On May 8, 2023, Senate Bill No. 142 became law.  The new law (P.L.2023, c.38) amends the “New Jersey Business Corporation Act” (N.J.S.14A:15-2) to allow for entity conversion and domestication.  This amendment brings New Jersey in line with many other states that already allow for domestication and conversion.  The goal of the new law is to make New Jersey a more attractive state for the incorporation of businesses.

Business “conversion” is the act by which a business is changed from one type of entity to another.  Business “domestication” is the act of converting a foreign business into a domestic one.

Under the new law, conversion is available to the following entity types:  partnerships, limited liability companies, statutory trusts, business trusts or associations, real estate investment trusts, common law trusts, national associations, or any other unincorporated business.  However, the new law specifically excludes all sole proprietorships.

Moreover, the new law requires that any domestic corporation that converts to any other entity that will be domiciled in New Jersey is required to file a certificate of conversion containing the following information:

• The name of the corporation, or a proposed new name.
• The future effective date or time of the conversion.
• A statement that the conversion was adopted pursuant to the provisions of the bill.

If you are considering a change to an existing business structure or domicile, or have any questions on how P.L.2023, c.38 may affect your current businesses, Campanella Law Office is ready to help.

(This blog, prepared by Campanella Law Office, is for general informational purposes only and is not intended to convey specific legal advice, nor is it intended to create or constitute an attorney-client relationship.)