Keith Bishop at the California Corporate & Securities Law blog has put together a post profiling recent scholarship on Nevada corporate law. The articles and essays linked there show a variety of opinions about Nevada's recent rise to more prominence in corporate law.
The rise has been dramatic, especially for SEC reporting companies. Several months ago I used computer analysis of the SEC's EDGAR database to document the recent meteoric increase in the number of Nevada reporting ompanies. The post showed that Nevada has greatly outstripped Delaware in new SEC reporting companies in the last five years.
The news from Nevada is actually somewhat unsettling when one digs deeper into the data, as the majority of these Nevada public companies have at least one investor red flag. It turns out that most of these companies are (at least) one of the following: shell companies, blank check companies, reverse merger companies, development stage companies, or penny stocks--not exactly traits that exude legitimacy.
Indeed, one might wonder whether Nevada is a sort of "attractive nuisance" for investors. Of course, there are legitimate public companies incorporated in Nevada, but the data on the these "sideshow" companies is compelling. Why are so many of these "unconventional" companies incorporating in Nevada?