Secretary Of State, Nevada Corporations: The Responsibilities

September 26, 2004
By Richard Smith

Under Nevada state law, the Secretary of State, Nevada Corporations has a number of duties and responsibilities. These include:

• Being a publicly elected official (i.e. the Secretary of State has to run for re-election);
• Is the commissioner for consumer rights – in this regard the Secretary of State is required to be the champion of the consumer;
• Is required to ensure there be good, prudent business practice carried-on by Nevada state incorporated companies – here, state incorporated corporations are required to file annual reports with the Secretary of State detailing a list of officers, directors and the resident agent of the corporation on the last day of the anniversary month of incorporation; and
• Is required to entice new business to invest in the State of Nevada and incorporate in the state – where possible.

Of all of these responsibilities, it is quite possibly the last that is the most onerous. More and more states are now clamoring for corporations to invest in their state and the previously enticing carrot of zero-rate taxation is no longer seen as such an attraction; what with Delaware and Washington states both offering the same. However, unlike competing states, the Sectary of State for Nevada still has a trump card to play – and one that is promoted more and more over the benefits of zero-rate corporate income tax; namely, strict privacy.

Under Nevada state law it is nearly impossible to determine who the shareholders of a corporation are, and if you can do such, the fact that the state allows both nominee and bearer stockholders effectively means that Nevada state incorporated corporations can effectively go about their business without cause for a breach of privacy concern. For large industries involved in entertainment, such benefits are not hard to see. However, even with small one-man corporations, the strict privacy requirements, coupled with the fact that state law makes it almost impossible to pierce the corporate veil, on top of the fact that one need not be resident in Nevada in order to benefit from these favorable state laws, all mean that even in these tough times the Secretary of State has little cause for concern when it comes to enticing new corporations to incorporate in the State of Nevada.