Kenneth C. Oh
Counsel
212-784-6911 koh@sh-law.comKey Contacts
Back
New Jersey’s Revised Uniform Limited Liability Company Act (the “Revised Act”) became effective on March 1, 2014.
The Revised Act was effective as of March 18, 2013 for newly formed LLCs and now applies to all New Jersey LLCs regardless of when formed. The changes in the law are significant enough to warrant managers and members conducting a thorough review of their Operating Agreement. A few changes by the new law include:
Duration
The Revised Act eliminates the default rule that unless otherwise set forth in the LLC’s Certificate of Formation, the LLC had a limited existence. LLCs have perpetual duration under the Revised Act.
Operating Agreements
The Revised Act provides that a LLC’s Operating Agreement can be in writing, oral or even implied. An Operating Agreement can alter or eliminate certain fiduciary duties. Indemnification is mandatory for members, managers, employees and agents under certain circumstances. The Operating Agreement can eliminate or alter the indemnification provisions.
Minority Shareholder Oppression
The Revised Act applies the minority oppression laws to an LLC. Minority members of an LLC may now seek dissolution of the LLC if the managers or the controlling members have acted in a manner that is oppressive. Minority members are also permitted to seek the appointment of a custodian or provisional manager or require the LLC or other members to purchase the equity interest of an oppressed member.
Dissociation of a Member
Under the Revised Act, a resigning member or withdrawing shareholder is no longer entitled to receive the fair market value of his/her ownership interest in the LLC. The resigning member relinquishes voting rights and retains only an economic interest.
There are numerous other changes by the Revised Act that may impact your LLC. If you have any questions about this new law or would like to discuss how it affects your limited liability company, please contact me, or the Scarinci Hollenbeck attorney with whom you work.
- Practices: Corporate, Partnerships, & LLC Disputes, Corporate Transactions & Business
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Dissolving Your Business: Essential Legal Steps to Protect Your Interests
If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]
Author: Christopher D. Warren
The Role of Corporate Restructuring in Mergers & Acquisitions
Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]
Author: Dan Brecher
Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public
Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]
Author: Bryce S. Robins
Understanding Chattel Paper: A Key Component in Secured Transactions
Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]
Author: Dan Brecher
Crypto Compliance: A Comprehensive Guide
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Author: Bryce S. Robins
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.