A bullish 71,136 new business incorporations were filed at the Secretary of State office in Carson City in 2004, a 25 percent increase over the previous year, says Scott Anderson, deputy secretary for commercial recordings.
"As the economy goes, so goes the number of filings in our office,"Anderson said last week.
The last day of 2004 showed 246,973 corporations on file, up 12 percent from the year before, twice the normal jump of 5 or 6 percent.
Filings in previous years were flat, a sign of the stagnant economy: 56,786 filings in 2003; 51,960 in 2002; 52,676 in 2001; 52,544 in 2000.
"As an industry,we were not surprised by these numbers," says Derek
Rowley, president of the Nevada Resident Agents Association.A resident agent handles incorporation filings for companies.
He credits the increase to changes made during the 2003 legislative session to decrease the filing fees a move his group lobbied for after learning that Governor Guinn wanted to increase fees by 50 percent.
Nevada's filing fee decreased in 2004 from $175 to $75, while the base fee increased from $85 to $125.
Base fees can go to $11,100 depending on the capitalization of the corporation, said Anderson.
Capitalization is the total value of authorized shares.
"We showed how they could generate additional revenue stream by lowering the filing fee, then raising the renewals fee," said Rowley."The new figures came within 3 percent of the numbers we projected."
Those fees generated $55 million for the state coffers in the fiscal year July 2003 through June 2004.
The fees generate $7 for every $1 spent, according to Anderson.
"Nevada is finding itself in a more competitive field," said Rowley."Filing costs increased dramatically over the past 10 years.
The fee changes saved our industry."
Any out-of-state corporation that files in Nevada must have a full-time resident agent here.
The Secretary of State website lists about 170 agents.
Nevada is by far the largest filing office per capita, said Anderson, and in the top 10 nationwide.
Low costs are a draw, but privacy is key.
Delaware, Florida, South Dakota and Wyoming have similar structures.
The governor of Utah has proposed similar low fees.
Nevada businesses are incorporating at record rates as well, said Gwen Currie, CEO of Fountainhead, a resident agent firm in Carson City."Many sole proprietors are incorporating for liability protection." "In 18 years I've never seen it this good," says resident agent Terry Chilcoat of Gardnerville,whose business is up 14 percent this month from the same time last year.
"The big sell I give my clients is that Nevada has the best privacy laws."
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