Corporate Ownership Disclosure Again In The Crosshairs

Nevada Secretary of State Announces Task Force

Last month, Nevada Secretary of State Ross Miller announced the formation of a task force to investigate registered Nevada business entities that are suspected of being involved in illegal activities including tax evasion, money laundering, securities violations, and the marketing of shell or shelf companies for fraudulent and/or deceptive purposes.

Many people may think of Nevada as a sort of Great Basin Switzerland. But as Secretary Miller points out “We have a unique law in Nevada which allows us to demand a list of beneficial owners of any entity registered in Nevada that is suspected of illegal activities”. This statement is correct – mostly. NRS 78.152(3) authorizes the Secretary of State, upon the request of any law enforcement agency in the course of a criminal investigation, to require a corporation to provide a list of “owners of record” (not beneficial owners). The statute also requires a corporation to “answer any interrogatory submitted by the Secretary of State that will assist in the criminal investigation”. Similar statutes apply to foreign corporations (NRS 80.113), limited liability companies (86.246), and foreign limited liability companies (NRS 86.54615).

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