The New Jersey Corporate and Business Law Study Commission was created by the New Jersey Legislature and charged with the responsibility of studying and reviewing all aspects of the New Jersey statutes, legislation and court decisions relating to business entities, including business corporations and partnerships and the issuance of ownership interests or securities thereby, as well as all aspects of laws governing nonprofit corporations. The commission’s duties also entail engaging in comparative study and examination of the business and corporate laws of the other states. It has only three members, who are appointed to three-year terms by the New Jersey governor, the Senate, and the Assembly, respectively; the commission reports to the governor and the Legislature. This article surveys the mission and the work of this tiny legislative commission.
The commission has set out to restore New Jersey to its glory days as “the place to incorporate.” In 1903, 60 percent of the state’s income was earned from fees charged to corporations — not surprising, considering that in that year 95 percent of the nation’s major corporations were incorporated in New Jersey. This all came to an abrupt end when then-Gov. Woodrow Wilson got a series of antitrust laws (known as the “Seven Sisters Act”) passed. This provided the opening for Delaware, which had duplicated New Jersey’s liberal corporate laws and was patiently waiting in the wings for a turn of events that would bring an end to New Jersey’s monopoly on incorporation dollars. Of course, Delaware got on top and has stayed there. Studies have shown that for corporations not incorporating in their home state, many consider the Delaware incorporation to be the most attractive alternative.
