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.
WHETHER FREIGHT IS PREPAID OR ALLOWED DOES NOT AFFECT TITLE TO LUMBER.
Question.—A dealer in Buffalo sells a car of lumber to a dealer in Baltimore with the understanding that freight is to be allowed from Buffalo to Baltimore. Please state whether there is any distinction as to the ownership of the lumber in transit, whether the Buffalo dealer prepays the freight in Buffalo or allows the Baltimore dealer to deduct the amount of freight in settlement. If the freight is prepaid in Buffalo at the time of shipment, and the lumber be lost in transit prior to delivery, is the ownership of the lumber vested with the Buffalo or the Baltimore dealer?
Reply: If lumber is sold with an understanding that the seller is to pay the freight, it makes no difference at all, as to ownership during transit, whether freight is prepaid and included in the price, or whether it is deducted from the price and left for the buyer to pay. A seller is not bound to carry the lumber to its destination and deliver it there unless he has expressly agreed to do so. This is true whether the seller pays the freight or not; in either case a valid delivery, transferring risk and title, may be made, if the seller so chooses, at the beginning of the transportation unless the seller has agreed to deliver the goods elsewhere.
Opinion No. 9.