Are you getting ready to start a new business? If so, you have many important tasks ahead of you – but few are as important as actually registering your business! For entrepreneurs looking to form an LLC, this guide breaks down everything you need to know about starting a limited liability company in New Jersey.
LLCs are a good choice for most business types, as they are relatively easy to set up (compared to a corporation), and they offer personal liability protection, shielding the owner’s personal assets from business-related lawsuits. The process of starting an NJ LLC is handled by the New Jersey Department of Revenue. This guide will break things down step-by-step, to help you start the business of your dreams!
1. Consider utilizing an LLC formation service
Before you begin, consider this: If you are willing to pay a bit extra, you can have an LLC formation service help you with the process of forming an LLC. This will greatly expedite and simplify the LLC forming experience, and will also help ensure that everything is done correctly.
If you do go this route, there are two companies that are highly recommended. These are ZenBusiness, a budget-friendly option with plans from just $49, and Northwest Registered Agent, a full-service option that is known for excellent service and support.
To be clear, this is optional. You can also do all the required steps on your own. But if you’d like to save some time, and ensure an error-free signup process, then using a service is well worth the modest cost for most small businesses.
Check out our roundup of the Best LLC Services
2. Name your new company
The process of registering your new company starts with selecting a name for the business. You must decide on a name before you complete any of the application paperwork.
You may already have a name in mind. If so, simply conduct a name search on the New Jersey website. This will allow you to see whether the name is still available. In NJ, it is required for new businesses to have names that are distinguishable from all existing business names in the state. This means that if a name is already taken – or a very similar name is already registered – you cannot use the name for your company.
There are a few other rules to be aware of, as well. The LLC name cannot use government-related phrases or words that may confuse the business with a government entity. And certain words from regulated industries – think “banking”, “attorney”, etc. require special permission (and extra paperwork) in order to use.
And finally, the name must contain “Limited Liability Company”, or abbreviations such as “LLC” or “L.L.C.”.
Once you find an appropriate name that’s available, you can move on to the next step. Alternatively, you can reserve the name if you’d like to use it, but aren’t quite ready to move on with the business formation process.
Using Alternate Names in New Jersey
New Jersey state law allows for the use of “alternate names”. In other states, this can be referred to as “trade names” or “doing business as”/DBA names.
An alternate name is a secondary name that is registered and attached to an existing business entity. The business entity/LLC must be formed before an alternate name can be registered. Once the alternate name is fully registered, the LLC can legally do business under that name in the state of NJ. This allows for some flexibility – and also means that you don’t need to worry too much about choosing the perfect LLC name.
3. Appoint a Registered Agent
A New Jersey Registered Agent is required for all LLCs in the state of NJ. This Agent is a representative of your business. Their primary role is to receive documents, legal notices, tax forms, and other important mailings, on behalf of the business. It is the Registered Agent’s address that most important documents will be mailed to.
Anyone who lives in New Jersey can be a Registered Agent – even yourself, or an employee. A company can also serve as a Registered Agent, although your LLC cannot be its own Agent.
The two most popular options for business owners are either to be their own agent or use an NJ Registered Agent service. The two services we recommend are Northwest Registered Agent and ZenBusiness. Both of these services can be your Registered Agent – and they can help with the initial formation process. Or, you can do the formation filings yourself, and then use a company like Northwest as your Registered Agent.
Using a professional service is helpful for a number of reasons. For one, it protects your privacy, as the company’s address is used instead of your own. And it can help ensure that no documents get lost, or missed while you’re on vacation.
Check out our roundup of the Best Registered Agent Services
4. File the New Jersey Certificate of Formation
The Certificate of Formation (called the Articles of Organization in most states) must be filed with the New Jersey Division of Revenue in order to form your LLC. The document can be filed online, by mail, or in person. There is a nonrefundable filing cost of $125.
To file online – Use the online business formation portal with the New Jersey Division of Revenue and Enterprise Services. Follow the instructions and pay the $125 NJ LLC filing fee.
To file by mail – Fill out and print out this form with NJ-Reg. There are multiple sections to this filing; LLC formation filers should pay close attention to pages 21-25. Mail it in, along with a check for $125 for state fees, made payable to the New Jersey Division of Revenue, to the following address:
New Jersey Division of Revenue
P.O. Box 252
Trenton, NJ 08646
Then, you must simply wait for New Jersey to process the application. The typical processing time is 5-7 business days, although it can be substantially longer at times.
Note that this process is for new, domestic LLCs in the state of New Jersey. Foreign LLCs will face different requirements.
5. Register for New Jersey tax accounts
New Jersey requires LLCs to register for Employer and Business Tax accounts within 60 days of initial LLC formation. So, you should do this as soon as you receive your LLC documents.
If you register online initially, you will likely be prompted to also register for tax accounts. If not, you will need to manually register using this link at the New Jersey Department of Revenue and Enterprise Services. Alternatively, you can register by mail using pages 17-19 of this document, and mail it in to:
New Jersey Division of Revenue
P.O. Box 252
Trenton, NJ 08646
More information on New Jersey tax requirements can be found in this guide.
6. Create an LLC operating agreement
Note: This step is optional, but recommended.
An operating agreement is not required in New Jersey, so therefore this step is optional. However, it’s still strongly recommended for most businesses.
Operating agreements are an internal document (kept on file with the business) that establishes certain operating procedures for the business. Crucially, the document lays out the formal ownership structure. This means that for multi-owner companies, it is the operating agreement that will establish who owns what. Thus, the document is important for preventing future issues and disputes between LLC members.
A service like ZenBusiness can help you draft an operating agreement, using a premade template. You may also choose to use the services of a legal professional.
7. Apply for business licenses & permits
The LLC formation process will establish your business as a legal entity. However, in order to actually begin operating legally, you will likely need to satisfy some other requirements.
The specifics will vary depending on the type of business, how regulated the industry is, and where the business is located. You will need to research the specific requirements in your area.
New Jersey does not require a statewide general business license. However, there are certain environmental permits and safety permits for certain industries. More information on statewide requirements can be found here. If you plan to sell taxable goods or services, you will need to apply for a New Jersey seller’s permit.
Likewise, federal authorities may impose requirements for permits on certain businesses and activities. Environmental permits, health permits, and medical permits are examples. Look into your federal requirements in your industry before beginning operations.
Finally, there are local rules on a city or county level. Most areas require a local business license, regardless of industry. And specialty health permits, liquor licenses, etc. may also be handled on the local level. Check with the city or county governments in the area(s) that you plan to operate for details.
8. Apply for an EIN
An EIN, or employer identification number, is required to hire employees. So, most businesses will need one. Fortunately, there is no cost to apply for one, and the application is quick and simple. Simply fill out this application on the IRS website to apply for an EIN.
The EIN is a federal tax ID, used for federal tax filings, opening bank accounts, and hiring employees. It is a bit like a social security number, but for your business. It has nothing to do with the state of New Jersey – but because of its importance, all New Jersey LLCs should still apply for one. In fact, all NJ LLCs must apply for an EIN.
9. Open a business checking account
Business checking accounts, savings accounts, business credit cards, etc. all help to keep business and personal finances separate. This is crucial – not only for clean accounting but also for protecting the owner’s personal assets from business-related lawsuits.
Almost any bank or credit union will offer business accounts these days. Simply look around for one that fits your needs. Most banks will require a business license, an EIN (see above), and a small opening deposit. Requirements can vary, however, so call ahead to see what you will need to open the account.
10. Keep your business in good standing
There are various ongoing compliance tasks that need to be completed each year (or in some cases, each quarter). This includes requirements on a state, federal, and even local level. Again, this is a situation where the specifics will vary depending on the business, so you will need to do some research of your own.
Here are just a few of the requirements that your business may face:
- New Jersey Annual Report – due every year; $75 filing cost
- New Jersey state taxes
- Federal income taxes
- State employer taxes/payroll taxes
- State sales tax returns
- Federal employer taxes/payroll taxes
- Local tax returns
- Permit renewals
- Business license renewals
- Much more
This list is not complete, so you will need to research requirements for your specific industry and business structure. It’s wise to also make a list, complete with due dates, and add key dates to your calendar so you don’t miss anything.
Services like ZenBusiness can also help with ongoing compliance tasks, and help keep you on track. They can send reminders of important due dates, and can even help with specific tasks like the filing of annual reports. This is another reason to consider using ZenBusiness if you’d prefer a bit more guidance with the formation and ongoing compliance requirements of your small business.
Once you complete these steps, your New Jersey LLC will be formed! Now, you can focus on the day to day operations of running and growing your new company.