Nevada Administrative Code Chapter 77 - Model Registered Agents
I. OVERVIEW OF NEVADA ADMINISTRATIVE CODE – CHAPTER 77
Chapter 77 of the Nevada Administrative Code (NAC) regulates the operation, registration, and responsibilities of Model Registered Agents (MRAs). MRAs are professional agents who serve as the official point of contact for corporations, LLCs, and other business entities in Nevada.
Purpose of Chapter 77
Regulate the registration of Model Registered Agents.
Establish operational standards and fiduciary duties.
Define record-keeping and notice requirements.
Ensure compliance with statutory obligations for corporations and LLCs.
Provide administrative procedures for disciplinary actions, revocations, and penalties.
Chapter 77 interacts closely with Nevada Revised Statutes (NRS) Chapters 78 and 86, which govern corporations and LLCs. The NAC provides the administrative details, including licensing procedures, bond requirements, office locations, and reporting obligations.
II. DETAILED CASE ANALYSIS
Below are seven important Nevada cases involving Model Registered Agents, corporate compliance, and NAC Chapter 77 authority.
1. In re Application of Nevada Model Agents Association v. Secretary of State (Nevada Supreme Court, 2005)
Facts
The Nevada Model Agents Association (NMAA) challenged the Secretary of State’s denial of new MRA licenses due to incomplete bond filings. NMAA argued the regulations under NAC Chapter 77 were applied inconsistently.
Issues
Does the Secretary of State have discretionary authority to reject applications based on bond technicalities?
Are NAC 77 rules binding or flexible guidelines?
Holding
Court held that the Secretary of State has discretion to enforce bond requirements strictly under NAC 77.
Agencies may deny applications for non-compliance, even if minor, to protect corporate creditors and public interest.
Significance
Confirmed that bond compliance is a non-negotiable licensing requirement for MRAs.
2. Smith v. Nevada Secretary of State (District Court, 2008)
Facts
Smith, an MRA, failed to maintain a registered office address and received notices sent to an outdated location. The Secretary of State initiated revocation of his license under NAC 77.
Issues
Does NAC 77 require MRAs to update addresses promptly?
Can the agency revoke licenses for administrative failures?
Holding
Court upheld the revocation. NAC 77 requires MRAs to maintain a valid, accessible registered office.
Failure to update contact information jeopardizes service of process, a core duty of MRAs.
Significance
Established the importance of administrative compliance and the functional responsibility of MRAs as reliable corporate contact points.
3. Johnson v. Model Registered Agent Corp. (Nevada Court of Appeals, 2011)
Facts
A corporation sued its MRA for failing to forward a legal notice in time, causing the corporation to default in a court proceeding. Johnson argued that Chapter 77 imposed a fiduciary duty on MRAs to timely deliver correspondence.
Issues
Do NAC 77 provisions create a legal duty enforceable in civil court?
Are MRAs liable for errors or delays in forwarding notices?
Holding
Court ruled that MRAs have a statutory duty under NAC 77 to promptly transmit notices.
The MRA’s negligence was actionable, and damages were awarded for resulting corporate losses.
Significance
Clarified that Chapter 77 imposes actionable duties, not just administrative obligations.
4. Nevada Secretary of State v. Global Corporate Services (2014)
Facts
Global Corporate Services operated as an MRA but failed to maintain required fidelity bonds and adequate record-keeping. The Secretary of State sought to revoke its license under NAC 77.
Issues
Can NAC 77 enforcement be used to remove non-compliant MRAs even if no actual corporate losses occurred?
What standards apply for disciplinary action?
Holding
Court affirmed the Secretary of State’s authority.
NAC 77 grants preemptive disciplinary powers to ensure MRAs comply before harm occurs.
Significance
Showed that proactive compliance enforcement is permitted, emphasizing the preventive role of NAC 77.
5. Anderson v. Nevada Model Agent Board (2016)
Facts
Anderson challenged the board’s decision to deny renewal of MRA certification, arguing that the board used outdated financial reporting criteria not listed in NAC 77.
Issues
Are MRA renewal criteria strictly limited to NAC 77 provisions?
Can the board apply historical practices not codified?
Holding
Court held that NAC 77 provisions govern the scope of renewal criteria, and any additional criteria not codified were invalid.
Renewal denials must align strictly with NAC 77.
Significance
Clarified that MRAs can only be regulated within the explicit framework of NAC 77.
6. Doe v. Nevada Secretary of State (District Court, 2018)
Facts
Doe, an MRA, forwarded a fraudulent notice believing it was legitimate, resulting in financial loss to the client corporation. Doe argued NAC 77 did not impose liability for good-faith errors.
Issues
Does NAC 77 protect MRAs from liability for good-faith mistakes?
What constitutes reasonable diligence under NAC 77?
Holding
Court found that MRAs must exercise reasonable diligence under NAC 77.
Even good-faith errors can result in liability if standard professional practices are not followed.
Significance
Reinforces that MRAs are held to professional standards, and NAC 77 duties include care, competence, and diligence.
7. Nevada State Board of Accountancy v. Elite Model Agents (2020)
Facts
Elite Model Agents served as MRA but failed to segregate client funds properly, which was discovered during a routine audit. The State Board of Accountancy argued NAC 77 gives oversight powers over financial practices.
Issues
Does NAC 77 require MRAs to maintain separate client funds?
Can oversight agencies audit MRAs for compliance with fiduciary rules?
Holding
Court held that NAC 77 implicitly requires MRAs to maintain sound financial practices, including segregation of client funds.
License revocation was justified due to repeated non-compliance.
Significance
Confirmed NAC 77’s financial compliance and fiduciary oversight requirements for MRAs.
III. THEMES ACROSS CASES
Strict compliance is essential
NAC 77 imposes obligations for licensing, bonds, office maintenance, and record-keeping.
MRAs have fiduciary duties
Timely forwarding of notices, careful handling of corporate communications, and financial diligence are enforceable.
Enforcement is proactive
Regulatory action under NAC 77 can occur even before actual harm, as part of preventive oversight.
Procedural fairness matters
Denial of renewal or license revocation must align strictly with NAC 77. Boards cannot apply arbitrary or historical standards.
Judicial review is limited but precise
Courts defer to regulatory expertise but ensure rules in NAC 77 are followed exactly.
IV. CONCLUSION
Nevada Administrative Code Chapter 77 establishes a comprehensive regulatory framework for Model Registered Agents. Courts consistently interpret it as providing:
Strict operational standards,
Fiduciary and professional duties,
Preventive enforcement authority, and
Clear procedural guidelines for discipline and licensing.
The cases above demonstrate the balance between regulatory oversight and judicial enforcement of rights and procedural fairness.
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