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What Surety Bond Amount is Required for Document Preparers in Nevada?
| Number of Registrants | Surety Bond Amount |
|---|---|
| 1 Registrant (or sole proprietorship) | $25,000 |
| 2-25 Registrants | $50,000 |
| 26-75 Registrants | $75,000 |
| 76-125 Registrants | $100,000 |
| 126-200 Registrants | $150,000 |
| 201 or more Registrants | $200,000 |
| A registrant is any person who performs document preparation services. | |
Why is a Nevada Document Preparation Service Bond Required?
The Document Preparation Service surety bond provides an indemnification or limited guarantee to a customer or any other person who files a valid action or proceeding related to financial damages caused by the bonded principal or related parties resulting from; acts or omission of the registrant, which violates a provision of law or a regulation, wrongful failure or refusal by the registrant to provide services in accordance with a contract, fraud, dishonesty, negligence or other wrongful conduct, acts or omissions of the registrant in violation of any 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, or payment to the Secretary of State for any civil penalty or award of attorney’s fees or costs of suit pursuant to the laws of the state.
Document Preparation Service Bonds And Getting Your Nevada Business License/Registration
NRS Chapter 240A governs the registration and professional conduct of those who provide document preparation services in Nevada. A document preparation service is defined in Nevada as a person who, for compensation and under the direction of a client, provides assistance in certain legal matters and is required to be registered with the Nevada Secretary of State. The state law affords consumers protections and remedies for conduct violations by a document preparation service. One of these protections is the required surety bond. Learn more about Document Service Preparer licensing requirements from the Nevada Secretary of State.
Additional Nevada Document Preparation Service Bond Resources & Links
Effective July 2017, the Nevada Legislative Session through Assembly Bill 324 revised and expanded its definition of Document Preparation Services to include “A person who, for compensation, assists a client in preparing all or substantially all of a federal or state tax return or a claim for a tax refund”. In following, those meeting this definition are now obligated to furnish a surety bond.
How Does the State of Nevada define Document Preparation Services?
"A document preparation service is a person who, for compensation and under the direction of a client, provides assistance in certain legal matters and is required to be registered with the Nevada Secretary of State." The Nevada state law provides consumers protections and remedies for violations of conduct by a document preparation service. NRS Chapter 240A governs the registration and conduct of persons who provide document preparation services. More specifically, the state's definition also includes the following activities:
- Preparing or completing any pleading, application or other document for the client,
- Translating an answer to a question posed in such a document,
- Securing any supporting document, such as a birth certificate, required in connection with the legal matter,
- Submitting a completed document on behalf of the client to a court or administrative agency, or
- Preparing or assisting in the preparation of all or substantially all of a federal or state tax return or claim for a tax refund
- A paralegal who performs one or more of the actions described unless the paralegal works under the direction and supervision of an attorney authorized to practice law in this State,
- A bankruptcy petition preparer as defined by section 110 of the United States Bankruptcy Code, 11 U.S.C. § 110, or
- Holds himself or herself out as a person who provides such services.
A person acting as a document preparation service is precluded from providing legal advice unless he or she is a licensed attorney in the State of Nevada.
What are the bond coverages required?
Minimum Penal Sum Business Entity Bond Requirements;
- If the business entity employs 1 registrant to perform document preparation services, $25,000;
- 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;
- If the business entity employs more than 200 registrants to perform document preparation services, $200,000.