LLC Reimbursement, Indemnification, Advancement, and Insurance Requirements in Nevada

At a glance

Requirements one by one

Outside and company proceedings

NRS § 86.411 permits an LLC to indemnify a present or former member, manager, employee, or agent, including requested service for another enterprise, in an outside civil, criminal, administrative, or investigative proceeding. Its good-faith and reasonable-belief tests apply, with an additional no-reasonable-cause-to-believe-unlawful test for criminal matters. NRS § 86.421 applies a separate permissive route to a suit by or in the right of the LLC; after an exhausted court judgment of liability to the LLC or a settlement payment to it, indemnity requires a court application and is limited to expenses the court finds fair and reasonable.

Successful defense and approval

To the extent a covered person succeeds on the merits or otherwise in defense of a proceeding or a claim, issue, or matter, NRS § 86.431(1) says the company “shall indemnify” the person's actually and reasonably incurred defense expenses. For other indemnification under NRS §§ 86.411 and 86.421, § 86.431(2) requires a specific-case propriety decision unless a court orders it or an advance is made under § 86.441. The documents may set the decision maker; without such a provision, a majority in interest of nonparty members decides, or independent counsel gives a written opinion in the listed circumstances.

Defense advances

NRS § 86.441 lets the articles, operating agreement, or a separate agreement require the company to pay member or manager civil or criminal defense expenses as incurred, before the case ends. The company must receive an undertaking to repay if a court ultimately finds the person ineligible for indemnity. Other personnel's advancement rights under contract or other law are expressly preserved.

Insurance and other financial arrangements

NRS § 86.461(1) permits insurance or other financial arrangements for present and former covered people and requested outside-enterprise service even when the company lacks power to indemnify the particular liability. Under § 86.461(2), other financial arrangements are restricted after a final adjudication of intentional misconduct, fraud, or knowing law violation, with the stated advance and court-order exceptions. NRS § 86.471 separately addresses conclusiveness and approval of insurance or arrangements in the absence of fraud. Permission to purchase does not decide policy coverage.

What trips people up

The protection routes are not interchangeable. NRS § 86.301 addresses who may incur LLC debt; the proceeding provisions in NRS §§ 86.411–.471 do not supply a separate formula for reimbursing an ordinary company bill someone paid. NRS § 86.451(1) preserves other document or vote rights but restricts indemnity for members or managers after a final adjudication establishes material intentional misconduct, fraud, or knowing law violation, subject to its court-order and advance exceptions. Under § 86.451(2), authorized protection continues after the person's status ends and benefits specified successors. Section 86.286(5) permits agreement control of duties while preserving the implied covenant of good faith and fair dealing; § 86.286(7) preserves liability for a bad-faith violation.

Common questions

Does winning one issue count? Yes. NRS § 86.431(1) measures successful-defense indemnity by the action or a particular claim, issue, or matter.

Must the company advance a manager's defense costs? Only if its articles, operating agreement, or separate agreement provides for the § 86.441 advance and the repayment undertaking is received.

Can the company insure a former agent? NRS § 86.461(1) expressly includes a person who “is or was” a company agent; actual coverage depends on the policy.

Statutes and sources

• NRS § 86.301: “no debt may be contracted or liability incurred by or on behalf of a limited-liability company” except through the listed authority routes. Official NRS chapter, accessed 2026-09-23.
• NRS § 86.286(5), (7): “such duties may be expanded, restricted or eliminated by provisions in the operating agreement, except that an operating agreement may not eliminate the implied contractual covenant of good faith and fair dealing.” Official NRS chapter, accessed 2026-09-23.
• NRS § 86.411: “A limited-liability company may indemnify any person who was or is a party or is threatened to be made a party” to a covered outside proceeding, subject to its conduct test. Official NRS chapter, accessed 2026-09-23.
• NRS § 86.421: “Indemnification may not be made for any claim, issue or matter” after the specified liability adjudication or settlement payment, except as the court determines upon application. Official NRS chapter, accessed 2026-09-23.
• NRS § 86.431(1)–(2): “the company shall indemnify him or her against expenses” to the extent of successful defense; other indemnity requires the specified case decision. Official NRS chapter, accessed 2026-09-23.
• NRS § 86.441: “The articles of organization, the operating agreement or a separate agreement made by a limited-liability company may provide” for advances on the specified undertaking. Official NRS chapter, accessed 2026-09-23.
• NRS § 86.451(1)–(2): protection “Continues for a person who has ceased to be a member, manager, employee or agent” subject to the subsection's adjudication exception. Official NRS chapter, accessed 2026-09-23.
• NRS § 86.461(1)–(2): “A limited-liability company may purchase and maintain insurance or make other financial arrangements” even without indemnity authority, subject to the separate arrangement restriction. Official NRS chapter, accessed 2026-09-23.
• NRS § 86.471: “In the absence of fraud” its stated decisions about insurance and financial arrangements are conclusive. Official NRS chapter, accessed 2026-09-23.