New Jersey Business Corporation Act: Key Legal Rules

Key Takeaways

• The New Jersey Business Corporation Act (NJBCA) governs the formation, operation, and dissolution of for-profit corporations in New Jersey.
• The Act includes requirements for incorporators, corporate naming rules, and registered agent obligations.
• Recent amendments allow for entity conversions and domestications, enabling businesses to switch entity types or jurisdictions.
• The Act outlines the annual report and tax filing obligations for corporations, including Franchise and Corporate Business Tax requirements.
• Corporations may amend their certificate of incorporation, merge with other entities, or dissolve, following procedures specified in the NJBCA.

The New Jersey Business Corporation Act defines Corporation or Domestic Corporation as for-profit profit or incorporated under the rules of the state of New Jersey. When creating a corporation, the incorporator can be one or more individuals who can file a certificate of incorporation with the Secretary of State office. Individuals filing for incorporation must:

• Be at least 18 years of age or older
• Be United States citizens
• Be residents of the state of New Jersey or be subscribers to shares in the corporation

Unless a corporation has a limited purpose set by its certificate of incorporation, corporations have the ability to engage in any lawful business in the state. Additionally, each corporation must have a registered agent and maintain a registered office located in the state of New Jersey. The registered office does not need to be the same address as the primary business address.

New Jersey Corporation Law

For a business to be considered a corporation in the state of New Jersey, certain factors and requirements will need to be satisfied including:

• The name of the company must contain a reference to its incorporation, such as "corporation," "company," or "limited." The name can also use abbreviations instead of words to indicate incorporation.
• To exist as a corporation, a certificate of incorporation must be filed with the New Jersey Secretary of State
• The directors will need to hold an initial meeting after incorporation to complete their organization of the corporation.
• At an organizational meeting, the directors should elect officials, develop their by-laws, and authorize the issuing of stock shares.
• Bylaws that are consistent with the corporation's certificate of incorporation can also contain provisions for managing the business.
• The corporation may have a board of directors consisting of one or more persons under whose authority the corporation will be exercised.
• The board of directors will be limited by provisions set forth in the certificate of incorporation.
• The certificate of incorporation should describe the number and class of shares that will be issued.
• An annual shareholder's meeting will be set in place by the bylaws in the certificate of incorporation. If there is no set place stated in the bylaws, the meeting shall be held at the registered office.

Recent Updates to the New Jersey Business Corporation Act

In 2023, New Jersey modernized the New Jersey Business Corporation Act (NJBCA) through Senate Bill 142 (P.L. 2023, Chapter 38). This amendment introduced provisions for entity conversions and domestications to provide businesses greater flexibility in their corporate structuring.

Key highlights of the amendment include:

• Conversions: Corporations can now convert to other entity types, such as limited liability companies (LLCs), and vice versa. This allows businesses to reorganize their structure without dissolving and re-forming as a new entity.
• Domestications: The new provisions allow a foreign entity to become a New Jersey corporation, or for a New Jersey corporation to domesticate into another jurisdiction.
• Approval Requirements: Conversions and domestications generally require board and shareholder approvals, along with the filing of a certificate of conversion or domestication with the New Jersey Secretary of State.
• Creditor Protections: The law includes provisions to protect creditors’ rights during these transactions.

These changes align New Jersey’s corporate law with other business-friendly states, such as Delaware, making New Jersey a more competitive choice for business formation​.

New Jersey Title 14A. Corporations, General 14A § 17-15

The New Jersey Title 14A states that a corporation is created under the act may merge with another corporation and still be empowered to provide the same professional services. The act prohibits a merger or a consolidation with other foreign corporations.

The act also sets out further stipulations that corporations in the state of New Jersey must comply with including:

• A corporation must provide information to the Secretary of State's office that provides the names and addresses of all officers, shareholders, and directors. All those listed must be able to legally operate within the state.
• If the corporation is foreign-based, it will need to annually provide the above information through an attorney-at-law who has the rights to legally practice in the state of incorporation.
• The forms will need to be signed by the president or vice president as well as the secretary or assistant secretary of the corporation. These signatures will need to be in the presence of a state-authorized notary.

Annual Reports and Tax Filing Requirements for New Jersey Corporations

Under the New Jersey Business Corporation Act and state tax laws, corporations operating in New Jersey must meet specific annual reporting and tax obligations to remain in good standing.

Key requirements include:

• Annual Report Filing:
  Every corporation must file an annual report with the New Jersey Division of Revenue and Enterprise Services. This report includes details such as:
  • Registered agent and office address
  • Names and addresses of directors and officers
  • Business purpose (if required)
• Franchise Tax and Corporate Business Tax (CBT):
  New Jersey imposes a Corporate Business Tax on both domestic and foreign corporations conducting business in the state. The CBT rates and minimum tax amounts vary depending on a corporation’s income and gross receipts.
• Due Dates:
  • The annual report is typically due by the end of the corporation’s anniversary month.
  • Corporate tax returns (Form CBT-100 or CBT-100S for S corporations) are generally due on or before the 15th day of the fourth month after the close of the corporation's fiscal year.
• Penalties for Noncompliance:
  Failure to file the annual report or pay the necessary taxes may result in administrative dissolution or revocation of the corporation’s authority to do business in New Jersey​.

New Jersey Title 14A. Corporations, General 14A § 2-2

The name of a corporation either foreign or domestic shall not contain wording or phrases that the corporation performs service other than what has been laid out in its certificate of incorporation. 

The name will also be required to be different from any other corporation, both foreign and domestic, that is registered within the state or has its name reserved. This restriction also prohibits a company name that is a derivative of another. The name must also contain words within it to identify that it is a corporation, including such terms as:

• Corporation
• Company
• Incorporated
• LTD

If two companies that legally operate as a corporation in the state of New Jersey merge, they do not have to change their name to operate in the state. This applies to both domestic and foreign consolidations and mergers that occur.

Frequently Asked Questions

1. What is the purpose of the New Jersey Business Corporation Act?
   The Act provides the legal framework for the creation, operation, conversion, merger, and dissolution of for-profit corporations in New Jersey.
2. Can a New Jersey corporation convert to an LLC under the NJBCA?
   Yes. The 2023 amendments allow corporations to convert into LLCs or other entity types through a streamlined conversion process.
3. What is the deadline for filing a New Jersey corporate annual report?
   The annual report must be filed by the end of the corporation’s anniversary month each year.
4. Are foreign corporations required to register under the New Jersey Business Corporation Act?
   Yes. Foreign corporations doing business in New Jersey must register with the Secretary of State and comply with annual reporting and tax requirements.
5. How can a corporation change its business name in New Jersey?
   A corporation can amend its certificate of incorporation by filing the appropriate amendment form with the Secretary of State to change its business name, ensuring the new name complies with NJBCA naming requirements.

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