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CALIFORNIA CORPORATE & SECURITIES LAW

Nevada Seizes Delaware’s Business Entity Formation Crown

Delaware has long dominated the market for incorporations.  Thus, I was surprised to see University of Nevada Law Professor Eric H. Franklin write that Nevada enjoys a 4 to 1 advantage over Delaware in corporate formations.  If this seems inexplicable, there is an explanation.  Delaware accounts for three times as many business formations as Nevada.…

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SEC Overlooks Nevada’s Transfer Agent Licensing Laws

Transfer agents provide a number of crucial services, primarily for publicly traded companies.  Among other responsibilities, they maintain ownership records, record security transfers, issue and cancel certificates and distribute dividends.  Since 1975, persons performing transfer agent services for public companies must be licensed by the “appropriate regulatory authority” (“ARA”) pursuant to Section 17A(c) of the…

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Nevada’s Secretary of State Concatenates Veil Piercing, Indemnification And Exculpation

The Nevada Secretary of State’s website unabashedly proclaims “Nevada is the second most popular commercial filing jurisdiction in the country, due largely to our favorable business laws and low-tax environment.”  The website then continues with a list of “legal advantages”, including the following: Piercing the corporate veil in Nevada requires the presence of “fraud” or…

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Over 1,000 Nevada Business Entities To Lose Their Registered Agent

In 2007, Nevada adopted the Model Registered Agents Act.  It is currently one of 10 states to have done so (plus the District of Columbia). Nevada’s enactment of the model act may have been predestined by the fact that the chair of the committee appointed by the National Conference of Commissioners on Uniform State Laws…

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Nevada Set To Boost Business Fees For Domestic And Foreign Corporations By 150%

Last week, the Nevada legislature passed what the Reno Gazette-Journal has branded as the state’s “largest-ever tax increase”.  Although the state’s legislative website does not yet list the bill as having been approved by Governor Brian Sandoval, the Governor’s office released this laudatory statement concerning the legislation. Nevada corporations and foreign corporations transacting business in Nevada will encounter…

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Nevada Secretary Of State Denies Hacking Claim

Recently, Cytta Corp., a small Nevada corporation, filed this Form 8-K reporting that it had “discovered that it was the victim of an online hacking incident on October 30th, 2014 in that, unauthorized person or persons accessed the Nevada Secretary of State Corporate filing system known as ‘Silverflume’ and surreptitiously altered the Officer and Director information…

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Nevada’s New Business Portal Collects $100 Million In State Revenue

A little over a year ago, I wrote about the Nevada Secretary of State’s launch of Silverflume.  This innovative internet website aims to be a “one stop” portal that consolidates and coordinates the information needed to start a business.  Silverflume asks a series of questions about the type of entity desired, what it will do, where…

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Delaware Embraces General Solicitation

Nevada Secretary of State Ross Miller has been a tireless promoter of Nevada’s private corporation law.  Over a year ago, he announced an on-line business entity search tool for iPhone, iPad and iPod Touch users.  See Business Entity Search Now Available On Your iPhone And iPad.  A few months later, Secretary Miller announced an innovative business-to-government…

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Emptores Caveant! Buyer Liability In Securities Offerings

Much of the focus of securities litigation is on the liability of sellers, but what about buyers?  Can buyers prevaricate with impunity? Corporations Code Section 25401 prohibits misstatements and omissions of material facts.  Section 25401 explicitly covers persons who “buy” or who “offer to buy” a security.  California’s insider trading statute, Section 25402, also reaches purchases. …

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Nevada Legislature May Prohibit The Establishment of Corporations For “Illicit Purposes”

Nevada’s legislature meets in regular session every other year for 12o consecutive calendar days.  Nev. Const. Art. II, § 4 and NRS 218A.078.  Although the 77th session does not start until February 4, legislators are already introducing bills. Because Nevada is often associated with legalized gaming and prostitution (the latter only in certain counties, see NRS…

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