Formation of Corporations
 

A corporation may be organized under this act for any lawful business purpose or purposes except to do in this State any business for which organization is permitted under any other statute of this State unless such statute permits organization under this act.


COMMISSIONERS' COMMENT--1968

This section is derived from the first sentence of section 201(a) of the New York Act. Only a corporation for profit may be organized under this Revision. See the definition of "corporation" or "domestic corporation" in subsection 14A:1-2(g), as well as the words in this section authorizing organization under this Act of a corporation "for any lawful business purpose or purposes". This section expressly excludes from organization under this Act those classes of corporations for profit for which the Legislature has prescribed or may hereafter prescribe organization under other general legislation, such as banks, savings banks, insurance companies, savings and loan associations, etc. Each such corporation is compelled to resort for organization to the statute specifically applicable to it, unless that statute also permits organization under this Revision.

As to setting forth the corporate purposes in the certificate of incorporation of a corporation organized under this Revision, see paragraph 14A:2-7(1)(b), which authorizes the formation of an all-purpose corporation, and see the Comment to section 14A:2-7.

14A:2-2. Corporate name of domestic or foreign corporations

(1) The corporate name of a domestic corporation or of a foreign corporation authorized to transact business in this State


(a) Shall not contain any word or phrase, or abbreviation or derivative thereof, which indicates or implies that it is organized for any purpose other than one or more of the purposes permitted by its certificate of incorporation;


(b) Shall be such as to distinguish it upon the records in the office of the Secretary of State from the names of other for profit and nonprofit domestic corporations and for profit and nonprofit foreign corporations qualified to do business in this State and from the names of domestic limited partnerships and foreign limited partnerships and from names subject to a current name reservation or a current name registration, unless there is filed a certified copy of a final judgment of a court of competent jurisdiction establishing the prior right of the corporation to the use of such name in this State;


(c) Shall not contain any word or phrase, or any abbreviation or derivative thereof, the use of which is prohibited or restricted by any other statute of this State, unless any such restrictions have been complied with; and


(d) Shall contain the word "corporation," "company," "incorporated," or shall contain an abbreviation of one of those words, or shall include the abbreviation Ltd. or shall contain words or abbreviations of like import in other languages, except that a foreign corporation which does not have those words or an abbreviation thereof in its name shall add at the end of its name one of those words or an abbreviation thereof for use in this State.


(2) This section


(a) Shall not require any domestic corporation or any foreign corporation authorized to transact business in this State to change its corporate name ; and


(b) Shall not prevent a domestic corporation with which another corporation, domestic or foreign, is merged, or which is formed by the reorganization or consolidation of one or more other domestic or foreign corporations or upon a sale, lease or other disposition to, or exchange with, a domestic corporation of all or substantially all the assets of another corporation, domestic or foreign, including its name, from having the same corporate name as any of such corporations if at the time such other corporation was organized under the laws of, or is authorized to transact business in, this State.


(3) If the name of a foreign corporation is not available for use in this State because of the prohibitions of subsection 14A:2-2(1), such corporation may be authorized to transact business in this State under an assumed name which is available for corporate use under this section. Such corporation shall file in the office of the Secretary of State with its application for an original or amended certificate of authority a resolution of its board adopting such assumed name for use in transacting business in this State.


(4) The corporate name of a domestic corporation or nonprofit corporation which has been dissolved shall not be available for corporate use for one year after the effective time of dissolution, unless, within such one-year period, the written consent of such dissolved corporation to the adoption of its name is filed in the office of the Secretary of State with the certificate of incorporation of another domestic corporation or with the application of a foreign corporation for an original or amended certificate of authority to transact business in this State.


(5) The filing in the office of the Secretary of State of the certificate of incorporation of a domestic corporation or the issuance by the Secretary of State of a certificate to a foreign corporation authorizing it to transact business in this State shall not preclude an action by this State to enjoin a violation of this section or an action by any person adversely affected to enjoin such violation or the use of a corporate name in violation of the rights of such person, whether on principles of unfair competition or otherwise. The court in any such action may grant any other appropriate relief.

14A:2-2.1. Corporate alternate names

(1) No domestic corporation, or foreign corporation which transacts business in this State within the meaning of section 14A:13-3, shall transact any business in this State using a name other than its actual name unless


(a) It also uses its actual name in the transaction of any such business in such a manner as not to be deceptive as to its actual identity; or


(b) It has been authorized to transact business in this State, using an assumed name as provided in subsection 14A:2-2(3); or


(c) It has first registered the alternate name as provided in this section.


(2) Any corporation may adopt and use any alternate name, including any which would be unavailable as the name of a domestic or foreign corporation because of the prohibitions of paragraph 14A:2-2(1)(b), but not including a name prohibited as a corporate name by paragraph 14A:2-2(1)(c), by filing a certificate of registration of a corporate alternate name with the Secretary of State executed on behalf of the corporation. The certificate shall set forth


(a) The name, jurisdiction and date of incorporation of the corporation;


(b) The alternate name;


(c) A brief statement of the character or nature of the particular business or businesses to be conducted using the alternate name;


(d) That the corporation intends to use such name in this State;


(e) That the corporation has not previously used the alternate name in this State in violation of this section or, if it has, the month and year in which it commenced such use.


(3) Such a registration shall be effective for five years from the date of filing, unless sooner terminated as provided below, and may be renewed successively for additional five-year periods by filing a certificate of renewal executed on behalf of the corporation at any time within three months prior to, but not later than, the date of expiration of the registration. Not more than four months and not less than one month prior to the date of expiration of the registration, the Secretary of State shall notify the corporation of the date of expiration and the requirements for renewal of the registration. The certificate of renewal shall be effective as of the date of expiration of the earlier registration. The certificate of renewal shall set forth the information required in paragraph 14A:2-2.1(2)(a) through paragraph 14A:2-2.1(2)(d), the date of filing of the certificate of registration then in effect, and that the corporation is continuing to use the alternate name. If a corporation ceases to use an alternate name in this State prior to the expiration date of the five-year registration period, it may file a termination certificate. A termination certificate shall state the name of the corporation, the alternate name for which the corporation has filed a certificate of registration and that the corporation has ceased to use the registered alternate name. The termination certificate may recite the date upon which the corporation ceased to use the alternate name, but no recital shall be required.


(4) Nothing in this section shall be construed


(a) To grant to the registrant of an alternate name any right in the name as against any prior or subsequent user of the name, regardless of whether used as a trademark, trade name, business name, or corporate name; or


(b) To interfere with the power of any court to enjoin the use of any such name on the basis of the law of unfair competition or on any other basis except the mere fact of identity or similarity of the alternate name to any other corporate name.


(5) A corporation which has used an alternate name in this State contrary to the provisions of this section shall, upon filing a certificate of registration of alternate name or an untimely certificate of renewal, pay to the Secretary of State the filing fee prescribed for such a certificate plus an additional filing fee equal to the full amount of the regular filing fee multiplied by the number of years it has been using such alternate name in violation of this section after August 1, 1974. For purposes of this subsection, any part of a year shall be considered a full year.


(6) The failure of a corporation to file a certificate of registration or renewal of alternate name shall not impair the validity of any contract or act of such corporation and shall not prevent such corporation from defending any action or proceeding in any court of this State, but no such corporation shall maintain any action or proceeding in any court of this State arising out of a contract or act in which it used such alternate name until it has filed such a certificate.


(7)(a) A corporation which files a certificate of registration of alternate name which contains a false statement or omission regarding the date it first used a fictitious name in this State shall, if such false statement or omission reduces the amount of the additional fee it paid or should have paid as provided in subsection 14A:2-2.1(5), forfeit to the State a penalty of not less than $200.00 nor more than $500.00.


(b) A corporation which ought to have filed a certificate of registration or renewal of alternate name and fails to do so within 60 days after being notified of its obligation to do so by certified or registered mail by the Secretary of State, by any other governmental officer, or by any person aggrieved by its failure to do so, shall forfeit to the State a penalty of not less than $200.00 nor more than $500.00.


(c) Such penalty shall be recovered with costs in an action prosecuted by the Attorney General. The court may proceed in such an action in a summary manner or otherwise.


(8) (Deleted by amendment, P.L. 1988, c. 94).

14A:2-2.2. "Blind" or "handicapped" as part of corporate name

No corporation organized under the laws of the State of New Jersey nor any foreign corporation authorized to do business in New Jersey shall use the words "blind," or "handicapped," or term, terms, imprint, stamp, label or symbol suggesting such impairments, as part of its name unless the approval of the Attorney General, or his designee, is attached to the certificate of incorporation or application for amendment thereof. Such approval shall indicate that the words "blind" or "handicapped," or term, terms, imprint, stamp, label or symbol suggesting such impairments, as used in the corporate name will not tend to mislead or confuse the public into believing that the corporation is organized for charitable or nonprofit purposes for the blind or handicapped. Any corporation presently organized under the laws of this State or any foreign corporation presently authorized to do business in this State that employs the words "blind," or "handicapped," or term, terms, imprint, stamp, label or symbol suggesting such impairment, in its corporate name shall seek the approval of the Attorney General, or his designee, within 90 days after the effective date of this act if it wishes to continue the use of such words, terms, imprint, stamp, label or symbol in its corporate name.

14A:2-3. Reserved name

(1) The exclusive right to the use of a corporate name may be reserved upon compliance with the provisions of this section.


(2) The reservation shall be made by filing in the office of the Secretary of State an application to reserve a specified corporate name, or the first name available for corporate use among not more than three specified names, executed by or on behalf of the applicant and setting forth the name and address of the applicant. If the Secretary of State finds that the name complies with the provisions of section 14A:2-2, he shall reserve it for the exclusive use of the applicant for a period of 120 days from the date of filing of the application and shall issue a certificate of reservation.


(3) The right to the exclusive use of a specified corporate name so reserved may be transferred by filing in the office of the Secretary of State a notice of such transfer, executed by or on behalf of the applicant for whom the name was reserved, and specifying the name and address of the transferee.


(4) The holder of a reserved name may renew the reservation for additional periods of 120 days by filing an application for renewal within the last 30 days of the current reservation period. There shall be no limit upon the number of renewals.

14A:2-4. Registered name

(1) Any foreign corporation may register its corporate name under this act, provided its corporate name is available for use under section 14A:2-2.


(2) Such registration shall be made by filing in the office of the Secretary of State:

(a) An application for registration executed on behalf of the corporation, setting forth the name and the address of the main business or headquarters office of the corporation, the jurisdiction of its incorporation, the date of its incorporation, a statement that it is carrying on or doing business, and a brief statement of the business in which it is engaged; and

(b) A certificate setting forth that such corporation is in good standing under the laws of the jurisdiction of its incorporation, executed by the official of such jurisdiction who has custody of the records pertaining to corporations and dated not earlier than 30 days prior to the filing of the application.

(3) Such registration shall be effective until the close of the calendar year in which the application for registration is filed.

14A:2-5. Renewal of registered name

A corporation which has a registration of its corporate name in effect may renew such registration from year to year by annually filing in the office of the Secretary of State an application for renewal setting forth the facts required to be set forth in an original application for registration, together with a certificate of good standing as required for the original registration. A renewal application may be filed between the first day of October and the thirty-first day of December in each year, and shall extend the registration for the following calendar year.

14A:2-6. Incorporators

(1) One or more individuals or domestic or foreign corporations may act as incorporator or incorporators of a corporation by signing and filing in the office of the Secretary of State a certificate of incorporation for such corporation. Individuals acting as incorporators shall be at least 18 years of age. Incorporators need not be United States citizens or residents of this State or subscribers to shares in the corporation.


(2) Except as otherwise provided in the certificate of incorporation, any action required or permitted by this act to be taken by incorporators may be taken without a meeting.


(3) When there are two or more incorporators, if any dies or is for any reason unable to act, the other or others may act. If there is no incorporator able to act, any person for whom an incorporator was acting as agent may act in his stead, or if such other person also dies or is for any reason unable to act, his legal representative may act.

14A:2-7. Certificate of incorporation

(1) The certificate of incorporation shall set forth:


(a) The name of the corporation;


(b) The purpose or purposes for which the corporation is organized. It shall be a sufficient compliance with this paragraph to state, alone or with specifically enumerated purposes, that the corporation may engage in any activity within the purposes for which corporations may be organized under this act, and all such activities shall by such statement be deemed within the purposes of the corporation, subject to express limitations, if any;


(c) The aggregate number of shares which the corporation shall have authority to issue;


(d) If the shares are, or are to be, divided into classes, or into classes and series, the designation of each class and series, the number of shares in each class and series, and a statement of the relative rights, preferences and limitations of the shares of each class and series, to the extent that such designations, numbers, relative rights, preferences and limitations have been determined;


(e) If the shares are, or are to be, divided into classes, or into classes and series, a statement of any authority vested in the board to divide the shares into classes or series or both, and to determine or change for any class or series its designation, number of shares, relative rights, preferences and limitations;


(f) Any provision not inconsistent with this act or any other statute of this State, which the incorporators elect to set forth for the management of the business and the conduct of the affairs of the corporation, or creating, defining, limiting or regulating the powers of the corporation, its directors and shareholders or any class of shareholders, including any provision which under this act is required or permitted to be set forth in the bylaws;


(g) The address of the corporation's initial registered office, and the name of the corporation's initial registered agent at such address. On or after the effective date of this 1989 amendatory and supplementary act, the address of the registered office as shown on the certificate of incorporation shall be a complete address, including the number and street location of the registered office and, if applicable, the post office box number;


(h) The number of directors constituting the first board and the names and addresses of the persons who are to serve as such directors;


(i) The names and addresses of the incorporators;


(j) The duration of the corporation if other than perpetual; and


(k) If, pursuant to subsection 14A:2-7(2), the certificate of incorporation is to be effective on a date subsequent to the date of filing, the effective date of the certificate.


(2) The certificate of incorporation shall be filed in the office of the Secretary of State. The corporate existence shall begin upon the effective date of the certificate, which shall be the date of the filing or such later time, not to exceed 90 days from the date of filing, as may be set forth in the certificate. Such filing shall be conclusive evidence that all conditions precedent required to be performed by the incorporators have been complied with and, after the corporate existence has begun, that the corporation has been incorporated under this act, except as against this State in a proceeding to cancel or revoke the certificate of incorporation or for involuntary dissolution of the corporation.


(3) The certificate of incorporation may provide that a director or officer shall not be personally liable, or shall be liable only to the extent therein provided, to the corporation or its shareholders for damages for breach of any duty owed to the corporation or its shareholders, except that such provision shall not relieve a director or officer from liability for any breach of duty based upon an act or omission (a) in breach of such person's duty of loyalty to the corporation or its shareholders, (b) not in good faith or involving a knowing violation of law or (c) resulting in receipt by such person of an improper personal benefit. As used in this subsection, an act or omission in breach of a person's duty of loyalty means an act or omission which that person knows or believes to be contrary to the best interests of the corporation or its shareholders in connection with a matter in which he has a material conflict of interest.

14A:2-8. Organization meeting of directors

On or after the effective date of the certificate of incorporation, an organization meeting of the board named in the certificate of incorporation shall be held, at the call of a majority of the board so named, to adopt by-laws, elect officers, authorize the issuance of shares, and transact such other business as may come before the meeting. The board members calling the meeting shall give at least 5 days' notice thereof by mail to each director named in the certificate of incorporation, which notice shall state the time and place of the meeting.

14A:2-9. By-laws; making and altering

(1) The initial by-laws of a corporation shall be adopted by the board at its organization meeting. Thereafter, the board shall have the power to make, alter and repeal by-laws unless such power is reserved to the shareholders in the certificate of incorporation, but by-laws made by the board may be altered or repealed, and new by-laws made, by the shareholders. The shareholders may prescribe in the by-laws that any by-law made by them shall not be altered or repealed by the board.


(2) The initial by-laws of a corporation adopted by the board at its organization meeting shall be deemed to have been adopted by the shareholders for purposes of this act.


(3) Any provision which this act requires or permits to be set forth in the by-laws may be set forth in the certificate of incorporation with equal force and effect.

14A:2-10. By-laws and other powers in emergency

(1) The board of a corporation may adopt emergency by-laws, subject to repeal or change by action of the shareholders, which shall, notwithstanding any different provision elsewhere in this act or in the certificate of incorporation or by-laws, be operative during any emergency in the conduct of the business of the corporation resulting from an attack on the United States or any nuclear or atomic disaster. The emergency by-laws may make any provision that may be practical and necessary for the circumstances of the emergency, including provisions that

(a) a meeting of the board may be called by any officer or director in such manner and under such conditions as shall be prescribed in the emergency by-laws;

(b) the director or directors in attendance at the meeting, or any greater number fixed by the emergency by-laws, shall constitute a quorum; and

(c) the officers or other persons designated in a list approved by the board before the emergency, all in such order of priority and subject to such conditions and for such period of time, not longer than reasonably necessary after the termination of the emergency, as may be provided in the emergency by-laws or in the resolution approving the list, shall, to the extent required to provide a quorum at any meeting of the board, be deemed directors for such meeting.

(2) Before or during any such emergency, the board may provide, and from time to time modify, lines of succession in the event that during such an emergency any or all officers or agents of the corporation shall for any reason be rendered incapable of discharging their duties.


(3) Before or during any such emergency, the board may change the head office or designate several alternative head offices or regional offices, or authorize the officers so to do, said change to be effective during the emergency.


(4) To the extent not inconsistent with any emergency by-laws so adopted, the by-laws of the corporation shall remain in effect during any such emergency and upon its termination the emergency by-laws shall cease to be operative.


(5) Unless otherwise provided in emergency by-laws, notice of any meeting of the board during any such emergency need be given only to such of the directors as it may be feasible to reach at the time and by such means as may be feasible at the time, including publication, or other means of mass communication.


(6) To the extent required to constitute a quorum at any meeting of the board during any such emergency, the officers of the corporation who are present shall, unless otherwise provided in emergency by-laws, be deemed, in order of rank and within the same rank in order of seniority, directors for such meeting.


(7) No officer, director or employee acting in accordance with any emergency by-laws shall be liable except for willful misconduct. No officer, director or employee shall be liable for any action taken by him in good faith in such an emergency in furtherance of the ordinary business affairs of the corporation even though not authorized by the by-laws then in effect.

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