Legislation to modernize business filing statutes to include entity conversion and domestication was recently approved by the full Assembly, 74-0. It now goes to the Senate for further review.
As a result of a lack of clear statutory authority in New Jersey, entities wishing to convert or domesticate are forced to use a process that requires two or three indirect steps.
The bill (A-3513), would allow businesses in New Jersey to undergo conversion, or converting from one type of business entity to another, and domestication, the process of an out-of-state business entity converting to a domestic corporation.
The measure’s sponsors, Assembly Democrats Roy Freiman (D-Somerset, Mercer, Middlesex, Hunterdon), Raj Mukherji (D-Hudson) Vince Mazzeo (D-Atlantic) and Joann Downey (D-Monmouth) released the following joint statement.
“Outdated laws are tying the hands of new businesses trying to open their doors in the Garden State. We can make New Jersey a more attractive state for the incorporation of businesses by bringing state law in line with many other states that allow domestication and conversion. This legislation would simplify the process, open doors to the business community and create a friendlier business environment in New Jersey.”