Nevada Collection Agency Bond

Nevada Collection Agency Bond

Nevada Collection Agency Bond


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What is an Nevada Collection Agency Bond? 


Nevada Collection Agency/Debt Collector Bond's are required by Nevada's Department of Business and Industry to obtain your Nevada Collection Agency/Debt Collector Bond. The Nevada Collection Agency Bond amount is set at $35,000-$60,000. 


The State requires a Collection Agency bond for:  


a $35,000-$60,000 surety bond

 

Different parts of a bond:


 There are 3 parts to a Collection Agency surety bond. The Principal "YOU", The Surety Company, and the Obligee. The Principal is the business or individual applying for the Collection Agency Surety Bond. The Obligee is the individual or entity requiring the Surety Bond and the Surety Company is the company who provides the Surety Bond coverage.


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Nevada Collection Agency Bond Information and Requirements:


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 appropriate penal sum.  

The law specifies that no part of a bond may be withdrawn while the registration of a registrant remains in effect, or while a proceeding to suspend or revoke the registration is pending. 

The surety bond must be executed by a company qualified and authorized to do business in this State, and it must cover the period of the registration of any registrant covered by the bond.  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 appropriate penal sum of the bond is exhausted. Should that occur, the Secretary of State will immediately notify the registrant in writing that his or her registration is suspended 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.

If a claim against a bond is filed pursuant to NRS 240A.120, the claimant must notify the Secretary of State in writing upon filing the action. See Making a claim against a bond.


Cash Bond

In lieu of the surety bond requirement, a registrant or business entity may deposit an appropriate penal sum cash bond with the Secretary of State. A cash bond must be submitted to the Secretary of State by cashier’s check in the full amount payable to the State of Nevada with a Cash Bond deposit form. Pursuant to NRS240A.120, the Secretary of State may retain the cash 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 on filing a cash bond.


Purchasing a Surety Bond

The Secretary of State does not regulate the price for securing a surety bond.  Prices will vary depending upon factors. The price is set by the marketplace and the surety companies who issue bonds.  Contact a surety bonding company authorized to do business in Nevada for information on cost and how to obtain a surety bond.

The surety bond may be issued for an individual performing document preparation services in Nevada, or may be issued to a business entity performing document preparation services in Nevada. 


Surety issued to an individual performing document preparation services

 A surety bond issued to an individual must be for the minimum penal sum of $25,000 with the individual named as principal and must include any fictitious name under which the business owner is conducting or advertising document preparation services.

A sole proprietorship may not file a business entity bond, however, a sole proprietor may hire employees.  In that instance, each employee must have his or her own individual bond in their name.  In some instances, a sole proprietorship may be issued to a husband and wife or registered domestic partners.  In that instance, each person must have an individual bond in his or her name. 


Bond issued to a business entity that has one or more employees who perform document preparation services for the business entity

A business entity that has one or more employees who perform document preparation services may file with the Secretary of State a cash or surety bond in the appropriate penal sum on behalf of all employees of the business entity who are registered as a document preparation service and provide document preparation services for the business entity. The surety bond must be executed with the business entity as principal (except if a business entity employs only one registrant to perform document preparation services, the registrant must be named as principal in the bond filed).

If a business entity files a cash or surety bond, the employees of the business entity who are covered by the bond are not required to file a separate individual bond.

The business entity bond must cover the period of registration of each employee of the business entity.  For purposes of determining the amount of the penal sum required, the number of registrants employed by the business entity is the greatest number of registrants who will perform document preparation services for the business entity at any time during the year, including without limitation, on a temporary or seasonal basis.

The business entity must maintain with the Secretary of State a list of employees covered by the business entity bond.  The business entity must notify the Secretary of State when a registrant is no longer employed by the business entity.  That individual’s registration, if not expired, will be suspended by operation of law pursuant to NRS 240A.120.

The registrant may be reinstated if, before the current term of the registration expires, the registrant files a new bond with the Secretary of State.


Minimum Penal Sum Business Entity Bond Requirements

The number of registrants employed by a business entity to perform document preparation services is the greatest number of registrants who will perform document preparation services for the business entity at any time during the year, including, without limitation, on a temporary or seasonal basis.

  • If the business entity employs 1 registrant to perform document preparation services, $25,000; If a business entity employs only one registrant to perform document preparation services, the registrant must be named as principal in the bond filed.
  • If the business entity employs at least 2 but not more than 25 registrants to perform document preparation services, $50,000;
  • If the business entity employs at least 26 but not more than 75 registrants to perform document preparation services, $75,000;
  • If the business entity employs at least 76 but not more than 125 registrants to perform document preparation services, $100,000;
  • If the business entity employs at least 126 but not more than 200 registrants to perform document preparation services, $150,000; and
  • If the business entity employs more than 200 registrants to perform document preparation services, $200,000.


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