New Jersey Legislature Considers Corporate and Business Law Reforms

A series of bills that would reform the New Jersey Business Corporation Act (“NJBCA”) are slowly churning their way through the New Jersey State Legislature. The pending legislation is modeled upon provisions of the “Delaware Business Corporation Law” and the recommendations of the “New Jersey Corporate and Business Law Study Commission.” In sum, the proposed revisions would generally benefit corporate boards of directors and modernize provisions of the NJBCA. Inspections of Corporate Books and Records Assembly Bill 2975 (Pinkin)/Senate Bill 2238 (Diegnan) modifies the NJBCA to allow corporations to impose reasonable limitations or conditions on the use or distribution of requested corporate books and records. While the bill does not define such “limitations and conditions,” the legislative statement accompanying A-2975/S-2238 provides an example of conditioning the receipt of requested materials on the demanding shareholder agreeing to customary confidentiality obligations. The bill preserves the ultimate authority of a court to decide and order relief in actions brought by shareholders for inspection of materials. On January 23, 2017, A-2975 passed the General Assembly by a vote of 69-0. On June 19, 2017, S-2238 passed the Senate Commerce Committee by a vote of 4-0. This bill is now awaiting a vote in the full...