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

Summary

Statement of the Assembly Commerce and Economic Development Committee of the State of New Jersey, dated March 14, 2022, reporting Assembly Bill 2285 favorably. The bill provides for professional limited liability companies, formed by filing a certificate of formation under the Revised Uniform Limited Liability Company Act that names the professional services offered; an existing limited liability company may elect the status by amendment. Such a company renders professional services only through licensed members, managers, officers, agents and employees, and may employ unlicensed persons working under licensed supervision. Its name must include professional limited liability company or an abbreviation such as PLLC. The bill takes effect on the 180th day after 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
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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