Certificate of Formation NJ: Everything You Need to Know
A certificate of formation in NJ must be filed in the public record for certain business entities to be authorized to transact business in the state. 9 min read
2. New Jersey Business License, LLC Formation, and Incorporation
3. Choosing a Name for Your Business
4. Name Requirements for Out-of-State Business Entities:
5. Name Filings for Sole Proprietorships
6. New Jersey LLC Name Requirement
7. Requirements for the Certificate of Formation
8. What's Next to Form the Business?
9. Do I Need to File Bylaws With the State?
10. Member/Manager Information
11. Registering all Business for Tax and Employer Purposes
12. Proof of Registration
13. Does New Jersey Have Publication Requirements or Other Follow-Up Filings?
14. Other Business Types
15. Certificate of Formation Template
What Is a Certificate of Formation in NJ?
A certificate of formation NJ must be filed in the public record for certain businesses to be authorized to transact business in the state. Legal entities required to file this certificate of formation include:
General partnerships and sole proprietors are not required to file the Certificate of Formation.
New Jersey Business License, LLC Formation, and Incorporation
Many businesses choose to incorporate or form a limited liability company in New Jersey because of the vibrant business community led by corporate giants Johnson & Johnson, Prudential Financial, and Honeywell International. New Jersey is especially popular with business leaders in agriculture, pharmaceuticals, and tourism.
Choosing a Name for Your Business
After determining the type of entity you will establish for your business, you need to decide on a name. Your name must be distinguished from other New Jersey businesses. You can search all the business names registered with the state at no cost. For help in this search, for a fee, you can contact the corporations division by phone at 609-292-9292.
If you have a name you wish to use and it is available, you can submit an Application for Reservation of Name form to the New Jersey Division of Revenue along with a $50 fee. The name can be reserved for 120 days to allow time to complete your business formation filings.
Name Requirements for Out-of-State Business Entities:
If your business was incorporated or organized in a state other than New Jersey, then the name used for filing the certificate of formation must match exactly with the business name on the documents forming the business in the state of organization. If the formal business name is currently in use in New Jersey, then the out-of-state business can establish a “dba” or “doing business as” name for purposes of transacting business in New Jersey.
Only businesses not organized in New Jersey can register “dba” or fictitious names. Do so by submitting a form determined by the type of entity making the registration. The registration is not available for submission online.
Name Filings for Sole Proprietorships
Business entities such as corporations, LLCs, and certain partnerships file their registration with the state. A sole proprietor using a “trade name” files their registration at the County Clerk's office.
New Jersey LLC Name Requirement
If the business entity is formed as a limited liability company in New Jersey, its name must adhere to several requirements and restrictions:
- The business name must have at the end "Limited Liability Company,” “LLC,” or “L.L.C.”
- The name must not be misleading so as to give consumers the idea that the business operates in any manner other than for the purposes set forth in the company's Certificate of Formation.
- The name must not be confusingly similar and must be distinct from other LLCs, out-of-state LLCs, and other reserved names and registrations.
- Use of the terms “Little League,” “Olympic,” “Realtor,” and “Trust” are prohibited. Additional words not allowed in corporate names include Cemetery, D.C., District of Columbia, Metropolitan, Postal, and Underwriters.
- Certain words are restricted in a business or trade name in New Jersey and require approval before use: Blind, Cemetery, Funeral Homes, Handicapped, Insurance, Little League, Olympia, Olympic, and Urban Renewal.
Requirements for the Certificate of Formation
Once its business type and name are settled, a new business gets created by filing a Certificate of Formation. You can complete and file this document with the New Jersey Department of Treasury, Division of Taxation online or by mail.
The Certificate of Formation must include the following information:
- Corporate name and address.
- The name and address of a registered agent with a New Jersey address at which the agent will be available to receive tax and legal documents related to the business. This individual or organization must be available to receive official documents during business hours. The registered agent can be a resident of New Jersey or a domestic or foreign corporation that is legally allowed to conduct business in the state.
- The month chosen for the end of the business's tax year.
- The purpose of the business organization.
- If the business entity is a corporation, the number of shares of stock it will be allowed to issue.
- A list of names and addresses of initial directors appointed to run the corporation.
- The name and address of every person undertaking to form the business entity.
The fee for filing the Certificate of Formation is $125 for all “for profit” businesses and nonprofit businesses organized outside of New Jersey. Nonprofit businesses formed in the State of New Jersey pay a filing fee of $75.
What's Next to Form the Business?
Set Up a Corporate Records Book
A corporation must have a principal office, which is a physical location within New Jersey where the corporation keeps its important records.
The incorporator should set up a corporate book that contains the corporation's certificate of formation, bylaws, stock certificates and records of transfers of stock, meeting minutes, and all other important company documents.
Appoint Initial Corporate Directors
The incorporator, after completing the corporation's documents for formation, should select individuals for the initial board of directors. These directors will govern the corporation until the shareholders meet and elect directors.
The names and addresses of the initial directors will be designated on the “Incorporator's Statement.” While the Incorporator's Statement does not have to be submitted to New Jersey government, it should be signed by the incorporator and kept in the corporate book.
Hold Your First Board of Directors Meeting
Once selected, the board of directors should meet promptly to make several initial decisions, including:
- Appointment of officers to manage the corporation's day-to-day business.
- Preparation and adoption of bylaws that outline how the corporation is to be governed.
- The number of authorized shares of stock, the different classes and restrictions and rights of stockholders, stock certificates issue authorization, and determination of the official form of stock.
- Adoption of a corporate seal.
- Determination of the corporation's fiscal year.
- If applicable, approval to form as an “S” corporation under the Internal Revenue Code.
The incorporator or one member of the board of directors should be designated as the secretary to keep minutes of the initial board meeting. The directors should prepare and approve the minutes and keep them in the corporate records book.
Although it is not a requirement, small corporations typically issue paper stock certificates. Under federal and state securities laws that govern the sale and offer of corporate stock, shares of stock in a corporation are considered securities.
Do I Need to File Bylaws With the State?
Bylaws are an extremely important part of forming a corporation. They make up an internal corporate document that establishes the basic ground rules governing a corporation's operation. While they are not required to be filed with the state, they should be maintained in the corporate records book for easy access to review the guidelines for managing the business. Bylaws give the corporation legitimacy in the eyes of banks, creditors, the Internal Revenue Service, and other business and government entities with which the corporation will interact.
In contrast to corporations, limited liability companies or LLCs do not have a board of directors. The LLC business is managed by individuals called member/managers. Each LLC must have at least one member/manager but might have more.
New Jersey law gives no restrictions or other requirements with regard to where member/managers live, but they must be at least 18 years old.
The Certificate of Formation must list the names and addresses of each member/manager of the LLC.
Registering all Business for Tax and Employer Purposes
Regardless of whether the business is formed in New Jersey or another state, or whether it is a corporation, LLC, partnership, or sole proprietor, to transact business in New Jersey, Form NJ-REG must be filed to register the business for employment and tax purposes. The NJ-REG form requests detailed and complete information about the company's activities and organization.
There is no fee to file the NJ-REG, but it must be filed no less than five days before beginning operation of the business in New Jersey. Additionally, if the business will be collecting sales tax, the NJ-REG must be filed no less 15 days before the business's first sale.
Before filing the NJ-REG, the business must have a federal identification number (FEIN), which will also be its tax number in New Jersey. This is a mandatory requirement for all businesses with employees. You can apply for an FEIN online with the IRS or with the online NJ-REG.
The NJ-REG can be submitted along with the initial business formation filing. If filed separately, the NJ-REG is due within 60 days of the Certificate of Formation.
The Division of Taxation, upon receipt of a filed NJ-REG without a Certificate of Formation, will conduct a nexus review to determine proper tax treatment. In New Jersey, a corporation must pay an annual minimum state tax, which varies depending on its gross receipts in the state. For instance, if its gross receipts are less than $100,000, it must pay a minimum tax of $500. If the gross receipts are more than $1 million, the minimum tax will be $2,000. Businesses formed outside of New Jersey must file a paper NJ-REG form if there is no state tax nexus. This paper filing is required to receive a Business Registration Certificate.
In addition to the NJ-REG form, there may be other local and state forms and licenses required before transacting business.
Corporations that have elected to be “S” corporations must file that designation within 75 days from the start of the corporation's first fiscal year. This election is made on Form 2553 and must be filed with the New Jersey Division of Taxation.
Proof of Registration
Filing the NJ-REG allows businesses to receive a Business Registration Certificate. This certificate is required for businesses to enter into contracts with any public agency in New Jersey.
Does New Jersey Have Publication Requirements or Other Follow-Up Filings?
Businesses do not have to post or publish public notices regarding the company's business formation. Its only recurring filings in that regard are annual reports filed with the Department of the Treasury, Division or Revenue, along with a $50 filing fee on or before the anniversary date of the company formation or prior filing.
Though not business formation filings, New Jersey corporations pay an annual tax of at least $500 based on income.
Other Business Types
Flea Markets or Seasonal Operations
Although temporary in nature, there is no difference in filing requirements between seasonal operations or temporary businesses such as flea market sellers or other “pop-up” businesses and those which operate throughout the year. This means they must also complete the Public Entity Filing and register for tax and employer purposes as appropriate for their business activities.
Professional Services Businesses
In many states, professionals such as accountants, attorneys, and physicians can organize together as PLLCs, or “Professional Limited Liability Companies.” This is not allowed in New Jersey, but they can form a corporation or an LLC.
Foreign Corporations Doing Business in New Jersey
Foreign corporations are those organized in a foreign country or a state other than New Jersey. To conduct business in New Jersey, the foreign corporation must file the Certificate of Formation just like a new business forming in New Jersey. The foreign corporation must include with the filing a document from the corporation's home state confirming that it is in good standing there. This certificate of good standing must be dated within the past 30 days and can be obtained online or via mail for $125. The foreign corporation must also designate a resident process agent who is physically located in New Jersey and authorized to accept important documents on the corporation's behalf.
Certificate of Formation Template
Here is an example of a Certificate of Formation:
ABC FORMS, LLC
To establish a limited liability company in accordance with the New Jersey Limited Liability Company Act, the undersigned hereby certifies:
- ABC FORMS, LLC is the name of the limited liability company.
- The address of the initial registered office of the limited liability company is 100 Campus Drive, Florham Park, New Jersey 07932-0950 or P.O. Box 1946, Morristown, New Jersey 07962-2945. The registered agent at the address is Jane Doe.
- The limited liability company has _______ (two or more) initial members.
- The members of the limited liability company shall adopt its initial operating agreement and reserve the authority to create, change, and repeal the agreement.
- The limited liability company has a limited duration and shall expire on ________. (Optional provisions)
- This Certificate of Formation shall be effective on _________.
IN WITNESS WHEREOF, the undersigned has put into effect the Certificate of Formation and certified that this is his or her act and deed and all the facts herein stated are true on the _____ day of ___________, 20___.
*Note: The Certificate of Formation's effective date cannot be postponed for over 30 days after filing. In the event that the Certificate of Formation will become effective after filing with the Secretary of State, this provision should be omitted.
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