Nevada Revised Statutes Chapter 240A.120 requires that a Document Preparation Service must file with the Secretary of State a surety or cash bond in the penal sum of $50,000. The bond must provide:
(a) Indemnification to a client or any other person who is determined in an action or proceeding to have suffered damage as a result of:
(1) An act or omission of the registrant, or an agent or employee of the registrant, which violates a provision of this chapter or a regulation or order adopted or issued pursuant thereto;
(2) A wrongful failure or refusal by the registrant, or an agent or employee of the registrant, to provide services in accordance with a contract entered into pursuant to NRS 240A.190;
(3) The fraud, dishonesty, negligence or other wrongful conduct of the registrant or an agent or employee of the registrant; or
(4) An act or omission of the registrant in violation of any other federal or state law for which the return of fees, an award of damages or the imposition of sanctions have been awarded by a court of competent jurisdiction in this State; or
(b) Payment to the Secretary of State for any civil penalty or award of attorney’s fees or costs of suit owing and unpaid by the registrant to the Secretary of State pursuant to this chapter.
The law specifies that no part of the bond may be withdrawn while the registration of the registrant remains in effect, or while a proceeding to suspend or revoke the registration is pending. The bond must be executed by a surety company qualified and authorized to do business in this State, and it must cover the period of the registration of the registrant.
The surety is required to give notice to the Secretary of State if they are releasing the bond or if the bond has been exhausted. The registration of a registrant is suspended by operation of law when the registrant is no longer covered by a bond or the penal sum of the bond is exhausted. The Secretary of State will immediately notify the registrant in writing that his or her registration is suspended by operation of law until another bond is filed. The Secretary of State may reinstate the registration of a registrant whose registration has been suspended before the current term of the registration expires if the registrant files with the Secretary of State a new bond.
In lieu of the surety bond requirement, a registrant may deposit $50,000 cash bond with the Secretary of State's office. You will need to submit a Cash Bond deposit form and a cashier's check in the full amount payable to the State of Nevada, Office of the Secretary of State. Pursuant to NRS240A.120, the Secretary of State may retain the bond until the expiration of 3 years after the date the registrant has ceased to do business, or 3 years after the date of the expiration or revocation of the registration, to ensure that there are no outstanding claims against the bond. Contact this office for additional information.
Purchasing a Surety Bond
The Secretary of State does not regulate the price for securing a bond. Prices will vary depending upon factors. The price is set by the marketplace and the surety companies who issue the bonds. Contact an insurance company authorized to do business in Nevada for assistance and guidance in obtaining a surety bond.
The surety bond may be issued to an individual performing document preparation service, or may be issued to a business entity performing document preparation services in Nevada. If the surety is held by a business entity, neither its principals, employees, nor independent contractors are required to post a separate bond covering document preparation services performed by any such principal, employee, or independent contractor, so long as they are covered by the business entity’s surety bond. The bond must clearly state who is covered.
While a bond is continuous unless cancelled, this office must receive proof of annual bond renewal. Proof of a bond renewal may be submitted in the form of a Continuation Certificate or a paid invoice showing zero balance due, bond number, and bond term. Both of these documents can be obtained from the surety company that issued the bond. If a new bond is purchased, this office must receive the original signed surety. There can be no lapse in bond coverage.
Surety Bond Language
The Nevada Attorney General’s office has provided the following templates for a surety bond issued pursuant to NRS 240A.120:
- Use this bond form if the bond is for an individual who has applied for or holds a certificate of registration from the Nevada Secretary of State pursuant to Nevada Revised Statutes Chapter 240A: Click here for a bond covering an individual
- Use this bond form if the bond is issued to a business entity performing document preparation services in Nevada to cover owners, managers, employees, or agents who have applied for or who hold a certificate of registration from the Nevada Secretary of State pursuant to Nevada Revised Statutes Chapter 240A: Click here for a bond covering a business entity