A Nevada Corporation is a corporation chartered under the laws of the U.S. state of Nevada.
Nevada, like the state of Delaware (See Delaware corporation), is well known as a corporate haven. Many major corporations are chartered in Nevada, particularly corporations whose headquarters is located in California and other Western US states.
While public companies can benefit from Nevada's flexible statute, Nevada is particularly attractive to privately held corporations, and its statute's default provisions are particularly favorable to management. As in the case of Delaware, critics of the Nevada corporate law believe that its provisions, and the Nevada courts, are excessively friendly to corporations and their management at the expense of shareholders' rights.
Legal benefits
Nevada's laws offer flexibility to a board of directors in managing the affairs of a corporation, and permit management to put in place strong protection from hostile takeovers.
Nevada (unlike other states) permits the corporation's articles of incorporation to vest authority to adopt, amend or repeal bylaws exclusively in the directors, so that shareholders would not be able to change the corporation's bylaws.
Disputes over the internal affairs of Nevada corporations are usually filed in the Nevada District Courts, from which judgments can be appealed to the state Supreme Court. Because of the large number of corporations chartered in Nevada, the courts in that state are more focused on the application of corporate law than the courts of most other states. Nevada's courts are developing a strong body of case law that serves to give corporations and their counsel guidance on matters of corporate governance, although Delaware and some other states have a larger body of such case law.
Current Information
The newly elected Secretary of State, Ross Miller (D) (son of former Nevada governor Bob Miller) has indicated that he wishes to eliminate "bearer shares" and "nominee officers" which are two of the primary attributes that Nevada corporations currently enjoy and the reason thousands of companies choose to incorporate there. It is unknown what effect this will have on the number of corporations filed in Nevada. The outgoing Secretary of State, Dean Heller (R) was just elected to U.S. Congress.
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Wenesday March 17th 2010
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