Senate Commerce Committee Statement to Senate, No. 898 — State of New Jersey (March 11, 2021)

Summary

The Senate Commerce Committee of the State of New Jersey, in a statement dated March 11, 2021, reports favorably Senate Bill No. 898. The bill provides that corporations may keep records of shares, including shareholder names and the number, class and series of shares, on an electronic network, and may use electronic transmissions to meet certain notice provisions. "Electronic network" includes distributed networks or databases that use blockchain technology, administered by or on behalf of the corporation. The statement says the bill is based on recent changes to the Delaware General Corporation Law. As reported, the bill is identical to Assembly Bill No. 1178.

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SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No.
898

STATE
OF NEW JERSEY

DATED: MARCH
11, 2021

The
Senate Commerce Committee reports favorably Senate Bill No. 898.

This
bill provides that corporations may utilize electronic networks, including
distributed electronic networks, in order to meet recordkeeping requirements.

Current
law requires corporations to keep records containing the names and addresses of
all shareholders, the number, class and series of shares held by each and the
dates when they respectively became the owners of the shares. This bill
provides that these corporate records of shares may be kept on an electronic
network. It also provides that corporations may use electronic transmissions
from electronic networks to meet with certain notice provisions of existing
law.

As
used in the bill, “electronic network” means one or more electronic networks or
databases, including one or more distributed electronic networks or databases
that utilize blockchain technology, administered by or on the behalf of the
corporation.

This
bill is based on recent changes to the Delaware General Corporation Law which
allow Delaware corporations to utilize distributed electronic networks, also
known as blockchain technology, in order to create and maintain certain
shareholder records and meet with certain shareholder notice requirements.
This bill clarifies that New Jersey corporations may use blockchain technology
in order to simplify recordkeeping requirements.

As reported, this bill is identical to Assembly Bill
No. 1178, as also reported by the committee.

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