Once you decide to give entrepreneurship a try, you have to be ready to make big decisions. Among the most important ones are those you need to make even before starting your company. The first one is the location. The second is the business entity structure. Those factors will have an impact on the operations of your business as well as its regulatory and reporting obligations.
Doing Business In New Jersey
As stated earlier, the location where you will form your business will affect the way you will be running your company. Each state offers certain benefits and has its own laws related to businesses.
New Jersey is home to many companies from different industries. Registering your business in this state can provide you with various advantages.
Now, the next thing you have to decide on is the business entity structure. For most startups, the obvious choice is a limited liability company (LLC). This structure does not only offer liability protection for the personal assets of the owners but also provides flexibility in taxation.
Aside from those, forming a New Jersey LLC gives you access to various programs and incentives that can be beneficial to your company. Check with state and local agencies to learn about these programs or other initiatives. You may also look at the requirements to find out if you qualify for any of them.
- Sales and Use Tax Exemption Program
- Premier Lender Program
- Garden State Growth Zone Business Lease Incentive
Forming A New Jersey LLC
Understanding the process of starting an LLC in New Jersey will help you enjoy the benefits of the structure and ensure the legality of your operations in the state.
- Naming The Company – According to state law, all LLCs should have a proper designator. Your company name should include the phrase “limited liability company” or any of its abbreviations. Additionally, it has to be distinguishable, so you have to make sure that no other business entity is registered under that name in New Jersey. To check this, you can do a name search in the database of the state.You can choose to reserve the name to prevent other entities from using it while you are preparing the requirements for your business formation. This step is optional, so it is perfectly fine if you opt to not do it. If you want to reserve a name, file an Application for Reservation of Name with the Division of Revenue and Enterprise Services. It comes with a $50 filing fee.
You can also use an alternate name that is different from the legal name of your LLC that is registered with the state. This name will be your assumed name, which is also called a fictitious name, trade name, or doing business as (DBA). To do this, file a Registration of Alternate Name with the Division of Revenue and pay the $50 corresponding fee. Keep in mind that you can only do this after you finish registering your company in New Jersey.
- Nominating A Registered Agent – All companies doing business in New Jersey have to appoint one. This can be an individual resident or a third-party organization like DoMyLLC that is authorized to transact business in New Jersey. Make sure they are always available during normal business hours because they will be in charge of accepting legal correspondence and other business mails on behalf of your company. To help you out, read our article Five Traits Of A Good LLC Registered Agent For Your Business.
- Registering Your Business – To formalize and legalize your operations in New Jersey, you will have to file a Public Records Filing for New Business Entity with the Division of Revenue and Enterprise Services of the Department of Treasury. The filing fee is $125. If you file online, you will have to pay an additional $3.50.To complete the form, you will have to prepare the following pieces of information:
- Company Name
- The Three-Letter Code Of Your Company, Which Is LLC
- Purpose Of The Business
- Dissolution Date If It Is Not Perpetual
- Name And Address Of Your Registered Agent
- Signature Of An Authorized Representative
- Preparing An Operating Agreement – The state does not require you to create an operating agreement. However, this formation document will establish a way to run your LLC. It also sets the management structure of the company as well as the rights and duties of each member and manager.
- Ensuring Compliance – There are other requirements that your New Jersey LLC has to comply with. Here are some of them:
- Employer Identification Number (EIN) – An LLC with multiple members has to acquire an EIN from the Internal Revenue Service (IRS). Meanwhile, an LLC with a single member will need the EIN if it plans on hiring employees. Additionally, you will need the EIN to open a bank account under the name of your company.
- Licenses and Permits – Depending on the industry you are in and the activities of your company, you may have to get certain permits, licenses, or certifications. Make sure you check with state agencies. For local permits and licenses, you will have to check with the clerk in the county, town, or city where your primary place of business is located.
- Tax Registration – All LLCs doing business in New Jersey have to register with the Division of Revenue, regardless of whether they have employees or are planning on collecting sales taxes. You can register by filing a Business Registration Application by mail or online. You have to submit the completed form within 60 days after submitting the Public Records Filing for New Business Entity. Then, your company will have to pay an annual minimum state tax of $125 per owner.
- Annual Report – Your company has to submit an annual report on the anniversary month of its formation. You can file online through the Annuals and Change Services page on the Division of Revenue’s website. The filing fee for this report is $50.
Completing the formation process in New Jersey will prevent any issues. If you think you need help in handling the tasks, contact DoMyLLC.
Business Filing Section