SENATE JUDICIARY COMMITTEE

STATEMENT TO

[First Reprint]

ASSEMBLY, No. 2875

with committee amendments

STATE OF NEW JERSEY

DATED: JUNE 5, 1997

      The Senate Judiciary Committee reports favorably and with committee amendments Assembly Bill No. 2875 [1R].

      This bill would make revisions to the "New Jersey Limited Liability Company Act" as suggested in the 1995 Annual Report of the New Jersey Corporate and Business Law Study Commission.

      This bill would:

      1. Allow for the perpetual existence of limited liability company, as permitted by recent Internal Revenue Service rules;

      2. Permit a limited liability company to continue temporarily with only one member, so long as one or more additional members are added within 90 days;

      3. Revise the termination of membership provisions of current law.;

      4. Authorizes each member of a limited liability company, when managed by its members, to bind the company, including the authority to file for insolvency or reorganization on behalf of the limited liability company;

      5. Clarifies the rights of a resigning member to receive the fair value of the member's interest as of the date of resignation;

      6. Adds a new section to the present law requiring limited liability companies to file an annual report with the Secretary of State;

      7. Establish a procedure for the reinstatement of the certificates of limited liability corporations that have been revoked or transferred to the inactive list.

      The amendments adopted by the committee would delete two paragraphs from N.J.S.A.42:2B-7. Enactment of the bill would make these provisions unnecessary.

      These amendments make this bill identical to S1993 [1R].