Senate Bill No. 439–Committee on Commerce and Labor

March 15, 1999

____________

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes concerning accountants. (BDR 54-807)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: No.

~

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

 

AN ACT relating to accountants; revising provisions governing the qualifications and examination of applicants for certificates of certified public accounting; making various changes relating to the professional conduct of companies practicing certified public accounting or public accounting; revising provisions governing the organizational structure of companies practicing certified public accounting or public accounting; prohibiting the secretary of state from accepting for filing certain articles of incorporation or amendments thereto that contain certain words relating to accounting; repealing certain prohibited acts; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. NRS 628.033 is hereby amended to read as follows:

1-2 628.033 "State" [includes] means any state , territory or possession of

1-3 the United States and the District of Columbia.

1-4 Sec. 2. NRS 628.160 is hereby amended to read as follows:

1-5 628.160 1. The board may by regulation adopt and amend rules of

1-6 professional conduct appropriate to establish and maintain a high standard

1-7 of quality, integrity and dignity in the profession of public accountancy.

1-8 2. In addition to the requirements of chapter 233B of NRS, the board

1-9 shall, at least 60 days before the adoption of any such rule or amendment,

1-10 mail copies of the proposed rule or amendment to each holder of a live

1-11 permit , [issued pursuant to NRS 628.380,] to the address shown in the

1-12 records of the board, together with a notice advising him of the date, time

1-13 and place of the hearing on the proposed rule or amendment and requesting

1-14 that he submit his comments thereon at least 15 days before the hearing.

1-15 The comments are advisory only. Failure by inadvertence or error to mail

2-1 the rule, amendment or notice to each holder of a permit does not affect the

2-2 validity of any rule or amendment if the board has made an effort in good

2-3 faith to mail the notice to all holders of permits.

2-4 3. The board may adopt regulations concerning the professional

2-5 conduct of corporations , [and] partnerships and limited-liability

2-6 companies practicing certified public accounting or public accounting

2-7 which it deems consistent with or required by the public welfare, including

2-8 regulations:

2-9 (a) Governing the style, name and title of [such corporations and

2-10 partnerships.] the corporations, partnerships and limited-liability

2-11 companies.

2-12 (b) Governing the affiliation of [such corporations and] the

2-13 corporations, partnerships and limited-liability companies with any other

2-14 organizations.

2-15 Sec. 3. NRS 628.190 is hereby amended to read as follows:

2-16 628.190 [The]

2-17 1. Except as otherwise provided in this section and NRS 628.310, a

2-18 certificate of certified public accountant must be granted by the board to

2-19 any person who:

2-20 [1.] (a) Is a resident of this state or, if not a resident, has designated to

2-21 the board an agent who is a resident for notification and service of process;

2-22 [2.] (b) Is a person [of fiscal integrity] who is without any history of

2-23 acts involving dishonesty or moral turpitude;

2-24 [3. Meets]

2-25 (c) Complies with the requirements of education and experience as

2-26 provided in NRS 628.200; [and

2-27 4. Has passed a written examination selected by the board containing

2-28 the following sections:

2-29 (a) Business law and professional responsibilities;

2-30 (b) Auditing;

2-31 (c) Accounting and reporting, including taxation, managerial accounting

2-32 and auditing for governmental and nonprofit organizations;

2-33 (d) Financial accounting and reporting, including for business

2-34 enterprises; and

2-35 (e) Other related sections that the board determines to be appropriate.]

2-36 (d) Has submitted to the board a complete set of his fingerprints and

2-37 written permission authorizing the board to forward the fingerprints to

2-38 the central repository for Nevada records of criminal history for

2-39 submission to the Federal Bureau of Investigation for its report; and

2-40 (e) Has passed the examination prescribed by the board.

2-41 2. The board may refuse to grant a certificate of certified public

2-42 accountant to an applicant if he has been convicted of a felony under the

2-43 laws of any state or of the United States.

3-1 3. The board may issue a provisional certificate to an applicant until

3-2 the board receives the report from the Federal Bureau of Investigation.

3-3 Sec. 4. NRS 628.200 is hereby amended to read as follows:

3-4 628.200 1. [The] Except as otherwise provided in subsection 4, the

3-5 requirement of education for a certificate of certified public accountant is at

3-6 least 150 semester hours or an equivalent number of quarter hours and

3-7 includes a baccalaureate degree or an equivalent degree from a college or

3-8 university recognized by the board:

3-9 (a) With a major in accounting, or what the board determines to be

3-10 substantially the equivalent of a major in accounting; or

3-11 (b) With a major other than accounting supplemented by what the board

3-12 determines to be substantially the equivalent of an accounting major,

3-13 including related courses in other areas of business administration.

3-14 2. The requirement for experience for a certificate of certified public

3-15 accountant is:

3-16 (a) Two years of public accounting experience ; [, including, but in no

3-17 way limited to, attesting while in practice as a certified public accountant, a

3-18 registered public accountant, a staff accountant employed by a person who

3-19 is licensed to practice public accounting or any combination of these types

3-20 of experience;] or

3-21 (b) Experience in internal auditing work or governmental accounting

3-22 and auditing work of a character and for a length of time sufficient in the

3-23 opinion of the board to be substantially equivalent to the requirements of

3-24 paragraph (a).

3-25 3. The board:

3-26 (a) Shall adopt regulations concerning [the] :

3-27 (1) The number of semester hours or an equivalent number of quarter

3-28 hours in accounting and other courses required by an applicant to satisfy

3-29 the requirements of subsection 1.

3-30 (2) The public accounting experience, internal auditing work, and

3-31 governmental accounting and auditing work required by an applicant to

3-32 satisfy the requirements of subsection 2.

3-33 (b) May provide by regulation for the substitution of qualified programs

3-34 of continuing education to satisfy partially the requirement of experience

3-35 described in paragraph (b) of subsection 2 or may add any program to the

3-36 requirement of experience.3

3-37 4. Notwithstanding any provision of this section to the contrary, an

3-38 applicant for a certificate of certified public accountant who has received

3-39 conditional credit pursuant to NRS 628.260 for passing sections of the

3-40 examination required for a certificate, and who applies that credit to his

3-41 subsequent passage of the examination, is subject to the educational

3-42 requirements to receive a certificate that were in effect on the date on

3-43 which he first received the conditional credit.

4-1 Sec. 5. NRS 628.230 is hereby amended to read as follows:

4-2 628.230 1. The [examinations described in NRS 628.190]

4-3 examination prescribed by the board must be conducted by the board [and

4-4 take place as often as the board finds desirable, but not less frequently] not

4-5 less than once each year.

4-6 2. The board shall prescribe by regulation the methods of applying for

4-7 [examination and for] and conducting the examination, including the

4-8 grading of papers and the determination of passing grades. The board may

4-9 [make such use of] use all or any part of the Uniform Certified Public

4-10 Accountants’ Examination and Advisory Grading Service as it deems

4-11 appropriate to assist it in performing its duties hereunder.

4-12 Sec. 5.3. NRS 628.240 is hereby amended to read as follows:

4-13 628.240 A candidate for a certificate of certified public accountant,

4-14 who has met the educational requirements as provided in NRS 628.200, is

4-15 eligible to take the examination without waiting until he meets the

4-16 requirements of experience if he also meets the requirements of

4-17 [subsections 1 and 2] paragraphs (a) and (b) of subsection 1 of NRS

4-18 628.190.

4-19 Sec. 5.5. NRS 628.260 is hereby amended to read as follows:

4-20 628.260 1. The board may by regulation prescribe the terms and

4-21 conditions under which a candidate:

4-22 (a) Must pass all sections of the examination [indicated in] prescribed

4-23 by the board pursuant to NRS 628.190 [in order] to qualify for a

4-24 certificate.

4-25 (b) Who , at any given examination , passes two or more sections, but

4-26 not all sections, may receive conditional credit for the sections passed, and

4-27 need not sit for re-examination in those sections. The board may by

4-28 regulation:

4-29 (1) Provide minimum grades for each section not passed in order to

4-30 receive credit for those passed;

4-31 (2) Provide a limit on the time in which each candidate must pass all

4-32 sections of the examination or lose any credit received; and

4-33 (3) Require a candidate to sit for all sections of the examination

4-34 which he did not pass in a previous examination.

4-35 2. The board may give credit to a candidate who has passed all or part

4-36 of the examination in another state or other jurisdiction of the United

4-37 States, if the certified public accountant members of the board have

4-38 determined by regulation that the standards under which the examination

4-39 was held are as high as the standards established for the examination

4-40 required by this chapter.

4-41 Sec. 5.7. NRS 628.280 is hereby amended to read as follows:

4-42 628.280 1. The board shall charge each candidate for a certificate of

4-43 certified public accountant a fee to be determined by the board by

5-1 regulation for the initial examination [provided for in] prescribed by the

5-2 board pursuant to NRS 628.190.

5-3 2. Fees for re-examinations under NRS 628.190 must also be charged

5-4 by the board in amounts determined by it by regulation for each section of

5-5 the examination in which the candidate is re-examined.

5-6 3. The applicable fee must be paid by the candidate at the time he

5-7 applies for examination or re-examination.

5-8 4. The board shall charge each candidate for a certificate of certified

5-9 public accountant a fee to be determined by the board by regulation for

5-10 review and inspection of his examination paper.

5-11 Sec. 6. NRS 628.310 is hereby amended to read as follows:

5-12 628.310 1. The board may waive the examination , the requirements

5-13 for education or the requirements for experience, or any combination

5-14 thereof, required under NRS 628.190, and may issue a certificate as a

5-15 certified public accountant to any person who is the holder of a certificate

5-16 as a certified public accountant then in effect issued under the laws of any

5-17 state or other jurisdiction of the United States approved by the board,

5-18 constituting a recognized qualification for the practice of public accounting

5-19 comparable to that of a certified public accountant of this state, state [,and

5-20 who:

5-21 1. Possesses the qualifications set forth in subsection 3 of NRS

5-22 628.190 which were in effect in this state on the date on which he received

5-23 his original certificate; and

5-24 2. Either possesses the qualifications set forth in subsection 4 of NRS

5-25 628.190, which were in effect in this state on the date on which he received

5-26 his original certificate, or has:

5-27 (a) Passed] if:

5-28 (a) The person has passed an examination that is substantially the same

5-29 as the examination [required by subsection 4 of NRS 628.190; and

5-30 (b) Experience] conducted pursuant to NRS 628.230 with a grade that

5-31 would have been a passing grade in this state on the date on which he

5-32 received his original certificate;

5-33 (b) The person has experience in the practice of public accountancy,

5-34 either as a certified public accountant or as a staff accountant employed by

5-35 or under the direct supervision of a person who is a certified public

5-36 accountant, while holding a certificate as a certified public accountant for

5-37 more than [5] 4 of the 10 years immediately preceding his making

5-38 application pursuant to this chapter [.] ; and

5-39 (c) The requirements for education of the state or other jurisdiction

5-40 from which the person received his original certificate were substantially

5-41 equivalent to the requirements for education of this state on the date on

5-42 which the person received his original certificate.

6-1 2. The board may waive the examination, the requirements for

6-2 education or the requirements for experience, or any combination

6-3 thereof, under NRS 628.190, and may issue a certificate as a certified

6-4 public accountant to any person who is the holder of an equivalent

6-5 certificate then in effect issued by a foreign country if:

6-6 (a) Persons who are certified as public accountants in this state are

6-7 granted similar privileges by the foreign country in which the applicant is

6-8 certified;

6-9 (b) The applicant’s certificate:

6-10 (1) Was issued by the appropriate authority that regulates the

6-11 practice of public accountancy in the foreign country in which the

6-12 certificate was issued;

6-13 (2) Has not expired or been revoked or suspended; and

6-14 (3) Authorizes the applicant to issue reports upon financial

6-15 statements;

6-16 (c) The requirements for education and examination of the regulatory

6-17 authority of the foreign country were substantially equivalent to the

6-18 requirements for education and examination of this state on the date on

6-19 which the applicant received his certificate;

6-20 (d) The applicant:

6-21 (1) Complied with requirements for experience in the foreign

6-22 country in which the certificate was issued that are substantially

6-23 equivalent to the requirements set forth in NRS 628.200; or

6-24 (2) Has completed in this state at least 4 years of public accounting

6-25 experience, or equivalent experience determined to be appropriate by the

6-26 board, within the 10 years immediately preceding his making application

6-27 for certification in this state;

6-28 (e) The applicant has passed a written examination on national

6-29 standards for public accounting and ethics that is acceptable to the

6-30 board; and

6-31 (f) The applicant submits with his application a list of all jurisdictions

6-32 in which he has applied for and received a certificate to practice public

6-33 accounting.

6-34 3. A person who is granted a certificate as a certified public

6-35 accountant pursuant to subsection 2 shall notify the board, in writing,

6-36 within 30 days after:

6-37 (a) He is issued an equivalent certificate to practice public accounting

6-38 by another jurisdiction or is denied the issuance of such a certificate;

6-39 (b) A certificate to practice public accounting issued to him by

6-40 another jurisdiction is revoked or suspended; or

6-41 (c) Another jurisdiction in which he is certified to practice public

6-42 accounting commences any type of disciplinary action against him.

7-1 Sec. 6.5. NRS 628.325 is hereby amended to read as follows:

7-2 628.325 1. One or more natural persons may organize a corporation

7-3 for the practice of public accounting under the Professional Corporations

7-4 and Associations Act, chapter 89 of NRS. The corporation is not required

7-5 to have more directors than shareholders, but at least one director must be a

7-6 shareholder. The other directors need not, but may, be shareholders.

7-7 2. One or more natural persons may:

7-8 (a) Organize a corporation pursuant to chapter 78 of NRS;

7-9 (b) Qualify to do business as a foreign corporation pursuant to chapter

7-10 80 of NRS;

7-11 (c) Organize a limited-liability company pursuant to chapter 86 of NRS;

7-12 or

7-13 (d) Register as a foreign limited-liability company pursuant to chapter

7-14 86 of NRS,

7-15 to practice public accounting.

7-16 3. The organization, qualification or registration of a corporation or

7-17 company pursuant to subsection 2:

7-18 (a) Does not modify:

7-19 (1) The relationship between an accountant and a client;

7-20 (2) The liability arising out of that relationship; or

7-21 (3) The compliance of the corporation or company with this chapter

7-22 or any regulations adopted pursuant thereto.

7-23 (b) Does not render:

7-24 (1) A person liable in tort for any act in which he has not personally

7-25 participated.

7-26 (2) The manager, a member or an employee of a limited-liability

7-27 company liable in contract for any contract which he executes on behalf of

7-28 a limited-liability company within the limits of his authority.

7-29 4. Notwithstanding any specific statute to the contrary, a simple

7-30 majority of the ownership of a corporation, partnership or limited-

7-31 liability company organized for the practice of public accounting in this

7-32 state, in terms of the financial interests and voting rights of all

7-33 shareholders, partners, officers, members and principals thereof, must

7-34 belong to persons who are certified public accountants in any state or

7-35 registered public accountants in this state. Each shareholder, partner,

7-36 officer, member or principal whose principal place of business is in this

7-37 state and who performs professional services in this state must be:

7-38 (a) If the corporation, partnership or limited-liability company

7-39 registered with the board is a corporation, partnership or limited-liability

7-40 company of certified public accountants, a certified public accountant in

7-41 this state in good standing; and

7-42 (b) If the corporation, partnership or limited-liability company

7-43 registered with the board is a corporation, partnership or limited-liability

8-1 company of public accountants, a certified public accountant or

8-2 registered public accountant in this state in good standing.

8-3 5. A corporation, partnership or limited-liability company organized

8-4 for the practice of public accounting in this state may have as a

8-5 shareholder, partner, officer, member or principle any natural person

8-6 who is not a certified public accountant in any state or a registered public

8-7 accountant in this state if:

8-8 (a) The natural person is actively engaged in the business of the

8-9 corporation, partnership or limited-liability company, or any affiliate

8-10 thereof; and

8-11 (b) The corporation, partnership or limited-liability company complies

8-12 with any other requirements that the board by regulation may impose.

8-13 Sec. 7. NRS 628.343 is hereby amended to read as follows:

8-14 628.343 1. A corporation organized for the practice of public

8-15 accounting shall register with the board as a corporation of certified public

8-16 accountants and comply with the following requirements:

8-17 (a) The sole purpose and business of the corporation must be to furnish

8-18 to the public services not inconsistent with this chapter or the regulations of

8-19 the board, except that the corporation may invest its money in a manner not

8-20 incompatible with the practice of public accounting.

8-21 (b) [Each shareholder of the corporation must be a certified public

8-22 accountant of some state in good standing, and be principally employed by

8-23 the corporation or actively engaged in its business. No other person may

8-24 have any interest in the stock of the corporation.] The principal officer of

8-25 the corporation and any officer or director having authority over the

8-26 practice of public accounting by the corporation must be a certified public

8-27 accountant of some state in good standing.

8-28 (c) At least one shareholder of the corporation must be a certified public

8-29 accountant of this state in good standing.

8-30 (d) Each manager in charge of an office of the corporation in this state

8-31 and each shareholder or director who is regularly and personally engaged

8-32 within this state in the practice of public accounting must be a certified

8-33 public accountant of this state in good standing.

8-34 (e) In order to facilitate compliance with the provisions of this section

8-35 relating to the ownership of stock, there must be a written agreement

8-36 binding the shareholders or the corporation to purchase any shares offered

8-37 for sale by, or not under the ownership or effective control of, a qualified

8-38 shareholder. The corporation may retire any amount of stock for this

8-39 purpose, notwithstanding any impairment of its capital, so long as one share

8-40 remains outstanding.

8-41 (f) The corporation shall comply with other regulations pertaining to

8-42 corporations practicing public accounting in this state adopted by the

8-43 board.

9-1 2. Application for registration must be made upon the affidavit of a

9-2 shareholder who holds a live permit to practice in this state as a certified

9-3 public accountant. The board shall determine whether the applicant is

9-4 eligible for registration and may charge an initial fee and an annual renewal

9-5 fee set by the board by regulation. A corporation which is so registered may

9-6 use the words "certified public accountants" or the abbreviation "C.P.A.’s"

9-7 or "CPA’s" in connection with its corporate name. Notice must be given to

9-8 the board within 1 month after the admission to or withdrawal of a

9-9 shareholder from any corporation so registered.

9-10 Sec. 8. NRS 628.345 is hereby amended to read as follows:

9-11 628.345 1. A limited-liability company organized for the practice of

9-12 public accounting shall register with the board as a limited-liability

9-13 company of certified public accountants and comply with the following

9-14 requirements:

9-15 (a) The sole purpose and business of the limited-liability company must

9-16 be to furnish to the public services not inconsistent with this chapter or the

9-17 regulations of the board, except that the limited-liability company may

9-18 invest its money in a manner not incompatible with the practice of public

9-19 accounting.

9-20 (b) [Each member of the limited-liability company must be a certified

9-21 public accountant of some state in good standing, and be principally

9-22 employed by the limited-liability company or actively engaged in its

9-23 business. No other person may have any interest in the limited-liability

9-24 company.] The manager, if any, of the limited-liability company must be a

9-25 certified public accountant of some state in good standing.

9-26 (c) At least one member of the limited-liability company must be a

9-27 certified public accountant of this state in good standing.

9-28 (d) Each person in charge of an office of the limited-liability company in

9-29 this state and each member who is regularly and personally engaged within

9-30 this state in the practice of public accounting must be a certified public

9-31 accountant of this state in good standing.

9-32 (e) In order to facilitate compliance with the provisions of this section

9-33 relating to the ownership of interests, there must be a written agreement

9-34 binding the members or the limited-liability company to purchase any

9-35 interest offered for sale by, or not under the ownership or effective control

9-36 of, a qualified member.

9-37 (f) The limited-liability company shall comply with other regulations

9-38 pertaining to limited-liability companies practicing public accounting in

9-39 this state adopted by the board.

9-40 2. Application for registration must be made upon the affidavit of the

9-41 manager or a member of the limited-liability company. The affiant must

9-42 hold a live permit to practice in this state as a certified public accountant.

9-43 The board shall determine whether the applicant is eligible for registration

10-1 and may charge an initial fee and an annual renewal fee set by the board by

10-2 regulation. A limited-liability company which is so registered may use the

10-3 words "certified public accountants" or the abbreviation "C.P.A.’s" or

10-4 "CPA’s" in connection with its name. Notice must be given to the board

10-5 within 1 month after the admission to or withdrawal of a member from any

10-6 limited-liability company so registered.

10-7 Sec. 9. NRS 628.363 is hereby amended to read as follows:

10-8 628.363 1. A corporation organized for the practice of public

10-9 accounting shall register with the board as a corporation of public

10-10 accountants and comply with the following requirements:

10-11 (a) The sole purpose and business of the corporation must be to furnish

10-12 to the public services not inconsistent with this chapter or the regulations of

10-13 the board, except that the corporation may invest its money in a manner not

10-14 incompatible with the practice of public accounting.

10-15 (b) [Each shareholder of the corporation must be a certified public

10-16 accountant in any state or a public accountant of this state in good standing,

10-17 and be principally employed by the corporation or actively engaged in its

10-18 business. No other person may have any interest in the stock of the

10-19 corporation.] The principal officer of the corporation and any officer or

10-20 director having authority over the practice of public accounting by the

10-21 corporation must be a certified public accountant or registered public

10-22 accountant of this state in good standing.

10-23 (c) Each manager in charge of an office of the corporation in this state

10-24 must be a certified public accountant or a registered public accountant of

10-25 this state in good standing.

10-26 (d) In order to facilitate compliance with the provisions of this section

10-27 relating to the ownership of stock, there must be a written agreement

10-28 binding the shareholders or the corporation to purchase any shares offered

10-29 for sale by, or not under the ownership or effective control of, a qualified

10-30 shareholder. The corporation may retire any amount of stock for this

10-31 purpose, notwithstanding any impairment of its capital, so long as one share

10-32 remains outstanding.

10-33 (e) The corporation shall comply with other regulations pertaining to

10-34 corporations practicing public accounting in this state adopted by the

10-35 board.

10-36 2. Application for registration must be made upon the affidavit of a

10-37 shareholder who holds a live permit to practice in this state as a certified

10-38 public accountant or as a registered public accountant. The board shall

10-39 determine whether the applicant is eligible for registration. The board may

10-40 charge a registration fee and renewal fee and a reporting fee in an amount

10-41 set by regulation. A corporation which is so registered may use the words

10-42 "public accountants" in connection with its corporate name. Notice must be

11-1 given to the board within 1 month after the admission to or withdrawal of a

11-2 shareholder from any corporation so registered.

11-3 Sec. 10. NRS 628.365 is hereby amended to read as follows:

11-4 628.365 1. A limited-liability company organized for the practice of

11-5 public accounting shall register with the board as a limited-liability

11-6 company of public accountants and comply with the following

11-7 requirements:

11-8 (a) The sole purpose and business of the limited-liability company must

11-9 be to furnish to the public services not inconsistent with this chapter or the

11-10 regulations of the board, except that the limited-liability company may

11-11 invest its money in a manner not incompatible with the practice of public

11-12 accounting.

11-13 (b) [Each member of the limited-liability company must be a certified

11-14 public accountant in any state or a public accountant of this state in good

11-15 standing, and be principally employed by the limited-liability company or

11-16 actively engaged in its business. No other person may have any interest in

11-17 the limited-liability company.] The manager, if any, of the limited-liability

11-18 company must be a certified public accountant or registered public

11-19 accountant of this state in good standing.

11-20 (c) Each person in charge of an office of the limited-liability company in

11-21 this state must be a certified public accountant or a registered public

11-22 accountant of this state in good standing.

11-23 (d) In order to facilitate compliance with the provisions of this section

11-24 relating to the ownership of interests, there must be a written agreement

11-25 binding the members or the limited-liability company to purchase any

11-26 interest offered for sale by, or not under the ownership or effective control

11-27 of, a qualified member.

11-28 (e) The limited-liability company shall comply with other regulations

11-29 pertaining to limited-liability companies practicing public accounting in

11-30 this state adopted by the board.

11-31 2. Application for registration must be made upon the affidavit of the

11-32 manager or a member of the limited-liability company. The affiant must

11-33 hold a live permit to practice in this state as a certified public accountant or

11-34 as a registered public accountant. The board shall determine whether the

11-35 applicant is eligible for registration. The board may charge a registration

11-36 fee and renewal fee and a reporting fee in an amount set by regulation. A

11-37 limited-liability company which is so registered may use the words "public

11-38 accountants" in connection with its name. Notice must be given to the

11-39 board within 1 month after the admission to or withdrawal of a member of a

11-40 limited-liability company so registered.

11-41 Sec. 11. NRS 628.380 is hereby amended to read as follows:

11-42 628.380 1. Permits to engage in the practice of public accounting in

11-43 this state must be issued by the board to holders of the certificate of

12-1 certified public accountant issued under NRS 628.190 to 628.310,

12-2 inclusive, and to registered public accountants registered or licensed

12-3 pursuant to NRS 628.350, if all offices of the certificate holder or registrant

12-4 are maintained and registered as required under NRS 628.370, and if the

12-5 certificate holder or registrant has complied with the continuing education

12-6 requirements provided in this chapter and in the board’s regulations.

12-7 2. All permits expire on December 31 of each year and may be

12-8 renewed annually for a period of 1 year by certificate holders and

12-9 registrants in good standing upon payment of an annual renewal fee set by

12-10 the board by regulation.

12-11 3. Failure of a certificate holder or registrant to apply for an annual

12-12 permit to practice [within:

12-13 (a) Three years after the expiration date of the permit to practice last

12-14 obtained or renewed; or

12-15 (b) Three years after the date upon which the certificate holder or

12-16 registrant was granted his certificate or registration, if no permit was ever

12-17 issued to him,] deprives him of the right to a permit, unless the board, in its

12-18 discretion, determines that the failure was caused by excusable neglect.

12-19 4. The board shall adopt a regulation specifying the fee for issuance or

12-20 renewal of a permit more than [3 years] 1 year after the expiration of a

12-21 previous permit or granting of a certificate or registration.

12-22 5. The board may provide by regulation for the placing of certificates

12-23 and registrations in a retired or inactive status. The regulation may provide

12-24 for a procedure for applying for retired or inactive status and for applying

12-25 to return to active status, and must specify fees, if any, to accompany the

12-26 applications.

12-27 Sec. 12. NRS 628.390 is hereby amended to read as follows:

12-28 628.390 1. After giving notice and conducting a hearing, the board

12-29 may revoke, or may suspend for a period of not more than 5 years, any

12-30 certificate issued under NRS 628.190 to 628.310, inclusive, any

12-31 registration or license granted to a registered public accountant under NRS

12-32 628.350, or any registration of a partnership, corporation, limited-liability

12-33 company or office, or may revoke, suspend or refuse to renew any permit

12-34 issued under NRS 628.380, or may censure the holder of any permit, for

12-35 any one or any combination of the following causes:

12-36 (a) Fraud or deceit in obtaining a certificate as certified public

12-37 accountant, or in obtaining registration or a license as a public accountant

12-38 under this chapter, or in obtaining a permit to practice public accounting

12-39 under this chapter.

12-40 (b) Dishonesty, fraud or gross negligence by a certified or registered

12-41 public accountant in the practice of public accounting or, if not in the

12-42 practice of public accounting, of a kind which adversely affects the ability

12-43 to perform public accounting.

13-1 (c) Violation of any of the provisions of this chapter.

13-2 (d) Violation of a regulation or rule of professional conduct adopted by

13-3 the board under the authority granted by this chapter.

13-4 (e) Conviction of a felony under the laws of any state or of the United

13-5 States.

13-6 (f) Conviction of any crime, an element of which is dishonesty or fraud,

13-7 under the laws of any state or of the United States.

13-8 (g) Cancellation, revocation, suspension or refusal to renew authority to

13-9 practice as a certified public accountant or a registered public accountant

13-10 by any other state, for any cause other than failure to pay an annual

13-11 registration fee or to comply with requirements for continuing education or

13-12 review of his practice in the other state.

13-13 (h) Suspension or revocation of the right to practice before any state or

13-14 federal agency.

13-15 (i) Unless the person has been placed on inactive or retired status,

13-16 failure to obtain an annual permit under NRS 628.380, within:

13-17 (1) One year after the expiration date of the permit to practice last

13-18 obtained or renewed by the certificate holder or registrant; or

13-19 (2) One year after the date upon which the certificate holder or

13-20 registrant was granted his certificate or registration, if no permit was ever

13-21 issued to him, unless the failure has been excused by the board.

13-22 (j) Conduct discreditable to the profession of public accounting or which

13-23 reflects adversely upon the fitness of the person to engage in the practice of

13-24 public accounting.

13-25 (k) Making a false or misleading statement in support of an

13-26 application for a certificate, registration or permit of another person.

13-27 2. In addition to other penalties prescribed by this section, the board

13-28 may impose a civil penalty of not more than $5,000 for each violation. The

13-29 board may recover:

13-30 (a) Attorney’s fees and costs incurred in respect to a hearing held

13-31 pursuant to subsection 1 from a licensee if he is found in violation thereof;

13-32 and

13-33 (b) Attorney’s fees and costs incurred in the recovery of a civil penalty

13-34 imposed.

13-35 Sec. 12.5. NRS 628.510 is hereby amended to read as follows:

13-36 628.510 1. Except as otherwise provided in subsection 2, a person

13-37 shall not sign or affix his name or the name of a partnership, corporation or

13-38 limited-liability company, or any trade or assumed name used by him or by

13-39 the partnership, corporation or limited-liability company in business, with

13-40 any wording indicating that he is an accountant or auditor, or that the

13-41 partnership, corporation or limited-liability company is authorized to

13-42 practice as an accountant or auditor or with any wording indicating that he

13-43 or the partnership, corporation or limited-liability company has expert

14-1 knowledge in accounting or auditing, to any accounting or financial

14-2 statement, or attest to any accounting or financial statement, unless he holds

14-3 a live permit, or the partnership, corporation or limited-liability company is

14-4 registered pursuant to NRS 628.340, 628.343, 628.345, 628.360, 628.363

14-5 or 628.365 and all of his offices in this state for the practice of public

14-6 accounting are maintained and registered under NRS 628.370.

14-7 2. The provisions of subsection 1 do not prohibit:

14-8 (a) Any officer, employee, partner, principal or member of any

14-9 organization from affixing his signature to any statement or report in

14-10 reference to the financial affairs of that organization with any wording

14-11 designating the position, title or office which he holds in the organization.

14-12 (b) Any act of a public official or public employee in the performance of

14-13 his duties as such.

14-14 (c) Any person who does not hold a live permit from preparing a

14-15 financial statement or issuing a report if the statement or report,

14-16 respectively, includes a disclosure that:

14-17 (1) The person who prepared the statement or issued the report does

14-18 not hold a live permit issued by the board; and

14-19 (2) The statement or report does not purport to have been prepared

14-20 in compliance with the professional standards of accounting adopted by

14-21 the board.

14-22 Sec. 13. NRS 78.045 is hereby amended to read as follows:

14-23 78.045 1. The secretary of state shall not accept for filing any articles

14-24 of incorporation or any certificate of amendment of articles of

14-25 incorporation of any corporation formed pursuant to the laws of this state

14-26 which provides that the name of the corporation contain the word "bank" or

14-27 "trust," unless:

14-28 (a) It appears from the articles or the certificate of amendment that the

14-29 corporation proposes to carry on business as a banking or trust company,

14-30 exclusively or in connection with its business as a bank or savings and loan

14-31 association; and

14-32 (b) The articles or certificate of amendment is first approved by the

14-33 commissioner of financial institutions.

14-34 2. The secretary of state shall not accept for filing any articles of

14-35 incorporation or any certificate of amendment of articles of incorporation

14-36 of any corporation formed pursuant to the provisions of this chapter when it

14-37 appears from the articles or the certificate of amendment that the business

14-38 to be carried on by the corporation is subject to supervision by the

14-39 commissioner of insurance or by the commissioner of financial institutions,

14-40 unless the articles or certificate of amendment is first approved by the

14-41 commissioner who will be supervising the business of the corporation.

14-42 3. Except as otherwise provided in subsection [4,] 5, the secretary of

14-43 state shall not accept for filing any articles of incorporation or any

15-1 certificate or amendment of articles of incorporation of any corporation

15-2 formed pursuant to the laws of this state if the name of the corporation

15-3 contains the words "engineer," "engineered," "engineering," "professional

15-4 engineer" or "licensed engineer" unless:

15-5 (a) The state board of professional engineers and land surveyors certifies

15-6 that the principals of the corporation are licensed to practice engineering

15-7 pursuant to the laws of this state; or

15-8 (b) The state board of professional engineers and land surveyors

15-9 certifies that the corporation is exempt from the prohibitions of NRS

15-10 625.520.

15-11 4. The secretary of state shall not accept for filing any articles of

15-12 incorporation or any certificate of amendment of articles of

15-13 incorporation of any corporation formed pursuant to the laws of this

15-14 state which provides that the name of the corporation contain the words

15-15 "accountant," "accounting," "accountancy," "auditor" or "auditing"

15-16 unless the Nevada state board of accountancy certifies that the

15-17 corporation:

15-18 (a) Is registered pursuant to the provisions of chapter 628 of NRS; or

15-19 (b) Has filed with the state board of accountancy under penalty of

15-20 perjury a written statement that the corporation is not engaged in the

15-21 practice of accounting and is not offering to practice accounting in this

15-22 state.

15-23 5. The provisions of subsection 3 do not apply to any corporation,

15-24 whose securities are publicly traded and regulated by the Securities

15-25 Exchange Act of 1934, which does not engage in the practice of

15-26 professional engineering.

15-27 [5.] 6. The commissioner of financial institutions and the

15-28 commissioner of insurance may approve or disapprove the articles or

15-29 amendments referred to them pursuant to the provisions of this section.

15-30 Sec. 14. NRS 80.010 is hereby amended to read as follows:

15-31 80.010 1. Before commencing or doing any business in this state,

15-32 [every] each corporation organized pursuant to the laws of another state,

15-33 territory, the District of Columbia, a [dependency] possession of the United

15-34 States or a foreign country, that enters this state to do business must:

15-35 (a) File in the office of the secretary of state of this state:

15-36 (1) A certificate of corporate existence issued not more than 90 days

15-37 before the date of filing by an authorized officer of the jurisdiction of its

15-38 incorporation setting forth the filing of documents and instruments related

15-39 to the articles of incorporation, or the governmental acts or other instrument

15-40 or authority by which the corporation was created. If the certificate is in a

15-41 language other than English, a translation, together with the oath of the

15-42 translator and his attestation of its accuracy, must be attached to the

15-43 certificate.

16-1 (2) A certificate of acceptance of appointment executed by its resident

16-2 agent, who must be a resident or located in this state. The certificate must

16-3 set forth the name of the resident agent, his street address for the service of

16-4 process, and his mailing address if different from his street address. The

16-5 street address of the resident agent is the registered office of the

16-6 corporation in this state.

16-7 (3) A statement executed by an officer of the corporation,

16-8 acknowledged before a person authorized by the laws of the place where

16-9 the acknowledgment is taken to take acknowledgments of deeds, setting

16-10 forth:

16-11 (I) A general description of the purposes of the corporation; and

16-12 (II) The authorized stock of the corporation and the number and

16-13 par value of shares having par value and the number of shares having no

16-14 par value.

16-15 (b) Lodge in the office of the secretary of state a copy of the document

16-16 most recently filed by the corporation in the jurisdiction of its incorporation

16-17 setting forth the authorized stock of the corporation, the number of

16-18 par-value shares and their par value, and the number of no-par-value shares.

16-19 2. The secretary of state shall not file the documents required by

16-20 subsection 1 for any foreign corporation whose name is the same as, or

16-21 deceptively similar to the name of a corporation, limited partnership or

16-22 limited-liability company existing pursuant to the laws of this state or a

16-23 foreign corporation, foreign limited partnership or foreign limited-liability

16-24 company authorized to transact business in this state or a name to which the

16-25 exclusive right is at the time reserved in the manner provided in the laws of

16-26 this state, unless the written acknowledged consent of the holder of the

16-27 registered or reserved name to use the same name or the requested similar

16-28 name accompanies the articles of incorporation.

16-29 3. The secretary of state shall not accept for filing the documents

16-30 required by subsection 1 or NRS 80.110 for any foreign corporation if the

16-31 name of the corporation contains the words "engineer," "engineered,"

16-32 "engineering," "professional engineer" or "licensed engineer" unless the

16-33 state board of professional engineers and land surveyors certifies that:

16-34 (a) The principals of the corporation are licensed to practice engineering

16-35 pursuant to the laws of this state; or

16-36 (b) The corporation is exempt from the prohibitions of NRS 625.520.

16-37 4. The secretary of state shall not accept for filing the documents

16-38 required by subsection 1 or NRS 80.110 for any foreign corporation if it

16-39 appears from the documents that the business to be carried on by the

16-40 corporation is subject to supervision by the commissioner of financial

16-41 institutions, unless the commissioner certifies that:

16-42 (a) The corporation has obtained the authority required to do business in

16-43 this state; or

17-1 (b) The corporation is not subject to or is exempt from the requirements

17-2 for obtaining such authority.

17-3 5. The secretary of state shall not accept for filing the documents

17-4 required by subsection 1 or NRS 80.110 for any foreign corporation if

17-5 the name of the corporation contains the words "accountant,"

17-6 "accounting," "accountancy," "auditor" or "auditing" unless the

17-7 Nevada state board of accountancy certifies that the foreign corporation:

17-8 (a) Is registered pursuant to the provisions of chapter 628 of NRS; or

17-9 (b) Has filed with the state board of accountancy under penalty of

17-10 perjury a written statement that the foreign corporation is not engaged in

17-11 the practice of accounting and is not offering to practice accounting in

17-12 this state.

17-13 Sec. 15. NRS 82.106 is hereby amended to read as follows:

17-14 82.106 1. The secretary of state shall not accept for filing pursuant to

17-15 this chapter any articles of incorporation or any certificate of amendment of

17-16 articles of incorporation of any corporation formed or existing pursuant to

17-17 this chapter if the name of the corporation contains the words "trust,"

17-18 "engineer," "engineered," "engineering," "professional engineer" or

17-19 "licensed engineer."

17-20 2. The secretary of state shall not accept for filing any articles of

17-21 incorporation or any certificate of amendment of articles of incorporation

17-22 of any corporation formed or existing under this chapter when it appears

17-23 from the articles or the certificate of amendment that the business to be

17-24 carried on by the corporation is subject to supervision by the commissioner

17-25 of insurance.

17-26 3. The secretary of state shall not accept for filing pursuant to this

17-27 chapter any articles of incorporation or any certificate of amendment of

17-28 articles of incorporation of any corporation formed or existing pursuant

17-29 to this chapter if the name of the corporation contains the words

17-30 "accountant," "accounting," "accountancy," "auditor" or "auditing."

17-31 Sec. 16. NRS 86.171 is hereby amended to read as follows:

17-32 86.171 1. The name of a limited-liability company formed under the

17-33 provisions of this chapter must contain the words "Limited-Liability

17-34 Company," "Limited Company," or "Limited" or the abbreviations "Ltd.,"

17-35 "L.L.C.," "L.C.," "LLC" or "LC." The word "Company" may be

17-36 abbreviated as "Co."

17-37 2. The name proposed for a limited-liability company must be

17-38 distinguishable from the names of all other artificial persons organized or

17-39 registered under chapter 78, 78A, 80, 81, 82, 84, 86, 87, 88 or 89 of NRS

17-40 whose names are on file in the office of the secretary of state. If a proposed

17-41 name is not so distinguishable, the secretary of state shall return the articles

17-42 of organization to the organizer, unless the written acknowledged consent

18-1 of the holder of the registered name to use the same name or the requested

18-2 similar name accompanies the articles of organization.

18-3 3. For the purposes of this section and NRS 86.176, a proposed name

18-4 is not distinguished from a registered or reserved name solely because one

18-5 or the other contains distinctive lettering, a distinctive mark, a trade-mark

18-6 or a trade name, or any combination of these.

18-7 4. The name of a limited-liability company whose charter has been

18-8 revoked, whose existence has terminated, which has merged and is not the

18-9 surviving company, or which for any other reason is no longer in good

18-10 standing is available for use by any other artificial person.

18-11 5. The secretary of state shall not accept for filing any articles of

18-12 organization for any limited-liability company if the name of the limited-

18-13 liability company contains the words "accountant," "accounting,"

18-14 "accountancy," "auditor" or "auditing" unless the Nevada state board of

18-15 accountancy certifies that the limited-liability company:

18-16 (a) Is registered pursuant to the provisions of chapter 628 of NRS; or

18-17 (b) Has filed with the state board of accountancy under penalty of

18-18 perjury a written statement that the limited-liability company is not

18-19 engaged in the practice of accounting and is not offering to practice

18-20 accounting in this state.

18-21 Sec. 16.5. Section 2 of Senate Bill No. 19 of this session is hereby

18-22 amended to read as follows:

18-23 Sec. 2. NRS 80.010 is hereby amended to read as follows:

18-24 80.010 1. Before commencing or doing any business in this

18-25 state, each corporation organized pursuant to the laws of another

18-26 state, territory, the District of Columbia, a possession of the United

18-27 States or a foreign country, that enters this state to do business

18-28 must:

18-29 (a) File in the office of the secretary of state of this state:

18-30 (1) A certificate of corporate existence issued not more than

18-31 90 days before the date of filing by an authorized officer of the

18-32 jurisdiction of its incorporation setting forth the filing of documents

18-33 and instruments related to the articles of incorporation, or the

18-34 governmental acts or other instrument or authority by which the

18-35 corporation was created. If the certificate is in a language other than

18-36 English, a translation, together with the oath of the translator and

18-37 his attestation of its accuracy, must be attached to the certificate.

18-38 (2) A certificate of acceptance of appointment executed by its

18-39 resident agent, who must be a resident or located in this state. The

18-40 certificate must set forth the name of the resident agent, his street

18-41 address for the service of process, and his mailing address if

18-42 different from his street address. The street address of the resident

18-43 agent is the registered office of the corporation in this state.

19-1 (3) A statement executed by an officer of the corporation,

19-2 acknowledged before a person authorized by the laws of the place

19-3 where the acknowledgment is taken to take acknowledgments of

19-4 deeds, setting forth:

19-5 (I) A general description of the purposes of the corporation;

19-6 and

19-7 (II) The authorized stock of the corporation and the number

19-8 and par value of shares having par value and the number of shares

19-9 having no par value.

19-10 (b) Lodge in the office of the secretary of state a copy of the

19-11 document most recently filed by the corporation in the jurisdiction

19-12 of its incorporation setting forth the authorized stock of the

19-13 corporation, the number of par-value shares and their par value, and

19-14 the number of no-par-value shares.

19-15 2. The secretary of state shall not file the documents required

19-16 by subsection 1 for any foreign corporation whose name is the same

19-17 as, or deceptively similar to the name of a corporation, limited

19-18 partnership or limited-liability company existing pursuant to the

19-19 laws of this state or a foreign corporation, foreign limited

19-20 partnership or foreign limited-liability company authorized to

19-21 transact business in this state or a name to which the exclusive right

19-22 is at the time reserved in the manner provided in the laws of this

19-23 state, unless the written acknowledged consent of the holder of the

19-24 registered or reserved name to use the same name or the requested

19-25 similar name accompanies the articles of incorporation.

19-26 3. The secretary of state shall not accept for filing the

19-27 documents required by subsection 1 or NRS 80.110 for any foreign

19-28 corporation if the name of the corporation contains the words

19-29 "engineer," "engineered," "engineering," "professional engineer" or

19-30 "licensed engineer" unless the state board of professional engineers

19-31 and land surveyors certifies that:

19-32 (a) The principals of the corporation are licensed to practice

19-33 engineering pursuant to the laws of this state; or

19-34 (b) The corporation is exempt from the prohibitions of NRS

19-35 625.520.

19-36 4. The secretary of state shall not accept for filing the

19-37 documents required by subsection 1 or NRS 80.110 for any foreign

19-38 corporation if it appears from the documents that the business to be

19-39 carried on by the corporation is subject to supervision by the

19-40 commissioner of financial institutions, unless the commissioner

19-41 certifies that:

19-42 (a) The corporation has obtained the authority required to do

19-43 business in this state; or

20-1 (b) The corporation is not subject to or is exempt from the

20-2 requirements for obtaining such authority.

20-3 5. The secretary of state shall not accept for filing the

20-4 documents required by subsection 1 or NRS 80.110 for any foreign

20-5 corporation if the name of the corporation contains the words

20-6 "accountant," "accounting," "accountancy," "auditor" or "auditing"

20-7 unless the Nevada state board of accountancy certifies that the

20-8 foreign corporation:

20-9 (a) Is registered pursuant to the provisions of chapter 628 of

20-10 NRS; or

20-11 (b) Has filed with the state board of accountancy under penalty

20-12 of perjury a written statement that the foreign corporation is not

20-13 engaged in the practice of accounting and is not offering to practice

20-14 accounting in this state.

20-15 6. As used in this section, "street address" of a resident

20-16 means the actual physical location in this state at which a resident

20-17 agent is available for service of process.

20-18 Sec. 17. NRS 628.382 is hereby repealed.

20-19 Sec. 18. 1. This section and sections 1, 2, 3 and 5 to 17, inclusive, of

20-20 this act become effective on July 1, 1999.

20-21 2. Section 4 of this act becomes effective at 12:01 a.m. on January 1,

20-22 2001.

 

20-23 TEXT OF REPEALED SECTION

 

20-24 628.382 Prohibited acts.

20-25 1. A person engaged in the practice of public accounting shall not:

20-26 (a) Pay a commission to obtain a client; or

20-27 (b) Accept a commission for a referral to a client of the products or

20-28 services of another.

20-29 2. This section does not prohibit payments for:

20-30 (a) The purchase of an accounting practice; or

20-31 (b) Retirement,

20-32 to a person presently or formerly engaged in the practice of public

20-33 accounting or to his heirs or estate.

~