SENATE JUDICIARY COMMITTEE

 

STATEMENT TO

 

SENATE, No. 1993

 

with committee amendments

 

STATE OF NEW JERSEY

 

DATED: JUNE 5, 1997

 

 

      The Senate Judiciary Committee reports favorably and with committee amendments Senate Bill No. 1993.

      The bill makes 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.

      The 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; and

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

      The amendments adopted by the committee include a provisions which established certain fees payable by limited liability corporation:

a $50.00 fee for filing an annual report; a late filing fee of $200.00 for reinstatement of a certificate and a $50.00 reinstatement filing fee. The amendments also provide a procedure for the reinstatement of the certificates of limited liability corporations that have been revoked or transferred to the inactive list. In addition, the amendments 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 A2875 [2R].