New Jersey Statutes Limited Liability Company Act

By Joseph Scrofano

New Jersey permits business owners to form limited liability companies, or LLCs, and any substantive legal issues relating to LLCs are governed by state law. The New Jersey Division of Revenue enforces the laws surrounding the formation and dissolution of LLCs in the state. While many states LLC laws share similarities, certain requirements are unique to New Jersey.

New Jersey permits business owners to form limited liability companies, or LLCs, and any substantive legal issues relating to LLCs are governed by state law. The New Jersey Division of Revenue enforces the laws surrounding the formation and dissolution of LLCs in the state. While many states LLC laws share similarities, certain requirements are unique to New Jersey.

Name

Like most states, the New Jersey Limited Liability Company Act prohibits LLC organizers from forming an LLC with the same name as another registered business entity in the state -- unless the LLC organizers obtain written consent from the business. An LLC in New Jersey must contain the phrasing “Limited Liability Company” or the initials “LLC.”

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Certificate of Formation

Under the New Jersey LLC Act, one or more persons who have authority to organize the LLC must file a Certificate of Formation with the New Jersey Department of Revenue. In this filing, the organizers must include the name for the LLC, whether the LLC will dissolve on a certain date, and the LLC’s registered agent’s name and address. A registered agent is someone the LLC grants authority to accept important mail like correspondence with the state and other legal notices. The Certificate of Formation must also state that the LLC has at least one member.

Other Issues

An operating agreement sets forth the rights and responsibilities of the individual members. It sets policies for the management and operation of the company, as well as the members' voting rights and initial contributions. New Jersey law does not require that LLC members file an operating agreement with the Department of Revenue. For tax purposes, New Jersey LLCs are usually treated like partnerships where the gains and losses from the LLC “flow through” to the individual members’ personal tax returns. However, in some cases, LLC members can elect to be taxed as a corporation or sole proprietorship. New Jersey LLCs also limit the personal liability of individual members in most cases.

Dissolution

The New Jersey LLC Act only allows members to dissolve an LLC under certain circumstances. If the members state the LLC will dissolve on a certain date in the Certificate of Formation, the LLC will dissolve on that date. If the members list -- in the operating agreement -- specific events that will trigger dissolution, then the LLC's members may dissolve the LLC if such an event occurs. All members may provide written consent to dissolve, or a court may order the LLC to dissolve. Finally, if the LLC loses all of its members -- to retirement, death or otherwise -- then it will automatically be dissolved within 90 days of losing all members, unless it acquires at least one new member during that time.

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New Jersey LLC Information

A limited liability company (LLC) is a type of business structure in which the owners (called members in an LLC) are not generally held personally liable for any debts owed by the company. Each state has its own laws and regulations for forming and maintaining an LLC. In New Jersey, formation and operation of LLCs is governed by the New Jersey Limited Liability Company Act and the Division of Revenue.

New Jersey LLC Statutes

A limited liability company, or LLC, is a business entity that combines the tax benefits of partnership with the limited liability of a traditional corporation. In New Jersey, the law relating to LLCs is set out in the Limited Liability Company Act, contained in Title 42:2B of the New Jersey Statutes. The Act provides that an LLC may carry on any lawful business, purpose or activity.

How to Draft an LLC Agreement

State law regulates the operations of limited liability companies, or LLCs, far more loosely than it regulates corporate operations. In addition, no state requires an LLC to create an operating agreement. If a dispute arises among members of an LLC with no operating agreement, relatively few state law default rules exist for LLCs to rely on as standards to resolve disputes. For this reason, it is important for an LLC to create a comprehensive LLC operating agreement and have it signed by each member.

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