AN INDIVIDUAL MAY TRANSACT BUSINESS UNDER A CORPORATE TITLE IN NEW JERSEY.
Frequently the question arises regarding a person’s legal right to start business under a corporate title; for instance, as “Can John Smith conduct business as the Pine Lumber Company,” etc.
Question from New Jersey.—A person wishes to start a lumber business in New Jersey. Can he adopt a style such as “The Crescent Lumber Company” without being incorporated, the manager being the sole proprietor? Is there anything necessary to be done in such a case beyond hanging out his sign at his place of business?
Reply: In New York no person is now allowed to establish a business under any name, corporate or individual, except his own name, until he has first placed on record in the county clerk’s office, in the county in which the business is to be carried on, a statement of the facts. So far as we can find, however, there is no similar statute in New Jersey. It is a comparatively recent law in this State and there are not many other States that have adopted it. The public cannot be misled to its detriment by such a method of doing business as our correspondent proposes, and there is no common law rule against it. If any creditor supposes that the business is being carried on by a corporation he will not be harmed by the mistake, because the liability of an individual owner, or of a firm, is greater than that of the stockholders of a corporation. A creditor who learns that his business belongs to an individual, instead of a corporation, will be benefited by the knowledge, not damaged. If there should be a statute just enacted requiring registration, the county clerk will know of it.
Opinion No. 10.