Having an LLC in NJ is a better and cheaper option than having other business structures. A limited liability company (LLC) reduces the owners’ personal liability and protects their personal assets. One can start an LLC in two ways, domestic LLCs or foreign LLCs (LLCs in more than one state). By following some basic steps, you can easily form an LLC in New Jersey.
On this page, you’ll learn about the following:
- How to Start an LLC in New Jersey
- After Starting your New Jersey LLC
- New Jersey Foreign LLC
- Why an LLC in New Jersey
- Best Businesses in New Jersey
- New Jersey LLC Formation Review
How to Start an LLC in New Jersey
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. This section gives you a step-by-step guide on how to start an LLC in NJ.
Step 1: Decide a Name for Your LLC
Deciding on a business name is the first step to start an LLC. In New Jersey, before you name your LLC, it is important to note a few things. Firstly, make sure the name is available to use. If the name is available, then check if the name complies with all the New Jersey business naming requirements. Once you pass through them, you can successfully name your business.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.
Because of this, here are some of the major benefits of choosing the best LLC corporate names.
- To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
- After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
- You can only get the EIN number when you have your name registration certificate with you.
Requirements when deciding a name for your LLC
LLC Name Search: A business name search is required to check if the desired name is available or not. If the name is available then the business owner has to fill up a name reservation form and send it to the Secretary of State, New Jersey. To do the name search, one has to visit the Business Entity Search page on the official Secretary of State website. Send the name reservation form to the below address by mail to reserve your LLC name in New Jersey. The cost of a name reservation is $50.
Important Quick Links:
NJ Division of Revenue,
PO Box 308, Trenton, NJ 08646
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Step 2: Assign a Registered Agent in New Jersey
A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will receive significant tax forms, legal forms, formation documents, any internal document, a notice of lawsuits, and other official government correspondence in New Jersey. Choosing a New Jersey registered agent for service of process for your LLC is required.
Make sure your registered agents are residents of New Jersey having a physical street address. It could also be a business with a principal business address in the state. Here are the recommended agents and employees for you:
Note that availing of the services of professional registered agents would be your best option since you are guaranteed that whoever is handling your legal affairs knows their stuff well. You will enjoy peace of mind and focus only on running your business, as the ‘professionals’ take care of all legal matters.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in New Jersey. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years.
Step 3: File Certificate of Formation in New Jersey
A Certificate of Name Reservation is needed to file a Certificate of Formation, as other states call it. You need to make reports of this certificate with the New Jersey Secretary of State, which costs $125. LLC cost in New Jersey includes other taxes and fees. You may file them online or by mail.
This New Jersey Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in New Jersey, like if it is a member-managed or managers-managed. LLCs with employees can check the New Jersey government portal for the guidelines available to hire employees.
Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your New Jersey LLC will offer.
How to File Online
Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county. To know more about online filing, visit the New Jersey Certificate of Formation.
How to File by Mail
If you prefer filing real-life forms for your Indiana LLC registration, then you can download the New Jersey Limited Company Certificate of Formation. Read the form thoroughly and fill it out. It will have to fill, among others, your name, city, state, zip code, and signature. You may also file in person by visiting the office on business days.
Mail To: New Jersey Division of Revenue
P.O. Box 308
Trenton, NJ 08646
New Jersey Division of Revenue
33 W. State St.
Trenton, NJ 08608
Step 4: Register Business for Tax & Employer Purposes
Eery LLC in New Jersey must register with the New Jersey Division of Revenue and Enterprise Services within 60 days of LLC formation. With this, your business can receive a New Jersey tax identification number, allowing you to receive returns and notices. You can do this either online or by mail.
New Jersey Division of Revenue
P.O. Box 252 Trenton,
New Jersey Division of Revenue
33 West State Street Trenton,
Step 5: Create Your New Jersey LLC Operating Agreement
A liability company operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to an LLC operating agreement New Jersey does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all your details of business operation. This document would be useful if you decide to dissolve New Jersey LLC later.
Step 6: Filing a New Jersey LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes and taxes in general. It is like a Social Security number dedicated to a business’ taxes. The EIN is necessary for any active business or any form of business for that matter.
EIN is needed when the LLC hires employees. Hiring employees in New Jersey LLC requires specific rules and regulations. One should know about them before hiring employees. EIN for New Jersey foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Before sending the form, ask for EIN Assistant. Enter details of your LLC, and finally complete the form and send it to the address given.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
And that’s all! Congratulation, you are now done with all the necessary steps to form your New Jersey LLC. If you still haven’t used a professional service from here, I strongly recommend having one to handle the remaining tasks.
After Starting your New Jersey LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File New Jersey business permits & licenses
- Get liability for business and professional liability insurance with coverage for employees
- File a New Jersey LLC annual report or biennial report
- Already existing LLCs that wish to operate in New Jersey must register as New Jersey foreign LLC.
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
New Jersey Foreign LLC
To register a New Jersey foreign LLC, one has to file the foreign LLC formation certificate with the Secretary of State, New Jersey. Forming a foreign LLC allows you to operate your business in more than one state in the USA as a single business entity. Check New Jersey Foreign LLC to know more about having a foreign LLC.
Why an LLC in New Jersey
If you look at the top options for establishing a new business, New Jersey’s name will be in the top few options. The reason behind this is the lucrative offerings that the government of the state provides. Business funding options, reductions in tax liabilities, minimum state tax, and line of credit are some of the benefits NJ offers. Read more on New Jersey’s classification of LLC tax. New Jersey has some leveraging benefits from others that are discussed below. So, let’s have a look.
Well Educated Labor Market
It is an absolute fact that when business people start an LLC in New Jersey, then the opportunity for employment increases in that state. According to New Jersey universities’ research and data, the number of degrees awarded in the state is the highest, and no other state has reached that number. The workforce that an LLC will get in New Jersey is well educated, which is better for LLC growth.
Such a workforce will have a higher knowledge of modern resources and a comprehensive understanding of business and are prepared to face the industry from the time of universities.
Sales and Use Tax Exemption Program
The STX program is one of the significant advantages that every New Jersey LLC enjoys. It is a sales tax exemption program in which you can enroll the business, those who are making a renovation or construction on their property to expand the company. LLCs buying property for their organization is also eligible for STX Program. It will be valid until the LLC is buying building materials, furniture, furnishings, fixture, etc., material for their company. Once it is all done, then the exemption will be removed.
Premier Lender Program
Starting a business is a huge task, and if there is a limitation on funding, then it seems impossible for a person to proceed. But in the Premier Lender Program started for LLC in New Jersey, a person can hold the helping hand of the new Jersey government. It is a financing option provided to the businesses for which the cost is meager. One only has to show an asset, and against that, they can receive a loan of amount $2 million or, in some cases, up to $1.5 million depending on the asset and business plan.
Best Businesses in New Jersey
Before you form an LLC in New Jersey, you should gain complete knowledge of the state. You should know the top businesses operating in the state and how much they contribute to the state economy? If you already have the information, it is good; otherwise, you must read the information below.
The life sciences industry is growing ever since in the 4th smallest state of the USA. The sector consists of 3 sub-sectors: Pharma itself, the research sector of biotechnology, and the development of medicine. The development of the industry is perfectly depicted by the 118.000 employees that are working in the industry.
Some of the big bulls of the sector in New Jersey state are Johnson and Johnson, Bayer Healthcare, and 21 other Fortune 500 companies. The contribution of this sector is around $45 billion to state GDP.
Financial Services Business
With an Annual contribution of $31 billion, the sector has shown significant growth in the sector. Currently, 11,400 firms operate in the country that offers finance to new businesses, helping people in their financial chores like tax-paying and business returns and insurance companies.
The reason behind so many financial companies operating in New Jersey despite small size are cheap yet prime real estate, affordable cost of living, and a considerable low taxation amount business has to bear.
Transport and Logistics
The supporting sector of manufacturing has eventually become the most significant contributor to the state’s economy. The state’s road network is very dense, and the seaport is also the second-largest, making it a prime location for logistics. More and more e-commerce companies are opening their fulfillment centers in the state now, in which Amazon is also one. With the increasing demand for e-commerce, the contribution of this sector is now $20.42 billion.
Some small businesses that have worked well in the state are:-
- Fulfillment business
- Shipping company
- Online resume writing
New Jersey LLC Formation Review
Time needed: 5 minutes.
To recap, here are the easy steps again when forming an LLC in New Jersey. Click on the steps in this list to read the full detail.
- Name your New Jersey LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a registered agent
In New Jersey, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Register your business for tax and employer purposes
You will need to register for business taxes, and the types of taxes you pay will vary according to the type of business you operate.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
How Fast Can I Form an LLC in New Jersey
If you’re wondering how fast you can form an LLC in New Jersey, the answer may surprise you. While there’s no specific time frame, you can usually expect to form an LLC within four weeks, or less if you file the documents in an expedited manner. While filing the documents in a timely manner is essential for your LLC to operate properly, the time taken to complete the process can be a factor to consider.
Creating a name for your LLC is a crucial step in the process. The name of the business should be something descriptive of the products or services you will provide. Avoid vague or generic names that are already taken by someone else. Try to avoid ripping off another business or creating something too complicated to be remembered. However, if you do have to choose a name for your new business, make sure it meets the state’s requirements for a trademarked name.
When you’re forming an LLC, you’ll need to get a Federal Tax Identification Number (EIN) before you can legally conduct business. EINs protect the social security numbers of business owners, so you’ll need them if you intend to hire employees. If you are planning to hire employees, you should also acquire a New Jersey EIN. EINs are a legal foundation for conducting business. Once registered, an LLC must maintain compliance and active status.
If you are a resident of New Jersey, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $125 (domestic LLC) and $125 (foreign LLC), LLC costs in New Jersey include $75 for Annual Reports every year. LLCs are liable to pay sales tax of 6.625% every year
It takes 5 to 7 business days to get an LLC in NJ if you file it online or via mail.
Every year all the LLC have to submit an Annual Report and pay $75 to the New Jersey Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start their LLC in New Jersey at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, leave a comment below.