[Corrected Copy]

 

ASSEMBLY, No. 2884

STATE OF NEW JERSEY

213th LEGISLATURE

 

INTRODUCED JUNE 5, 2008

 


 

Sponsored by:

Assemblyman NELSON T. ALBANO

District 1 (Cape May, Atlantic and Cumberland)

Assemblyman WAYNE P. DEANGELO

District 14 (Mercer and Middlesex)

Assemblywoman SANDRA LOVE

District 4 (Camden and Gloucester)

Assemblyman PATRICK J. DIEGNAN, JR.

District 18 (Middlesex)

Assemblyman JOSEPH VAS

District 19 (Middlesex)

Assemblywoman BONNIE WATSON COLEMAN

District 15 (Mercer)

Assemblywoman PAMELA R. LAMPITT

District 6 (Camden)

 

Co-Sponsored by:

Assemblywoman Rodriguez, Assemblymen Wisniewski, Moriarty, Assemblywoman Pou and Senator Van Drew

 

 

SYNOPSIS

     Expands scope of unincorporated entities permitted to merge or consolidate with domestic corporations.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning mergers or consolidation of certain domestic corporations and amending N.J.S.14A:1-2.1 and P.L.1995, c.279.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    N.J.S.14A:1-2.1 is amended to read as follows:

     14A:1-2.1.  Definitions.

     As used in this act, unless the context otherwise requires, the term:

     (a)   "Act" or "this act" means the "New Jersey Business Corporation Act" and includes all amendments and supplements thereto.

     (b)   "Attorney General" means the Attorney General of New Jersey.

     (c)   "Authorized shares" means the shares of all classes and series which the corporation is authorized to issue.

     (d)   "Board" means board of directors.  "Entire board" means the total number of directors which the corporation would have if there were no vacancies.

     (e)   "Bonds" includes secured and unsecured bonds, debentures, notes and other written obligations for the payment of money.

     (f)    "Certificate of incorporation" includes:

     (i)    the original certificate of incorporation or any other instrument filed or issued under any statute to form a domestic or foreign corporation, as amended, supplemented or restated by certificates of amendment, merger or consolidation or by other certificates or instruments filed or issued under any statute; and

     (ii)   a special act or charter creating a domestic or foreign corporation, as amended, supplemented or restated.

     (g)   "Corporation" or "domestic corporation" means a corporation for profit organized under this act, or existing on its effective date and theretofore organized under any other law of this State for a purpose or purposes for which a corporation may be organized under this act.

     (h)   "Director" means any member of the governing board of a corporation, whether designated as director, trustee, manager, governor, or by any other title.

     (i)    "Foreign corporation" means a corporation for profit organized under the laws of a jurisdiction other than this State [for a purpose or purposes for which a corporation may be organized under this act] , including any state or territory of the United States or the District of Columbia, the United States or any foreign country or other foreign jurisdiction.

     (j)    "Resolution" means any action taken or authority granted by the shareholders, the board, or a committee of the board, regardless of whether evidenced by a formal resolution.

     (k)   "Secretary of State" means the Secretary of State of New Jersey.

     (l)    "Shareholder" means one who is a holder of record of shares in a corporation.

     (m)  "Shares" means the units into which the proprietary interests in a corporation are divided.

     (n)   "Subscriber" means one who subscribes for shares in a corporation, whether before or after incorporation.

     (o)   "Subsidiary" means a domestic or foreign corporation whose outstanding shares are owned directly or indirectly by another domestic or foreign corporation in such number as to entitle the holder at the time to elect a majority of its directors without regard to voting power which may thereafter exist upon a default, failure or other contingency.

     (p)   "Treasury shares" means shares of a corporation which have been issued, and have been subsequently acquired by the corporation under circumstances which do not result in cancellation.  Treasury shares are issued shares, but not outstanding shares.

     (q)   "Other business entity" means a partnership [or] , limited liability company, statutory trust, business trust or association, real estate investment trust, common-law trust, national association, or any other unincorporated business, whether organized under the laws of this State or under the laws of any other state or territory of the United States or the District of Columbia, the United States or any foreign country or other foreign jurisdiction.

     (r)    "Votes cast" means all votes cast in favor of and against a particular proposition, but shall not include abstentions.

(cf:  P.L.1995, c.279, s.1)

 

     2.    Section 30 of P.L.1995, c.279 (C.14A:10-14) is amended to read as follows:

     30.  (1)  A domestic corporation may merge or consolidate with one or more other business entities in the following manner:

     (a)   Each domestic corporation shall comply with the provisions of chapter 10 of Title 14A of the New Jersey Statutes with respect to the merger or consolidation of domestic corporations and each other business entity shall comply with the applicable provisions of the laws of the jurisdiction under which it is organized.

     (b)   The certificate of merger or consolidation required by [section] N.J.S.14A:10-4.1 shall be executed on behalf of each domestic corporation and each other business entity and, in addition to the information required by subsection (1) of N.J.S.14A:10-4.1[(1)], shall set forth that the applicable provisions of the laws of the jurisdiction under which each other business entity was organized have been, or upon compliance with filing and recording requirements will have been, complied with.

     (c)   If the surviving business entity or new business entity meets the definition of "other business entity" pursuant to subsection (q) of N.J.S.14A:1-2.1 , and is organized under the laws of another [state or foreign] jurisdiction and is to transact business in this State, it shall comply with the [provisions of the] laws of this State [with respect to foreign partnerships or foreign limited liability companies, as appropriate] applicable to that other business entity, and, whether or not it is to transact business in this State, the certificate of merger or consolidation required by [section] N.J.S.14A:10-4.1 shall, in addition to other required information, set forth:

     (i)    an agreement by [such foreign] that other business entity that it may be served with process in this State in any proceeding for the enforcement of any obligation of any domestic corporation or any other business entity, previously amenable to suit in this State, which is a party to such merger or consolidation, and in any proceeding for the enforcement of the rights of a dissenting shareholder of any such domestic corporation against the surviving or new corporation; [and]

     (ii)   an irrevocable appointment by [such foreign] that other business entity of the Secretary of State of this State as its agent to accept service of process in any such proceeding, and the post office address, within or without this State, to which the Secretary of State shall mail a copy of the process in such proceeding; and

     (iii)   an agreement by [such foreign] that other business entity that it will promptly pay to the dissenting shareholders of any such domestic corporation the amount, if any, to which they shall be entitled under the provisions of chapter 11 of Title 14A of the New Jersey Statutes with respect to the rights of dissenting shareholders.

     (2)   The provisions of subsection (4) of N.J.S.14A:10-3[(4)] shall apply to a merger in which the surviving corporation is a domestic corporation.

     (3)   If the surviving or new corporation is a domestic corporation, the effect of such merger or consolidation shall be the same as in the case of the merger or consolidation of domestic corporations.  If the surviving or new corporation is any other business entity, the effect of such merger or consolidation shall be the same as in the case of the merger or consolidation of domestic corporations except insofar as provided otherwise in the laws under which such other business entity is organized.

(cf:  P.L.1995, c.279, s.30) 

 

     3.    This act shall take effect immediately.


STATEMENT

 

     This bill amends the definition of “foreign corporation” to provide that a foreign corporation means a corporation for profit organized under the laws of a jurisdiction other than this State, including any state or territory of the United States or the District of Columbia, the United States or any foreign country or other foreign jurisdiction.  Additionally, the requirement under the current definition that a foreign corporation’s purpose coincide with the purpose or purposes for which a corporation may be organized under the corporation law has been eliminated to reflect the analogous definitions of “foreign limited partnership” under the Uniform Limited Partnership Law (see N.J.S.A.42:2A-5) and “foreign limited liability company” under the New Jersey Limited Liability Company Act (see N.J.S.A.42:2B-2). 

     The bill also amends the definition of “other business entity” to include in the broadest sense, all unincorporated entities formed under any domestic or foreign jurisdiction.  That definition is based generally upon analogous provisions of Section 252 of the Delaware General Corporation Law and the definition of “other business entity” under the New Jersey Limited Liability Company Act (see N.J.S.A.42:2B-2).

     The bill expands the scope of unincorporated entities that may be permitted to merge or consolidate with a domestic corporation beyond the traditional partnerships and limited liability companies previously allowed.  Specifically, the bill provides greater flexibility in the types of entities with which a domestic corporation may merge, including traditional partnerships and limited liability companies, as well as statutory trusts, business trusts or associations, real estate investment trusts, common-law trusts, national associations, or any other unincorporated business, subject to the requirement that the other entity comply with the laws of this State.  These changes are generally based on Sections 254, 263, and 264 of the Delaware General Corporation Law.

     This bill modernizes New Jersey law to reflect the expanded scope of business combinations by and among corporations and other unincorporated business entities.