BILL PACKAGE TO UPDATE & IMPROVE N.J.’S CORPORATE BUSINESS RULES NOW LAW

(TRENTON) — A six-bill package sponsored by Assembly Democrats Patrick J. Diegnan, Matthew W. Milam, Nelson T. Albano, Albert Coutinho, Upendra Chivukula, Wayne P. DeAngelo, Pamela R. Lampitt and Bonnie Watson Coleman 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 Diegnan (D-Middlesex).

“This package sends another message that we are serious about working with businesses that call New Jersey home, all the while updating some of our laws to meet the latest technologies,” said Chivukula (D-Somerset).

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

“With continued turbulence in our national economy, we must do everything we can to ensure that New Jersey remains an excellent place to do business,” said Watson Coleman (D-Mercer).

“Ensuring New Jersey businesses and the workers they employ can emerge strong from this economic meltdown with the momentum they need has been a top priority, and this is yet another step in that direction,” said Lampitt (D-Camden).

“In the current competitive marketplace, we must ensure that New Jersey does what it can to make itself a great place to do business,” said Milam (D-Cumberland/Atlantic/Cape May).

“We’re making the state more business friendly and helping to combat the global economic crisis to put New Jersey businesses in a position to emerge from it stronger than ever,” said Coutinho (D-Essex).

According to the sponsors, the changes in New Jersey’s corporate business laws stem largely from conversations they had with business leaders and from a desire to be more cognizant of how corporations work and operate in the instant-access global marketplace.

The sponsors also studied policies in neighboring states — particularly Delaware, which is widely regarded as being very accepting when it comes to corporate governance. Portions of the package mirror Delaware’s General Corporation Laws; portions go even further.

Signed into law Monday by Gov. Jon S. Corzine 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). The measure is sponsored by Diegnan, Chivukula, DeAngelo, Watson Coleman and Lampitt.
  • 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). The measure is sponsored by Diegnan, Milam, Watson Coleman and Lampitt.

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). It was sponsored by Coutinho, Diegnan, Watson Coleman and Lampitt.
  • 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). It was sponsored by DeAngelo, Chivukula, Coutinho, Diegnan, Watson Coleman and Lampitt.
  • 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). It was sponsored by Albano, DeAngelo, Diegnan, Watson Coleman and Lampitt.
  • 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). It was sponsored by Milam, Albano, Diegnan, Watson Coleman and Lampitt.

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