Nudging Entrepreneurs into Noncompliance: Why Does Nevada Have so Many Benefit Corporations? [Blog Post]

4 Pages Posted: 12 Jan 2017

Date Written: September 23, 2016

Abstract

Despite the fact that there were about three times as many businesses formed in Delaware than in Nevada in 2014, Nevada had more than four times the number of benefit corporation formations. What accounts for this discrepancy? Are Nevada entrepreneurs particularly socially conscious? Does Nevada law provide more protection for businesses that look beyond the bottom line? Has the "Delaware of the West" moniker begun to take hold among the entrepreneurs interested in corporate social responsibility?

It turns out that the answer is much more mundane. The startling number of benefit corporations formed in Nevada is due to the Nevada Secretary of State’s website design. As this blog post shows, the architecture of the website inadvertently encourages the formation of benefit corporations.

Keywords: benefit corporations, nudge, noncompliance, nevada, b corp

Suggested Citation

Amarante, Eric Franklin, Nudging Entrepreneurs into Noncompliance: Why Does Nevada Have so Many Benefit Corporations? [Blog Post] (September 23, 2016). Available at SSRN: https://ssrn.com/abstract=2897684 or http://dx.doi.org/10.2139/ssrn.2897684

Eric Franklin Amarante (Contact Author)

University of Tennessee College of Law ( email )

1505 West Cumberland Avenue
Knoxville, TN 37996
United States

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