TRENTON – The Assembly approved a bill Thursday that would modernize the rules governing the formation of limited liability companies in New Jersey by a vote of 77-1.
“Streamlining the ways companies can form in New Jersey is a smart step toward increased job creation and economic growth,” said Assemblyman John Burzichelli (D-Gloucester/Salem/ Cumberland), a sponsor of the bill. “Common sense bills like this to make it easier for businesses to grow and prosper in our state are necessary to help navigate through this difficult economy. After all, stronger businesses mean better jobs for New Jersey residents.”
The bill would modernize regulations for creating and operating LLCs – 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). “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.
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