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Meeting for the first time since the summer recess, the New Jersey Assembly Commerce and Economic Development Committee this week debated several bills proposing reforms in the way corporations conduct business.
The seven-bill package, sponsored by Assemblyman Patrick Diegnan, D-Middlesex, is designed to update New Jersey’s business laws to make it easier for corporations to conduct operations here.
“In the midst of a national recession, we’re actively working to make New Jersey more business friendly,” said Diegnan. “To be competitive in the 21st century, New Jersey corporations have to be able to operate in real time in the global marketplace. This legislative package allows them to do just that.”
Diegnan said the proposed changes came about after conversations with business leaders and from a desire for New Jersey lawmakers to be more cognizant of how corporations operate in today’s 24/7, instant-access marketplace.
Many of the proposals are modeled on Delaware General Corporation Law, from a state long seen as more business-friendly than its neighbor to the north. Diegnan said he hopes the revisions will help make New Jersey more attractive to businesses.
The bills have not yet been introduced in the Senate.
The most far-reaching of the bills (A-2884) would increase the options by which a corporation can merge, acquire or consolidate with a non-incorporated business. It lifts limits on domestic corporations by allowing partnerships with foreign and non-incorporated businesses.
Other bills in the package:
A-2879 allows certain corporate notices to be filed electronically. The bill updates existing law to allow e-filing of shareholder resolutions and corporate bylaws, as recommended by the New Jersey Corporate and Business Law Study Commission.
A-2880 eliminates the 10-day waiting period for certain shareholder actions to take effect. The measure would affect shareholder approvals that do not involve mergers or acquisitions.
A-2881 amends the law governing resignations of corporate directors. The proposal would give corporations more flexibility by allowing directors to submit resignation letters in advance, contingent upon certain business conditions having been met.
A-2882 expedites corporate filings to allow for one- and two-hour services. The bill recognizes the fast pace of modern business by advancing the speed by which corporate transactions can take place. Under current law, the fastest corporate filing option available is priority same-day service, which can take up to 8.5 hours.
A-2883 adds flexibility to the way corporations can choose directors. The measure allows corporations to modify their bylaws so they can adopt voting mechanisms without changing their charters.
A-2885 increases the type of equity awards a corporation can use by recognizing equity grants as compensation besides more traditional stock options.