Pending Changes to Nevada Corporate Law

Nevada’s legislature, which only meets every other year, is currently in session and is contemplating SB 55, which proposes several changes to commercial recordings in that state. Let me give you a brief overview of the potential changes this bill would enact.

This bill would change the law to permit an entity, under certain circumstances, to cancel a filing that has been submitted to the Secretary of State. In order for this to be allowed, there are two criteria which would need to be met:
1. The filing could not have been processed and placed into the public record by the Secretary of State at the time the request to cancel was made.
2. Any required fee must have been paid.
The method of communication of the request would be a Statement of Cancellation and the proposed fee would be $50.

The bill also proposes that an entity could “correct” a filing which contains an inaccurate description, or if the document was incorrectly signed, attested, sealed, verified or acknowledged. The method to correct the document would include filing a Certificate of Correction, which would include the following information:
1. Name of the entity
2. Description of the record to be corrected, including the filing date
3. Identifies the error or defect
4. Restates the section to be corrected in accurate form
5. Must be signed by an officer of the entity or by the incorporator or director if no stock has been issued (in the case of a corporation).
The cost to file a Certificate of Correction is proposed to be $175 and the date of effectiveness is the date of filing of the original document -- unless someone has relied on the incorrect record. For those individuals, the effective date would be the date of the filing of the Certificate of Correction.

SB 55 would change the current requirement that an appointment of a registered agent for service of process be accompanied by a Certificate of Acceptance of Appointment from the registered agent. The new procedure would be that the filer would be required to include a declaration that the registered agent had accepted the appointment. This declaration would be made under penalty of perjury. In addition, if the registered agent had not in fact accepted the appointment, they could within 30 days, file a Statement of Rejection of Appointment at no cost.

In addition, SB 55 would allow the Secretary of State to notify corporations of their Annual List due date via any appropriate method of communication rather than solely by mail as the law currently reads.

A requirement would also be created that any entity would have to maintain a current list of its owners of record at its registered office or principal place of business in the state. If they choose not to maintain the list at that location, they would be required to maintain a statement identifying where the list is kept. This list would be required to be provided to the Secretary of State upon request.

Also, the law would allow entities whose right to transact business in the state of Nevada has been revoked, to dissolve the entity by filing a Certificate of Dissolution and paying the required fee which is proposed as $500.

This is just a very brief overview of a few of the changes proposed by Nevada SB 55. For more a more in-depth understanding of the potential ramifications of this bill, please read the full text of SB 55.

SB 55 was introduced on December 8, 2008 and was referred to the Committee on Judiciary. It was read to the committee on February 2, 2009 and we will need to monitor its progress to determine how and when these changes may affect us.