Concerning assets and liabilities ...
Nevada Revised Statute 80.190 states, in part ... "each foreign corporation doing business [or qualified to do business] in this state shall, ... publish a statement of its last calendar year's business ... The statement must include: "
(e) The total assets and liabilities of the corporation at the end of the year.
Unfortunately, there has been controversy concerning this ambiguous part of the law.
Following are questions brought up by various companies ...
1. The law asks us to publish "the total assets and liabilities". It does not ask us to publish the total assets and also the total liabilities.
In the english language, the word "and" means "combined with".
If the assets of our company total $5.00 and the liabilities of our company total $3.00 then the total assets and liabilities of our company is $8.00.
Although it was probably the intent of the legislature to ask for the publication of the total assets and also the total liabilities, the law itself is very clear - it askes for the combination of the total assets and liabilities.
We believe that a judgmental decision or an official Attorney General's Opinion on this matter should be rendered.
Note: - To date, neither a judgmental decision or an official Attorney General's Opinion on this matter has been forthcoming.
2. The law asks us to publish "the total assets and liabilities". It does not ask us to publish the total financial assets and liabilities.
This is confusing and ambiguous. - Does the law require us to list physical assets and liabilities such as a list of the number of pencils and paper clips that we have on hand? - Or is the intent of the law to require us to publish the financial assets and liabilities?
If the intent of the law is to require the publication of financial assets and liabilities as of the end of the calendar year then are we expected to have our properties (such as a building or vehicle) officially appraised at the end of each calendar year or may we approximate the current value? - Note that the law does not say "the approximate total assets and liabilities"
We believe that a judgmental decision or an official Attorney General's Opinion on this matter should be rendered.
Note: - To date, neither a judgmental decision or an official Attorney General's Opinion on this matter has been forthcoming.
3. The law asks us to publish "the total assets and liabilities" at the end of the calendar year.
We have been informed that "total assets and liabilities" means the total assets and liabilities of the company regardless of where they are located.
The law, unfortunately, does not specify "which" calendar year end.
A company headquartered in Germany (Damiler-Chrysler) has a calendar year end of Midnight, December 31st. However, it has assets and liabilities in various other countries and time zones around the world.
Because a shipment of automobile parts sent from Germany early on January 1st of one year could feasibly arrive and be transfered to a dealer/distributer in New York late on December 31st of the previous year the company would be required to report assets even though they were transferred the previous year.
The problem with the different time zones (different calendar year ends) is further complicated with the shipping of goods through international waters from one time zone to another on December 31st.
Further difficulties have arisen for a Swiss company who manufactures a proprietary type of thermocouple. - They have leased a number of these specialty items to N.A.S.A. who has installed them on two of the Mars Rovers that are now located on the planet Mars. - As the thermocouples are considered assets of the company, they want to know if they are to report their assets as of the end of the Martian calendar year.
We believe that a judgmental decision or an official Attorney General's Opinion on this matter should be rendered.
Note: - To date, neither a judgmental decision or an official Attorney General's Opinion on this matter has been forthcoming.
Because of these and numerous other ambiguities, until the matter is cleared up, many companies publish "Upon Request" or "$0.00" for assets and liabilities.
To the best of our knowledge, no company has ever been fined for publishing "Upon Request" or simply $0.00.
It should be noted that although the law (NRS 80.190) provides for the penalization of companies that do not publish a Statement of Business, there is no provision for penalizing companies who publish erroneous or inaccurate information.
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