In Nevada’s business-friendly climate, limited liability companies (LLCs) and closely held corporations are popular choices for entrepreneurs and professionals. But with that flexibility comes risk—especially when disagreements arise between partners, shareholders, or members. One of the most pressing issues Nevada businesses are facing in 2025 is an uptick in corporate governance disputes, particularly claims for breach of fiduciary duty.
What’s Driving These Disputes?
Several factors are fueling this rise:
- Increased business formations during and after the pandemic
- Lack of formal operating agreements in small LLCs
- Disagreements over profit distribution, ownership rights, and succession
- Blurring of roles between managing and passive members
- Use of LLCs for professional practices (e.g., law, medicine, real estate), where disputes can be deeply personal and financially complex
Understanding Fiduciary Duties in Nevada
Under NRS Chapters 78 (Corporations) and 86 (LLCs), certain individuals—such as officers, directors, and managing members—owe fiduciary duties to the business entity and its stakeholders (i.e., shareholders and members). These duties generally include:
- Duty of Loyalty – Avoiding self-dealing or conflicts of interest
- Duty of Care – Exercising reasonable diligence in decision-making
- Duty of Good Faith and Fair Dealing – Honoring the intent and expectations set forth in governing documents
Except for the duty of good faith and fair dealing, Nevada law is unique in that it allows some waiver of the other fiduciary duties in LLC operating agreements—but only if clearly and expressly stated. Absent such language, courts will apply default fiduciary obligations when dealing with disputes.
Common Legal Flashpoints
Some of the most common disputes we’re seeing include:
- One member misusing company funds or assets for personal gain
- Side deals that bypass the business and redirect opportunities elsewhere
- Disputes over management authority or unauthorized actions taken on behalf of the company
- Lack of transparency or failure to provide financial records to co-owners
- Deadlocks in 50/50 ownership structures
Legal Remedies Available
Aggrieved members or shareholders may pursue:
- Derivative lawsuits (on behalf of the business against an insider)
- Accounting actions
- Injunctions or temporary restraining orders
- Judicial dissolution of the entity
- Damages for breach of fiduciary duty
In some cases, courts may freeze business accounts, appoint a receiver, or even order the buyout of one party’s interest.
Best Practices for Nevada Business Owners
To avoid becoming entangled in costly litigation, businesses should:
- Draft a comprehensive operating agreement or shareholder agreement tailored to your ownership structure
- Include clear terms on management authority, dispute resolution, and fiduciary waivers (if appropriate)
- Document major decisions and maintain financial transparency
- Conduct periodic legal reviews of governance documents—especially after major business changes
Get the Legal Support You Need
If you’re facing a fiduciary dispute, dealing with partner misconduct, or want to shore up your governance documents to prevent future problems, the attorneys at May Brock Law Group are here to help.
We represent businesses and professionals across Nevada in matters involving:
- Fiduciary breach claims
- Member and shareholder disputes
- Business dissolution and buyouts
- Operating agreement reviews and litigation
Call us today at Call for a Consultation or email [email protected] to schedule a consultation with one of our business law attorneys.