On Sept. 19, Gov. Chris Christie signed into law the Revised Uniform Limited Liability Company Act (RULLCA). This legislation repeals and replaces the New Jersey Limited Liability Company Act (NJLLCA) with a more modern and comprehensive scheme for regulating limited liability companies. The limited liability company (also known as the LLC) is a relatively new form of unincorporated business entity. LLCs were first introduced in this country when Wyoming adopted an LLC statute in 1977. It received little attention until 1988, when the Internal Revenue Service (IRS) promulgated Revenue Ruling 88-76. This stipulated that limited liability, by itself, would not disqualify an unincorporated entity from partnership tax treatment so long as it had, on the whole, more partnership attributes than corporate attributes. Thus it was possible, with careful planning, for a limited liability company to combine the limited liability of a corporation with the pass-through tax treatment of a partnership.
New Jersey became the 35th state to pass LLC legislation when it adopted NJLLCA, which became effective on Jan. 26, 1994. NJLLCA was modeled on the Delaware Limited Liability Company Act. However, whereas the Delaware statute has been extensively revised, amended and restated, the NJLLCA has undergone only modest revisions.
