Limited Liability Companies- Important Changes
On March 1st 2014 the New Jersey Revised Uniform Limited Liability Company Act was enacted. RULLCA became an important new guidepost for NJ LLCs.
Many of the rules change or clarify issues of duty, voting, resignation & information access by members of the LLC. One of the most important changes is for non-single memeber LLCs and the necessity for a viable shareholder’s agreement.
In the past it was common for LLCs with 2 or more members to form an LLC, in name only, without giving proper consideration to the rights and responsibilities of the members themselves. Often one of the members was not even recognized as a managing member. This was true despite good advice to the contrary from counsel.
Since the adoption of RULLCA in NJ it is recommended, in the strongest possible terms, that any LLC that is not a single member LLC, formally adopt a shareholder’s agreement that specifies respective member interests, investments, duties, other obligations & membership rights. RULLCA seems to default to certain findings absent a specifically prepared shareholders agreement.