2117.

Source:Laws 1967, c. 100, § 17, p. 308.

21-2201. Act, how cited.

Sections 21-2201 to 21-2223 shall be known and may be cited as the Nebraska Professional Corporation Act.

Source:Laws 1969, c. 121, § 1, p. 555; Laws 1994, LB 488, § 1; Laws 2011, LB315, § 2.

21-2202. Terms, defined.

For purposes of the Nebraska Professional Corporation Act, unless the context otherwise requires:

(1) Certificate of registration or registration certificate from or by the regulating board means either (a) a document prepared and issued by the regulating board or (b) verification, by the Secretary of State, that all of those directors, officers, shareholders, and professional employees listed on the application filed with the Secretary of State, except for the secretary and assistant secretary, are duly licensed or otherwise legally authorized to render the professional service for which the professional corporation is organized or a service ancillary to those which the professional corporation renders, through the electronic accessing of the regulating board's licensing records or through compacts or other certifying organizations recognized by the regulating board;

(2) Professional corporation means a corporation which is organized under the act for the specific purpose of rendering professional service and which has as its shareholders only individuals who themselves are duly licensed or otherwise legally authorized within this state to render the same professional service as the corporation;

(3) Professional service means any personal service rendered by an attorney, a certified public accountant, a public accountant, a dentist, an osteopathic physician, a physician and surgeon, a real estate broker, an associate real estate broker, a real estate salesperson, or a veterinarian. For purposes of the act, those professions pertaining to the diagnosis, care, and treatment of humans shall be considered to be of the same profession; and

(4) Regulating board means a board which is charged with the licensing and regulating of the practice or profession which the professional corporation is organized to render.

Source:Laws 1969, c. 121, § 2, p. 555; Laws 1980, LB 893, § 1; Laws 1989, LB 342, § 1; Laws 1995, LB 406, § 2; Laws 2012, LB852, § 2; Laws 2024, LB628, § 5.
Effective Date: July 19, 2024

21-2203. Powers, benefits, and privileges.

Except as the Nebraska Professional Corporation Act shall otherwise require, professional corporations shall enjoy all the powers, benefits, and privileges and be subject to all the duties, restrictions, and liabilities of a business corporation under the Nebraska Model Business Corporation Act and sections 21-301 to 21-325.02.

Source:Laws 1969, c. 121, § 3, p. 556; Laws 1995, LB 109, § 208; Laws 2014, LB749, § 270.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

21-2204. Articles of incorporation; certificate of registration; filing.

(1) One or more individuals residing within the State of Nebraska, each of whom is licensed or otherwise legally authorized to render the same professional service, may, by filing articles of incorporation and a certificate of registration with the Secretary of State, organize and become a shareholder in a professional corporation. The articles of incorporation shall conform to the requirements of section 21-220 and the certificate of registration shall conform to the requirements of sections 21-2216 to 21-2218.

(2) In addition to the requirements of subsection (1) of this section, the articles of incorporation shall contain a statement of the profession to be practiced by the corporation.

Source:Laws 1969, c. 121, § 4, p. 556; Laws 1995, LB 109, § 209; Laws 2004, LB 16, § 1; Laws 2014, LB749, § 271.

21-2205. Professional services that may be rendered.

A professional corporation shall render only one type of professional service and such services as may be ancillary thereto and shall not engage in any other profession. No corporation organized and incorporated under the Nebraska Professional Corporation Act may render professional services except through its officers, employees, and agents who are duly licensed or otherwise legally authorized to render such professional services within this state. This section shall not be interpreted to include in the term employee, as used in the act, clerks, secretaries, bookkeepers, technicians, and other assistants who are not usually and ordinarily considered by custom and practice to be rendering professional services to the public for which a license or other legal authorization is required.

A professional corporation may own real and personal property necessary or appropriate for rendering the type of professional services it was organized to render and may invest its funds in real estate, mortgages, stocks, bonds, and any other type of investments.

Source:Laws 1969, c. 121, § 5, p. 556; Laws 1997, LB 622, § 57.

21-2206. Corporate name.

The corporate name of a corporation organized under sections 21-2201 to 21-2222 shall contain the word professional corporation, or P.C. The use of the word company, corporation, incorporated, or any other word, abbreviation, affix or prefix indicating that it is a corporation in the corporate name of a corporation organized under sections 21-2201 to 21-2222, other than the words professional corporation, or the abbreviation P.C. is specifically prohibited.

Source:Laws 1969, c. 121, § 6, p. 557.

21-2207. Offices; designate in articles of incorporation; change; duties.

A professional corporation shall have only those offices which are designated by street address in the articles of incorporation, and shall not change any such office or offices without amendment of the articles of incorporation.

Source:Laws 1969, c. 121, § 7, p. 557.

21-2208. Shares of capital stock; issuance; transfer; conditions; violation; effect.

A professional corporation may issue shares of its capital stock only to persons who are duly registered in Nebraska to render the same professional service as that provided in its articles of incorporation. A shareholder in a professional corporation may voluntarily transfer his shares only to a person who is duly licensed to render the same professional service as that for which the corporation was organized. No shares shall be issued by or transferred upon the books of the professional corporation unless there has been filed with the Secretary of State a certificate by the regulating board stating that the person to whom the shares are to be issued or transferred is duly licensed to render the same professional service as that for which the corporation was organized. Any share transferred or issued in violation of this section shall be null and void.

Source:Laws 1969, c. 121, § 8, p. 557.

21-2209. Provision of services in another jurisdiction; license required, when; foreign corporation; requirements.

(1) A professional corporation may provide professional services in another jurisdiction if such corporation complies with all applicable laws of such jurisdiction regulating the rendering of professional services. Notwithstanding any other provision of the Nebraska Professional Corporation Act, no shareholder, director, officer, employee, or agent of a professional corporation shall be required to be licensed to render professional services in this state or to reside in this state if such shareholder, director, officer, employee, or agent does not render professional services in this state and is licensed in one or more states, territories of the United States, or the District of Columbia to render a professional service described in the professional corporation's articles of incorporation.

(2) A foreign professional corporation shall not transact business in this state unless it renders one of the professional services specified in subdivision (3) of section 21-2202 and complies with the provisions of the act, including, without limitation, registration with the appropriate regulating board in this state as provided in sections 21-2216 to 21-2218. A foreign professional corporation shall not transact business in this state if the laws of the jurisdiction under which such foreign professional corporation is incorporated do not allow for a professional corporation incorporated under the laws of this state to transact business in such jurisdiction.

(3)(a) A foreign professional corporation shall (i) apply for a certificate of authority in the same manner as a foreign business corporation pursuant to sections 21-2,203 to 21-2,220 and (ii) file with the Secretary of State a current certificate of registration as provided in sections 21-2216 to 21-2218.

(b) Except as otherwise provided in the Nebraska Professional Corporation Act, foreign professional corporations shall enjoy all the powers, benefits, and privileges and shall be subject to all the duties, restrictions, and liabilities of a foreign business corporation under sections 21-301 to 21-325.02 and the Nebraska Model Business Corporation Act.

(c) A foreign professional corporation shall not be required as a condition to obtaining a certificate of authority to have all of its shareholders, directors, and officers licensed to render professional services in this state if all of its shareholders, directors, and officers, except the secretary and assistant secretary, are licensed in one or more states or territories of the United States or the District of Columbia to render a professional service described in its articles of incorporation and any shareholder, director, officer, employee, or agent who renders professional services within this state on behalf of the foreign professional corporation is licensed to render professional services in this state.

(d) A foreign professional corporation is not required to obtain a certificate of authority to transact business in this state unless it maintains or intends to maintain an office in this state for the conduct of business or professional practice.

(4) For purposes of this section, foreign professional corporation means a corporation which is organized under the law of any other state or territory of the United States or the District of Columbia for the specific purpose of rendering professional services and which has as its shareholders only individuals who are duly licensed or otherwise legally authorized to render the same professional services as the corporation.

Source:Laws 1994, LB 488, § 2; Laws 1995, LB 109, § 210; Laws 1995, LB 406, § 3; Laws 2004, LB 16, § 2; Laws 2014, LB749, § 272.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

21-2210. Professional relationship and liabilities.

Nothing contained in sections 21-2201 to 21-2222 shall be interpreted to abolish, repeal, modify, restrict or limit the law now in effect in this state applicable to the professional relationship and liabilities between the person furnishing the professional services and the person receiving such professional services or to the standards of professional conduct. Any officer, shareholder, agent or employee of a corporation organized under sections 21-2201 to 21-2222 shall remain personally and fully liable and accountable for any negligent or wrongful act or misconduct committed by him, or by any person under his direct supervision and control, while rendering professional service on behalf of the corporation to the person for whom such professional services were being rendered. The corporation shall be liable up to the full value of its property for any negligent or wrongful acts or misconduct committed by any of its officers, agents or employees while they are engaged on behalf of the corporation.

Source:Laws 1969, c. 121, § 10, p. 558.

21-2211. Regulating board; powers.

Nothing in sections 21-2201 to 21-2222 shall restrict or limit in any manner the authority and duty of a regulating board in registering individuals licensed to perform professional services or the practice of the profession which is within the jurisdiction of such board, notwithstanding the fact that such individual is an officer, director, shareholder or employee of a professional corporation and renders such professional service or engages in the practice of such profession through the professional corporation.

Source:Laws 1969, c. 121, § 11, p. 558.

21-2212. Death or disqualification of shareholder; purchase or redemption of shares; death or disqualification of last remaining shareholder; powers of successor in interest.

(1) The articles of incorporation or the bylaws of the professional corporation shall provide for the purchase or redemption of the shares of any shareholder upon his or her death or disqualification to render the professional services of the professional corporation within this state.

(2) Unless otherwise provided in the articles of incorporation or the bylaws of the professional corporation, upon the death or disqualification of the last remaining shareholder of a professional corporation, a successor in interest to such deceased or disqualified shareholder may dissolve the corporation and wind up and liquidate its business and affairs, notwithstanding the fact that such successor in interest could not have become a shareholder of the professional corporation. The successor in interest may file articles of dissolution with the Secretary of State in accordance with section 21-2,186. Thereafter, the successor in interest may wind up and liquidate the corporation's business and affairs in accordance with section 21-2,188 and notify claimants in accordance with sections 21-2,189 and 21-2,190.

Source:Laws 1969, c. 121, § 12, p. 558; Laws 2010, LB759, § 1; Laws 2014, LB749, § 273.

21-2213. Officer, shareholder, agent, or employee; legally disqualified; effect.

If any officer, shareholder, agent, or employee of a corporation organized under sections 21-2201 to 21-2222 who has been rendering professional service to the public becomes legally disqualified to render such professional service within this state, or accepts employment that, pursuant to existing law, places restrictions or limitations upon his continued rendering of such professional services, he shall sever all employment with, and financial interests in, such corporation forthwith. A corporation's failure to require compliance with this provision shall constitute a ground for the forfeiture of its articles of incorporation and its dissolution.

Source:Laws 1969, c. 121, § 13, p. 558.

21-2214. Secretary of State; names of corporations; certify to Attorney General; legally disqualified officer, shareholder, agent, or employee; action for dissolution.

The Secretary of State shall certify to the Attorney General, from time to time, the names of all corporations organized pursuant to the provisions of sections 21-2201 to 21-2222 which have failed to comply with the provisions of section 21-2213. Whenever the Secretary of State shall certify the name of the corporation to the Attorney General as having given cause for dissolution, the Secretary of State shall concurrently mail to the corporation at its registered office a notice that such certification has been made. Upon the receipt of such certification, the Attorney General shall file an action in the name of the state against such corporation for its dissolution.

Source:Laws 1969, c. 121, § 14, p. 559.

21-2215. Involuntary dissolution; procedure.

Every action for the involuntary dissolution of a corporation failing to comply with the provisions of section 21-2213 shall be commenced by the Attorney General either in the district court of the county in which the registered office of the corporation is situated or in the district court of Lancaster County. Summons shall issue and be served as in other civil actions. If process is returned not found, the Attorney General shall cause publication to be made as in other civil cases in some newspaper published in the county where the last-known registered office of the corporation is situated, containing a notice of pendency of such action, the title of the court, the title of the action, and the date on and after which default may be entered. The Attorney General shall cause a copy of such notice to be mailed to the corporation at its last-known registered office or mailing address within ten days after the first publication thereof. The certificate of the Attorney General of the mailing of such notice shall be prima facie evidence thereof. Such notice shall be published at least once each week for two successive weeks, and the first publication thereof may begin at any time after the summons has been returned. Unless a corporation shall have been served with summons, no default shall be taken against it earlier than thirty days after the first publication of such notice.

Source:Laws 1969, c. 121, § 15, p. 559.

21-2216. Regulating board; certificate of registration; contents; filing; fee; display; electronic access; Secretary of State; duty; corporate suspension or dissolution; when.

(1) No corporation shall open, operate, or maintain an establishment or do business for any purposes set forth in the Nebraska Professional Corporation Act without (a) filing with the Secretary of State a certificate of registration from the regulating board of the particular profession for which the professional corporation is organized to do business, which certificate shall set forth the name and addresses of all shareholders as of the last day of the month preceding such filing, and (b) certifying that all shareholders, directors, and officers, except the secretary and the assistant secretary, are duly licensed to render the same professional services as those for which the corporation was organized. Application for a certificate of registration shall be made by the professional corporation to the regulating board in writing and shall contain the names of all officers, directors, shareholders, and professional employees of the professional corporation, the street address at which the applicant proposes to perform professional services, and such other information as may be required by the regulating board.

(2) If it appears to the regulating board that each shareholder, officer, director, and professional employee of the applicant, except the secretary and the assistant secretary, is licensed to practice the profession of the applicant and that each shareholder, officer, director, or professional employee is not otherwise disqualified from performing the professional services of the applicant, such regulating board shall certify, in duplicate upon a form bearing its date of issuance and prescribed by such regulating board, that such proposed or existing professional corporation complies with the provisions of the act and of the applicable rules and regulations of such regulating board. Each applicant for such registration certificate shall pay such regulating board a fee of twenty-five dollars for the issuance of such duplicate certificate.

(3) One copy of such certificate shall be prominently exposed to public view upon the premises of the principal place of business of each professional corporation organized under the act, and one copy shall be filed by the professional corporation with the Secretary of State who shall charge a fee as specified in section 21-205. The certificate from the regulating board shall be filed in the office of the Secretary of State together with the articles of incorporation. A registration certificate bearing an issuance date more than twelve months old shall not be eligible for filing with the Secretary of State.

(4) When licensing records of regulating boards are electronically accessible, the regulating board, in conjunction with the Secretary of State, shall develop an automated process to allow the Secretary of State to electronically access and verify the records. The access shall be made in lieu of the certificate of registration or registration certificate being prepared and issued by the regulating board. The professional corporation shall file with the Secretary of State an application setting forth the name and residence addresses of all officers, directors, shareholders, and professional employees as of the last day of the month preceding the date of the application and shall file with the Secretary of State an annual update thereafter. Each application shall be accompanied by a licensure verification fee as specified in section 21-205. The Secretary of State shall verify that all of the directors, officers, shareholders, and professional employees listed on the application, except for the secretary and assistant secretary, are duly licensed or otherwise legally authorized to render the same professional service for which the professional corporation was organized or a service ancillary to those which the professional corporation renders. Verification shall be done by electronically accessing the regulating board's licensing records or through compacts or other certifying organizations recognized by the regulating board. If any director, officer, shareholder, or professional employee is not licensed or otherwise legally authorized to perform the professional service that the professional corporation was organized to render, or a service ancillary to those which the professional corporation renders, the corporation will be suspended. The biennial report and tax cannot be filed and paid in the office of the Secretary of State until the corporation attests in writing that the director, officer, shareholder, or professional employee is licensed or otherwise legally authorized to practice, which shall be verified by the Secretary of State, or is no longer a director, officer, shareholder, or professional employee of the corporation. When the biennial report and the tax become delinquent, the corporation shall be dissolved for nonpayment of taxes in compliance with section 21-323.

Source:Laws 1969, c. 121, § 16, p. 560; Laws 1971, LB 489, § 1; Laws 1973, LB 157, § 4; Laws 1976, LB 749, § 1; Laws 1982, LB 928, § 16; Laws 1992, LB 1019, § 27; Laws 1995, LB 406, § 4; Laws 2003, LB 524, § 18; Laws 2008, LB379, § 20; Laws 2020, LB910, § 8; Laws 2024, LB628, § 6.
Effective Date: July 19, 2024

21-2217. Registration certificate; term; filing; failure to file; effect; not transferable.

Each registration certificate issued to each applicant shall expire by its own terms one year from the date of issuance and may not be renewed. Each professional corporation must annually apply to its regulating board for a registration certificate in the manner provided in section 21-2216. A certificate from the regulating board as provided in section 21-2216 must annually be filed with the Secretary of State within thirty days of the expiration date of the last certificate on file in the office of the Secretary of State or such corporation shall be suspended. If the corporation is suspended, the biennial report and tax cannot be filed and paid in the office of the Secretary of State until the certificate from the regulating board is filed in the office of the Secretary of State. If the report is not filed, the tax paid, and the certificate filed by April 16 of the current year, when the report and tax become delinquent, the corporation shall be dissolved for nonpayment of taxes in compliance with section 21-323. Registration certificates shall not be transferable or assignable.

Source:Laws 1969, c. 121, § 17, p. 561; Laws 1971, LB 489, § 2; Laws 1973, LB 157, § 5; Laws 1987, LB 186, § 2; Laws 2003, LB 524, § 19.

21-2218. Regulating board; certificate of registration; revoke or suspend; procedure.

The regulating board may, upon a form prescribed by it, suspend or revoke any certificate of registration of any professional corporation, upon the revocation or suspension of the license to render professional service of any officer, director, shareholder, or professional employee of a holder of a certificate of registration. Notice of such revocation shall be provided the professional corporation affected by sending by certified or registered United States mail a certified copy of such revocation to the professional corporation at its principal place of business set forth in the registration certificate so revoked. At the same time, the regulating board shall forward by regular United States mail a certified copy of such revocation to the Secretary of State who shall thereupon remove the revoked registration certificate from his file and deliver the same to such regulating board.

Source:Laws 1969, c. 121, § 18, p. 561.

21-2219. Merger or consolidation.

A professional corporation organized under the provisions of the Nebraska Professional Corporation Act may consolidate or merge with another domestic professional corporation organized under the act to render the same professional service or a foreign professional corporation admitted or which would qualify to be admitted under the act to render the same professional service in this state.

Source:Laws 1969, c. 121, § 19, p. 561; Laws 1994, LB 488, § 3.

21-2220. Sections; attorneys at law; applicability.

The provisions of sections 21-2201 to 21-2222 shall be applicable to attorneys at law only to the extent and under such terms and conditions as the Supreme Court of the State of Nebraska shall determine to be necessary and appropriate. Articles of incorporation of professional corporations organized to practice law shall contain such provisions as may be appropriate to comply with applicable rules of the court.

Source:Laws 1969, c. 121, § 20, p. 561.

21-2221. Sections; when not applicable.

Sections 21-2201 to 21-2222 shall not apply to any individual or group of individuals within this state who prior to December 25, 1969, were permitted to organize a corporation and perform personal services to the public by the means of a corporation, and sections 21-2201 to 21-2222 shall not apply to any corporations organized by such individual or group of individuals prior to December 25, 1969; Provided, any such individual or group of individuals or any such corporation may bring themselves and such corporation within the provisions of sections 21-2201 to 21-2222 by amending the articles of incorporation in such a manner as to be consistent with all the provisions of sections 21-2201 to 21-2222 and by affirmatively stating in the amended articles of incorporation that the shareholders have elected to bring the corporation within the provisions of sections 21-2201 to 21-2222.

Source:Laws 1969, c. 121, § 21, p. 562.

21-2222. Rights of natural persons.

Nothing contained in the Nebraska Professional Corporation Act is intended to alter the right of natural persons licensed to provide professional service to organize as a partnership, a limited liability company, an unincorporated association, a business trust, or any other lawful form of business organization.

Source:Laws 1969, c. 121, § 22, p. 562; Laws 1993, LB 121, § 158.

21-2223. Designated broker; professional corporation.

A designated broker as defined in section 81-885.01 may be organized as a professional corporation under the Nebraska Professional Corporation Act.

Source:Laws 2011, LB315, § 3.

21-2301. Terms, defined.

For purposes of the Nebraska Industrial Development Corporation Act, unless the context otherwise requires:

(1) Corporation means any corporation organized pursuant to the act;

(2) Local political subdivision means any county or any city of the metropolitan class; and

(3) Project means any land and any building or other improvement on the land, and all real and personal properties deemed necessary in connection therewith, whether or not now in existence, which shall be suitable for use by the following or by any combination of two or more of the following: (a) Any industry for the manufacturing, processing, or assembling of any agricultural, manufactured, or mineral products, (b) any commercial enterprise in storing, warehousing, distributing, or selling any products of agriculture, mining, or industry, or (c) any enterprise for research in connection with any of the foregoing or for the purpose of developing new products or new processes or improving existing products or known processes, or for the purpose of aiding in the development of facilities for the exploration of outer space or promoting the national defense, but shall not include facilities designed for the sale or distribution to the public of electricity, gas, water, telephone, or other services commonly classified as public utilities.

Source:Laws 1972, LB 1517, § 1; Laws 1995, LB 494, § 1.

21-2302. Legislative intent.

It is the intent of the Legislature to authorize the incorporation in any local political subdivision in this state of public corporations to acquire, enlarge, improve, expand, own, lease, and dispose of properties to the end that such corporations may be able to promote industry, develop trade, and further the use of the agricultural products and natural resources of this state by inducing manufacturing, industrial, commercial, and research enterprises (1) to establish new projects in this state, (2) to enlarge and expand existing projects located in this state, or (3) to relocate, in or around the same local political subdivision in this state, projects to replace projects all or a major portion of which have been acquired for one or more public purposes by the United States of America, the State of Nebraska, or any branch, arm, agency, instrumentality, or political subdivision of either, whether by purchase, through the exercise of the power of eminent domain, or by other means.

It is the further intent of the Legislature to vest the corporations with all the powers that may be necessary to enable them to accomplish their purposes, except that the corporations shall not have the power of eminent domain. It is not intended that the corporations themselves be authorized to operate any such manufacturing, industrial, commercial, or research enterprise. The Nebraska Industrial Development Corporation Act shall be liberally construed in conformity with such intention.

Source:Laws 1972, LB 1517, § 2; Laws 1995, LB 494, § 2.

21-2303. Incorporation; procedure; application; approval.

Whenever any number of natural persons, not less than three, each of whom shall be a duly qualified elector of and taxpayer in the local political subdivision, file with the governing body of any local political subdivision an application in writing seeking permission to apply for the incorporation of an industrial development board of the local political subdivision, the governing body shall proceed to consider the application. If the governing body, by appropriate resolution duly adopted, (1) finds and determines that it is wise, expedient, necessary, or advisable that the corporation be formed, (2) authorizes the persons making the application to proceed to form the corporation, and (3) approves the form of the articles of incorporation proposed to be used in organizing the corporation, then the persons making the application shall execute, acknowledge, and file articles of incorporation for the corporation under the Nebraska Industrial Development Corporation Act. No corporation may be formed unless the application has first been filed with the governing body of the local political subdivision and the governing body has adopted a resolution pursuant to this section.

Source:Laws 1972, LB 1517, § 3; Laws 1995, LB 494, § 3.

21-2304. Articles of incorporation; contents.

The articles of incorporation shall set forth: (1) The names and residences of the applicants together with a recital that each of them is an elector of and taxpayer in the local political subdivision, (2) the name of the corporation, (3) a recital that permission to organize the corporation has been granted by resolution duly adopted by the governing body of the local political subdivision and the date of the adoption of the resolution, (4) the location of the registered office of the corporation, which shall be in the local political subdivision, and the name of its current registered agent at such office, (5) the purposes for which the corporation is organized, (6) the number of directors of the corporation, (7) the period, if any, of duration of the corporation, and (8) any other matter which the applicants choose to insert in the articles of incorporation which is not inconsistent with the Nebraska Industrial Development Corporation Act or with the laws of this state. The articles of incorporation shall be subscribed and acknowledged before a notary public by each of the applicants.

Source:Laws 1972, LB 1517, § 4; Laws 1995, LB 494, § 4; Laws 2008, LB379, § 21.

21-2305. Articles of incorporation; filing.

When executed and notarized under section 21-2304, the articles of incorporation shall be filed with the Secretary of State. The Secretary of State shall examine the articles of incorporation and, if he or she finds (1) that the recitals contained in the articles of incorporation are correct, (2) that the requirements of section 21-2304 have been complied with, and (3) that the name of the corporation is not identical with or similar enough to the name of another corporation already in existence in this state as to lead to confusion and uncertainty, the Secretary of State shall approve the articles of incorporation and record them in his or her office. When the articles of incorporation have been made, filed, and approved the applicants shall constitute a corporation under the name set out in the articles of incorporation pursuant to the Nebraska Industrial Development Corporation Act.

Source:Laws 1972, LB 1517, § 5; Laws 1995, LB 494, § 5.

21-2306. Articles of incorporation; amendment; procedure.

The articles of incorporation may at any time be amended to make any changes or add any provisions which might have been included in the first instance. To amend the articles of incorporation, the members of the board of directors of the corporation shall file with the governing body of the local political subdivision an application in writing seeking permission to amend the articles of incorporation and specifying in the application the amendment proposed to be made. The governing body shall consider the application and if by appropriate resolution it (1) duly finds and determines that it is wise, expedient, necessary, or advisable that the proposed amendment be made, (2) authorizes the same to be made, and (3) approves the form of the proposed amendment, then the persons making the application shall execute an instrument embodying the amendment specified in the application. The instrument shall be subscribed and acknowledged before a notary public by each member of the board of directors and shall be filed with the Secretary of State. The Secretary of State shall examine the proposed amendment and, if he or she finds that the requirements of this section have been complied with and that the proposed amendment is within the scope of what might be included in the original articles of incorporation, the Secretary of State shall approve the amendment and record it in his or her office. When the amendment has been made, filed, and approved it shall become effective and the articles of incorporation shall be amended pursuant to the amendment. The articles of incorporation under the Nebraska Industrial Development Corporation Act shall be amended only as provided in this section.

Source:Laws 1972, LB 1517, § 6; Laws 1995, LB 494, § 6.

21-2307. Board of directors; qualifications; expenses; public meetings.

The corporation shall have a board of directors in which all powers of the corporation shall be vested and which shall consist of any number of directors, not less than three, all of whom shall be duly qualified electors of and taxpayers in the local political subdivision. The directors shall serve without compensation, except that they shall be reimbursed for expenses incurred in the performance of their duties under the Nebraska Industrial Development Corporation Act pursuant to sections 81-1174 to 81-1177. The directors shall be elected by the governing body of the local political subdivision. Any meeting held by the board of directors for any purpose shall be open to the public.

Source:Laws 1972, LB 1517, § 7; Laws 1981, LB 204, § 20; Laws 1995, LB 494, § 7; Laws 2020, LB381, § 16.

21-2308. Corporate powers.

(1) The corporation shall have the following powers together with all powers incidental or necessary for the performance of its duties under the Nebraska Industrial Development Corporation Act: (a) To have succession by its corporate name for the period specified in the articles of incorporation unless sooner dissolved as provided in section 21-2314, (b) to sue and be sued and to prosecute and defend, at law or in equity, in any court having jurisdiction of the subject matter and of the parties, (c) to have and to use a corporate seal and to alter the corporate seal at pleasure, (d) to acquire, whether by purchase, construction, exchange, gift, lease, or otherwise, and to improve, maintain, equip, and furnish one or more projects, including all real and personal properties which the board of directors may deem necessary in connection with the projects and regardless of whether or not any of the projects shall be in existence, (e) to lease to others any or all of its projects and to charge and collect rent for the projects and to terminate any lease upon the failure of the lessee to comply with any of the obligations of the lease, (f) to sell, exchange, donate, and convey any or all of its properties whenever its board of directors find the action to be in furtherance of the purposes for which the corporation was organized, (g) to issue its bonds for the purpose of carrying out its powers, (h) to mortgage and pledge any or all of its projects or any part or parts of its projects, whether then owned or thereafter acquired, and to pledge the revenue and receipts from the mortgage or pledge as security for the payment of the principal and interest on any bonds issued and any agreements made in connection with the bonds issued, and (i) to employ and pay compensation to the employees and agents, including attorneys, as the board of directors deem necessary for the business of the corporation.

(2)(a) If the local political subdivision is a county, any project or projects of the corporation shall be located within the county, except that in no event shall any project or part of a project be located within the corporate limits of a city or village.

(b) If the local political subdivision is a city of the metropolitan class, any project or projects of the corporation may be located within or without or partially within and partially without the city of the metropolitan class, subject to the following conditions: (i) No project or part of a project shall be located more than twenty-five miles from the corporate limits of the city of the metropolitan class, (ii) in no event shall any project or part of a project be located within the corporate limits of another city or of any village in this state, (iii) no project or part of a project shall be located within the police jurisdiction of another city or of any village in this state unless the governing body of the city or village has adopted a resolution consenting to the location of the project or part of the project in the police jurisdiction of the city or village, and (iv) no project or part of a project shall be located in a county other than that in which the city of the metropolitan class is situated unless the board of county commissioners of the other county has adopted a resolution consenting to the location of the project or part of the project in the county.

Source:Laws 1972, LB 1517, § 9; Laws 1995, LB 494, § 8; Laws 1996, LB 931, § 1.

21-2309. Corporate bonds; payment.

All bonds issued by the corporation shall be payable solely out of the revenue and receipts derived from the leasing or sale by the corporation of its projects or of any thereof as may be designated in the proceedings of the board of directors under which the bonds shall be authorized to be issued. The bonds may be executed and delivered by the corporation at any time, may be in a form and in denominations and of a tenor and maturities, may be in registered or bearer form either as to principal or interest or both, may be payable in installments and at a time or times not exceeding forty years from the date of issuance, may be payable at a place or places whether within or without the State of Nebraska, may bear interest at a rate or rates payable at a time or times and at a place or places and evidenced in a manner, may be executed by officers of the corporation and in a manner, and may contain provisions not inconsistent with this section, as provided in the proceedings of the board of directors authorizing the bonds to be issued. If deemed advisable by the board of directors, there may be included in the proceedings under which bonds of the corporation are authorized to be issued, an option to redeem all or any part of the bonds as specified in the proceedings at a price or prices and after notice or notices and on terms and conditions as set forth in the proceedings and as summarized on the face of the bonds. This section shall not be construed to confer on the corporation any right or option to redeem any bonds except as may be provided in the proceedings under which the bonds are issued. Any bonds of the corporation may be sold at public or private sale in a manner and from time to time as determined by the board of directors to be most advantageous. The corporation may pay all expenses, premiums, and commissions which its board of directors deems necessary or advantageous in connection with the issuance of the bonds. Issuance by the corporation of one or more series of bonds for one or more purposes shall not preclude it from issuing other bonds in connection with the same project or any other project, but the proceedings under which any subsequent bonds are issued shall recognize and protect any prior pledge or mortgage made for a prior issue of bonds, unless in the proceedings authorizing the prior issue the right was reserved to issue subsequent bonds on a parity with the prior issue. Any bonds of the corporation at any time outstanding may at any time be refunded by the corporation by the issuance of refunding bonds in an amount the board of directors deems necessary, but not exceeding an amount sufficient to refund the principal of the bonds to be refunded, together with any unpaid interest on the bonds to be refunded and any premiums and commissions necessary to be paid in connection therewith. Any refunding may be effected whether the bonds to be refunded shall have matured at that time or at a later date, either by sale of the refunding bonds and the application of the proceeds of the refunding bonds for the payment of the bonds to be refunded, or by the exchange of the refunding bonds for the bonds to be refunded with the consent of the holders of the bonds to be refunded, and regardless of whether or not the bonds to be refunded were issued in connection with the same projects or separate projects and regardless of whether or not the bonds proposed to be refunded are payable on the same date or on different dates or are due serially or otherwise. All bonds and the interest coupons applicable to the bonds are negotiable instruments.

Source:Laws 1972, LB 1517, § 10; Laws 1995, LB 494, § 9.

21-2310. Bonds; security.

The principal of and interest on bonds issued by the corporation shall be secured by a pledge of the revenue and receipts out of which the principal of and interest on the bonds is payable, and may be secured by a mortgage or deed of trust covering all or any part of the projects from which the revenue or receipts pledged may be derived, including any enlargements of and additions to any projects made at a later date. The resolution under which the bonds are authorized to be issued and any mortgage or deed of trust may contain any agreements and provisions respecting the maintenance of the projects covered thereby, the fixing and collection of rents for any portions thereof leased by the corporation to others, the creation and maintenance of special funds from the revenue and the rights and remedies available in the event of default, all as the board of directors deems advisable and not in conflict with the provisions of this section. Each pledge, agreement, mortgage, and deed of trust made for the benefit of security of any of the bonds of the corporation shall continue to be effective until the principal of and interest on the bonds for the benefit of which the pledge, agreement, mortgage, and deed of trust were made shall have been fully paid. In the event of default in payment or in any agreements of the corporation made as a part of the contract under which the bonds were issued, whether contained in the proceedings authorizing the bonds or in any mortgage or deed of trust executed as security for the bonds, the rights of the bondholders may be enforced by mandamus, the appointment of a receiver in equity, or by foreclosure of any such mortgage or deed of trust, or any one or more of the remedies.

Source:Laws 1972, LB 1517, § 11; Laws 1995, LB 494, § 10.

21-2311. Corporation; property; bonds; exempt from taxation.

The corporation and all properties at any time owned by it and only while owned by it and the income from the properties, and all bonds issued by it and the income from the bonds, shall be exempt from taxation in the State of Nebraska.

Source:Laws 1972, LB 1517, § 12; Laws 1995, LB 494, § 11.

21-2312. Local political subdivision; liability; exempt.

The local political subdivision shall not be liable for the payment of the principal of or interest on any bonds of the corporation or for the performance of any pledge, mortgage, obligation, or agreement of any kind undertaken by the corporation, and none of the bonds of the corporation or any of its agreements or obligations shall be construed to constitute an indebtedness of the local political subdivision within the meaning of any constitutional or statutory provision.

Source:Laws 1972, LB 1517, § 13; Laws 1995, LB 494, § 12.

21-2313. Corporation; nonprofit.

The corporation shall be a nonprofit corporation and no part of its net earnings remaining after payment of its expenses shall inure to the benefit of any individual, firm, or corporation, except that in the event the board of directors determines that sufficient provision has been made for the full payment of the expenses, bonds, and other obligations of the corporation, any net earnings of the corporation thereafter accruing shall be paid to the local political subdivision with respect to which the corporation was organized.

Source:Laws 1972, LB 1517, § 14; Laws 1995, LB 494, § 13.

21-2314. Corporation; dissolution; effect.

Whenever the board of directors by resolution determines that the purposes for which the corporation was formed have been substantially complied with and all bonds issued and all obligations incurred by the corporation have been fully paid, the board of directors shall execute and file for record in the office of the Secretary of State a certificate of dissolution reciting such facts and declaring the corporation dissolved. A certificate of dissolution shall be executed under the corporate seal of the corporation. Upon the filing of the certificate of dissolution, the corporation shall stand dissolved and the title to all funds and properties owned by it at the time of dissolution shall vest in the local political subdivision. Possession of the funds and properties shall be delivered to the local political subdivision.

Source:Laws 1972, LB 1517, § 15; Laws 1995, LB 494, § 14.

21-2315. Corporation; documents; filing without payment of fees or taxes.

The articles of incorporation, any deeds or other documents conveying properties to the corporation, any mortgages or deeds of trust executed by the corporation, any leases made by the corporation, and the certificate of dissolution of the corporation may all be filed for record without the payment of any tax or fees other than fees as authorized by law for the recording of the instruments.

Source:Laws 1972, LB 1517, § 16; Laws 1995, LB 494, § 15.

21-2316. Act; how construed.

The Nebraska Industrial Development Corporation Act shall not be construed as a restriction or limitation upon powers which the corporation might otherwise have under any laws of this state, but shall be construed as cumulative of any such powers. No proceedings, notice, or approval shall be required for the organization of the corporation or the issuance of any bonds or any instrument as security for the bonds or instrument, except as provided in the act, any other law to the contrary notwithstanding, but nothing in the act shall be construed to deprive the state and its governmental subdivisions of their respective police powers over any properties of the corporation or to impair any power of any official or agency of the state and its governmental subdivisions which may be otherwise provided by law.

Source:Laws 1972, LB 1517, § 17; Laws 1995, LB 494, § 16.

21-2317. Corporation incorporated under Nebraska Nonprofit Corporation Act; validated.

In all cases when there has been an attempt to incorporate a local political subdivision industrial development corporation under the provisions of the Nebraska Nonprofit Corporation Act, and articles of incorporation have been duly recorded and filed containing provisions substantially similar to those for incorporation under the provisions of the Nebraska Industrial Development Corporation Act, the corporation may, with the approval of the governing body of the local political subdivision in which it is located, become validated ab initio as a corporation organized under and governed by the act with respect to any bonds issued and all other matters concerning its affairs and business by executing and filing with the Secretary of State a certificate of its adoption of the act.

Source:Laws 1972, LB 1517, § 18; Laws 1995, LB 494, § 17; Laws 1996, LB 681, § 182.

Cross References

Nebraska Nonprofit Corporation Act, see section 21-1901.

21-2318. Act, how cited.

Sections 21-2301 to 21-2318 shall be known and may be cited as the Nebraska Industrial Development Corporation Act.

Source:Laws 1972, LB 1517, § 19.

21-2401. Repealed. Laws 1983, LB 599, § 15.

21-2402. Repealed. Laws 1983, LB 599, § 15.

21-2403. Repealed. Laws 1983, LB 599, § 15.

21-2404. Repealed. Laws 1983, LB 599, § 15.

21-2405. Repealed. Laws 1983, LB 599, § 15.

21-2406. Repealed. Laws 1983, LB 599, § 15.

21-2407. Repealed. Laws 1983, LB 599, § 15.

21-2408. Repealed. Laws 1983, LB 599, § 15.

21-2409. Repealed. Laws 1983, LB 599, § 15.

21-2410. Repealed. Laws 1983, LB 599, § 15.

21-2411. Repealed. Laws 1983, LB 599, § 15.

21-2412. Repealed. Laws 1983, LB 599, § 15.

21-2413. Repealed. Laws 1983, LB 599, § 15.

21-2414. Repealed. Laws 1983, LB 599, § 15.

21-2415. Repealed. Laws 1983, LB 599, § 15.

21-2416. Repealed. Laws 1983, LB 599, § 15.

21-2417. Repealed. Laws 1983, LB 599, § 15.

21-2418. Repealed. Laws 1988, LB 1110, § 26.

21-2419. Repealed. Laws 1988, LB 1110, § 26.

21-2420. Repealed. Laws 1988, LB 1110, § 26.

21-2421. Repealed. Laws 1988, LB 1110, § 26.

21-2422. Repealed. Laws 1988, LB 1110, § 26.

21-2423. Repealed. Laws 1988, LB 1110, § 26.

21-2424. Repealed. Laws 1988, LB 1110, § 26.

21-2425. Repealed. Laws 1988, LB 1110, § 26.

21-2426. Repealed. Laws 1988, LB 1110, § 26.

21-2427. Repealed. Laws 1988, LB 1110, § 26.

21-2428. Repealed. Laws 1988, LB 1110, § 26.

21-2429. Repealed. Laws 1988, LB 1110, § 26.

21-2430. Repealed. Laws 1988, LB 1110, § 26.

21-2431. Act, how cited.

Sections 21-2431 to 21-2453 shall be known and may be cited as the Shareholders Protection Act.

Source:Laws 1988, LB 1110, § 2.

21-2432. Legislative declarations.

It is declared that:

(1) This state has traditionally regulated the affairs of corporations, including the regulation of mergers and other business combinations. The United States Supreme Court has recently reaffirmed the power of states to regulate these affairs;

(2) Issuing public corporations encompass, represent, and affect, through their ongoing business operations, a variety of constituencies including shareholders, employees, customers, suppliers, and local communities and their economies whose welfare is vital to this state's interests;

(3) In order to promote the welfare of these constituencies, the regulation of the internal affairs of issuing public corporations by the laws of this state governing business corporations should allow for the stable, long-term growth of issuing public corporations;

(4) Business combinations involving public corporations frequently occur through acquisition techniques which in effect coerce shareholders to participate in the transaction;

(5) Business combinations involving public corporations are also frequently financed largely through debt to be repaid in the short term through changes in operations of the public corporation, the sale of assets of the public corporation, and other means. These measures involve a substantial risk of unfair business dealing, may prevent shareholders from realizing the full value of their holdings through forced mergers and other coercive devices, and may undermine the state's interest in promoting stable relationships involving the corporations that it charters; and

(6) The Shareholders Protection Act is not intended to alter the case law development on directors' fiduciary duties of care and loyalty in responding to challenges to control or the burden of proof with regard to compliance with those duties, nor is the act intended to prevent the use of any other lawful defensive measure.

Source:Laws 1988, LB 1110, § 1.

21-2433. Definitions, where found.

For purposes of the Shareholders Protection Act, unless the context otherwise requires, the definitions found in sections 21-2434 to 21-2447 shall be used.

Source:Laws 1988, LB 1110, § 3.

21-2434. Acquiring person, defined.

Acquiring person shall mean a person who makes or proposes to make a control-share acquisition. If two or more persons act as a partnership, limited partnership, limited liability company, syndicate, or other group pursuant to any agreement, arrangement, relationship, or understanding, whether or not in writing, for the purpose of acquiring, owning, or voting shares of an issuing public corporation, all members of the partnership, limited partnership, limited liability company, syndicate, or other group shall constitute a person for purposes of this section.

Source:Laws 1988, LB 1110, § 4; Laws 1993, LB 121, § 159.

21-2435. Affiliate, defined.

Affiliate shall mean a person who directly or indirectly controls, is controlled by, or is under common control with another person.

Source:Laws 1988, LB 1110, § 5.

21-2436. Associate, defined.

Associate, when used to indicate a relationship with any person, shall mean any of the following: (1) Any corporation, limited liability company, or organization of which the person is an officer, director, member, or partner or is, directly or indirectly, the owner of ten percent or more of any class of voting stock; (2) any trust or estate in which the person has at least a ten percent beneficial interest or as to which the person serves as trustee or personal representative or in a similar fiduciary capacity; and (3) any relative or spouse of the person, or any relative of the spouse, who has the same residence as such person.

Source:Laws 1988, LB 1110, § 6; Laws 1993, LB 121, § 160.

21-2437. Business combination, defined.

Business combination, when used in reference to any issuing public corporation and any interested shareholder of the issuing public corporation, shall mean:

(1) Any merger or consolidation of the issuing public corporation or any subsidiary of the issuing public corporation with:

(a) The interested shareholder; or

(b) Any other corporation, whether or not such other corporation is an interested shareholder of the issuing public corporation, that is or after the merger or consolidation would be an affiliate or associate of the interested shareholder;

(2) Any sale, lease, exchange, mortgage, pledge, transfer, or other disposition in a single transaction or a series of transactions to or with the interested shareholder or any affiliate or associate of the interested shareholder of assets of the issuing public corporation or any subsidiary of the issuing public corporation:

(a) Having an aggregate market value equal to ten percent or more of the aggregate market value of all the assets, determined on a consolidated basis, of the issuing public corporation; or

(b) Having an aggregate market value equal to ten percent or more of the aggregate market value of all the outstanding shares of the issuing public corporation;

(3) Any transaction or series of transactions which results in the issuance or transfer by the corporation or by any subsidiary of the corporation of any stock of the corporation or of such subsidiary to the interested shareholder if such stock has an aggregate market value equal to at least five percent of the aggregate market value of all the outstanding shares of the corporation except pursuant to the exercise of warrants or rights to purchase stock offered or distributed, or a dividend or distribution paid or made, pro rata to all shareholders of the issuing public corporation and except pursuant to the exercise or conversion of securities exercisable for or convertible into stock of such corporation or any such subsidiary, which securities were outstanding prior to the time that the interested shareholder became an interested shareholder;

(4) Any transaction involving the corporation or any subsidiary of the corporation which has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the corporation or of any such subsidiary which is owned directly or indirectly by the interested shareholder except as a result of immaterial changes due to fractional share adjustments; or

(5) Any receipt by the interested shareholder or any affiliate or associate of the interested shareholder of the benefit, directly or indirectly, except proportionately as a shareholder of the issuing public corporation, of any loans, advances, guarantees, pledges, or other financial assistance or any tax credits or other tax advantages provided by or through the issuing public corporation or any subsidiary of the issuing public corporation.

Source:Laws 1988, LB 1110, § 7.

21-2438. Control, controlling, controlled by, or under common control with, defined.

Control, controlling, controlled by, or under common control with shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise. A person who is the owner of ten percent or more of a corporation's outstanding voting stock shall be presumed to have control of the corporation in the absence of proof by a preponderance of the evidence to the contrary. A person shall not be considered to have control of a corporation if the person holds voting power, in good faith and not for the purpose of avoiding the Shareholders Protection Act, as an agent, bank, broker, nominee, custodian, or trustee for one or more owners who do not individually or as a group have control of the corporation.

Source:Laws 1988, LB 1110, § 8.

21-2439. Control-share acquisition, defined.

Control-share acquisition shall mean an acquisition, directly or indirectly, by an acquiring person of ownership of voting stock of an issuing public corporation that, except for the Shareholders Protection Act, would, when added to all other shares of the issuing public corporation owned by the acquiring person, entitle the acquiring person, immediately after the acquisition, to exercise or direct the exercise of a new range of voting power within any of the following ranges of voting power: (1) At least twenty percent but less than thirty-three and one-third percent; (2) at least thirty-three and one-third percent but less than or equal to fifty percent; or (3) over fifty percent.

The acquisition of any shares of an issuing public corporation shall not constitute a control-share acquisition if the acquisition is consummated in any of the following circumstances: (a) Before April 9, 1988; (b) pursuant to a contract existing before April 9, 1988; (c) pursuant to the laws of descent and distribution; (d) pursuant to the satisfaction of a pledge or other security interest created in good faith and not for the purpose of circumventing the Shareholders Protection Act; (e) pursuant to a merger or plan of share exchange effected in compliance with sections 21-2,161 to 21-2,168 if the issuing public corporation is a party to the plan of merger or plan of share exchange; or (f) from a person who owns over fifty percent of the shares of an issuing public corporation and who acquired the shares prior to April 9, 1988.

All shares, the ownership of which is acquired within a one-hundred-twenty-day period, and all shares, the ownership of which is acquired pursuant to a plan to make a control-share acquisition, shall be deemed to have been acquired in the same acquisition.

Source:Laws 1988, LB 1110, § 9; Laws 1995, LB 109, § 211; Laws 2014, LB749, § 274.

21-2440. Interested shareholder, defined.

Interested shareholder shall mean any person, other than the issuing public corporation or any subsidiary of the issuing public corporation, who is (1) the owner, directly or indirectly, of ten percent or more of the outstanding voting stock of such corporation or (2) an affiliate or associate of such corporation and at any time within the five-year period immediately prior to the date in question was the owner, directly or indirectly, of ten percent or more of the then outstanding voting stock of such corporation. For the purpose of determining whether a person is an interested shareholder, the number of shares of voting stock of such corporation deemed to be outstanding shall include shares deemed to be owned by such person but shall not include any other unissued shares of voting stock of such corporation which may be issuable pursuant to any agreement, arrangement, or understanding or upon exercise of conversion rights, warrants, or options or otherwise.

Source:Laws 1988, LB 1110, § 10.

21-2441. Interested shares, defined.

Interested shares shall mean the voting stock of an issuing public corporation owned by an acquiring person.

Source:Laws 1988, LB 1110, § 11.

21-2442. Issuing public corporation, defined.

Issuing public corporation shall mean:

(1) A domestic corporation (a) which has one hundred or more shareholders and (b) which has (i) its principal executive offices within Nebraska, (ii) assets in Nebraska with a market value of at least ten million dollars, or (iii) ten percent or more of its shareholders resident in Nebraska or ten percent or more of its shares owned by Nebraska residents. For purposes of section 21-2453 only, the determination described in this subdivision shall be made as of the share acquisition date in question. The residence of a shareholder shall be presumed to be the address appearing on the records of the corporation; or

(2) A foreign corporation which has (a) one hundred or more shareholders, (b) its principal executive offices within Nebraska, (c) assets in Nebraska with a market value of at least ten million dollars, (d) ten percent or more of its shareholders resident in Nebraska or ten percent or more of its shares owned by Nebraska residents, and (e) at least five hundred employees in Nebraska. For purposes of section 21-2453 only, the determination described in this subdivision shall be made as of the share acquisition date in question. The residence of a shareholder shall be presumed to be the address appearing on the records of the corporation.

Source:Laws 1988, LB 1110, § 12.

21-2443. Owner, defined.

Owner, when used with respect to any stock of any class or series, shall mean a person who individually or with or through any affiliates or associates (1) beneficially owns such stock, directly or indirectly, (2) has (a) the right to acquire such stock, whether such right is exercisable immediately or only after the passage of time, pursuant to any agreement, arrangement, or understanding or upon the exercise of conversion rights, exchange rights, warrants, or options or otherwise, except that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by such person or any of such person's affiliates or associates until such tendered stock is accepted for purchase or exchange or (b) the right to vote such stock pursuant to any agreement, arrangement, or understanding, except that a person shall not be deemed the owner of any stock if the agreement, arrangement, or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten or more persons, or (3) has any agreement, arrangement, or understanding for the purpose of acquiring, holding, voting, except voting pursuant to a revocable proxy or consent as described in subdivision (2)(b) of this section, or disposing of such stock with any other person who beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such stock.

Source:Laws 1988, LB 1110, § 13.

21-2444. Person, defined.

Person shall mean any individual, corporation, partnership, limited liability company, unincorporated association, or other entity.

Source:Laws 1988, LB 1110, § 14; Laws 1993, LB 121, § 161.

21-2445. Share acquisition date, defined.

Share acquisition date, with respect to any person and any issuing public corporation, shall mean the date that the person first becomes an interested shareholder of the issuing public corporation.

Source:Laws 1988, LB 1110, § 15.

21-2446. Subsidiary of an issuing public corporation, defined.

Subsidiary of an issuing public corporation shall mean any other corporation of which voting stock having a majority of the votes entitled to be cast is owned, directly or indirectly, by such issuing public corporation.

Source:Laws 1988, LB 1110, § 16.

21-2447. Voting stock, defined.

Voting stock shall mean stock of any class or series entitled to vote generally in the election of directors.

Source:Laws 1988, LB 1110, § 17.

21-2448. Stock or other property; market value; how determined.

The market value of stock or property other than cash or stock shall be determined as follows:

(1) In the case of stock, by:

(a) The highest closing sale price during the thirty days immediately before the date in question of a share of the same class or series of stock on the composite tape for stocks listed on the New York Stock Exchange or, if the same class or series of stock is not quoted on the composite tape or if the same class or series of stock is not listed on the New York Stock Exchange, on the principal United States securities exchange registered under the federal Securities Exchange Act of 1934 on which the same class or series of stock is listed;

(b) If the same class or series of stock is not listed on an exchange described in subdivision (1)(a) of this section, the highest closing bid quotation for a share of the same class or series of stock during the thirty days immediately before the date in question on the National Association of Securities Dealers Automated Quotation System or any similar system then in use; or

(c) If no quotations described in subdivision (1)(b) of this section are available, the fair market value on the date in question of a share of the same class or series of stock as determined in good faith by the board of directors of the issuing public corporation; and

(2) In the case of property other than cash or stock, the fair market value of the property on the date in question as determined in good faith by the board of directors of the issuing public corporation.

Source:Laws 1988, LB 1110, § 18.

21-2449. Acquiring person; deliver information statement; contents; amendment.

(1) An acquiring person may deliver to the issuing public corporation at its principal executive office an information statement which shall contain all of the following:

(a) The identity of the acquiring person and the identity of each affiliate and associate of the acquiring person;

(b) A reference that the information statement is made under the Shareholders Protection Act;

(c) The number and class or series of shares of the issuing public corporation owned, directly or indirectly, prior to the control-share acquisition by each such person;

(d) The number and class or series of shares of the issuing public corporation acquired or proposed to be acquired pursuant to the control-share acquisition by each such person and specification of the following ranges of voting power that the acquiring person in good faith believes would result from consummation of the control-share acquisition:

(i) At least twenty percent but less than thirty-three and one-third percent;

(ii) At least thirty-three and one-third percent but less than or equal to fifty percent; or

(iii) Over fifty percent; and

(e) The terms of the control-share acquisition or proposed control-share acquisition, including such objective facts as would be substantially likely to affect the decision of a shareholder with respect to voting on the control-share acquisition.

(2) If any material change occurs in the facts set forth in the information statement including any material increase or decrease in the number of shares of the issuing public corporation acquired or proposed to be acquired by such person, the acquiring person shall promptly deliver to the issuing public corporation at its principal executive office an amendment to the information statement containing information relating to such material change.

Source:Laws 1988, LB 1110, § 19.

21-2450. Consideration of voting rights; special meeting; conditions.

(1) If the acquiring person (a) makes a request in writing for a special meeting of the shareholders at the time of delivery of the information statement, (b) has made a control-share acquisition or has made a bona fide written offer to make a control-share acquisition, and (c) gives a written undertaking, within ten days after receipt by the issuing public corporation of the information statement, to pay or reimburse the issuing public corporation's expenses of a special meeting of the shareholders, a special meeting of the shareholders of the issuing public corporation shall be called for the purpose of considering the voting rights to be accorded to shares acquired or to be acquired pursuant to the control-share acquisition. The special meeting shall be held no later than fifty days after receipt of the information statement unless the acquiring person agrees to a later date. If the acquiring person so requests in writing at the time of delivery of the information statement, the special meeting shall not be held sooner than thirty days after receipt by the issuing corporation of the information statement.

(2) If no request for a special meeting is made, consideration of the voting rights to be accorded to shares acquired or to be acquired pursuant to the control-share acquisition shall be presented at the next special or annual meeting of the shareholders, notice of which has not been given prior to the receipt of the information statement, unless the matter of the voting rights becomes moot.

(3) The notice of the meeting shall be accompanied at a minimum by a copy of the information statement, a copy of any amendment to the information statement previously delivered to the issuing public corporation, and a statement disclosing that the board of the issuing public corporation recommends approval of, expresses no opinion and is remaining neutral toward, recommends rejection of, or is unable to take a position with respect to according voting rights to shares acquired or to be acquired in the control-share acquisition. The notice of meeting shall be given at least thirty days before the meeting.

Source:Laws 1988, LB 1110, § 20.

21-2451. Control-share acquisition; voting rights of shares.

Shares acquired in a control-share acquisition shall have the same voting rights as other shares of the same class or series in all elections of directors but shall have voting rights on all other matters only if approved by a vote of shareholders of the issuing public corporation at a special or annual meeting of shareholders pursuant to the Shareholders Protection Act and, to the extent so approved, shall have the same voting rights as other shares of the same class or series. Any such control-share acquisition shall be approved by (1) the affirmative vote of the holders of a majority of the shares entitled to vote which are not interested shares and (2) in the case of any shares entitled to vote as a class, the affirmative vote of the holders of a majority of the shares of such class which are not interested shares.

Any shares acquired in a control-share acquisition which do not have voting rights accorded to them by approval of a resolution of shareholders shall regain such voting rights on transfer to a person, other than the acquiring person or any affiliate or associate of the acquiring person, unless the acquisition of the shares by the other person constitutes a control-share acquisition, in which case the voting rights of the shares shall be subject to the Shareholders Protection Act.

Source:Laws 1988, LB 1110, § 21.

21-2452. Business combination; prohibited activities.

Except as provided in section 21-2453, no issuing public corporation shall engage in any business combination with any interested shareholder of the issuing public corporation for a period of five years after the interested shareholder's share acquisition date unless the business combination or the acquisition of shares made by the interested shareholder on the interested shareholder's share acquisition date is approved by the board of directors of the issuing public corporation prior to the interested shareholder's share acquisition date.

Source:Laws 1988, LB 1110, § 22.

21-2453. Act; exemptions.

The Shareholders Protection Act shall not apply to any of the following:

(1) Unless the articles of incorporation provide otherwise, a business combination with an interested shareholder who was an interested shareholder immediately before April 9, 1988, unless the interested shareholder subsequently increased its ownership of the voting power of the outstanding voting stock of the issuing public corporation to a proportion in excess of the proportion of voting power that the interested shareholder owned immediately before April 9, 1988, excluding an increase approved by the board of directors of the issuing public corporation before the increase occurred;

(2) An issuing public corporation if the corporation's original articles of incorporation contain a provision expressly electing not to be governed by the act;

(3) An issuing public corporation if the corporation, by action of its board of directors, adopts an amendment to its bylaws within forty-five days of April 9, 1988, expressly electing not to be governed by the act, which amendment shall not be further amended by the board of directors;

(4) An issuing public corporation if the corporation does not have a class of voting stock that is listed on a national securities exchange or is authorized for quotation on an interdealer quotation system of a registered national securities association unless such circumstances result from action taken by an interested shareholder or a transaction in which a person becomes an interested shareholder;

(5) A business combination of an issuing public corporation with an interested shareholder which became an interested shareholder inadvertently and as soon as practicable divested sufficient shares so that the shareholder ceased to be an interested shareholder; or

(6) A business combination of an issuing public corporation with an interested shareholder which was an interested shareholder immediately before April 9, 1988, and inadvertently increased its ownership of the voting power of the outstanding voting stock of the issuing public corporation to a proportion in excess of the proportion of voting power that the interested shareholder owned immediately before April 9, 1988, if the interested shareholder divests itself of a sufficient amount of voting stock so that the interested shareholder is no longer the owner of a proportion of the voting power in excess of the proportion of voting power that the interested shareholder held immediately before April 9, 1988.

Source:Laws 1988, LB 1110, § 23.

21-2501. Act, how cited.

Sections 21-2501 to 21-2508 shall be known and may be cited as the Name Protection Act.

Source:Laws 1986, LB 1025, § 1.

21-2502. Registration of corporate name; procedure; term.

(1) Any corporation which has done business under a corporate name in the State of Nebraska for a period of twenty-five years or more may register such name with the Secretary of State by filing in the office of the Secretary of State, in duplicate, on a form to be furnished by the Secretary of State, an application for registration of that name setting forth the following information:

(a) The name and street address of the corporation applying for such registration and the state of incorporation;

(b) The date the name was first used anywhere and the date such name was first used in this state by the applicant; and

(c) A statement that the applicant is the owner of the name and that no other person has the right to use such name in this state either in the identical form or in such near resemblance as might be calculated to deceive or to be mistaken therefor.

(2) The application shall be signed by an officer of the corporation applying, whose signature shall be acknowledged before a notary public. The application shall be accompanied by a filing fee of two hundred dollars payable to the Secretary of State. The Secretary of State shall return a duplicate stamped copy with the date of filing to the applicant or the representative submitting the application for filing.

(3) Registration of the corporate name under this section shall be effective for ten years from the date of registration and shall not be renewable by the registrant.

Source:Laws 1986, LB 1025, § 2.

21-2503. Corporation dissolution; change of name; effect; continued use of name; not required.

Any corporation may be dissolved or may change its name from the name registered in accordance with the Name Protection Act, and such dissolution or change of name shall not be deemed an abandonment of any name registered pursuant to such act. Continued use of a registered name shall not be a prerequisite to protection of a registered name under such act.

Source:Laws 1986, LB 1025, § 3.

21-2504. Corporate name; registration; assignment; procedure.

Any corporate name and its registration shall be assignable by instruments in writing duly executed. The instruments shall include the street address, city, and state of the assignee and shall be recorded with the Secretary of State, in duplicate, upon the payment of a fee of five dollars payable to the Secretary of State who, upon recording the assignment, shall return the duplicate copy, stamped with the date of filing, to the applicant or the representative submitting the assignment for filing.

Source:Laws 1986, LB 1025, § 4.

21-2505. Names registered; Secretary of State; duties.

The Secretary of State shall keep for public information a record of all names registered under the Name Protection Act.

Source:Laws 1986, LB 1025, § 5.

21-2506. Secretary of State; cancel registration; when.

The Secretary of State shall cancel from the register:

(1) Any registration for which the Secretary of State receives a voluntary request for cancellation from the registrant or the assignee of record;

(2) All registrations granted under the Name Protection Act upon completion of the term of ten years from the date of registration;

(3) Any registration concerning which a court of competent jurisdiction finds:

(a) That the registration was granted improperly; or

(b) That the registration was obtained fraudulently; or

(4) Any registration which a court of competent jurisdiction orders canceled on any ground.

Source:Laws 1986, LB 1025, § 6.

21-2507. False or fraudulent registration; liability.

Any person who for himself or herself or on behalf of any other person files or registers any name in the office of the Secretary of State under the Name Protection Act by knowingly making any false or fraudulent representation or declaration, verbally or in writing, or by any other fraudulent means, shall be liable to pay all damages sustained in consequence of such filing or registration, to be recovered by or on behalf of the party injured in any court of competent jurisdiction.

Source:Laws 1986, LB 1025, § 7.

21-2508. Wrongful use of registered name; liability; action to enjoin; other remedies.

Any person shall be liable in a civil action by the owner of a registered name for a wrongful use of such name, and any owner of a name registered under the Name Protection Act may enjoin the wrongful use of the registered name. Any court of competent jurisdiction may grant an injunction to restrain such use and may require the defendant to pay to such owner all profits derived from and all damages suffered by reason of such wrongful use. Proof of monetary damage, loss of profits, competition between the parties, or intent to deceive shall not be required. Costs shall be allowed to the prevailing party unless the court otherwise directs. The court, in its discretion, may award attorney's fees to the prevailing party if (1) the party complaining of the improper or unauthorized use of a registered name has brought an action which he or she knew to be groundless or (2) the party charged with the improper or unauthorized use of a registered name has willfully engaged in the improper or unauthorized use of the registered name. The relief provided in this section is in addition to remedies otherwise available for the same conduct under the common law or other statutes of this state.

Source:Laws 1986, LB 1025, § 8.

21-2601. Repealed. Laws 2013, LB 283, § 10.

21-2601.01. Repealed. Laws 2013, LB 283, § 10.

21-2602. Repealed. Laws 2013, LB 283, § 10.

21-2603. Repealed. Laws 2013, LB 283, § 10.

21-2604. Repealed. Laws 2013, LB 283, § 10.

21-2604.01. Repealed. Laws 2013, LB 283, § 10.

21-2605. Repealed. Laws 2013, LB 283, § 10.

21-2606. Repealed. Laws 2013, LB 283, § 10.

21-2607. Repealed. Laws 2013, LB 283, § 10.

21-2608. Repealed. Laws 2013, LB 283, § 10.

21-2609. Repealed. Laws 2013, LB 283, § 10.

21-2610. Repealed. Laws 2013, LB 283, § 10.

21-2611. Repealed. Laws 2013, LB 283, § 10.

21-2612. Repealed. Laws 2013, LB 283, § 10.

21-2613. Repealed. Laws 2013, LB 283, § 10.

21-2614. Repealed. Laws 2013, LB 283, § 10.

21-2615. Repealed. Laws 2013, LB 283, § 10.

21-2616. Repealed. Laws 2013, LB 283, § 10.

21-2617. Repealed. Laws 2013, LB 283, § 10.

21-2617.01. Repealed. Laws 2013, LB 283, § 10.

21-2618. Repealed. Laws 2013, LB 283, § 10.

21-2619. Repealed. Laws 2013, LB 283, § 10.

21-2620. Repealed. Laws 2013, LB 283, § 10.

21-2621. Repealed. Laws 2013, LB 283, § 10.

21-2622. Repealed. Laws 2013, LB 283, § 10.

21-2623. Repealed. Laws 2013, LB 283, § 10.

21-2624. Repealed. Laws 2013, LB 283, § 10.

21-2625. Repealed. Laws 2013, LB 283, § 10.

21-2626. Repealed. Laws 2013, LB 283, § 10.

21-2627. Repealed. Laws 2013, LB 283, § 10.

21-2628. Repealed. Laws 2013, LB 283, § 10.

21-2629. Repealed. Laws 2013, LB 283, § 10.

21-2630. Repealed. Laws 2013, LB 283, § 10.

21-2631. Repealed. Laws 2013, LB 283, § 10.

21-2631.01. Repealed. Laws 2013, LB 283, § 10.

21-2631.02. Repealed. Laws 2013, LB 283, § 10.

21-2631.03. Repealed. Laws 2013, LB 283, § 10.

21-2632. Repealed. Laws 2013, LB 283, § 10.

21-2632.01. Repealed. Laws 2013, LB 283, § 10.

21-2633. Repealed. Laws 2013, LB 283, § 10.

21-2634. Repealed. Laws 2013, LB 283, § 10.

21-2635. Repealed. Laws 2013, LB 283, § 10.

21-2636. Repealed. Laws 2013, LB 283, § 10.

21-2637. Repealed. Laws 2013, LB 283, § 10.

21-2638. Repealed. Laws 2013, LB 283, § 10.

21-2639. Repealed. Laws 2013, LB 283, § 10.

21-2640. Repealed. Laws 2013, LB 283, § 10.

21-2641. Repealed. Laws 2013, LB 283, § 10.

21-2642. Repealed. Laws 2013, LB 283, § 10.

21-2643. Repealed. Laws 2013, LB 283, § 10.

21-2644. Repealed. Laws 2013, LB 283, § 10.

21-2645. Repealed. Laws 2013, LB 283, § 10.

21-2646. Repealed. Laws 2013, LB 283, § 10.

21-2647. Repealed. Laws 2013, LB 283, § 10.

21-2648. Repealed. Laws 2013, LB 283, § 10.

21-2649. Repealed. Laws 2013, LB 283, § 10.

21-2650. Repealed. Laws 2013, LB 283, § 10.

21-2651. Repealed. Laws 2013, LB 283, § 10.

21-2652. Repealed. Laws 2013, LB 283, § 10.

21-2653. Repealed. Laws 2013, LB 283, § 10.

21-2654. Repealed. Laws 2013, LB 283, § 10.

21-2701. Terms, defined.

As used in sections 21-2701 to 21-2703, unless the context otherwise requires:

(1) Private corporation shall mean a corporation organized under Chapter 21, with a purpose of establishing, operating and maintaining a foreign trade zone;

(2) Public corporation shall mean this state; a political subdivision thereof; any municipality therein; any public agency of the state, of any political subdivision thereof, or of any municipality therein; or any other corporate instrumentality of this state, a political subdivision of this state or a municipality in this state; and

(3) Act of Congress shall mean the Act of Congress approved June 18, 1934, entitled An act to provide for the establishment, operation, and maintenance of foreign trade zones in ports of entry of the United States, to expedite and encourage foreign commerce, and for other purposes, as amended, and commonly known as the Foreign Trade Zone Act of 1934.

Source:Laws 1973, LB 387, § 1; R.S.1943, (1991), § 21-20,145.

21-2702. Foreign trade zones; establishment, operation, and maintenance.

Any private corporation or public corporation shall have the power to apply to the proper authorities of the United States for a grant of the privilege of establishing, operating and maintaining foreign trade zones and foreign trade subzones under the provisions of the Act of Congress and, when such grant is issued, to accept such grant and to establish, operate and maintain such foreign trade zones and foreign trade subzones and to do all things necessary and proper to carry into effect the establishment, operation and maintenance of such zones, all in accordance with the Act of Congress and other applicable law and rules and regulations.

Source:Laws 1973, LB 387, § 2; R.S.1943, (1991), § 21-20,146.

21-2703. Foreign trade zones; select and describe locations.

Any private corporation or public corporation may select and describe the location of the foreign trade zones or foreign trade subzones for which an application is made, and make such rules and regulations concerning the establishment, operation and maintenance of the foreign trade zones or foreign trade subzones as may be necessary to comply with the Act of Congress or as may be necessary to comply with the rules and regulations made in accordance with the Act of Congress.

Source:Laws 1973, LB 387, § 3; R.S.1943, (1991), § 21-20,147.

21-2801. Religious association; ceases to exist; vesting of property.

Whenever any religious association organized as follows:

(1) Unincorporated church, parish, congregation, or association which may or may not recognize some superior church authority,

(2) The single church, parish, or congregation which is incorporated as an entity and is legally independent of any superior denominational organization or authority, or

(3) The single church, parish, or congregation which is incorporated as a part of, and subject to the authority of some denominational organization having general supervision over it, ceases to exist or to maintain its organization, all its remaining real or personal property shall vest in, and be transferred, in the manner provided in section 21-2802, to the incorporated annual conference, presbytery, diocese, diocesan council, state convention, or other incorporated governing, supervising, or cooperative body of the same religious denomination within whose jurisdiction such association was located, or with which it was affiliated, it being intended that such property shall vest in and be transferred to the next highest governing, supervising, or cooperative corporate body of the same denomination, having its original corporate existence within this state; Provided, that associations or corporations as defined in subdivision (1), (2), or (3) of this section, which have been affiliated with or subject to superior church authority or denominational statewide cooperative agency or have used the name of such superior church or denominational statewide cooperative agency during the ownership of its property, becomes abandoned by their own act or as defined herein and where the governing law, constitution, articles of incorporation, or bylaws of such superior church authority or denominational statewide cooperative agency provides for reversion of such property to the superior church authority or denominational statewide cooperative agency or supervision of the disposition thereof, then, in case such local church is abandoned or ceases to exist or maintain its organization, in lieu of court proceedings, the superior church authority or denominational statewide cooperative agency may record a certified copy of that portion of its governing law, constitution, articles of incorporation, or bylaws in the office of the register of deeds of the county in which the real estate or other property is located and such provisions shall then be binding upon such property; and provided further, that the trustees or officers of such abandoned local church may, within three months after such recording, file an action in the district court to test the validity of the provisions of such governing law of the superior church authority or denominational statewide cooperative agency. When any religious society as defined in subdivision (1), (2), or (3) of this section shall have ceased to maintain periodic meetings for the purpose of worship or religious instruction for a period of two consecutive years, or if the governing body or congregation of the church votes to dissolve or votes to discontinue holding religious services, such society shall be deemed to have ceased to exist or to maintain its organization within the meaning of this section.

Source:Laws 1967, c. 105, § 18, p. 333; R.S.1943, (1991), § 21-1993.

21-2802. Religious association; vesting of property; application; notice; transfer of property.

Upon the application to the district court for the county where such religious association was located, as provided in section 21-2801, by any officer, director, or trustee of the body in which such property is to vest as aforesaid, the court shall appoint a time for hearing the application. Three weeks' published and posted notice thereof shall be given, and any additional notice which the court may direct. Such notice shall direct all interested persons to appear on the date of such hearing and make their objections thereto, if any they have, and it shall be published in a newspaper published in whole or in part within such county or, if there is no such newspaper, in a newspaper published within this state and of general circulation within such county, as directed by the court. The posted notice shall be in three prominent public places within the county where such property is located. If, upon hearing, it appears that a proper case exists under section 21-2801, the court shall adjudge and direct a transfer of such property to be made through a trustee appointed by it for that purpose. Affidavits of the publishing and posting of the notice may be filed in the proceedings, and they shall be evidence in all actions and proceedings in the courts of this state.

Source:Laws 1967, c. 105, § 19, p. 334; R.S.1943, (1991), § 21-1994.

21-2803. Religious association; affiliated with other association; withdrawal; use of name.

Whenever any religious association, as defined in subdivision (1) or (2) of section 21-2801, shall have been affiliated with a conference, missionary society, state convention, or other body which is incorporated as the statewide cooperative agency of affiliated religious associations as defined in subdivision (1) or (2) of section 21-2801, and while so affiliated and with the assistance and cooperation of such statewide denominational cooperative agency has acquired property and caused title to the same to be vested in the name of such local association using in whole or in part the denominational designation of the denomination of such statewide denominational cooperative agency and thereafter, after a substantial change in the membership, such local religious association shall withdraw from and terminate its affiliation with the statewide denominational cooperative agency then such religious society, so far as title to the property acquired during such cooperation is concerned, shall be deemed to have ceased to exist or maintain its organization, within the meaning of section 21-2801, and shall not be thereafter entitled to use in the name of such religious association the characteristic denominational designation or other words calculated to induce the belief that it is in any way belonging to or affiliated with the denomination maintaining such a statewide cooperative agency.

Source:Laws 1967, c. 105, § 20, p. 335; R.S.1943, (1991), § 21-1995.

21-2901. Act, how cited.

Sections 21-2901 to 21-29,134 shall be known and may be cited as the Nebraska Limited Cooperative Association Act.

Source:Laws 2007, LB368, § 1; Laws 2008, LB848, § 1.

21-2902. Legislative power to amend or repeal.

The Legislature shall have the power to amend or repeal all or part of the Nebraska Limited Cooperative Association Act at any time and all domestic and foreign limited cooperative associations subject to the act shall be governed by the amendment or repeal.

Source:Laws 2007, LB368, § 2.

21-2903. Terms, defined.

For purposes of the Nebraska Limited Cooperative Association Act, unless the context otherwise requires:

(1) Articles of organization includes initial, amended, and restated articles of organization. In the case of a foreign limited cooperative association, the term includes all records that:

(a) Have a function similar to articles of organization; and

(b) Are required to be filed in the office of the Secretary of State or other official having custody of articles of organization in this state or the country under whose law it is organized;

(2) Bylaws includes initial, amended, and restated bylaws;

(3) Contribution means a benefit that a person provides to a limited cooperative association in order to become a member or in the person's capacity as a member;

(4) Debtor in bankruptcy means a person that is the subject of:

(a) An order for relief under 11 U.S.C. 101 et seq., as the sections existed on January 1, 2008; or

(b) An order comparable to an order described in subdivision (4)(a) of this section under federal, state, or foreign law governing insolvency;

(5) Designated office means the office designated under section 21-2913;

(6) Distribution means a transfer of money or other property from a limited cooperative association to a member because of the member's financial rights or to a transferee of a member's financial rights. The term does not include the amounts described in section 21-2983;

(7) Domestic entity means an entity organized under the laws of this state;

(8) Entity means an association, a business trust, a company, a corporation, a cooperative, a limited cooperative association, a general partnership, a limited liability company, a limited liability partnership, or a limited partnership, domestic or foreign;

(9) Financial rights means the right to participate in allocation and distribution under sections 21-2980 and 21-2981 but does not include rights or obligations under a marketing contract governed by sections 21-2949 to 21-2952;

(10) Foreign limited cooperative association means a foreign entity organized under a law similar to the Nebraska Limited Cooperative Association Act in another jurisdiction;

(11) Foreign entity means an entity that is not a domestic entity;

(12) Governance rights means the right to participate in governance of the limited cooperative association under section 21-2928;

(13) Investor member means a member that has made a contribution to a limited cooperative association and is not permitted or required by the articles of association or bylaws to conduct patronage business with the limited cooperative association in order to receive financial rights;

(14) Limited cooperative association means an association organized under the Nebraska Limited Cooperative Association Act;

(15) Member means a person that is a patron member or investor member or both in a limited cooperative association. The term does not include a person that has dissociated as a member;

(16) Members' interest means the interest of a patron member or investor member;

(17) Members' meeting means an annual or a special members' meeting;

(18) Patron means a person or entity that conducts economic activity with a limited cooperative association which entitles the person to receive financial rights based upon patronage;

(19) Patronage means business transactions between a limited cooperative association and a person which entitles the person to receive financial rights based on the value or quantity of business done between the person and the limited cooperative association;

(20) Patron member means a person admitted as a patron member pursuant to the articles of organization or bylaws and who is permitted or required by the articles of organization or bylaws to conduct patronage business with the limited cooperative association in order to receive financial rights;

(21) Person means an individual; an entity; a trust; a governmental subdivision, agency, or instrumentality; or any other legal or commercial entity;

(22) Principal office means the office, whether or not in this state, where the principal executive office of a limited cooperative association or a foreign limited cooperative association is located;

(23) Record, used as a noun, means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form;

(24) Required information means the information a limited cooperative association is required to maintain under section 21-2910;

(25) Sign means, with the present intent to authenticate a record:

(a) To execute or adopt a tangible symbol; or

(b) To attach or logically associate an electronic symbol, sound, or process to or with a record;

(26) State means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States;

(27) Transfer includes assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, and transfer by operation of law; and

(28) Voting member means a member that, under the articles of organization or bylaws, has a right to vote on matters subject to vote by members.

Source:Laws 2007, LB368, § 3; Laws 2008, LB848, § 2.

21-2904. Nature of limited cooperative association.

(1) A limited cooperative association is an entity distinct from its members.

(2) A limited cooperative association may be organized under the Nebraska Limited Cooperative Association Act for any lawful purpose, regardless of whether or not for profit, except for the purpose of being a financial institution which is subject to supervision by the Department of Banking and Finance under section 8-102 or which would be subject to supervision by the department if chartered by the State of Nebraska or the business of an insurer as described in section 44-102.

(3) A limited cooperative association has a perpetual duration, unless otherwise set forth in its articles of organization or bylaws.

Source:Laws 2007, LB368, § 4.

21-2905. Powers.

(1) Except as otherwise provided in the Nebraska Limited Cooperative Association Act, a limited cooperative association has the power to do all things necessary or convenient to carry on its activities, including the power to sue, be sued, and defend in its own name and to maintain an action against a member for harm caused to the limited cooperative association by a violation of the articles of organization or bylaws of the limited cooperative association or violation of a duty to the limited cooperative association.

(2)(a) Except as otherwise provided in subdivision (b) of this subsection, a limited cooperative association shall not issue bonds, debentures, or other evidence of indebtedness to a member unless, prior to issuance, the association provides the member with a written disclosure statement that includes a conspicuous notice that the money is not insured or guaranteed by an agency or instrumentality of the United States Government and that the investment may lose value.

(b) A limited cooperative association need not provide the written disclosure statement described in subdivision (a) of this subsection to any member that is described in subdivision (8) of section 8-1111.

(c) Any extension of credit by a limited cooperative association to a member in connection with the sale of the association's goods or services shall not:

(i) Exceed nine months from the date of such sale; or

(ii) Be secured by real property, except that an extension of credit in default at the end of the original term may be extended or renewed for successive periods not exceeding nine months in length and may be secured by real property at the end of the original term or any extension or renewal thereof.

(d) No new money may be advanced by an association in connection with the extension or renewal of an extension of credit granted under subdivision (2)(c) of this section.

Source:Laws 2007, LB368, § 5.

21-2906. Name.

(1) The name of a limited cooperative association must contain the words "limited cooperative association" or their abbreviation.

(2) The name of a limited cooperative association shall not be the same as or deceptively similar to:

(a) The name of any entity organized or authorized to transact business in this state;

(b) A name reserved or registered under section 21-2907 or 21-2908; and

(c) A fictitious name approved for a foreign limited cooperative association authorized to transact business in this state.

Source:Laws 2007, LB368, § 6.

21-2907. Reservation of name.

(1) A person may reserve the exclusive use of the name of a limited cooperative association, including a fictitious name for a foreign limited cooperative association whose name is unavailable, by delivering an application to the Secretary of State for filing. The application shall set forth the name and address of the applicant and the name proposed to be reserved. If the Secretary of State finds that the name applied for is available, it shall be reserved for the applicant's exclusive use for a nonrenewable one-hundred-twenty-day period.

(2) The owner of a name reserved for a limited cooperative association may transfer the reservation to another person by delivering to the Secretary of State a signed notice of the transfer which states the name and address of the transferee.

Source:Laws 2007, LB368, § 7.

21-2908. Foreign limited cooperative association; name.

(1) A foreign limited cooperative association may register its name pursuant to section 21-2907 if the name is not the same as or deceptively similar to names that are unavailable under section 21-2906.

(2) A foreign limited cooperative association may register its name, or its name with any addition required by section 21-29,106, by delivering to the Secretary of State for filing an application:

(a) Setting forth its name, or its name with any addition required by section 21-29,106, the state or country of organization and date of its organization, and a brief description of the nature of the affairs in which it is engaged; and

(b) Accompanied by a certificate of existence or authorization from the state or country of organization.

(3) A foreign limited cooperative association whose registration is effective may qualify as a foreign limited cooperative association under its name or consent in a record to the use of its name by a limited cooperative association later organized under the Nebraska Limited Cooperative Association Act or by a foreign limited cooperative association later authorized to transact business in this state. The registration of the name terminates when the limited cooperative association is organized or the foreign limited cooperative association qualifies or consents to the qualification of another foreign limited cooperative association under the registered name.

Source:Laws 2007, LB368, § 8.

21-2909. Use of terms or abbreviation.

The use of the terms "cooperative or nonstock cooperative" or an abbreviation of the terms under the Nebraska Limited Cooperative Association Act is not a violation of the provisions restricting the use of the terms under the Nonstock Cooperative Marketing Act or sections 21-1301 to 21-1339, however, use of the term "cooperative" by a limited cooperative association shall not be construed under any other law to qualify a limited cooperative association as a cooperative organized under the Nonstock Cooperative Marketing Act or sections 21-1301 to 21-1339.

Source:Laws 2007, LB368, § 9.

Cross References

Nonstock Cooperative Marketing Act, see section 21-1401.

21-2910. Required information.

A limited cooperative association shall maintain in a record at its principal office the following information:

(1) A current list showing the full name and last-known street address, mailing address, and term of office of each director and officer;

(2) A copy of the initial articles of organization and all amendments to and restatement of the articles, together with signed copies of any powers of attorney under which any articles, amendments, or restatement has been signed;

(3) A copy of the initial bylaws and all amendments to or restatement of the bylaws;

(4) A copy of any filed articles of merger or consolidation;

(5) A copy of any audited financial statements;

(6) A copy of the minutes of meetings of members and records of all actions taken by members without a meeting for the three most recent years;

(7) A current list showing the full name and last-known street and mailing addresses, separately identifying the patron members, in alphabetical order, and the investor members, in alphabetical order;

(8) A copy of the minutes of directors' meetings and records of all actions taken by directors without a meeting for the three most recent years;

(9) A record stating:

(a) The amount of cash contributed and agreed to be contributed by each member;

(b) A description and statement of the agreed value of other benefits contributed and agreed to be contributed by each member;

(c) The times at which, or events on the happening of which, any additional contributions agreed to be made by each member are to be made; and

(d) For a person that is both a patron member and an investor member, a specification of the interest the person owns in each capacity; and

(10) A copy of all communications in a record to members as a group or to any class of members as a group for the three most recent years.

Source:Laws 2007, LB368, § 10; Laws 2008, LB848, § 3.

21-2911. Business transactions of member with limited cooperative association.

A member may lend money to and transact other business with the limited cooperative association and has the same rights and obligations with respect to the loan or other transaction as a person that is not a member subject to the articles of organization or bylaws or a specific contract relating to the transaction.

Source:Laws 2007, LB368, § 11.

21-2912. Dual capacity.

A person may be both a patron member and an investor member. A person that is both a patron member and an investor member has the rights, powers, duties, and obligations provided by the Nebraska Limited Cooperative Association Act and the articles of organization or bylaws in each of those capacities. When the person acts as a patron member, the person is subject to the obligations, duties, and restrictions under the act and the articles of organization or bylaws governing patron members. When the person acts as an investor member, the person is subject to the obligations, duties, and restrictions under the act and the articles of organization or bylaws governing investor members.

Source:Laws 2007, LB368, § 12.

21-2913. Designated office and agent for service of process.

(1) A limited cooperative association and a foreign limited cooperative association shall designate and continuously maintain in this state:

(a) An office, which need not be a place of its activity in this state; and

(b) An agent for service of process.

(2) An agent for service of process of a limited cooperative association or foreign limited cooperative association shall be an individual who is a resident of this state or other person authorized to do business in this state.

Source:Laws 2007, LB368, § 13.

21-2914. Change of designated office or agent for service of process.

(1) In order to change its registered office, its agent for service of process, or the address of its agent for service of process, a limited cooperative association or a foreign limited cooperative association shall deliver to the Secretary of State for filing a statement of change containing:

(a) The name of the limited cooperative association or foreign limited cooperative association;

(b) The street and mailing addresses of its current registered office;

(d) The name and street and mailing addresses of its current agent for service of process; and

(e) If the current agent for service of process or an address of the agent is to be changed, the new information.

(2) A statement of change is effective when filed with the Secretary of State.

Source:Laws 2007, LB368, § 14.

21-2915. Resignation of agent for service of process.

(1) To resign as an agent for service of process of a limited cooperative association or a foreign limited cooperative association, the agent shall deliver to the Secretary of State for filing a statement of resignation containing the name of the limited cooperative association or foreign limited cooperative association.

(2) After receiving a statement of resignation, the Secretary of State shall file it and mail a copy to the principal office of the limited cooperative association or foreign limited cooperative association and another copy to the principal office if the address of the principal office appears in the records of the Secretary of State and is different from the address of the registered office.

(3) An agency for service of process terminates thirty days after the Secretary of State files the statement of resignation.

Source:Laws 2007, LB368, § 15.

21-2916. Service of process.

(1) An agent for service of process appointed by a limited cooperative association or a foreign limited cooperative association is an agent of the limited cooperative association or foreign limited cooperative association for service of any process, notice, or demand required or permitted by law to be served upon the limited cooperative association or foreign limited cooperative association.

(2)(a) If a limited cooperative association or a foreign limited cooperative association has no agent for service of process or the agent cannot with reasonable diligence be served the limited cooperative association may be served by registered or certified mail, return receipt requested, addressed to the limited cooperative association at its principal office. Service shall be perfected under this subsection at the earliest of:

(i) The date the limited cooperative association receives the mail;

(ii) The date shown on the return receipt, if signed on behalf of the limited cooperative association; or

(iii) Five days after its deposit in the United States mail as evidenced by the postmark, if mailed postage prepaid and correctly addressed.

(b) This subsection shall not limit or affect the right to serve any process, notice, or demand required or permitted by law to be served upon a limited cooperative association in any other manner now or hereafter permitted by law.

Source:Laws 2007, LB368, § 16.

21-2917. Signing of records to be delivered for filing to the Secretary of State.

Records delivered to the Secretary of State for filing pursuant to the Nebraska Limited Cooperative Association Act shall be signed in the following manner:

(1) The initial articles of organization shall be signed by at least one organizer;

(2) A notice of cancellation under section 21-29,108 shall be signed by each organizer that signed the initial articles of organization;

(3) Except as otherwise provided in this subsection, a record signed on behalf of an existing limited cooperative association shall be signed by an officer or authorized representative; and

(4) A record filed on behalf of a dissolved limited cooperative association by a person winding up the activities under section 21-2989 or a person appointed under such section to wind up those activities.

Source:Laws 2007, LB368, § 17.

21-2918. Signing and filing of records pursuant to judicial order.

(1) If a person required by the Nebraska Limited Cooperative Association Act to sign or deliver a record to the Secretary of State for filing does not do so, any other aggrieved person may petition the district court of Lancaster County to order:

(a) The person to sign the record and the person to deliver the record to the Secretary of State for filing; or

(b) The Secretary of State to file the record unsigned.

(2) If an aggrieved person under subsection (1) of this section is not the limited cooperative association or foreign limited cooperative association to which the record pertains, the aggrieved person shall make the limited cooperative association or foreign limited cooperative association a party to the action. An aggrieved person under subsection (1) of this section may seek any or all of the remedies provided in such subsection in the same action.

(3) A record filed unsigned pursuant to this section is effective without being signed.

Source:Laws 2007, LB368, § 18.

21-2919. Delivery to and filing of records by Secretary of State; effective time and date.

(1) A record authorized to be delivered to the Secretary of State for filing under the Nebraska Limited Cooperative Association Act shall be captioned to describe the record's purpose and be delivered to the Secretary of State in a medium authorized by the Secretary of State. Unless the Secretary of State determines that a record does not comply with the filing requirements of the act and if all filing fees have been paid the Secretary of State shall file the record and send a copy of the filed record and a receipt for the fees to the person on whose behalf the record was filed.

(2) Upon request and payment of a fee, the Secretary of State shall send to the requester a certified copy of the requested record.

(3) Except as otherwise provided in the act, a record delivered to the Secretary of State for filing under the act may specify an effective time and a delayed effective date. Except as otherwise provided in the act, a record filed by the Secretary of State is effective:

(a) If the record does not specify an effective time and does not specify a delayed effective date, on the date and at the time the record is filed as evidenced by the Secretary of State's endorsement of the date and time on the record;

(b) If the record specifies an effective time but not a delayed effective date, on the date the record is filed at the time specified in the record;

(i) The specified date; or

(ii) The ninetieth day after the record is filed; or

(d) If the record specifies an effective time and a delayed effective date, at the specified time on the earlier of:

(i) The specified date; or

(ii) Ninety days after the record is filed.

Source:Laws 2007, LB368, § 19.

21-2920. Correcting filed record.

(1) A limited cooperative association or foreign limited cooperative association may deliver to the Secretary of State for filing a statement of correction to correct a record previously delivered by the limited cooperative association or foreign limited cooperative association to the Secretary of State and filed by the Secretary of State, if at the time of filing the record contained false or erroneous information or was defectively signed.

(2) A statement of correction shall not state a delayed effective date and shall:

(a) Describe the record to be corrected, including its filing date, or contain an attached copy of the record as filed;

(b) Specify the incorrect information and the reason it is incorrect or the manner in which the signing was defective; and

(3) When filed by the Secretary of State, a statement of correction is effective retroactively as of the effective date of the record the statement corrects, but the statement is effective when filed as to persons relying on the uncorrected record and adversely affected by the correction prior to its correction.

Source:Laws 2007, LB368, § 20.

21-2921. Liability for false information in filed record.

If a record delivered to the Secretary of State for filing under the Nebraska Limited Cooperative Association Act and filed by the Secretary of State contains false information, a person that suffers loss by reliance on the information may recover damages for the loss from a person that signed the record or caused another to sign it on the person's behalf and knew the information to be false at the time the record was signed.

Source:Laws 2007, LB368, § 21.

21-2922. Certificate of good standing or authorization.

(1) The Secretary of State, upon application and payment of the required fee, shall furnish a certificate of good standing for a limited cooperative association if the records filed in the office of the Secretary of State show that the Secretary of State has filed articles of organization, the limited cooperative association is in good standing, and there has not been filed articles of dissolution.

(2) The Secretary of State, upon application and payment of the required fee, shall furnish a certificate of authorization for a foreign limited cooperative association if the records filed in the office of the Secretary of State show that the Secretary of State has filed a certificate of authority, has not revoked the certificate of authority, and has not filed a notice of cancellation pursuant to section 21-29,108.

(3) Subject to any qualification stated in the certificate, a certificate of good standing or authorization issued by the Secretary of State may be relied upon as conclusive evidence that the limited cooperative association or foreign limited cooperative association is in good standing or is authorized to transact business in this state.

Source:Laws 2007, LB368, § 22; Laws 2008, LB848, § 4.

21-2923. Biennial report.

(1) A limited cooperative association or a foreign limited cooperative association authorized to transact business in this state shall deliver to the Secretary of State for filing a biennial report that states:

(a) The name of the limited cooperative association or foreign limited cooperative association;

(b) The street and mailing addresses of the limited cooperative association's or foreign limited cooperative association's designated office and the name and street and mailing addresses of its agent for service of process in this state;

(c) In the case of a limited cooperative association, the street and mailing addresses of its principal office if different from its designated office; and

(d) In the case of a foreign limited cooperative association, the state or other jurisdiction under whose law the foreign limited cooperative association is formed and any alternative name adopted under section 21-29,106.

(2) Information in the biennial report must be current as of the date the biennial report is delivered to the Secretary of State.

(3) Commencing on January 1, 2009, a biennial report shall be filed between January 1 and April 1 of each odd-numbered year following the year in which a limited cooperative association files articles of organization or a foreign limited cooperative association becomes authorized to transact business in this state.

(4) If a biennial report does not contain the information required in subsection (1) of this section, the Secretary of State shall promptly notify the reporting limited cooperative association or foreign limited cooperative association and return the report for correction. If the report is corrected to contain the information required in subsection (1) of this section and delivered to the Secretary of State within thirty days after the effective date of the notice, it is timely delivered.

(5) If a filed biennial report contains an address of a designated office or the name or address of an agent for service of process which differs from the information shown in the records of the Secretary of State immediately before the filing, the differing information in the biennial report is considered a statement of change under section 21-2914.

(6) If a limited cooperative association fails to file a biennial report under this section, the Secretary of State may proceed under section 21-2994 to administratively dissolve the limited cooperative association.

(7) If a foreign limited cooperative association fails to file a biennial report under this section, the Secretary of State may proceed under section 21-29,107 to revoke the certificate of authority of the foreign limited cooperative association.

(8) A correction or an amendment to the biennial report may be delivered to the Secretary of State for filing at any time.

Source:Laws 2007, LB368, § 23; Laws 2014, LB774, § 4.

21-2924. Filing fees.

The filing fees for records filed under the Nebraska Limited Cooperative Association Act with the Secretary of State are governed by section 33-101. The fees for filings under the act shall be paid to the Secretary of State, and the Secretary of State shall remit the fees to the State Treasurer. The State Treasurer shall credit sixty percent of the fees to the General Fund and forty percent of the fees to the Secretary of State Cash Fund.

Source:Laws 2007, LB368, § 24; Laws 2020, LB910, § 9.

21-2925. Organizers.

A limited cooperative association may be organized by one or more organizers who need not be members.

Source:Laws 2007, LB368, § 25.

21-2926. Formation of limited cooperative association; articles of organization.

(1) To form a limited cooperative association, articles of organization shall be delivered to the Secretary of State for filing. The articles shall state:

(a) The name of the limited cooperative association;

(b) The purposes for which the limited cooperative association was formed;

(c) The street and mailing addresses of the initial registered office and the name, street, and mailing addresses of the registered agent for service of process;

(d) The name and the street and mailing addresses of each organizer;

(e) The term for which the limited cooperative association is to exist, if other than perpetual;

(f) The number and terms of directors or the method in which the number and terms shall be determined; and

(g) Any additional information required by the Secretary of State.

(2) Articles of organization may contain any other matters deemed relevant by the organizer or organizers.

(3) Unless the articles of organization state a delayed effective date, a limited cooperative association is formed when the Secretary of State receives for filing the articles of organization. If the articles state a delayed effective date, a limited cooperative association is not formed if, before the articles take effect, one or more organizers sign and deliver to the Secretary of State for filing a notice of cancellation.

Source:Laws 2007, LB368, § 26.

21-2927. Organization of limited cooperative association.

After the effective date of the articles of organization:

(1) If initial directors are named in the articles of organization, the initial directors shall hold an organizational meeting to appoint officers, adopt initial bylaws, and carry on any other business brought before the meeting; and

(2) If initial directors are not named in the articles of organization, the organizers shall designate the initial directors and call a meeting of them to adopt initial bylaws or carry on any other business necessary and proper to complete the organization of the limited cooperative association.

Source:Laws 2007, LB368, § 27.

21-2928. Bylaws.

(1) The bylaws shall be in a record and, if not stated in the articles of organization, include:

(a) A statement of the capital structure of the limited cooperative association, including a statement of the classes and relative rights, preferences, and restrictions granted to or imposed upon each group, class, or other type of member interest, the rights to share in profits or distributions of the limited cooperative association, and the method to admit members;

(b) A statement designating the voting and governance rights, including which members have voting power and any limitations or restrictions on the voting power under sections 21-2939 and 21-2942;

(c) A statement that member interests held by a member are transferable only with the approval of the board of directors or as otherwise provided in the articles of organization or bylaws; and

(d) If investor members are authorized, a statement concerning how profits and losses are apportioned and how distributions are made as between patron members and investor members.

(2) The bylaws of the limited cooperative association may contain any provision for managing and regulating the affairs of the limited cooperative association which is not inconsistent with the articles of organization.

Source:Laws 2007, LB368, § 28.

21-2929. Members.

In order to commence business, a limited cooperative association shall have two or more patron members, except that a limited cooperative association may have only one member if the member is an entity organized under the Nebraska Limited Cooperative Association Act, the Nonstock Cooperative Marketing Act, or sections 21-1301 to 21-1339.

Source:Laws 2007, LB368, § 29; Laws 2008, LB848, § 5.

Cross References

Cooperative corporations, see section 21-1301 et seq.

Cooperative farm land companies, see section 21-1333 et seq.

Nonstock Cooperative Marketing Act, see section 21-1401.

21-2930. Becoming a member.

A person becomes a member:

(1) As provided in the articles of organization and bylaws;

(2) As the result of merger or consolidation under section 21-29,122; or

(3) With the consent of all the members.

Source:Laws 2007, LB368, § 30; Laws 2008, LB848, § 6.

21-2931. No right or power as member to bind limited cooperative association.

A member does not have the right or power as a member to act for or bind the limited cooperative association.

Source:Laws 2007, LB368, § 31.

21-2932. No liability as member for limited cooperative association obligations.

Unless otherwise provided by the articles of organization, an obligation of a limited cooperative association, whether arising in contract, tort, or otherwise, is not the obligation of a member. A member is not personally liable, by way of contribution or otherwise, for an obligation of the limited cooperative association solely by reason of being a member.

Source:Laws 2007, LB368, § 32.

21-2933. Right of member and former member to information.

(1) On ten days' demand, made in a record received by the limited cooperative association, a member may inspect and copy required information under subdivisions (1) through (7) of section 21-2910 during regular business hours in the limited cooperative association's principal office. A demand to inspect and copy records shall be in good faith and for a proper purpose. A member may demand the same information under subdivisions (1) through (7) of section 21-2910 no more than once during a twelve-month period.

(2) On demand, made in a record received by the limited cooperative association, a member may obtain from the limited cooperative association and inspect and copy required information if the demand is just and reasonable. A demand to inspect and copy records is just and reasonable if:

(a) The member seeks the information for a proper purpose reasonably related to the member's interest as a member;

(b) The demand includes a description, with reasonable particularity, of the information sought and the purpose for seeking the information; and

(3) Within ten days after receiving a demand pursuant to subdivision (2)(b) of this section, the limited cooperative association shall inform, in a record, the member that made the demand:

(a) Of what information the limited cooperative association will provide in response to the demand;

(b) Of the reasonable time and place that the limited cooperative association will provide the information; and

(c) That the limited cooperative association will decline to provide any demanded information and the limited cooperative association's reasons for declining.

(4) A person dissociated as a member pursuant to section 21-2982 may inspect and copy required information during regular business hours in the limited cooperative association's principal office if:

(a) The information pertains to the period during which the person was a member;

(b) The person seeks the information in good faith; and

(5) The limited cooperative association shall respond to a demand made pursuant to subsection (4) of this section in the same manner as otherwise provided in this section.

(6) The limited cooperative association may impose reasonable restrictions, including nondisclosure restrictions, on the use of information obtained under this section. In a dispute concerning the reasonableness of a restriction, the limited cooperative association has the burden of proving reasonableness.

(7) A limited cooperative association may charge a person that makes a demand under this section reasonable costs of copying, limited to the costs of labor and material.

(8) A member or person dissociated as a member may exercise the rights under this section through an attorney or other agent. A restriction imposed under this section or by the articles of organization or bylaws on a member or person dissociated as a member applies both to the attorney or other agent and to the member or person dissociated as a member.

(9) The rights stated in this section do not extend to a person as transferee but may be exercised by the legal representative of an individual under legal disability who is a member or person dissociated as a member.

Source:Laws 2007, LB368, § 33.

21-2934. Annual members' meetings.

(1) The members of the limited cooperative association shall meet annually as provided in the articles of organization or bylaws or at the direction of the board of directors not inconsistent with the articles of organization or bylaws.

(2) Annual members' meetings may be held in or out of this state at the place stated in the articles of organization or bylaws or by the board of directors in accordance with the articles of organization or bylaws.

(3) The board of directors shall report or cause to be reported at the annual members' meeting the business and financial condition as of the close of the most recent fiscal year.

(4) Unless otherwise provided by the articles of organization or bylaws, the board of directors shall designate the presiding officer of the annual members' meeting.

Source:Laws 2007, LB368, § 34.

21-2935. Special members' meetings.

(1) Special members' meetings shall be called:

(a) As provided in the articles of organization or bylaws;

(b) By a majority vote of the board of directors;

(c) By demand in a record signed by members holding at least twenty percent of the votes of any class or group entitled to be cast on the matter that is the purpose of the meeting; or

(d) By demand in a record signed by members holding at least twenty percent of all votes entitled to be cast on the matter that is the purpose of the meeting.

(2) Any voting member may withdraw its demand under this section before the receipt by the limited cooperative association of demands sufficient to require a special members' meeting.

(3) A special members' meeting may be held in or out of this state at the place stated in the articles of organization or bylaws or by the board of directors in accordance with the articles of organization or bylaws.

(4) Only affairs within the purpose or purposes stated pursuant to subsection (2) of section 21-2965 may be conducted at a special members' meeting.

(5) Unless otherwise provided by the articles of organization or bylaws, the presiding officer of the meeting shall be designated by the board of directors.

Source:Laws 2007, LB368, § 35; Laws 2008, LB848, § 7.

21-2936. Notice of members' meetings.

(1) The limited cooperative association shall notify each member of the time, date, and place of any annual or special members' meeting not less than ten nor more than fifty days before the meeting.

(2) Unless the articles of organization or bylaws otherwise provide, notice of an annual members' meeting need not include a description of the purpose or purposes of the meeting.

(3) Notice of a special members' meeting shall include a description of the purpose or purposes of the meeting as contained in the demand under section 21-2935 or as voted upon by the board of directors under such section.

Source:Laws 2007, LB368, § 36.

21-2937. Waiver of members' meeting notice.

(1) A member may waive notice of any meeting of the members either before, during, or after the meeting.

(2) A member's participation in a meeting is waiver of notice of that meeting unless the member objects to the meeting at the beginning of the meeting or promptly upon arrival at the meeting and does not thereafter vote for or assent to action taken at the meeting.

Source:Laws 2007, LB368, § 37.

21-2938. Quorum.

Unless the articles of organization or bylaws provide otherwise, ten percent, but not less than five nor more than fifty of the members, need to be present at an annual or special members' meeting to constitute a quorum.

Source:Laws 2007, LB368, § 38.

21-2939. Voting by patron members; voting by investor members.

(1) Each patron member has one vote, but the articles of organization or bylaws may provide additional voting power to members on the basis of patronage under section 21-2941 and may provide for voting by district, group, or class under section 21-2956.

(2) If the articles of organization provide for investor members, each investor member has one vote, unless the articles of organization or bylaws otherwise provide. The articles of organization or bylaws may provide for the allocation of investor member voting power by class, classes, or any combination of classes.

(3) If a limited cooperative association has both patron and investor members:

(a) The aggregate voting power of all patron members shall not be less than fifty-one percent of the entire voting power entitled to vote, but the articles of organization or bylaws may reduce the collective voting power of patron members to not less than fifteen percent of the entire voting power entitled to vote; and

(b) The entire aggregate voting power of patron members shall be voted as determined by the majority vote of patron members voting at the members' meeting.

Source:Laws 2007, LB368, § 39; Laws 2008, LB848, § 8.

21-2940. Action without a meeting.

(1) Unless otherwise provided by the articles of organization or bylaws, any action that may be taken by the members may be taken without a meeting if each member entitled to vote on such action consents to the action in a record.

(2) Consent may be withdrawn by a member in a record at any time before the limited cooperative association receives a consent from each member entitled to vote.

(3) The consent record of any action may specify the effective date or time of the action.

Source:Laws 2007, LB368, § 40.

21-2941. Determination of voting power of patron member.

The articles of organization or bylaws may provide additional voting power be allocated for each patron member for:

(1) Actual, estimated, or potential patronage or any combination thereof;

(2) Equity allocated or held by a patron member in the limited cooperative association; or

(3) Any combination of subdivisions (1) and (2) of this section.

Source:Laws 2007, LB368, § 41.

21-2942. Voting by investor members.

If the articles of organization or bylaws provide for investor members, each investor member has one vote except as otherwise provided by the articles of organization or bylaws.

Source:Laws 2007, LB368, § 42.

21-2943. Manner of voting.

(1) Proxy voting by members is prohibited.

(2) Delegate voting based upon geographical district, group, or class is not voting by proxy under this section.

(3) The articles of organization or bylaws may provide for member voting by secret ballot delivered by mail or other means.

(4) The articles of organization or bylaws may provide for members to attend meetings or conduct members' meetings through the use of any means of communication, if all members attending the meeting can simultaneously communicate with each other during the meeting.

Source:Laws 2007, LB368, § 43.

21-2944. Districts and delegates; classes of members.

(1) The articles of organization or bylaws may provide:

(a) For the formation of districts and the conduct of members' meetings by districts and that elections of directors may be held at district meetings; or

(b) That districts may elect district delegates to represent and vote for the district in annual and special meetings of members.

(2) A delegate selected under subdivision (1)(b) of this section has one vote subject to subsection (3) of this section.

(3) The articles of organization or bylaws may provide additional voting power be allocated to each district, group, or class or delegate for the aggregate of the number of patron members in each district, group, or class as provided under section 21-2941.

Source:Laws 2007, LB368, § 44.

21-2945. Member interest.

A member's interest:

(1) Consists of: (a) Governance rights; (b) financial rights; and (c) the right or obligation, if any, to do business with the limited cooperative association;

(2) Is personal property; and

(3) May be in certificated or uncertificated form.

Source:Laws 2007, LB368, § 45; Laws 2008, LB848, § 9.

21-2946. Patron and investor member interests.

(1) Subject to subsection (2) of this section, member interests shall be patron member interests.

(2) The articles of organization or bylaws may establish investor member interests.

Source:Laws 2007, LB368, § 46.

21-2947. Transferability of member interest.

(1) Unless otherwise provided in the articles of organization or bylaws and subject to subsection (2) of this section, member interests are not transferable. The terms of the restriction on transferability shall be set forth in the limited cooperative association articles of organization or bylaws, the member records of the limited cooperative association, and shall be conspicuously noted on any certificates evidencing a member's interest.

(2) A member may transfer its financial rights in the limited cooperative association unless the transfer is restricted or prohibited by the articles of organization or bylaws.

(3) The transferee of a member's financial rights has, to the extent transferred, the right to share in the allocation of surplus, profits, or losses and to receive the distributions to the member transferring the interest.

(4) The transferee does not become a member upon transfer of a member's financial rights unless it is admitted as a member by the limited cooperative association.

(5) A limited cooperative association need not give effect to a transfer under this section until the limited cooperative association has notice of the transfer.

(6) A transfer of a member's financial rights in violation of a restriction or prohibition on transfer contained in the articles of organization or bylaws is void.

Source:Laws 2007, LB368, § 47.

21-2948. Security interest.

(1) An investor member or transferee may grant a security interest in financial rights in a limited cooperative association, but not in the governance rights in such association.

(2) A patron member shall not grant a security interest in financial rights or governance rights in a limited cooperative association.

(3) The granting of a security interest in financial rights is not considered a transfer for purposes of section 21-2947. Upon foreclosure of a security interest in financial rights a person obtaining the financial rights shall only obtain financial rights subject to the security interest and shall not obtain any governance rights or other rights with respect to the limited cooperative association.

(4) The limitation of this section to financial rights shall not apply in the case of a member interest that is not subject to a restriction or prohibition on transfer under the articles of organization or bylaws.

Source:Laws 2007, LB368, § 48.

21-2949. Marketing contract, defined; authority.

In this section and sections 21-2950 to 21-2952, marketing contract means a contract between a limited cooperative association and another person that need not be a patron member:

(1) Requiring the other person to sell, or deliver for sale or marketing on the person's behalf, a specified part of the person's products, commodities, or goods exclusively to or through the limited cooperative association or any facilities furnished by the association; or

(2) Authorizing the limited cooperative association to act for the person in any manner with respect to the products, commodities, or goods.

Source:Laws 2007, LB368, § 49; Laws 2008, LB848, § 10.

21-2950. Marketing contract.

(1) If a marketing contract provides for the sale of products, commodities, or goods to a limited cooperative association, the sale transfers title absolutely, except for security interests properly perfected, to the association upon delivery or at any other specific time expressly provided by the contract.

(2) A marketing contract may:

(a) Authorize a limited cooperative association to create an enforceable security interest in the products, commodities, or goods delivered; and

(b) Allow the limited cooperative association to sell the products, commodities, or goods delivered and pay the sales price on a pooled or other basis after deducting selling costs, processing costs, overhead, expenses, and other charges.

Source:Laws 2007, LB368, § 50; Laws 2008, LB848, § 11.

21-2951. Duration of marketing contract; termination.

The initial duration of a marketing contract may not exceed ten years, but the contract may be made self-renewing for additional periods not exceeding five years each. Unless the contract provides for another manner or time for termination, either party may terminate the contract by giving notice in a record at least ninety days before the end of the current term.

Source:Laws 2007, LB368, § 51; Laws 2008, LB848, § 12.

21-2952. Remedies for breach or anticipating repudiation of contract.

(1) A marketing contract may liquidate damages to be paid to a limited cooperative association for a breach or anticipatory repudiation of the marketing contract but only at an amount or at a formula that is reasonable in light of the actual or then anticipated harm caused by the breach or to be caused by the anticipatory repudiation. The provision may be enforced as liquidated damages and is not to be considered a penalty.

(2) If there is a breach or anticipatory repudiation of a marketing contract, the limited cooperative association may seek an injunction to prevent the further breach or an anticipatory repudiation of the contract and the specific performance of the contract.

(3) In the case of a marketing contract between a limited cooperative association and a patron member, the articles of organization or bylaws may also provide additional remedies for the remedies under subsections (1) and (2) of this section.

(4) Nothing in this section shall restrict a limited cooperative association from seeking any other remedy at law or equity in the enforcement of a marketing contract.

Source:Laws 2007, LB368, § 52; Laws 2008, LB848, § 13.

21-2953. Existence and powers of board of directors.

(1) A limited cooperative association shall have a board of directors consisting of three or more directors as set forth in the articles of organization or bylaws unless the number of members is less than three. If there are fewer than three members, the number of directors shall not be less than the number of members in the limited cooperative association.

(2) The affairs of the limited cooperative association shall be managed by, or under the direction of, the board of directors. The board of directors may adopt policies and procedures that are not in conflict with the articles of organization, the bylaws, and the Nebraska Limited Cooperative Association Act.

(3) A director does not have agency authority on behalf of the limited cooperative association solely by being a director.

Source:Laws 2007, LB368, § 53; Laws 2008, LB848, § 14.

21-2954. No liability as director for limited cooperative association's obligations.

An obligation of a limited cooperative association, whether arising in contract, tort, or otherwise, is not the obligation of a director. A director is not personally liable, directly or indirectly, by way of contribution or otherwise, for an obligation of the limited cooperative association solely by reason of being a director.

Source:Laws 2007, LB368, § 54.

21-2955. Qualifications of directors and composition of board.

(1) A director shall be an individual or individual representative of a member that is not an individual.

(2) The articles of organization or bylaws may provide for qualification of directors subject to this section.

(3) Except as otherwise provided in the articles of organization or bylaws and subject to subsections (4) and (5) of this section, each director shall be a member of the limited cooperative association or a designee of a member that is not an individual.

(4) Unless otherwise provided in the articles of organization or bylaws, a director may be an officer or employee of the limited cooperative association.

(5) If the limited cooperative association is permitted to have nonmember directors by its articles of organization or bylaws, the number of nonmember directors shall not exceed:

(a) One director, if there are two, three, or four directors; and

(b) One-fifth of the total number of directors, if there are five or more directors.

Source:Laws 2007, LB368, § 55; Laws 2008, LB848, § 15.

21-2956. Election of directors.

(1) At least fifty percent of the board of directors of a limited cooperative association shall be elected exclusively by patron members.

(2) Subject to the provisions of subsection (1) of this section, the articles of organization or bylaws may provide for the election of all or a specified number of directors by the holders of one or more groups of classes of members' interests.

(3) Subject to the provisions of subsection (1) of this section, the articles of organization or bylaws may provide for the nomination or election of directors by geographic district directly or by district delegates.

(4) Cumulative voting is prohibited unless otherwise provided in the articles of organization or bylaws.

(5) Except as otherwise provided by the articles of organization, bylaws, or section 21-2961, member directors shall be elected at an annual members' meeting.

(6) Nonmember directors shall be elected in the same manner as member directors unless the articles of organization or bylaws provide for a different method of selection.

Source:Laws 2007, LB368, § 56; Laws 2008, LB848, § 16.

21-2957. Term of director.

(1) A director's term expires at the annual members' meeting following the director's election unless otherwise provided in the articles of organization or bylaws. The term of a director shall not exceed three years.

(2) Unless otherwise provided in the articles of organization or bylaws, a director may be reelected for subsequent terms.

(3) A director continues to serve as director until a successor director is elected and qualified or until the director is removed, resigns, or dies.

Source:Laws 2007, LB368, § 57.

21-2958. Resignation of director.

(1) A director may resign at any time by giving notice in a record to the limited cooperative association.

(2) A resignation is effective when notice is received by the limited cooperative association unless the notice states a later effective date.

Source:Laws 2007, LB368, § 58.

21-2959. Removal of director.

Unless the articles of organization or bylaws otherwise provide, the following rules apply:

(1) Members may remove a director with or without cause;

(2) A member or members holding at least twenty-five percent of the total voting power entitled to be voted in the election of the director may demand removal of a director by a signed petition submitted to the officer of the limited cooperative association charged with keeping its records;

(3) Upon receipt of a petition for removal of a director, an officer or the board of directors shall:

(a) Call a special members' meeting to be held within ninety days after receipt of the petition by the association; and

(b) Mail or otherwise transmit or deliver in a record to the members entitled to vote on the removal notice of the meeting which complies with section 21-2936;

(4) A director against whom a petition has been submitted shall be informed in a record of the petition within a reasonable time before the members' meeting at which the members consider the petition; and

(5) A director is removed if the votes in favor of removal are equal to or greater than the votes required to elect the director.

Source:Laws 2007, LB368, § 59; Laws 2008, LB848, § 17.

21-2960. Suspension of director by board.

(1) The board of directors may suspend a director, if, considering the director's course of conduct and the inadequacy of other available remedies, immediate suspension is necessary for the best interests of the limited cooperative association and the director is engaged in:

(a) Fraudulent conduct with respect to the limited cooperative association or its members;

(b) Gross abuse of the position of the director;

(d) Any other behavior, act, or omission as provided by the articles of organization or bylaws.

(2) A suspension under subsection (1) of this section is effective for thirty days unless the board of directors calls and gives notice of a special members' meeting for removal of the director before the end of the thirty-day period in which case the suspension is effective until adjournment of the special meeting or the director is removed.

(3) After suspension, a director may be removed pursuant to section 21-2959.

Source:Laws 2007, LB368, § 60; Laws 2008, LB848, § 18.

21-2961. Vacancy on board.

(1) Unless the articles of organization or bylaws otherwise provide, a vacancy on the board of directors shall be filled:

(a) By majority vote of the remaining directors until the next annual members' meeting or special members' meeting held for that purpose; and

(b) For the unexpired term by members at the next annual members' meeting or special members' meeting called for that purpose.

(2) If the vacating director was elected by a group or class of members or by group, class, or district:

(a) The appointed director shall be of that group, class, or district; and

(b) The election of the director for the unexpired term shall be conducted in the same manner as would the election for that position without a vacancy.

Source:Laws 2007, LB368, § 61.

21-2962. Compensation of directors.

Unless the articles of organization or bylaws otherwise provide, the board of directors may fix the remuneration of directors and nondirector committee members.

Source:Laws 2007, LB368, § 62.

21-2963. Meetings.

(1) The board of directors shall meet at least annually and may hold meetings in or outside this state.

(2) Unless otherwise provided in the articles of organization or bylaws, the board of directors may permit directors to attend board meetings or conduct board meetings through the use of any means of communication, if all directors attending the meeting can communicate with each other during the meeting.

Source:Laws 2007, LB368, § 63.

21-2964. Action without meeting.

(1) Unless prohibited by the articles of organization or bylaws, any action that may be taken by the board of directors may be taken without a meeting if each director consents to action in a record.

(2) Consent under subsection (1) of this section may be withdrawn by a director in a record at any time before the limited cooperative association receives a record of consent from each director.

(3) The record of consent for any action may specify the effective date or time of the action.

Source:Laws 2007, LB368, § 64.

21-2965. Meetings and notice.

(1) Unless otherwise provided by the articles of organization or bylaws, the board of directors may establish a time and place for regular board meetings and notice of the time, place, or purpose of those meetings is not required.

(2) Unless otherwise provided by the articles of organization or bylaws, special meetings of the board of directors shall be preceded by at least three days' notice of the time, date, and place of the meeting. The notice shall contain a statement of the purpose of the special meeting and the meeting shall be limited to the matters contained in the statement.

Source:Laws 2007, LB368, § 65.

21-2966. Waiver of notice of meeting.

(1) Unless otherwise provided in the articles of organization or bylaws, a director may waive any required notice of a meeting of the board of directors in a record before, during, or after the meeting.

(2) Unless otherwise provided in the articles of organization or bylaws, a director's participation in a meeting is waiver of notice of that meeting, unless the director objects to the meeting at the beginning of the meeting or promptly upon the director's arrival at the meeting and does not thereafter vote for or assent to action taken at the meeting.

Source:Laws 2007, LB368, § 66.

21-2967. Quorum.

(1) Unless otherwise provided in the articles of organization or bylaws, a majority of the fixed number of directors on the board of directors constitutes a quorum for the management of the affairs of the limited cooperative association.

(2) If a quorum is in attendance at the beginning of the meeting, any action taken by the board of directors present is valid even if the withdrawal of directors originally present results in the number of directors being less than the number required for a quorum.

Source:Laws 2007, LB368, § 67.

21-2968. Voting.

Each director has one vote for purposes of decisions made by the board of directors.

Source:Laws 2007, LB368, § 68.

21-2969. Committees.

(1) Unless otherwise provided by the articles of organization or bylaws, a board of directors may create one or more committees and appoint one or more individuals to serve on a committee.

(2) Unless otherwise provided by the articles of organization or bylaws, an individual appointed to serve on a committee need not be a director or member of the limited cooperative association. An individual serving on a committee has the same rights, duties, and obligations as a director serving on a committee.

(3) Unless otherwise provided by the articles of organization or bylaws, each committee may exercise the powers as delegated by the board of directors except that no committee may:

(a) Approve allocations or distributions except according to a formula or method prescribed by the board of directors;

(b) Approve or propose to members action requiring approval of members; or

Source:Laws 2007, LB368, § 69.

21-2970. Standards of conduct and liability.

(1) A director shall discharge his or her duties as a director, including his or her duties as a member of a committee:

(a) In good faith;

(b) With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and

(2) In discharging his or her duties, a director shall be entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:

(a) One or more officers or employees of the limited cooperative association whom the director reasonably believes to be reliable and competent in the matters presented;

(b) Legal counsel, public accountants, or other persons as to matters the director reasonably believes are within the person's professional or expert competence; or

(c) A committee of the board of directors of which he or she is not a member, if the director reasonably believes the committee merits confidence.

(3) A director shall not be considered to be acting in good faith if he or she has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (2) of this section unwarranted.

(4) A director shall not be liable for any action taken as a director or any failure to take any action if he or she performed the duties of his or her office in compliance with this section.

Source:Laws 2007, LB368, § 70; Laws 2008, LB706, § 1.

21-2971. Conflict of interest.

Except as otherwise provided in section 21-2970, the Nebraska Model Business Corporation Act governs conflicts of interests between a director or member of a committee of the board of directors and the limited cooperative association.

Source:Laws 2007, LB368, § 71; Laws 2014, LB749, § 275.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

21-2972. Right of director to information.

A director may obtain, inspect, and copy all information regarding the state of activities and financial condition of the limited cooperative association and other information regarding the activities of the limited cooperative association reasonably related to the performance of the director's duties as director but not for any other purpose or in any manner that would violate any duty to the limited cooperative association.

Source:Laws 2007, LB368, § 72.

21-2973. Other considerations of directors.

Unless otherwise provided in the articles of organization or bylaws, a director, in determining the best interests of the limited cooperative association, may consider the interests of employees, customers, and suppliers of the limited cooperative association and of the communities in which the limited cooperative association operates and the long-term and short-term interests of the limited cooperative association and its members.

Source:Laws 2007, LB368, § 73.

21-2974. Appointment and authority of officers.

(1) A limited cooperative association has the offices provided in its articles of organization or bylaws or established by the board of directors consistent with the articles of organization or bylaws.

(2) The articles of organization or bylaws or the board of directors shall designate one of the officers for preparing all records required by section 21-2910 for the authentication of records.

(3) Officers have the authority and shall perform the duties as the articles of organization or bylaws prescribe or as the board of directors determines is consistent with the articles of organization or bylaws.

(4) The election or appointment of an officer does not of itself create a contract with the officer.

(5) Unless otherwise provided in the articles of organization or bylaws an individual may simultaneously hold more than one office in the limited cooperative association.

Source:Laws 2007, LB368, § 74.

21-2975. Resignation and removal of officers.

(1) The board of directors may remove an officer at any time with or without cause.

(2) An officer may resign at any time in a record giving notice to the limited cooperative association. The resignation is effective when the notice is given unless the notice specifies a later time.

Source:Laws 2007, LB368, § 75.

21-2976. Indemnification.

Indemnification of any individual who has incurred liability, is a party, or is threatened to be made a party because of the performance of duties to, or activity on behalf of, the limited cooperative association is governed by the Nebraska Model Business Corporation Act.

Source:Laws 2007, LB368, § 76; Laws 2014, LB749, § 276.

Cross References

Nebraska Model Business Corporation Act, see section 21-201.

21-2977. Members' contributions.

The articles of organization or bylaws may establish the amount, manner, or method of determining any member contribution requirements for members or may authorize the board of directors to establish the manner and terms of any contributions for members.

Source:Laws 2007, LB368, § 77.

21-2978. Forms of contribution and valuation.

(1) Unless otherwise provided in the articles of organization or bylaws, the contributions of a member may consist of tangible or intangible property or other benefit to the limited cooperative association, including money, services performed or to be performed, promissory notes, other agreements to contribute cash or property, and contracts to be performed.

(2) The receipt and acceptance of contributions and the valuation of contributions shall be reflected in the limited cooperative association's required records pursuant to section 21-2910.

(3) Unless otherwise provided in the articles of organization or bylaws, the board of directors shall value the contributions received or to be received. The determination by the board of directors on valuation is conclusive for purposes of determining whether the member's contribution obligation has been fully met.

Source:Laws 2007, LB368, § 78; Laws 2008, LB848, § 19.

21-2979. Contribution agreements.

(1) A contribution agreement entered into before formation of the limited cooperative association is irrevocable for six months unless:

(a) Otherwise provided by the agreement; or

(b) All parties to the agreement consent to the revocation.

(2) Upon default by a party to a contribution agreement entered into before formation, the limited cooperative association, once formed, may:

(a) Collect the amount owed as any other debt; or

(b) Unless otherwise provided in the agreement, rescind the agreement if the debt remains unpaid more than twenty days after the limited cooperative association demands payment from the party in a record.

Source:Laws 2007, LB368, § 79.

21-2980. Allocation of profits and losses.

(1) Subject to subsection (2) of this section, the articles of organization or bylaws shall provide for the allocation of net proceeds, savings, margins, profits, and losses between classes or groups of members.

(2)(a) Unless the articles of organization or bylaws otherwise provide, patron members shall be allocated at least fifty percent of the net proceeds, savings, margins, profits, and losses in any fiscal year. The articles of organization or bylaws shall not reduce the percentage allocated to patron members to less than fifteen percent of the net proceeds.

(b) For purposes of this subsection, the following rules apply:

(i) Amounts paid or due on contracts for the delivery to the association by patron members of products, goods, or services are not considered amounts allocated to patron members; and

(ii) Amounts paid, due, or allocated to investor members as a stated, fixed return on equity are not considered amounts allocated to investor members.

(3) Unless otherwise provided in the articles of organization or bylaws, in order to determine the amount of net proceeds, savings, margins, and profits, the board of directors may set aside a portion of the revenue, whether or not allocated to members, after accounting for other expenses, for purposes of:

(a) Creating or accumulating a capital reserve; and

(b) Creating or accumulating reserves for specific purposes, including expansion and replacement of capital assets and other necessary business purposes.

(4) Subject to subsection (5) of this section and the articles of organization or bylaws, the board of directors shall allocate the amount remaining after the allocations under subsections (1) through (3) of this section:

(a) To patron members annually in accordance with the ratio of each member's patronage during the period to total patronage of all patron members during the period; and

(b) To investor members, if any, in accordance with the ratio of each investor member's limited contribution to the total initial contribution of all investor members.

(5) For purposes of allocation of net proceeds, savings, margins, profits, and losses to patron members, the articles of organization or bylaws may establish allocation units based on function, division, district, department, allocation units, pooling arrangements, members' contributions, or other methods.

Source:Laws 2007, LB368, § 80; Laws 2008, LB848, § 20.

21-2981. Distributions.

(1) Unless otherwise provided by the articles of organization or bylaws and subject to subsection (2) of this section, the board of directors may authorize, and the limited cooperative association may make, distributions to members.

(2) Unless otherwise provided by the articles of organization or bylaws, distributions to members may be made in the form of cash, capital credits, allocated patronage equities, revolving fund certificates, the limited cooperative association's own securities or other securities, or in any other manner.

Source:Laws 2007, LB368, § 81.

21-2981.01. Distributions to members; redemption or repurchase authorized; how treated.

Property distributed under subsection (2) of section 21-2981, other than cash, may be redeemed or repurchased as provided in the articles of organization or bylaws but no redemption or repurchase may be made without full and final authorization by the board of directors, which may be withheld for any reason in the board's sole discretion. The redemption or repurchase will be treated as a distribution under section 21-2981.

Source:Laws 2008, LB848, § 21.

21-2981.02. Limit on distributions.

(1) A limited cooperative association shall not make a distribution if, after the distribution:

(a) The limited cooperative association would not be able to pay its debts as they become due in the ordinary course of the association's activities; or

(b) The limited cooperative association's assets would be less than the sum of its total liabilities.

(2) A limited cooperative association may base a determination that a distribution is not prohibited under subsection (1) of this section on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other methods that are reasonable in the circumstances.

(3) Except as otherwise provided in subsection (4) of this section, the effect of a distribution allowed under subsection (2) of this section is measured:

(a) In the case of distribution by purchase, redemption, or other acquisition of financial rights in the limited cooperative association, as of the date money or other property is transferred or debt is incurred by the association; and

(b) In all other cases, as of the date:

(i) The distribution is authorized, if the payment occurs within one hundred twenty days after that date; or

(ii) The payment is made, if payment occurs more than one hundred twenty days after the distribution is authorized.

(4) If indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is made.

(5) For purposes of this section, distribution does not include reasonable amounts paid to a member in the ordinary course of business as payment or compensation for commodities, goods, past or present services, or reasonable payments made in the ordinary course of business under a bona fide retirement or other benefits program.

Source:Laws 2008, LB848, § 22.

21-2981.03. Prohibited distribution; director liability; member or holder of financial rights liability; actions authorized; statute of limitation.

(1) A director who consents to a distribution made in violation of section 21-2981 is personally liable to the limited cooperative association for the amount of the distribution which exceeds the amount that could have been distributed without the violation if it is established that in consenting to the distribution the director failed to comply with section 21-2970 or 21-2971.

(2) A member or holder of financial rights which received a distribution knowing that the distribution to the member or holder was made in violation of section 21-2981.02 is personally liable to the limited cooperative association but only to the extent that the distribution received by the member or holder exceeded the amount that could have been properly paid under section 21-2981.02.

(3) A director against whom an action is commenced under subsection (1) of this section may:

(a) Implead in the action any other director that is liable under subsection (1) of this section and compel contribution from the person; and

(b) Implead in the action any person that is liable under subsection (2) of this section and compel contribution from the person in the amount the person received as described in such subsection.

(4) An action under this section is barred if it is not commenced within two years after the distribution.

Source:Laws 2008, LB848, § 23.

21-2982. Member's dissociation; power of estate of member.

(1) A member does not have a right to withdraw as a member of a limited cooperative association but has the power to withdraw.

(2) Unless otherwise provided by the articles of organization or bylaws, a member is dissociated from a limited cooperative association upon the occurrence of any of the following events:

(a) The limited cooperative association's having notice in a record of the person's express will to withdraw as a member or to withdraw on a later date specified by the person;

(b) An event provided in the articles of organization or bylaws as causing the person's dissociation as a member;

(d) The person's expulsion as a member by the board of directors if:

(i) It is unlawful to carry on the limited cooperative association's activities with the person as a member;

(ii) Subject to section 21-2947, there has been a transfer of all of the person's financial rights in the limited cooperative association;

(iii) The person is a corporation or association whether or not organized under the Nebraska Limited Cooperative Association Act; and:

(A) The limited cooperative association notifies the person that it will be expelled as a member because it has filed a statement of intent to dissolve or articles of dissolution, it has been administratively or judicially dissolved, its charter has been revoked, or its right to conduct business has been suspended by the jurisdiction of its organization; and

(B) Within ninety days after the person receives the notification described in subdivision (2)(d)(iii)(A) of this section, there is no revocation of the certificate of dissolution or no reinstatement of its charter or its right to conduct business; or

(iv) The person is a limited liability company, association, whether or not organized under the act, or partnership that has been dissolved and whose business is being wound up;

(e) In the case of a person who is an individual, the person's death;

(f) In the case of a person that is a trust, distribution of the trust's entire financial rights in the limited cooperative association, but not merely by the substitution of a successor trustee;

(g) In the case of a person that is an estate, distribution of the estate's entire financial interest in the limited cooperative association, but not merely by the substitution of a successor personal representative;

(h) Termination of a member that is not an individual, partnership, limited liability company, limited cooperative association, whether or not organized under the act, corporation, trust, or estate; or

(i) The limited cooperative association's participation in a merger or consolidation, if, under the plan of merger or consolidation as approved under section 21-29,122, the person ceases to be a member.

Source:Laws 2007, LB368, § 82; Laws 2008, LB848, § 24.

21-2983. Effect of dissociation as member.

(1) Upon a person's dissociation as a member:

(a) A person dissociated pursuant to section 21-2982 does not have further rights as a member; and

(b) Subject to sections 21-2947 and 21-2948, any financial rights owned by the person in the person's capacity as a member immediately before dissociation are owned by the person as a transferee who is not admitted as a member after dissociation.

(2) A person's dissociation as a member does not of itself discharge the person from any obligation to the limited cooperative association which the person incurred while a member.

Source:Laws 2007, LB368, § 83.

21-2984. Dissolution.

Except as otherwise provided in sections 21-2986 and 21-2987, a limited cooperative association is dissolved and its activities shall be wound up only upon the occurrence of any of the following:

(1) The happening of an event or the coming of a time specified in the articles of organization;

(2) The action of the organizers, board of directors, or members under sections 21-2986 and 21-2987;

(3) The passage of ninety days after the dissociation of a member, resulting in the limited cooperative association having less than two members, unless before the end of the period the limited cooperative association admits at least one member in accordance with its articles of organization or bylaws; or

(4) The filing of a declaration by the Secretary of State under section 21-2994.

Source:Laws 2007, LB368, § 84.

21-2985. Judicial dissolution.

A district court may dissolve a limited cooperative association or order any action that under the circumstances is appropriate and equitable:

(1) In a proceeding by the Attorney General, if it is established that:

(a) The limited cooperative association obtained its articles of organization through fraud; or

(b) The limited cooperative association has continued to exceed or abuse the authority conferred upon it by law;

(2) In a proceeding by a member, if it is established that:

(a) The directors are deadlocked in the management of the limited cooperative association's affairs, the members are unable to break the deadlock, and irreparable injury to the limited cooperative association is occurring or is threatened because of the deadlock;

(b) The directors or those in control of the limited cooperative association have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent;

(c) The members are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual members' meetings, to elect successors to directors whose terms have expired; or

(d) The assets of the limited cooperative association are being misapplied or wasted; or

(3) In a proceeding by the limited cooperative association to have its voluntary dissolution continued under judicial supervision.

Source:Laws 2007, LB368, § 85.

21-2986. Voluntary dissolution before commencement of activity.

A majority of the organizers or initial directors of a limited cooperative association that has not yet begun activity or the conduct of its affairs may dissolve the limited cooperative association.

Source:Laws 2007, LB368, § 86.

21-2987. Voluntary dissolution by the board and members.

In order to voluntarily dissolve:

(1) A resolution to dissolve shall be approved by a majority vote of the board of directors unless a greater vote is required by the articles of organization or bylaws;

(2) The board of directors shall mail or otherwise transmit or deliver in a record to each member:

(a) The resolution required by subdivision (1) of this section;

(b) A recommendation that the members vote in favor of the resolution, unless the board determines because of conflict of interest or other special circumstances it should not make such a recommendation;

(d) A notice of the meeting in the same manner as a special members' meeting;

(3) Subject to section 21-2939, the resolution to dissolve shall be approved by at least a two-thirds vote of patron members voting at the meeting and at least two-thirds vote of investor members voting at the meeting; and

(4) Unless otherwise provided in the resolution, the limited cooperative association is dissolved upon approval under subdivision (3) of this section.

Source:Laws 2007, LB368, § 87.

21-2988. Articles of dissolution.

(1) A limited cooperative association that has dissolved or is about to dissolve shall deliver to the Secretary of State for filing articles of dissolution that state:

(a) The name of the limited cooperative association;

(b) The date that the limited cooperative association dissolved or when it will dissolve; and

(2) A person has notice of a limited cooperative association's dissolution the later of ninety days after the filing of the statement or the effective date under subdivision (1)(b) of this section.

Source:Laws 2007, LB368, § 88.

21-2989. Winding up of activities.

(1) A limited cooperative association continues after dissolution only for purposes of winding up its activities.

(2) In winding up its activities, the limited cooperative association shall:

(a) Discharge its liabilities, settle and close its activities, and marshal and distribute its assets; and

(b) File articles of dissolution indicating it is winding up, preserve the limited cooperative association or its property as a going concern for a reasonable time, prosecute and defend actions and proceedings, transfer limited cooperative association property, settle disputes by mediation or arbitration, and perform other necessary acts.

(3) On the application of the limited cooperative association, any member, or a holder of financial rights the district court may order judicial supervision of the winding up, including the appointment of a person to wind up the dissolved limited cooperative association's activities, if:

(a) After a reasonable time, the limited cooperative association has not executed winding up under subsection (2) of this section; or

(b) The applicant establishes other good cause.

Source:Laws 2007, LB368, § 89.

21-2990. Distribution of assets in winding up limited cooperative association.

(1) In winding up a limited cooperative association's business, unless otherwise stated in the articles of organization or bylaws, the assets of the limited cooperative association shall be applied to discharge its obligations to creditors, including members who are creditors. Any remaining assets shall be applied to pay in money the net amount distributable to members in accordance with their right to distributions under subsection (2) of this section.

(2) Each member is entitled to a distribution from the limited cooperative association of any remaining assets in the proportion of the member's financial interests to the total financial interests of members of the limited cooperative association after all other obligations are satisfied.

Source:Laws 2007, LB368, § 90.

21-2991. Known claims against dissolved limited cooperative association.

(1) A dissolved limited cooperative association may dispose of the known claims against it by following the procedure described in subsection (2) of this section.

(2) A dissolved limited cooperative association may notify its known claimants of the dissolution in a record. The notice shall:

(a) Specify the information required to be included in a claim;

(b) Provide a mailing address to which the claim is to be sent;

(c) State the deadline for receipt of the claim, which may not be less than one hundred twenty days after the date the notice is received by the claimant; and

(d) State that the claim will be barred if not received by the deadline.

(3) A claim against a dissolved limited cooperative association is barred if the requirements of subsection (2) of this section are met and:

(a) The limited cooperative association has not been notified in a record of the claim; or

(b) In the case of a claim that is timely received but rejected by the dissolved limited cooperative association, the claimant does not commence an action to enforce the claim against the limited cooperative association within ninety days after the receipt of the notice of the rejection, if the notice of rejection states that the claim will be barred unless brought against the limited cooperative association within ninety days after receipt of the notice of rejection.

(4) This section does not apply to a claim based on an event occurring after the date of dissolution or a liability that is contingent on that date.

Source:Laws 2007, LB368, § 91.

21-2992. Other claims against dissolved limited cooperative association.

(1) A dissolved limited cooperative association shall publish notice of its dissolution and may request persons having claims against the limited cooperative association to present them in accordance with the notice.

(2) The notice shall:

(a) Be published at least once in a newspaper of general circulation in the county in which the dissolved limited cooperative association's principal office is located or, if it has none in this state, in the county in which the limited cooperative association's designated office is or was last located;

(b) Describe the information required to be contained in a claim and provide a mailing address to which the claim is to be sent; and

(c) State that a claim against the limited cooperative association is barred unless an action to enforce the claim is commenced within three years after publication of the notice.

(3) If a dissolved limited cooperative association publishes a notice in accordance with subsection (2) of this section, the claim of each of the following claimants is barred, unless the claimant commences an action to enforce the claim against the dissolved limited cooperative association within three years after the publication date of the notice:

(a) A claimant that did not receive notice in a record under section 21-2991;

(b) A claimant whose claim was timely sent to the dissolved limited cooperative association but not acted on; and

(4) A claim not barred under this section may be enforced:

(a) Against the dissolved limited cooperative association, to the extent of its undistributed assets; or

(b) If the assets have been distributed in liquidation, against a member or transferee of financial rights to the extent of that person's proportionate share of the claim or the limited cooperative association's assets distributed to the member or transferee in liquidation, whichever is less, but a person's total liability for all claims under this subsection does not exceed the total amount of assets distributed to the person as part of the winding up of the dissolved limited cooperative association.

Source:Laws 2007, LB368, § 92; Laws 2008, LB848, § 25.

21-2993. Court proceeding.

(1) A dissolved limited cooperative association that has published a notice under section 21-2991 or 21-2992 may file an application with the district court where the dissolved limited cooperative association's principal office is located for a determination of the amount and form of security to be provided for payment of claims that are contingent or have not been made known to the dissolved limited cooperative association or that are based on an event occurring after the effective date of dissolution but that, based on the facts known to the dissolved limited cooperative association, are reasonably estimated to arise after the effective date of dissolution.

(2) Notice of the proceeding shall be given by the dissolved limited cooperative association to each known claimant holding a contingent claim within ten days after the filing of the application of the limited cooperative association.

(3) The court may appoint a receiver to represent all claimants whose identities are unknown in any proceeding brought under this section. The reasonable fees and expenses of such receiver, including all reasonable expert witness fees, shall be paid by the dissolved limited cooperative association.

(4) Provision by the dissolved limited cooperative association for security in the amount and the form ordered by the court under section 21-2992 shall satisfy the dissolved limited cooperative association's obligations with respect to claims that are contingent, have not been made known to the dissolved limited cooperative association, or are based on an event occurring after the effective date of dissolution, and such claims may not be enforced against a member who received a distribution.

Source:Laws 2007, LB368, § 93.

21-2994. Administrative dissolution.

(1) The Secretary of State may dissolve a limited cooperative association administratively if the limited cooperative association does not, within sixty days after the due date:

(a) Pay any fee, tax, or penalty due to the Secretary of State under the Nebraska Limited Cooperative Association Act or other law;

(b) Deliver its biennial report to the Secretary of State;

(d) Notify the Secretary of State that its registered agent or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued.

(2) If the Secretary of State determines that a ground exists for administratively dissolving a limited cooperative association, the Secretary of State shall file a record of the determination and serve the limited cooperative association with a copy of the filed record.

(3) If, within sixty days after service of the copy, the limited cooperative association does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the Secretary of State that each uncorrected ground determined by the Secretary of State does not exist, the Secretary of State shall administratively dissolve the limited cooperative association by preparing, signing, and filing a declaration of dissolution that states the grounds for dissolution. The Secretary of State shall serve the limited cooperative association with a copy of the filed declaration.

(4) A limited cooperative association administratively dissolved continues its existence but may carry on only activities necessary to wind up its activities and liquidate its assets under sections 21-2989 and 21-2990 and to notify claimants under sections 21-2991 and 21-2992.

(5) The administrative dissolution of a limited cooperative association does not terminate the authority of its agent for service of process.

Source:Laws 2007, LB368, § 94.

21-2995. Reinstatement following administrative dissolution.

(1) A limited cooperative association that has been administratively dissolved may apply to the Secretary of State for reinstatement within five years after the effective date of its administrative dissolution. The application shall be delivered to the Secretary of State for filing and state:

(a) The name of the limited cooperative association and the effective date of its administrative dissolution;

(b) That the grounds for dissolution either did not exist or have been eliminated; and

(2) If the Secretary of State determines that (a) the application for reinstatement contains the information required by subsection (1) of this section and that the information is correct and (b) the limited cooperative association has paid to the Secretary of State all delinquent occupation taxes and has forwarded to the Secretary of State a properly executed and signed biennial report for the current year, the Secretary of State shall:

(a) Prepare a declaration of reinstatement that states this determination;

(b) Sign and file the original of the declaration of reinstatement; and

(3) A limited cooperative association that has been administratively dissolved for more than five years may apply to the Secretary of State for late reinstatement. The application shall be delivered to the Secretary of State for filing, along with the fee set forth in section 21-2924, and state:

(a) The name of the limited cooperative association and the effective date of its administrative dissolution;

(b) That the grounds for dissolution either did not exist or have been eliminated;

(d) That a legitimate reason exists for reinstatement and what such legitimate reason is; and

(e) That such reinstatement does not constitute fraud on the public.

(4) If the Secretary of State determines that (a) the application for late reinstatement contains the information required by subsection (3) of this section and that the information is correct and (b) the limited cooperative association has paid to the Secretary of State all delinquent occupation taxes and has forwarded to the Secretary of State a properly executed and signed biennial report for the current year, the Secretary of State shall:

(a) Prepare a declaration of late reinstatement that states this determination;

(b) Sign and file the original of the declaration of reinstatement; and

(5) When reinstatement becomes effective it relates back to and takes effect as of the effective date of the administrative dissolution and the limited cooperative association may resume or continue its activities as if the administrative dissolution had never occurred.

Source:Laws 2007, LB368, § 95; Laws 2012, LB854, § 8; Laws 2015, LB279, § 15.

21-2996. Denial of reinstatement; appeal.

(1) If the Secretary of State denies a limited cooperative association's application for reinstatement following administrative dissolution, the Secretary of State shall prepare, sign, and file a notice that explains the reason or reasons for denial and serve the limited cooperative association with a copy of the notice.

(2) Within thirty days after service of the notice of denial, the limited cooperative association may appeal the denial of reinstatement by petitioning the district court to set aside the dissolution. The petition shall be served on the Secretary of State and contain a copy of the Secretary of State's declaration of dissolution, the limited cooperative association's application for reinstatement, and the Secretary of State's notice of denial.

(3) The court may summarily order the Secretary of State to reinstate the dissolved limited cooperative association or may take other action the court considers appropriate.

Source:Laws 2007, LB368, § 96.

21-2997. Direct action by member.

(1) Subject to subsection (2) of this section, a member may maintain a direct action against the limited cooperative association, an officer, or a director to enforce the rights and otherwise protect the interests of the member, including rights and interests under the articles of organization or bylaws.

(2) A member maintaining a direct action under this section is required to plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited cooperative association.

Source:Laws 2007, LB368, § 97.

21-2998. Derivative action.

A member may maintain a derivative action to enforce a right of a limited cooperative association if the member adequately represents the interests of the limited cooperative association and if:

(1) The member first makes a demand on the limited cooperative association, requesting that it bring an action to enforce the right, and the limited cooperative association does not bring the action within a reasonable time; and

(2) Ninety days have expired after the date the demand was made unless the member has earlier been notified that the demand has been rejected by the limited cooperative association or unless irreparable injury to the limited cooperative association would result by waiting for the expiration of the time.

Source:Laws 2007, LB368, § 98.

21-2999. Proper plaintiff.

A derivative action may be maintained only by a person that is a member at the time the action is commenced and:

(1) That was a member when the conduct giving rise to the action occurred; or

(2) Whose status as a member devolved upon the person by operation of law from a person that was a member at the time of the conduct.

Source:Laws 2007, LB368, § 99.

21-29,100. Complaint.

In a derivative action, the complaint shall state with particularity:

(1) The date and content of the plaintiff's demand and the limited cooperative association's response to the demand; and

(2) If ninety days have not expired under subdivision (2) of section 21-2998, that irreparable injury to the limited cooperative association would result by waiting for the expiration of the time.

Source:Laws 2007, LB368, § 100.

21-29,101. Proceeds and expenses.

(1) Except as otherwise provided in subsection (2) of this section:

(a) Any proceeds or other benefits of a derivative action, whether by judgment, compromise, or settlement, belong to the limited cooperative association and not to the derivative plaintiff; and

(b) If the derivative plaintiff receives any proceeds, the derivative plaintiff shall immediately remit them to the limited cooperative association.

(2) If a derivative action is successful, in whole or in part, the court may award the plaintiff reasonable expenses, including reasonable attorney's fees, from the recovery of the limited cooperative association.

Source:Laws 2007, LB368, § 101.

21-29,102. Governing law.

(1) The laws of the state or other jurisdiction under which a foreign limited cooperative association is organized govern relations among the members of the foreign limited cooperative association and between the members and the foreign limited cooperative association.

(2) A foreign limited cooperative association shall not be denied a certificate of authority by reason of any difference between the laws of the jurisdiction under which the foreign limited cooperative association is organized and the laws of this state.

(3) A certificate of authority does not authorize a foreign limited cooperative association to engage in any activity or exercise any power that a limited cooperative association cannot engage in or exercise in this state.

Source:Laws 2007, LB368, § 102.

21-29,103. Application for certificate of authority.

(1) A foreign limited cooperative association may apply for a certificate of authority to transact business in this state by delivering an application to the Secretary of State for filing. The application shall state:

(a) The name of the foreign limited cooperative association and, if the name does not comply with section 21-2908, an alternative name adopted pursuant to section 21-29,106;

(b) The name of the state or other jurisdiction under whose law the foreign limited cooperative association is organized;

(c) The street and mailing addresses of the foreign limited cooperative association's designated office and, if the laws of the jurisdiction under which the foreign limited cooperative association is organized require the foreign limited cooperative association to maintain an office in that jurisdiction, the street and mailing addresses of the required office;

(d) The name and street and mailing addresses of the foreign limited cooperative association's agent for service of process in this state; and

(e) The name and street and mailing addresses of each of the foreign limited cooperative association's current directors and officers.

(2) A foreign limited cooperative association shall deliver with the completed application a certificate of good standing or existence or a similar record signed by the Secretary of State or other official having custody of the foreign limited cooperative association's publicly filed records in the state or other jurisdiction under whose law the foreign limited cooperative association is organized.

Source:Laws 2007, LB368, § 103.

21-29,104. Activities not constituting transacting business.

(1) Activities of a foreign limited cooperative association which do not constitute transacting business in this state within the meaning of this section include:

(a) Maintaining, defending, and settling an action or proceeding;

(b) Holding meetings of its members or carrying on any other activity concerning its internal affairs;

(d) Maintaining offices or agencies for the transfer, exchange, and registration of the foreign limited cooperative association's own securities or maintaining trustees or depositories with respect to those securities;

(e) Selling through independent contractors;

(f) Soliciting or obtaining orders, whether by mail or electronic means or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;

(g) Creating or acquiring indebtedness, mortgages, or security interests in real or personal property;

(h) Securing or collecting debts or enforcing mortgages or other security interests in property securing the debts and holding, protecting, and maintaining property so acquired;

(i) Conducting an isolated transaction that is completed within thirty days and is not one in the course of similar transactions of a like manner; and

(j) Transacting business in interstate commerce.

(2) For purposes of this section, the ownership in this state of income-producing real property or tangible personal property, other than property excluded under subsection (1) of this section, constitutes transacting business in this state.

(3) This section does not apply in determining the contacts or activities that may subject a foreign limited cooperative association to service of process, taxation, or regulation under any other law of this state.

Source:Laws 2007, LB368, § 104.

21-29,105. Filing of certificate of authority.

Unless the Secretary of State determines that an application for a certificate of authority does not comply with the filing requirements of the Nebraska Limited Cooperative Association Act, the Secretary of State, upon payment of all filing fees, shall file the application, prepare, sign, and file a certificate of authority to transact business in this state, and send a copy of the filed certificate, together with a receipt for the fees, to the foreign limited cooperative association or its representative.

Source:Laws 2007, LB368, § 105.

21-29,106. Noncomplying name of foreign cooperative.

(1) A foreign limited cooperative association whose name does not comply with section 21-2908 shall not obtain a certificate of authority until it adopts, for purposes of transacting business in this state, an alternative name that complies with such section. A foreign limited cooperative association that adopts an alternative name under this subsection and then obtains a certificate of authority with the name need not comply with sections 21-2907 and 21-2908. After obtaining a certificate of authority with an alternative name, a foreign limited cooperative association shall transact business in this state under the name unless the foreign limited cooperative association is authorized under sections 21-2907 and 21-2908 to transact business in this state under another name.

(2) If a foreign limited cooperative association authorized to transact business in this state changes its name to one that does not comply with sections 21-2907 and 21-2908, it shall not thereafter transact business in this state until it complies with subsection (1) of this section and obtains an amended certificate of authority.

Source:Laws 2007, LB368, § 106.

21-29,107. Revocation of certificate of authority.

(1) A certificate of authority of a foreign limited cooperative association to transact business in this state may be revoked by the Secretary of State in the manner provided in subsections (2) and (3) of this section if the foreign limited cooperative association does not:

(a) Pay, within sixty days after the due date, any fee, tax, or penalty due to the Secretary of State under the Nebraska Limited Cooperative Association Act or other law;

(b) Deliver, within sixty days after the due date, its biennial report required under section 21-2994;

(d) Deliver for filing a statement of a change under section 21-2914 within thirty days after a change has occurred in the name or address of the agent.

(2) To revoke a certificate of authority, the Secretary of State shall prepare, sign, and file a certificate of revocation and send a copy to the foreign limited cooperative association's registered agent for service of process in this state, or if the foreign limited cooperative association does not appoint and maintain an agent for service of process in this state, to the foreign limited cooperative association's designated office. The notice shall state:

(a) The revocation's effective date, which shall be at least sixty days after the date the Secretary of State sends the copy; and

(b) The foreign limited cooperative association's noncompliance with subsection (1) of this section which is the reason for the revocation.

(3) The authority of the foreign limited cooperative association to transact business in this state ceases on the effective date of the certificate of revocation unless before that date the foreign limited cooperative association cures each failure to comply with subsection (1) of this section stated in the notice. If the foreign limited cooperative association cures the failures, the Secretary of State shall so indicate on the filed notice.

Source:Laws 2007, LB368, § 107.

21-29,108. Cancellation of certificate of authority; effect of failure to have certificate.

(1) To cancel its certificate of authority to transact business in this state, a foreign limited cooperative association shall deliver to the Secretary of State for filing a notice of cancellation. The certificate is canceled when the notice becomes effective under section 21-2919.

(2) A foreign limited cooperative association transacting business in this state shall not maintain an action or proceeding in this state unless it has a certificate of authority to transact business in this state.

(3) The failure of a foreign limited cooperative association to have a certificate of authority to transact business in this state does not impair the validity of a contract or act of the foreign limited cooperative association or prevent the foreign limited cooperative association from defending an action or proceeding in this state.

(4) A member of a foreign limited cooperative association is not liable for the obligations of the foreign limited cooperative association solely by reason of the foreign limited cooperative association's having transacted business in this state without a certificate of authority.

(5) If a foreign limited cooperative association transacts business in this state without a certificate of authority or cancels its certificate of authority, it may be served in accordance with section 21-2916 for rights of action arising out of the transaction of business in this state.

Source:Laws 2007, LB368, § 108.

21-29,109. Action by Attorney General.

The Attorney General may maintain an action to restrain a foreign limited cooperative association from transacting business in this state in violation of the Nebraska Limited Cooperative Association Act.

Source:Laws 2007, LB368, § 109.

21-29,110. Authority to amend articles of organization or bylaws; rights of member.

(1) A limited cooperative association may amend its articles of organization or bylaws.

(2) Unless the articles of organization or bylaws provide otherwise, a member of a limited cooperative association does not have vested property rights resulting from any provision in the articles of organization or bylaws, including provisions relating to management, control, capital structure, distribution, entitlement, purpose, or duration of the limited cooperative association.

Source:Laws 2007, LB368, § 110; Laws 2008, LB848, § 26.

21-29,111. Notice and action on amendment of articles of organization or bylaws.

To amend its articles of organization or bylaws:

(1) A proposed amendment shall be approved by a majority vote of the board of directors unless a greater vote is required by the articles of organization or bylaws; and

(2) The board of directors shall mail or otherwise transmit or deliver in a record to each member:

(a) The proposed amendment;

(b) A recommendation that the members approve the amendment unless the board determines because of conflict of interest or other special circumstances it should not make such a recommendation;

(d) Any condition of its submission of the amendment to the members; and

(e) Notice of the meeting in the same manner as a special members' meeting.

Source:Laws 2007, LB368, § 111.

21-29,112. Change to amendment of articles of organization or bylaws at meeting.

(1) No substantive change to the proposed amendment of the articles of organization or bylaws shall be made at the members' meeting at which the vote occurs.

(2) Subject to subsection (1) of this section, any amendment of the amendment need not be separately voted upon by the board of directors.

(3) The vote to adopt an amendment to the amendment is the same as that required to pass the proposed amendment.

Source:Laws 2007, LB368, § 112.

21-29,113. Approval of amendment.

(1) An amendment to the articles of organization shall be approved by at least a two-thirds vote of members voting at the meeting.

(2) An amendment to the bylaws shall be approved by at least a majority vote of members voting at the meeting and by at least a majority of investor members voting at the meeting.

Source:Laws 2007, LB368, § 113.

21-29,114. Vote affecting group, class, or district of members.

Members shall vote as a separate group, if a proposed amendment affects the group, class, or district of members in:

(1) The equity capital structure of the limited cooperative association, including the rights of the limited cooperative association's members to share in profits or distributions, and the relative rights, preferences, and restrictions granted to or imposed upon one or more districts, classes, or voting groups of similarly situated members;

(2) The transferability of members' interests;

(3) The manner or method of allocation of profits or losses among members;

(4) The quorum for a meeting and rights of voting and governance not including the modification of district boundaries which may, unless otherwise provided in the articles of organization or operating agreement, be determined by the board of directors; or

(5) The terms for admission of new members.

Source:Laws 2007, LB368, § 114.

21-29,115. Emergency bylaws; procedure for adoption.

(1) Unless the articles of organization provide otherwise, the board of directors may adopt bylaws to be effective only in an emergency described in subsection (4) of this section. The emergency bylaws may be amended or repealed by the members and may make all provisions necessary for managing the limited cooperative association during the emergency, including:

(a) Procedures for calling a meeting of the board of directors;

(b) Quorum requirements for the meeting; and

(2) The regular bylaws consistent with the emergency bylaws remain effective during the emergency. The emergency bylaws are not effective after the emergency ends.

(3) Action taken by the limited cooperative association in good faith in accordance with the emergency bylaws:

(a) Binds the limited cooperative association; and

(b) May not be used to impose liability on a director, officer, employee, or agent of the limited cooperative association.

(4) An emergency exists for purposes of this section if a quorum of the board of directors cannot readily be assembled because of a catastrophic event.

Source:Laws 2007, LB368, § 115.

21-29,116. Amendment or restatement of articles of organization.

(1) To amend or restate its articles of organization, a limited cooperative association shall deliver to the Secretary of State for filing an amendment or restatement of the articles of organization stating:

(a) The name of the limited cooperative association;

(b) The date of filing of its initial articles of organization; and

(2) A limited cooperative association shall promptly deliver to the Secretary of State for filing an amendment to the articles of organization to reflect the appointment of a person to wind up the limited cooperative association's activities under sections 21-2989 and 21-2990.

(3) An organizer that knows that any information in filed articles of organization was false when the articles were filed or has become false due to changed circumstances shall promptly:

(a) Cause the articles to be amended; and

(b) Deliver to the Secretary of State an amendment for filing.

(4) Articles of organization may be amended at any time for any other proper purpose as determined by the limited cooperative association.

(5) Restated articles of organization shall be delivered to the Secretary of State for filing in the same manner as an amendment.

(6) Subject to section 21-2919, an amendment or restated article is effective when filed by the Secretary of State.

Source:Laws 2007, LB368, § 116.

21-29,117. Merger and consolidation; terms, defined.

For purposes of sections 21-29,117 to 21-29,127:

(1) Constituent limited cooperative association means a limited cooperative association that is a party to a merger or consolidation;

(2) Constituent organization means an organization, other than a limited cooperative association, that is a party to a merger or consolidation;

(3) Governing statute of an organization means the statute that governs the organization's internal affairs;

(4) Organization means a limited cooperative association, limited cooperative association governed by a law other than the Nebraska Limited Cooperative Association Act, a general partnership, a limited liability partnership, a limited partnership, a limited liability company, a business trust, a corporation, a cooperative, or any other person having a governing statute. The term includes domestic and foreign organizations whether or not organized for profit;

(5) Personal liability means personal liability for a debt, liability, or other obligation of an organization which is imposed on a person that co-owns, has an interest in, or is a member of the organization:

(a) By the organization's governing statute solely by reason of co-owning, having an interest in, or being a member of the organization; or

(b) By the organization's organizational documents under a provision of the organization's governing statute authorizing those documents to make one or more specified persons liable for all or for specified debts, liabilities, and other obligations of the organization solely by reason of co-owning, having an interest in, or being a member of the organization; and

(6) Surviving organization means an organization into which one or more other organizations are merged or consolidated. A surviving organization may exist before the merger or consolidation or be created by the merger or consolidation.

Source:Laws 2007, LB368, § 117; Laws 2008, LB848, § 27.

21-29,118. Repealed. Laws 2008, LB 848, § 35.

21-29,119. Repealed. Laws 2008, LB 848, § 35.

21-29,120. Repealed. Laws 2008, LB 848, § 35.

21-29,121. Repealed. Laws 2008, LB 848, § 35.

21-29,122. Merger or consolidation.

(1) Any one or more limited cooperative associations may merge or consolidate with or into any one or more limited cooperative associations, limited liability companies, general partnerships, limited partnerships, cooperatives, or corporations, and any one or more limited liability companies, general partnerships, limited partnerships, cooperatives, or corporations may merge or consolidate with or into any one or more limited cooperative associations.

(2) A plan of merger or consolidation shall be in a record and shall include:

(a) The name and form of each constituent organization;

(b) The name and form of the surviving organization and, if the surviving organization is to be created by the merger or consolidation, a statement to that effect;

(c) The terms and conditions of the merger or consolidation, including the manner and basis for converting the interests in each constituent organization into any combination of money, interests in the surviving organization, and other consideration;

(d) If the surviving organization is to be created by the merger or consolidation, the surviving organization's organizational documents;

(e) If the surviving organization is not to be created by the merger or consolidation, any amendments to be made by the merger or consolidation to the surviving organization's organizational documents; and

(f) If a member of a constituent limited cooperative association will have personal liability with respect to a surviving organization, the identity by descriptive class or other reasonable manner of the member.

Source:Laws 2007, LB368, § 122; Laws 2008, LB848, § 28.

21-29,123. Notice and action on plan of merger or consolidation by constituent limited cooperative association.

(1) Unless otherwise provided in the articles of organization or bylaws, the plan of merger or consolidation shall be approved by a majority vote of the board of directors.

(2) The board of directors shall mail or otherwise transmit or deliver in a record to each member:

(a) The plan of merger or consolidation;

(b) A recommendation that the members approve the plan of merger or consolidation unless the board makes a determination because of conflicts of interest or other special circumstances that it should not make such a recommendation;

(d) Any condition of its submission of the plan of merger or consolidation to the members; and

(e) Notice of the meeting in the same manner as a special members' meeting.

Source:Laws 2007, LB368, § 123; Laws 2008, LB848, § 29.

21-29,124. Approval or abandonment of merger or consolidation by members of constituent limited cooperative association.

(1) Unless the articles of organization or bylaws provide for a greater quorum and subject to section 21-2939, a plan of merger or consolidation shall be approved by at least a two-thirds vote of patron members voting under section 21-2939 and by at least a two-thirds vote of investor members, if any, voting under section 21-2942.

(2) Subject to any contractual rights, after a merger or consolidation is approved, and at any time before a filing is made under section 21-29,126, a constituent limited cooperative association may amend the plan of merger or consolidation or abandon the planned merger or consolidation:

(a) As provided in the plan; and

(b) Except as prohibited by the plan, with the same consent as was required to approve the plan.

Source:Laws 2007, LB368, § 124; Laws 2008, LB848, § 30.

21-29,125. Merger or consolidation with subsidiary.

(1) Unless the articles of organization or bylaws of the limited cooperative association or articles of organization or bylaws of the other organization otherwise provide, a limited cooperative association that owns at least ninety percent of each class of the voting power of a subsidiary organization may merge or consolidate the subsidiary into itself or into another subsidiary.

(2) The limited cooperative association owning at least ninety percent of the subsidiary organization before the merger or consolidation shall notify each other owner of the subsidiary, if any, of the merger within ten days after the effective date of the merger or consolidation.

Source:Laws 2007, LB368, § 125; Laws 2008, LB848, § 31.

21-29,126. Filings required for merger or consolidation; effective date.

(1) After each constituent organization has approved a merger or consolidation, articles of merger or consolidation shall be signed on behalf of each other preexisting constituent organization by an authorized representative.

(2) The articles of merger or consolidation shall include:

(a) The name and form of each constituent organization and the jurisdiction of its governing statute;

(b) The name and form of the surviving organization, the jurisdiction of its governing statute, and, if the surviving organization is created by the merger or consolidation, a statement to that effect;

(d) If the surviving organization is to be created by the merger or consolidation:

(i) If it will be a limited cooperative association, the limited cooperative association's articles of organization; or

(ii) If it will be an organization other than a limited cooperative association, the organizational document that creates the organization;

(e) If the surviving organization preexists the merger or consolidation, any amendments provided for in the plan of merger or consolidation for the organizational document that created the organization;

(f) A statement as to each constituent organization that the merger or consolidation was approved as required by the organization's governing statute;

(g) If the surviving organization is a foreign organization not authorized to transact business in this state, the street and mailing addresses of an office which the Secretary of State may use for the purposes of service of process; and

(h) Any additional information required by the governing statute of any constituent organization.

(3) Each constituent limited cooperative association shall deliver the articles of merger or consolidation for filing in the office of the Secretary of State.

(4) A merger or consolidation becomes effective under this section:

(a) If the surviving organization is a limited cooperative association, upon the later of:

(i) Compliance with subsection (3) of this section; or

(ii) Subject to section 21-2919, as specified in the articles of merger or consolidation; or

(b) If the surviving organization is not a limited cooperative association, as provided by the governing statute of the surviving organization.

Source:Laws 2007, LB368, § 126; Laws 2008, LB848, § 32.