Assembly Commerce and Economic Development Committee Statement to Assembly, No. 2285 (March 14, 2022)

Summary

This is the Assembly Commerce and Economic Development Committee Statement to Assembly, No. 2285, State of New Jersey, dated March 14, 2022. The committee reports favorably Assembly Bill No. 2285, which would provide for the formation of professional limited liability companies in New Jersey. Under the bill, a person may form one by filing a certificate of formation that specifies the company is a professional limited liability company and the professional services it is organized to provide. The statement says the company's name must contain the words "professional limited liability company" or an abbreviation such as "P.L.L.C." or "PLC". It also says the bill would take effect on the 180th day next following enactment.

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ASSEMBLY COMMERCE AND ECONOMIC DEVELOPMENT
                COMMITTEE

                           STATEMENT TO

                      ASSEMBLY, No. 2285

       STATE OF NEW JERSEY
                           DATED: MARCH 14, 2022

          The Assembly Commerce and Economic Development Committee
      reports favorably Assembly Bill No. 2285.
          This bill would provide for the formation of professional limited
      liability companies in New Jersey. Under the bill, a person may form
      a professional limited liability company by filing a certificate of
      formation with the filing office that, in addition to the information
      required pursuant to the "Revised Uniform Limited Liability Company
      Act," specifies:
          (1) that the company is a professional limited liability company;
      and
          (2) the professional service or services that the professional limited
      liability company is organized to provide.
          A limited liability company organized under another New Jersey
      law would be able to elect professional limited liability company status
      by amending its certificate of formation.
          The bill would not alter the right of licensed persons to perform
      professional services in any other business form allowed by law.
          The bill would not prohibit a professional limited liability
      company from employing persons who are not licensed to perform
      professional services that are rendered by the company if all of the
      following apply:
          (1) the unlicensed persons work at the direction or under the
      supervision of licensed persons;
          (2) the unlicensed persons do not hold themselves out to the public
      generally as being authorized to perform the professional services
      rendered by the company; and
          (3) the unlicensed persons are not prohibited by the licensing
      authority regulating any of the professional services rendered by the
      professional limited liability company from being so employed.
          Under the bill, professional limited liability companies would be
      governed by the laws applicable to other limited liability companies
      unless those other laws are limited or enlarged by or contrary to the
      provisions of the bill. The provisions of this bill would control.
          The bill provides that a professional limited liability company may
      render a category of professional services in this State only through its
      members, managers, officers, agents and employees who are
                                 2

themselves licensed persons qualified in this State to perform that
category of professional services. The bill would not limit or restrict
the operation of any limited liability company or its members,
including any licensed person, to the extent the company is otherwise
authorized under applicable law administered by the licensing
authority to render professional services through a limited liability
company that is not subject to the provisions of the bill.
    The bill would allow a professional limited liability company to
issue a transferable interest or admit as a member any person unless
the company is prohibited from doing so by the licensing authority.
    The bill provides that a transferable interest in a professional
limited liability company may be transferred to any person unless the
transfer is prohibited by the licensing authority. A member that
transfers a transferable interest in violation of this requirement is
deemed to have dissociated as a member of the company.
    The bill would require the name of a professional limited liability
company to satisfy the requirements of the "Revised Uniform Limited
Liability Company Act," except that the name must contain the words
"professional limited liability company" or the abbreviation
"P.L.L.C.", "P.L.C.", "PLLC" or "PLC" in uppercase or lowercase
letters.
    The bill would not alter any law applicable to the relationship
between a person performing professional services and a person
receiving those services, including liability arising out of those
professional services.
    The bill would prohibit a professional limited liability company
from performing any act that is prohibited from being performed by
individuals licensed to perform professional services that are rendered
by the company.
    The bill provides that each member, manager, officer, agent and
employee of a professional limited liability company who is licensed
to perform professional services is subject to the rules and regulations
adopted by and the disciplinary powers of the licensing authority or
licensing authorities regulating the professional services rendered by
the company in the jurisdiction in which the person performs
professional services.
    The bill would take effect on the 180th day next following
enactment.


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