Corzine Signs Laws Updating Corporate Business Rules

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TRENTON – A six-bill package to simplify many of New Jersey’s corporate governance statutes is now law. Two of the bills were signed Monday. Four others had been previously signed.

“For New Jersey to be competitive as a home for industry in the global marketplace, we need laws that will allow them to operate in real time, using 21st century technology,” said Assemblyman Patrick Diegnan (D-Middlesex).

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Signed into law Monday was legislation to:

• Allow any notice required under the provisions of the “New Jersey Business Corporation Act” to be issued electronically, saving corporations time and money and allowing for more immediate, direct access to corporate directors and shareholders (A-2879).

• Provide true one-hour and two-hour options for expedited over-the-counter corporate service requests. Formerly, expedited service was considered priority same day service, which was processed within 8.5 hours from the time the request is received (A-2882).

Already signed into law was legislation to:

• Enable corporate directors to provide a notice of resignation that is only effective when certain events occur, providing for smoother transitions in many circumstances – such as when a director doesn’t receive a majority vote at a shareholder’s meeting. (A-2881).

• Allow a corporation to eliminate plurality voting for director elections using the corporation’s bylaws, giving New Jersey corporations greater flexibility in adopting other voting methods concerning the selection of directors. Former law required a corporation to amend the certificate of incorporation for any such changes (A-2883).

• Modernize state law to better account for the expanded scope of global business interactions by amending the definition of a foreign corporation to mirror the definition used in the Uniform Limited Partnership Law and the New Jersey Limited Liability Company Act. The measure eliminated confusion caused by the differing definitions and also allow unincorporated entities beyond the traditional partnerships and limited liability companies to merge with New Jersey corporations (A-2884

• Provide greater flexibility in the types of equity awards a corporation may use, in recognition of the corporate trend away from granting stock options in favor of more restricted stock grants (A-2885).

“These changes will help bring new jobs and new opportunities to the state,” said Assemblyman Wayne DeAngelo (D-Mercer/Middlesex). “Amid a recession, working to bolster and protect the state’s private sector only makes sense.”


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