In January 2018, six amendments were made to the New Jersey Business Corporation Act. One authorizes New Jersey corporations to adopt what is often referred to as a forum selection by-law. Delaware has also authorized its corporations to adopt a forum selection clause, either in the Certificate of Incorporation or the by-laws.

Like a corporation’s Certificate of Incorporation, its by-laws, whether adopted by the shareholders or the board of directors, is also a contract between and among the shareholders. By-laws express the will of at least the majority and bind the minority as well as shareholders who subsequently acquire shares. A well-drawn forum selection by-law requires a shareholder, who desires to assert a claim involving the internal affairs of the corporation or against its current or former directors and officers for breach of fiduciary duty, to bring the action only in a New Jersey state court or the federal court in New Jersey. The by-law may further provide for the recovery of costs and reasonable attorney fees when the forum selection clause is violated.

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