Nevada Secretary Of State Corporations – A Role Of Conflicted Interests?

September 22, 2004
By Richard Smith

If you were not already aware of it, the Nevada Secretary of State Corporations is the person elected to oversee, and ensure compliance with, Nevada state laws regarding business practice and the ethical behavior of entities incorporated in the state. However, in addition to this role the Secretary of State is also charged with enticing new business into the state and, importantly, with protecting the interests of consumers in the state – including protecting the rights of consumers.

A question, therefore, arises: in serving the interests of the consumer and enticing business development in the state, is the secretary not undertaking a role of conflicted interests?

As it happens, the success of ongoing business operations in Nevada, the ever growing desire to be seen to be doing business in the state, the increased numbers of corporations incorporating in the state, along with general consumer satisfaction levels in the state all seem to indicate that Nevada has obtained a status of general equilibrium between consumer interests and good corporate governance that other states would like to mimic.

Indeed, the nice mix between happy corporates undertaking business in Nevada with general consumer satisfaction may, in part, be at the center of one of the reasons why so many American corporations now consider the State of Nevada an attractive option when it comes to deciding where to incorporate their business – and that is: as opposed to other states in the USA, Nevada has pretty much taken the view that corporations incorporated in Nevada are capable of taking care of themselves. In return for sensible overseeing of their business practices, Nevada appears to have adopted a “hands-off” approach; unless there is a breach of consumer rights. All of which indicates that corporates in the state can operate at less overhead costs than is the case elsewhere, with higher profit margins. All in all, yet another plus for incorporating and doing business in the State of Nevada.