New Jersey Statutes 15A:5-19. Agreements as to voting; provision in certificate of incorporation as to control of trustees
Terms Used In New Jersey Statutes 15A:5-19
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- person: includes corporations, companies, associations, societies, firms, partnerships and joint stock companies as well as individuals, unless restricted by the context to an individual as distinguished from a corporate entity or specifically restricted to one or some of the above enumerated synonyms and, when used to designate the owner of property which may be the subject of an offense, includes this State, the United States, any other State of the United States as defined infra and any foreign country or government lawfully owning or possessing property within this State. See New Jersey Statutes 1:1-2
- State: extends to and includes any State, territory or possession of the United States, the District of Columbia and the Canal Zone. See New Jersey Statutes 1:1-2
b. A provision in the certificate of incorporation otherwise prohibited by law because it improperly restricts the board in its management of the activities of the corporation, or improperly transfers or provides for the transfer to one or more members or trustees named in the certificate of incorporation or to be selected from time to time by members or, if none, the trustees, all or any part of the management otherwise within the authority of the board, shall nevertheless be valid if all the incorporators have authorized the provision in the certificate of incorporation or all the members, whether or not having voting power, or, if there are no members, the trustees have authorized the provision in an amendment to the certificate of incorporation.
c. A provision authorized by subsection b. of this section shall become invalid if, to the knowledge of the board, or of the members or trustees having the management authority otherwise in the board, subsequent to the adoption of the provision, memberships are transferred or issued to any person who becomes a member without notice thereof, unless that person consents in writing to the provision.
d. If a provision authorized by subsection b. of this section becomes invalid as provided in subsection c. of this section, the board, or the person or persons having the management authority otherwise in the board, shall amend the certificate of incorporation to delete the provision by filing a certificate of amendment in the office of the Secretary of State. The certificate shall be executed on behalf of the corporation and shall set forth:
(1) the name of the corporation;
(2) the date of the adoption of the amendment;
(3) the deleted provision; and
(4) the event set forth in subsection c. of this section by reason of which the provision has become invalid.
e. The effect of any provision authorized by subsection b. of this section shall be to grant to and impose upon the members or trustees vested with management authority otherwise in the board the rights, powers, privileges, and liabilities, including liability for managerial acts or omissions, that are granted to and imposed upon trustees by law to the extent that, and so long as, the discretion and powers which otherwise would be in the trustees in their management of corporate affairs are vested in the members or trustees by any provision. The members or trustees shall be deemed to be trustees for purposes of applying the provisions of this act and shall be deemed to be corporate agents for the purposes of section 15A:3-5
f. If the certificate of incorporation contains a provision authorized by subsection b. of this section, the existence of the provision shall be disclosed in writing in advance of issuance or transfer of membership certificates, if any, and shall be noted conspicuously on the face of the certificates; and, if noted, upon receipt of the certificate a member shall conclusively be deemed to have become a member with notice of the provision. A corporation may provide in its certificate of incorporation or bylaws that memberships are not transferable until the transferor evidences proof that the proposed transferee has notice of the provision.
L.1983, c. 127, s. 15A:5-19, eff. Oct. 1, 1983.