An LLC (Limited Liability Company) is one of the most popular business structures in the United States, as well as in many other parts of the world, as it provides the assets of the company owner(s) with protection should they be subjected to any legal battles.
If you reside in or want to operate in the Garden State, you will need to form a New Jersey LLC. To make the process as easy as possible for you, we’ve broken down the steps so it’s as easy to complete as possible. Here’s what you need to do.
The first step is to decide on your LLC’s name. Most new business owners have already given this step some thought but you need to be aware of the rules and ensure your preferred name meets New Jersey’s requirements.
Firstly, your name must be unique from all other businesses registered in the state, so you need to do your research and find out if any of your name ideas are available. New Jersey has a very straightforward business name search feature as you simply enter the name you want and it will tell you Yes or No as to whether it is available.
Your name must not include any abbreviations or terminology that may lead someone to believe the business is something it’s not, or affiliated with the government. For example, it cannot include Inc, Corps, LLP, Professional Association, or State Department.
Your name must include a designator that identifies your company as an LLC. You can choose from:
You can go here: New Jersey Business Search to check your preferred name’s availability or to brainstorm a new idea.
If you are not completely happy with the name you have chosen for forming your LLC, you will have the opportunity to File an Amendment or an Alternate Business Name later on. Alternatively, using a DBA (“doing business as”) is a good way to present a different brand to your customers without having to change your LLC’s name, which can be a tedious task.
If you’re planning to complete your company’s formation over a week or two, but your chosen name is available, it’s a good idea to reserve it so no one else can use it in the meantime.
To do this you can file an Application for Reservation of Name, for a filing fee of $50, with the NJ Division of Revenue & Enterprise Services which will reserve your name for 120 days, giving you plenty of time to form your LLC without losing your chosen name.
All New Jersey LLCs require a registered agent in the state. A registered agent is someone with a New Jersey address who can receive all legal notices on the behalf of your LLC. These legal notices are known as “Service of Process.” In most cases, these documents will be notices from the government, but if you are unfortunate enough to become the subject of a court case, your legal documents will also be sent to this address.
As long as you have a street address in New Jersey and are over the age of 18, you can be your own Registered Agent. (Note that you cannot use a PO Box or other mailbox service.) If that’s not possible, you can appoint a friend or family member. Many businesses choose to use a commercial registered agent because your company’s registered agent’s address will be available publicly, and few business owners want their home address available online.
A commercial agent is a cost-effective solution; they usually cost around $15 a month for basic mail-forwarding services and they’ll physically or electronically forward any mail to you.
We know this can be a difficult decision to make, so see our guide here to help you make your final decision.
If you decide a registered agent is the best choice for you, we can be your trusted partner in New Jersey. To find out more about our registered agent services simply contact us and we’ll give you the information you need to move on with the next steps.
Now it’s time for the most important step. New Jersey is unique from other states because this is a two-step process. In other states, you simply file an “Articles of Organization” or a “Certificate of Formation” and the process is complete.
In the state of New Jersey, you need to form your LLC and then register your LLC before it is legally recognized as a business.
In this step, we’ll focus on filing your Certificate of Formation, then you’ll complete two other steps, and then you’ll complete your business’s formation in step 6 when you register your business for tax.
Your first step is to complete your Public Records Filing for a New Business Entity with the NJ Division of Revenue & Enterprise Services for a filing fee of $125.
You can complete this step online here: Public Records Filing for New Business Entity.
You can also approve this step via mail, but it is so much easier to file online that we recommend you do it there. If you need to file via mail, you can find information at the above link.
This step will be approved within 5-30 minutes of submission online, after which it is referred to as your Certificate of Formation.
Your business is not yet a legal entity, but it will be in just a few steps.
Creating and implementing an Operating Agreement is not a legal requirement in New Jersey, but it is highly recommended and essential if you are not the only owner, here on known as “members.” Since an Operating Agreement is an internal document, it does not have to be shared with anyone outside of your LLC.
Your Operating Agreement needs to outline the responsibilities, obligations, and rights of the LLC’s members. It should contain:
Essentially, you want to make sure to include anything that is beneficial to put down in writing that will save you from internal legal issues later down the line, specifically the exact duties of each LLC member.
In most states, this step takes place after the business is a full legal entity, but in New Jersey, this must be completed in between the two central formation steps.
An EIN is a federal tax identification number and your business needs it not only to pay taxes, hire employees, and get a business bank account, but also to complete the final step in the formation process, which is registering your business.
The good news is this step is easy, fast, and free. To apply for your EIN online, click here.
Once your application is completed online, you will receive your EIN instantly and you can move on with the second step in making your business a legal entity.
Your New Jersey LLC will not become a legal entity until you complete this step.
Your LLC must be registered with the Division of Taxation within 60 days of formation by completing a Business Registration Application. There are absolutely no exceptions. Your New Jersey LLC registration will be approved within 2 business days. The website will guide you through each step.
Only once you have received your Certificate of Formation and your LLC has been registered, can you move on to the next steps in this guide.
(Congratulations on making it to this point! Your business is now a real legal entity. There are still a few steps left in this guide, but you’ve done the hard bit. We know that New Jersey doesn’t exactly make the process simple, so if you haven’t yet completed these steps and you want us to do them for you, click here.)
You don’t need to worry about filing taxes just yet, but it’s best to put your first deadlines on the calendar now.
All New Jersey LLCs are required to file an Annual Report with the NJ Division of Revenue & Enterprise Services, due on the LLC’s formation month. This report must be filed online along with a filing fee of $50.
All New Jersey LLCs must also register with the NJ Division of Revenue no matter what industry they are in or regardless of whether they have employees. They are then required to pay an annual state tax of a minimum of $125 per member. You will have already registered for this state tax in step 6 when you completed the Business Registration Application.
Before you can start trading in New Jersey, you will need to ascertain which licenses, permits, or certificates you may need. These will depend on the industry you are in and which county your LLC is based in.
To find out which licenses and permits are necessary for your LLC, check out the New Jersey Government Business Startup Guide, and/or contact your city clerk or local government representative of the municipality where your LLC is based.
One of the final steps is to get a business bank account set up. This is not a legal requirement in the US, but it is necessary to make sure that your personal assets are protected from any legal difficulties with your LLC. If your personal finances and business revenue are mixed up, not only will it make things more difficult when it comes to your accounts and paying taxes, but it also means that your personal finances are more vulnerable.
Use your new EIN to set up a business bank account so you can make sure your business and personal finances remain separate.
Now we come to the final step. Making sure that all essential documents are kept on-site at your business's primary address. The following documents need to be kept on file:
With all steps completed, your New Jersey LLC is formed and ready to begin trading!
While some states have made LLC formation straightforward, New Jersey is one of the more complicated. You’ve got an extra step most other states don’t have and getting it right can be daunting, and let’s be honest, a little boring.
The good news is we spend all day every day forming LLCs and corporations so that the brains behind it all don’t have to. All we need you to do is fill in this short form and you can get back to the exciting stuff, leaving us to do all the tedious work for you. We will get your LLC name registered, file for your Certificate of Formation and Business Registration, and of course, apply for your EIN on your behalf.
If you want to start your new venture feeling more like a CEO than a secretary, don’t hesitate to get started here.