Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Does NJ’s New LLC Law Impact Your Business?
Author: Scarinci Hollenbeck, LLC
Date: April 7, 2014
Key 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
When a Child Turns 18: The Gap in Your Family’s Estate Plan
Once a child turns 18, parents lose the automatic legal authority to make medical and financial decisions on their behalf, even if the child still lives at home or remains on the family’s insurance. Three documents close that gap: a durable power of attorney, a health care proxy or directive, and a HIPAA authorization. For […]
Author: George McGowan
Business Mediation: An Overview and Practical Tips
Business mediation is a confidential, voluntary process in which a neutral third party helps companies negotiate a resolution to a commercial dispute without going to trial. Because working with a mediator is very different from litigating in the courtroom, it is important to understand how commercial mediation works, when it makes sense for your dispute, […]
Author: Paul Grossman
Top 5 Causes Leading to Construction Defect Litigation
The five most common causes of construction defect litigation are design defects, substandard materials, workmanship defects, code violations, and subsurface defects. Because these flaws can compromise a building’s integrity, functionality, or safety, they frequently lead to disputes involving multiple parties and high financial stakes. Key takeaways: What is Construction Defect Litigation? Construction litigation is complex, […]
Author: Paul Grossman
How to Protect Your New Jersey Business When Going through a Divorce
The most effective ways to protect your business in a divorce are put in place before one begins: a prenuptial or postnuptial agreement, clean separation of business and personal finances, and divorce contingencies built into your operating or buy-sell agreements. If divorce is already underway, the priorities shift to establishing how the business is classified […]
Author: Jay McDaniel
10 Common Issues in Franchise Disputes
The most common franchise disputes involve breach of contract, franchise termination and non-renewal, intellectual property rights, territorial encroachment, royalty and fee payments, franchisor support obligations, and violations of state franchise laws such as the New Jersey Franchise Practices Act. Franchisors and franchisees can often resolve these conflicts by providing written notice detailing the dispute and […]
Author: Paul Grossman
Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together
New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]
Author: Sean M. Pena
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.