How to Form an LLC in New Jersey

New Jersey, the Garden State, is ideally located on the east coast, between New York, Delaware and Pennsylvania.

NJ is one of the smallest states across the nation, but it’s the most densely populated in the Union, making it a great place to start a business. Known as the “Crossroads of the East,” the state of New Jersey is rich in manufacturing and distribution opportunities. New Jersey’s economy is boosted by several major industries including Biopharmaceuticals, Transportation, Manufacturing, Health Care, Technology, Finances and Investment, Agriculture, Printing, Tourism, Food Processing, Telecommunications and Chemical Production.

If you want to start your own business in New Jersey, one of the best ways to do so is by forming a New Jersey LLC . Limited Liability Companies (LLCs) are a business entity designed for startups and small- and medium-sized businesses. LLCs are great for small and medium businesses because they give you many of the protections and advantages of larger corporations — without all the rules, regulations and compliance issues common to larger business entities. Let’s start by looking at the advantages of forming a New Jersey LLC.

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Advantages of Forming an LLC in New Jersey

New Jersey LLCs have several benefits for business owners…

• Starting a New Jersey LLC is quick and easy — you can complete all the necessary forms and actions online to start your company.

• An LLC limits your personal liability — any liabilities created by your New Jersey business (debts, obligations and other liabilities) are legally considered to be completely separate from your personal assets as the business owner or founder.

• New Jersey LLCs are easy to maintain — LLCs are light on rules and regulations. There’s no need for boards of directors, complex rules and regulations or formal annual meetings.

• LLCs are very easy to manage and you can add and amend members and make other changes with just a little paperwork.

• Tracking, filing and paying taxes is simple and easy — any income you earn through your New Jersey LLC is reported on your personal tax return. This means you won’t run into “double taxation” issues common with larger corporations.

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Steps to Form an LLC in New Jersey

Here are the steps you need to take to form an LLC in New Jersey.

1.  Choose a Name for your LLC
2.  Choose a Registered Agent
3.  File the Business Registration Application
4.  Register your Business with the State
5.  Prepare an Operating Agreement
6.  Obtain an EIN

1. Choose a Name for your LLC
Choosing a company name is the first and most important step in starting your LLC. Make sure to choose a name that complies with New Jersey naming requirements and that is easy to be searched by potential clients.

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1. Follow the naming guidelines:

Your New Jersey LLC needs an original, unique name. It should:
– Be distinctive and not used by another company in New Jersey
– Not be confusable with the name of another company in New Jersey

• Under New Jersey law, an LLC name must include the phrase “Limited Liability Company” or one of its abbreviations (LLC or L.L.C.).

• Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).

• Your LLC’s name must be distinguishable from the names of other business entities already on file with the New Jersey Division of Revenue & Enterprise Services. Names may be checked for availability by at the New Jersey Business Record Service business name database.

• Restricted words (e.g. Bank, Attorney, University, Insurance) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.

• You may reserve a name for 120 days by filing an Application for Reservation of Name (UNRR-1) with the New Jersey Division of Revenue & Enterprise Services. The application may be filed online at the Division of Revenue and Enterprise Services Central Forms Repository web application or by postal mail. The filing fee is $50.

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2. Is the name available?
When you start a business, the name you give your LLC should be something you’ve thought long about. Before you get too attached to the name, you ‘ll need to make sure it is available in the state of New Jersey or the state that you are filing in. Make sure the name you want isn’t already taken by doing a name search on the State of New Jersey website. If another LLC has the same name, you won’t be able to use it.

3. Is the URL available?
Another very important point and we definitely recommend is that you check to see if your business name is available as a web domain. Even if you don’t plan to make a business website today, you may want to buy the URL in order to prevent others from acquiring it.   After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google’s G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more.

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2. Choose a Registered Agent
An important part of LLC formation is the registered agent. Every New Jersey LLC must have a “registered agent.” That could be you, the managing director, owner or a dedicated registered agent service.

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What is a Registered Agent?
The registered agent in New Jersey is someone who receives official legal and tax correspondence and has responsibility for filing reports with the New Jersey Secretary of State.

This Agent is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. The registered agent may be a New Jersey resident or a foreign or domestic corporation authorized to do business in New Jersey. The registered agent must have a physical street address in New Jersey.

You may elect an individual within the company including yourself. Also, if you decide it, the registered agent does not have to be a member of the LLC. In fact, there is a whole industry of registered agent companies that you can hire to handle this on behalf of your company.

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Several points that you need to have in mind are…

1- The Registered Agent must have a physical street address in the state where you are forming the company. Some people establish companies outside of the state they live in and will need to use a Registered Agent service to provide the address.

2- You always need to have someone on hand to receive important documents for your business during business hours (typically 9 AM to 5 PM Monday to Friday). Therefore, person must always be available to sign for legal correspondence.

3- The Registered Agent’s name and address is part of the public record and available through the New Jersey Secretary of State’s website. If you would prefer your name and address isn’t published, this is a reason to choose a Registered Agent service.

4- If you change your New Jersey business address or move out of state, you don’t need to file additional documentation with the secretary of state for the new address of your Registered Agent. You will need to setup a new registered agent service in the new state.

There are more considerations, but these should help you with your decision to use a Registered Agent service.

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3. File the Business Registration Application
When starting a business in NJ, there must also be an Application for Registration (NJ-Reg) filed with the New Jersey Division of Taxation in order to receive tax information from the state. You must file this even if you don’t plan to collect, withhold, or pay taxes.  There’s no fee for registration. You must file your application at least five business days before you start doing business and fifteen days before if you will be collecting sales tax.

The NJ-Reg form asks for comprehensive information about your company and its activities. If you will be collecting sales tax, the NJ-Reg must be submitted at least 15 days before your first sale.

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4. Register your Business with the State
All LLCs in New Jersey are required to register with the New Jersey Division of Revenue and Enterprise Services within 60 days. You can do this either online, or by mail.

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Register Online:
Link to register online

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Register by Mail:
Link to download the PDF

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Fee: $125

Mail to:
New Jersey Division of Revenue
P.O. Box 252
Trenton, NJ 08646

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Submit In-Person:
New Jersey Division of Revenue
33 West State Street
Trenton, NJ 08608

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5. Prepare an Operating Agreement
In New Jersey, LLCs are not required to have an operating agreement.

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What is an operating agreement?
An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.

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Why are operating agreements important?
An operating agreement is an important document because it covers how the business will be run, how managers and members are chosen, rights and duties of members and several other key areas, and finally, it reduces the risk of future conflict.

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6. Obtain an EIN
What is an EIN? The Employer Identification Number (EIN), or Federal Tax Identification Number, is used to identify a business entity. It is essentially a social security number for the company.

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Why do I need an EIN?

An EIN is required for the following:
• To open a business bank account for the company
• For Federal and State tax purposes
• To hire employees for the company

Where do I get an EIN?
An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail.

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GET AN EIN

Request an EIN from the IRS
https://sa.www4.irs.gov/modiein/individual/index.jsp

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Apply for an EIN by Mail or Fax
Link to download the form

Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999

Fax:   (855) 641-6935