Nevada’s Five-Year Investigation Antitrust question does not apply only to the Nevada entity filing. If another company owns your LLC, that company is the parent. If your LLC owns another business, that business is a subsidiary. For example, your Nevada LLC may have faced one investigation; its parent may have faced three, and a subsidiary may have faced one. Together, those matters may reach the five-investigation threshold. The question covers investigations anywhere in the United States, including state and federal investigations. A matter handled by a state attorney general in California or a federal agency may count just as a Nevada investigation would. The wording does not cover a foreign investigation by itself. The five-year period is a lookback period from the filing. It is not limited to five completed calendar years. Also, five allegations in one investigation are not automatically five investigations.
What does “restrain trade” mean?
The investigation must concern alleged conduct that interferes with competition. Under NRS 598A.060, examples include competitors agreeing to fix prices, rig bids, divide territories, allocate customers, limit production, or work together to monopolize a market. Certain mergers, acquisitions, or purchases of business assets may also raise this issue if they are alleged to substantially reduce competition. That does not mean every government inquiry involving a contract qualifies. A tax audit, licensing inspection, wage investigation, customer complaint, or ordinary contract dispute is different from an antitrust investigation. Read the agency’s description of the conduct instead of relying on the case title alone.
The outcome matters too
An investigation does not meet this question merely because it was opened. It must also have ended with one of the consequences listed in the filing question: a fine, penalty, required divestiture, or restriction on acquiring holdings. A divestiture usually means the company had to sell a business, asset, or ownership interest. A restriction on acquiring holdings means the settlement limited what the company could purchase. An investigation that closed without one of these consequences may not satisfy this particular question.
Check the separate market-share question
This question appears alongside another asking whether the company controls at least 25 percent of the market for a product sold or distributed in Nevada. For an LLC, NRS 86.264 treats the market-share requirement and the five-investigation requirement as connected conditions. Comparable rules apply to certain corporations and other entities. So, answering “Yes” to the investigation question alone does not necessarily mean the special $100,000 filing requirement applies. The current Nevada Secretary of State form says that if both questions are answered “Yes,” the company must provide information about each investigation and include the $100,000 fee.
What should you do before filing?
Ask the parent company, subsidiaries, legal department, or compliance team for the group’s five-year antitrust history. For each possible matter, record the agency or court, jurisdiction, date, entities involved, allegations, settlement terms, and final outcome. If the answer may be “Yes,” do not guess at whether related state and federal matters count separately. Have antitrust counsel review the records before the filing is signed. IncParadise can help organize the Nevada filing, but legal counsel should decide how the company’s investigation history fits this test.
What This Means for Your LLC or Corporation
If you are completing a Nevada annual filing for your LLC or corporation, this is not a general question about whether your business has ever been investigated. Nevada wants you to look at the wider company group – your business, its parent, and its subsidiaries – and determine whether at least five separate U.S. investigations occurred during the previous five years. Those investigations must have involved alleged anticompetitive conduct, such as price fixing, bid rigging, dividing markets, or similar conduct, and must have ended in fines, penalties, required divestitures, or restrictions on future acquisitions. An ordinary tax audit, licensing inspection, or contract dispute does not fit this question. You must also consider whether the company controls at least 25% of a product market in Nevada. If both conditions apply, the filing requires details about each investigation and a separate $100,000 fee. IncParadise can help with the Nevada filing and compliance paperwork, while an antitrust attorney should review any uncertain investigation history.
