ASSEMBLY, No. 2285

STATE OF NEW JERSEY

220th LEGISLATURE

 

INTRODUCED FEBRUARY 7, 2022

 


 

Sponsored by:

Assemblyman  ROY FREIMAN

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

Assemblywoman  BRITNEE N. TIMBERLAKE

District 34 (Essex and Passaic)

Assemblyman  STERLEY S. STANLEY

District 18 (Middlesex)

 

Co-Sponsored by:

Assemblyman Auth and Assemblywoman DeFuccio

 

 

 

 

SYNOPSIS

     Establishes process for formation of professional limited liability companies.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning professional limited liability companies and supplementing P.L.2012, c.50 (C.42:2C-1 et seq.).

 

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

 

     1.    As used in this act:

     "License" means a license, certificate of registration, or any other evidence of the satisfaction of the requirements for the practice of a profession issued by a licensing authority.

     "Licensed person" means a person who is licensed by a licensing authority to provide at least one of the categories of professional services rendered by the professional limited liability company.

     "Licensing authority" means a state, federal, or local board, agency, or other entity that issues a license.

     "Professional limited liability company" means a limited liability company organized under this act for purposes that include rendering one or more categories of professional services.

     "Professional service" means a service that may be lawfully rendered only by a licensed person or person otherwise authorized by a licensing authority to render the service.

 

     2.    a.  A person may form a professional limited liability company by filing a certificate of formation with the filing office that, in addition to the information required under section 18 of P.L.2012, c.50 (C.42:2C-18), specifies:

     (1)   that the company is a professional limited liability company; and

     (2)   the professional service or services that the professional limited liability company is organized to provide.

     b.    A limited liability company organized under a law of this State other than this act may elect professional limited liability company status by amending its certificate of formation pursuant to section 19 of P.L.2012, c.50 (C.42:2C-19), to comply with subsection a. of this section and with section 6 of this act.

 

     3.    a.  This act shall not alter the right of licensed persons to perform professional services in any other business form allowed by law.

     b.    This act shall not prohibit a professional limited liability company from employing persons who are not licensed to perform professional services that are rendered by the company if all of the following apply:

     (1)   the unlicensed persons work at the direction or under the supervision of licensed persons;

     (2)   the unlicensed persons do not hold themselves out to the public generally as being authorized to perform the professional services rendered by the company; and

     (3)   the unlicensed persons are not prohibited by the licensing authority regulating any of the professional services rendered by the professional limited liability company from being so employed.

 

     4.    Professional limited liability companies shall be governed by the laws applicable to other limited liability companies, except as those laws are limited or enlarged by or contrary to this act, this act shall be controlling.

 

     5.    a.  A professional limited liability company may render a category of professional services in this State only through its members, managers, officers, agents and employees who are themselves licensed persons qualified in this State to perform that category of professional services.  This act shall not limit or restrict the operation of any limited liability company or its members, including any licensed person, to the extent the company is otherwise authorized under applicable law administered by the licensing authority to render professional services through a limited liability company that is not subject to this act.

     b.    A professional limited liability company may issue a transferable interest or admit as a member any person unless the company is prohibited from doing so by the licensing authority.

     c.     A transferable interest in a professional limited liability company may be transferred to any person unless the transfer is prohibited by the licensing authority. A member that transfers a transferable interest in violation of this subsection shall be deemed to have dissociated as a member under section 46 of P.L.2012, c.50 (C.42:2C-46).

 

     6.    The name of a professional limited liability company authorized to transact business in this State shall satisfy the requirements of section 8 of P.L.2012, c.50 (C.42:2C-8), except that the name shall contain the words "professional limited liability company" or the abbreviation "P.L.L.C.", "P.L.C.", "PLLC" or "PLC" in uppercase or lowercase letters.

 

     7.    This act shall not alter any law applicable to the relationship between a person performing professional services and a person receiving those services, including liability arising out of those professional services.

 

     8.    a.  A professional limited liability company shall not perform any act that is prohibited to be performed by individuals licensed to perform professional services that are rendered by the company.

     b.    Each member, manager, officer, agent and employee of a professional limited liability company who is a licensed person in the jurisdiction in which the person performs professional services is subject to the rules and regulations adopted by and the disciplinary powers of the licensing authority or licensing authorities regulating the professional services rendered by the company in the jurisdiction in which the person performs professional services.

 

     9.    This act shall take effect on the 180th day next following enactment.

 

 

STATEMENT

 

     This bill establishes a process for the formation of professional limited liability companies in New Jersey.

     The bill provides that a person may form a professional limited liability company by filing a certificate of formation with the filing office that, in addition to the information required pursuant to the "Revised Uniform Limited Liability Company Act," specifies:

     (1)   that the company is a professional limited liability company; and

     (2)   the professional service or services that the professional limited liability company is organized to provide.

     A limited liability company organized under a law of this State other than the bill may elect professional limited liability company status by amending its certificate of formation.

     The bill does not alter the right of licensed persons to perform professional services in any other business form allowed by law.

     The bill does not prohibit a professional limited liability company from employing persons who are not licensed to perform professional services that are rendered by the company if all of the following apply:

     (1)   the unlicensed persons work at the direction or under the supervision of licensed persons;

     (2)   the unlicensed persons do not hold themselves out to the public generally as being authorized to perform the professional services rendered by the company; and

     (3)   the unlicensed persons are not prohibited by the licensing authority regulating any of the professional services rendered by the professional limited liability company from being so employed.

     Under the bill, professional limited liability companies are governed by the laws applicable to other limited liability companies except if those laws are limited or enlarged by or contrary to the provisions of the bill, the provisions of the bill are controlling.

     The bill provides that a professional limited liability company may render a category of professional services in this State only through its members, managers, officers, agents and employees who are themselves licensed persons qualified in this State to perform that category of professional services.  The bill does not limit or restrict the operation of any limited liability company or its members, including any licensed person, to the extent the company is otherwise authorized under applicable law administered by the licensing authority to render professional services through a limited liability company that is not subject to the provisions of the bill.

     The bill allows a professional limited liability company to issue a transferable interest or admit as a member any person unless the company is prohibited from doing so by the licensing authority.

     The bill provides that a transferable interest in a professional limited liability company may be transferred to any person unless the transfer is prohibited by the licensing authority. A member that transfers a transferable interest in violation of this requirement is deemed to have dissociated as a member of the company.

     The bill requires the name of a professional limited liability company authorized to transact business in this State to satisfy the requirements of the "Revised Uniform Limited Liability Company Act," except that the name must contain the words "professional limited liability company" or the abbreviation "P.L.L.C.", "P.L.C.", "PLLC" or "PLC" in uppercase or lowercase letters.

     The bill does not alter any law applicable to the relationship between a person performing professional services and a person receiving those services, including liability arising out of those professional services.

     The bill prohibits a professional limited liability company from performing any act that is prohibited from being performed by individuals licensed to perform professional services that are rendered by the company.

     The bill provides that each member, manager, officer, agent and employee of a professional limited liability company who is a licensed person in the jurisdiction in which the person performs professional services is subject to the rules and regulations adopted by and the disciplinary powers of the licensing authority or licensing authorities regulating the professional services rendered by the company in the jurisdiction in which the person performs professional services.