TRENTON – A bill to update the rules governing the formation of Limited Liability Companies in New Jersey was advanced by an Assembly panel Monday.
LLCs are a form of unincorporated business organization that provides corporate-style limited liability to its owners with partnership-like capacity.
“Business organization rules ought to reflect what the business community needs. If a business organizes in another state because of our outmoded New Jersey rules, that is a lost opportunity and lost jobs for our state” said Assemblyman John Wisniewski (D-Middlesex), a sponsor of the bill. “This is a common sense approach that will help us gain a competitive edge with neighboring states.”
Significant changes would include:
- Eliminating the default and overlooked rule that LLCs have a limited duration;
- Allowing LLC operating agreements to be oral, written or implied;
- Allocating profits and losses on a per capita basis; and
- Providing remedies when members of a company act in an oppressive or harmful way to other members.
The bill cleared the Assembly Regulatory Oversight and Gaming Committee and now awaits consideration by the full Assembly.
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