New Jersey Franchise Forms - New Jersey Franchise Law

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New Jersey Franchise Forms FAQ New Jersey Franchise Agreement

What is a franchise?

There is a definition of a franchise which has been developed by the Federal Trade Commission. Basically, a franchise involves an owner of a trademark, trade name and/or copyright giving others a license under certain conditions to use these trademarks, trade names or copyrights in providing goods or services to the public. The franchisor is the party who grants the franchise, and the franchisee is the party who receives the franchise.

What is the legal relationship between a franchisor and franchisee?

Technically, the relationship between a franchisor and franchisee is a relationship between two independent contractors. Their rights are determined by the franchise agreement. A franchise then is not a separate business entity, but is a business relationship between two separate business organizations such as a sole proprietorship, a corporation, or a partnership. The relationship between the franchisor and franchisee is controlled by the franchise contract. A corporation, sole proprietorship, or partnership may own the franchise contract or may be the entity entering into the franchise contract.

What laws govern franchises?

There are laws that restrict termination of some franchises. In some states, prior notice of termination is required. Owners of automobile dealership franchises are protected from termination of their dealerships in bad faith. This protection is provided by the Federal Automobile Dealers Franchise Act.


What are Articles of Incorporation?

Articles of Incorporation are legal documents that formally establish a corporation and outline its purpose, structure, and regulations. In New Jersey, Articles of Incorporation are required to be filed with the Secretary of State to create a corporation. These documents include important details such as the corporation's name, address, number of shares, and the names and addresses of its officers and directors. They also specify the corporation's purpose, which can be a broad or specific description of the business activities it will engage in. By filing the Articles of Incorporation, the corporation gains legal recognition and protection, allowing it to operate and enter into contracts as a separate legal entity from its owners.


What to Include in Articles of Incorporation

When creating Articles of Incorporation in New Jersey, it's important to include certain elements. First, you need to provide a unique name for your corporation, making sure it's available and ends with the words "Incorporated" or "Corporation". Next, you'll want to mention the purpose of your corporation, outlining the specific activities it will undertake. It's also necessary to include the registered office address and the name of the initial registered agent who will handle legal documents. Moreover, you should mention the number of shares the corporation can issue and their par value if you have any. Lastly, it's crucial to list the names and addresses of the initial directors who will manage the corporation.


1. Full Name of Corporation

The full name of the corporation is ABC Company, located in New Jersey. We are a business entity operating in the state of New Jersey. Our company, ABC Company, conducts various operations and provides services in this region. We are committed to serving the community in New Jersey and strive to meet the needs of our customers and clients within this geographic area.


2. Principal Place of Business

The principal place of business refers to the main location where a company conducts its daily operations and manages its affairs. In the case of a company operating in New Jersey, the principal place of business would be the primary office or facility located within the state where the majority of business activities take place. This location serves as the central hub for employees, executives, and clients. It is where important decisions are made, meetings are held, and the overall business operations are managed. The principal place of business is crucial for defining the legal jurisdiction and ensuring compliance with state laws and regulations.


12. Limitation of Director’s Liability

In New Jersey, there are certain limitations on the liability of directors, which means they are not fully responsible for all actions and decisions made on behalf of a company. Directors can only be held accountable if they act in bad faith, engage in fraud, or commit intentional misconduct. This helps protect directors from being unfairly blamed for unforeseen circumstances or honest mistakes. However, it is important for directors to always act in the best interests of the company and its shareholders, as they can still be held liable if they breach their fiduciary duties or act negligently. Additionally, directors may also be held responsible for any unlawful distributions or illegal activities undertaken by the company. Overall, these limitations on director's liability in New Jersey aim to strike a balance between protecting directors and ensuring accountability for their actions.