New Jersey Assembly Bill A2285

New Jersey 2022-2023 Regular Session

• Introduced: 2/7/22
• Refer: 2/7/22
• Report Pass: 3/14/22
• Engrossed: 3/24/22
• Refer: 5/12/22

Caption

Establishes process for formation of professional limited liability companies.

Impact

The legislation provides significant clarity and structure for professionals seeking to operate within a limited liability company format. It does not modify existing rights of licensed professionals to practice in other business forms, thus maintaining the status quo for non-PLLC entities. However, it reinforces the requirement that professional services can only be rendered through licensed individuals, adding a layer of responsibility regarding compliance with state licensing laws. The bill aims to streamline the process of formation for PLLCs while ensuring that public safeguards remain intact with respect to professional qualifications.

Summary

A2285 aims to establish a comprehensive framework for the formation of professional limited liability companies (PLLCs) within the State of New Jersey. This bill allows licensed professionals to form PLLCs specifically organized to provide professional services that are lawful only when performed by licensed individuals. Notably, the bill stipulates that such companies must file a certificate of formation that details the specific professional services they intend to offer, thereby ensuring that the entities are regulated under the appropriate licensing jurisdictions.

Contention

Concerns may arise regarding the restrictions placed on unlicensed personnel within PLLCs. The bill outlines that non-licensed individuals can work under the supervision of licensed professionals, which raises questions among stakeholders about potential limitations on employment within these entities. Critics may argue that stringent limitations could hinder operational flexibility for new businesses, while supporters emphasize the importance of maintaining high standards of professional service. Additionally, the bill mandates that any transfers of interest in a PLLC must comply with rules set by the relevant licensing authorities, which could prompt debates over regulatory burdens versus business autonomy.