A measure sponsored by Assemblymen John J. Burzichelli, Troy Singleton and John S. Wisniewski that would make New Jersey more attractive for businesses and more competitive for good-paying jobs was approved by an Assembly panel on Monday.
The bill (A-1543) would modernize the rules governing the formation of Limited Liability Companies in New Jersey.
Burzichelli is a member of the Red Tape Review Commission that was formed to find ways to eliminate unnecessary regulation and help stimulate economic development.
“Streamlining the ways companies can form in New Jersey is a smart step toward increased job creation and economic growth,” said Burzichelli (D-Gloucester/Salem/ Cumberland). “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.
“The first step in boosting job creation is to signal to businesses that we’re committed to creating a business-friendly climate, free of unnecessary regulatory hurdles,” said Singleton (D-Burlington). “This is a pro-business bill, that’s ultimately pro-worker.”
“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 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.
The bill cleared the Assembly Regulatory Oversight and Gaming Committee and now awaits consideration by the full Assembly.