Nerve Center Test Law and Legal Definition
Nerve Center Test is a judicial analysis used to determine a corporation's real place of business where a corporation's activities are decentralized and spread across numerous states. It focuses on locating where the corporation's overall policy originates. However, where a corporation's activities are centralized, courts apply the place of operations or locus of operations test to determine a corporation's principal place of business.
Where a corporation is engaged in far-flung and varied activities which are carried on in different states, its principal place of business is the nerve center from which it radiates out to its constituent parts and from which its officers direct, control and coordinate all activities without regard to locale, in the furtherance of the corporate objective. The test applied by our United States Court of Appeals, is that place where the corporation has an office from which its business is directed and controlled--the place where all of its business is under the supreme direction and control of its officers. [Scot Typewriter Co. v. Underwood Corp., 170 F. Supp. 862 (D.N.Y. 195)]
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