N.J. LLC: Everything You Need to Know
New Jersey Limited Liability Company, or N.J. LLC, is a hybrid entity that combines the characteristics of a sole proprietorship, partnership, and corporation.5 min read
2. How Do I Create My N.J. LLC?
3. Step 1: Choosing a Name
4. Step 2: Filing
5. Step 3: Appointing a Registered Agent
6. Step 4: Prepare an Operating Agreement
7. Step 5: Regulatory and Tax Requirements
8. Step 6: Annual Reports
9. Step 7: Separate Personal Assets from Your LLC
10. Step 8: Register Your LLC for Tax Purposes
11. Step 9: Accounting
12. Step 10: Obtain Business Licenses and Permits
13. Step 11: Get Insurance
14. Step 12: Employee Hiring
What is a N.J. LLC?
A New Jersey Limited Liability Company, or N.J. LLC, is a hybrid entity in New Jersey that combines the characteristics of a sole proprietorship, partnership, and corporation. Most importantly, LLCs provide that its members will not be personally liable for the company’s debts.
How Do I Create My N.J. LLC?
There are many resources to help you get your N.J. business up and running. Below are 12 steps to creating your N.J. LLC.
Step 1: Choosing a Name
There are some important items to keep in mind when creating an LLC name in New Jersey, including:
- Your company’s name has to have LLC in its name
- Your company’s name has to be different from any other N.J. businesses. You can double-check this by visiting the N.J. Business Record Service database for business names.
- You can reserve a business name for up to 120 days by filing what’s called an Application for Reservation of Name with the N.J. Division of Revenue & Enterprise Services. Filing fee= $50
Step 2: Filing
The filing must include the name and address of owner, registered agent, and managing members; line of business in which the company will operate; and the dissolution date (if applicable). The filing can be completed in paper format or online. The filing fee is $125 if filed in paper format, and $128.50 if filing online and paying with a credit card.
Step 3: Appointing a Registered Agent
Every N.J. LLC is required to have a registered agent, an individual or entity who agrees to the acceptance of legal papers on the company’s behalf in the event that the LLC is sued. The agent you choose is required to have a physical address in the State of N.J.
Step 4: Prepare an Operating Agreement
An Operating agreement is not required in the State of N.J., but is highly recommended. For help creating an LLC operating agreement, you can check out online forms to learn everything you need to know about this type of agreement. If you do choose to file an operating agreement, it does not need to be filed with the public records office.
Step 5: Regulatory and Tax Requirements
Tax and regulatory requirements may, in fact, apply, including:
- Employer Identification Number (EIN): LLCs with more than one managing member must obtain an EIN, whether there are employees or not. Even one-member companies may still be required to get an EIN if:  the LLC will hire workers or  you choose to have the LLC taxed as a corporation rather than a sole proprietorship. NOTE that an EIN can be obtained on the IRS website, and you don’t have to pay a filing fee.
- Business Licenses: The State of N.J. may require you to obtain a registration, certification, or license depending on the line of business in which your company operates.
- State Tax Registration: Both N.J. and foreign LLCs authorized to conduct business in N.J. are required to register with the N.J. Division of Revenue, regardless of whether or not the LLC will hire employees or collect sales tax. This form can be filed online or mailed. N.J. LLCs are required to pay an annual minimum state tax of $125/member.
Step 6: Annual Reports
N.J. LLCs and foreign LLCs authorized to conduct business in the State of N.J. are required to file an annual report, which is to be filed each year in the anniversary month of the LLCs date of formation. The report should be filed online. There is a filing fee of $50.
Step 7: Separate Personal Assets from Your LLC
In order to ensure this is done properly, you’ll want to:
- Open a business bank account. This separation of assets is necessary to protect you personally. It also makes accounting and tax filing easier.
- Get a business credit card, which assists in separating personal and business assets. It also helps you build your company’s credit history. In turn, this can help you apply for a loan at a later date if need be.
Step 8: Register Your LLC for Tax Purposes
If you choose to hire employees in the State of N.J., you will be required to register for the following on behalf of your employees:
- Unemployment Insurance Tax
- Employee Withholding Tax
And if you are selling goods or services that will be taxed, you will have to register for New Jersey Sales tax.
Step 9: Accounting
Accounting is important. Even if you haven’t fully opened for business, it is important to have your accounting books ready to go in the event that your business takes off quickly. The benefits of having an organized accounting system include:
- Accounting records help you keep track of your business finances, including assets, debts, expenses, and employee's income.
- If you keep a well-organized accounting system, tax season will be a breeze!
- Your accounting system may sync with your business bank account(s) and credit card(s), which make it even easier to keep track of everything.
- You may also have an accounting system in place that can match specific transactions to the corresponding purchase orders, bills, and invoices.
Step 10: Obtain Business Licenses and Permits
Remember that you must comply with all federal, state, and local government regulations when operating your LLC.
- Federal level: Read the U.S. Small Business Administration (SBA) guide
- State level: Visit the State of N.J.’s Business Portal
- Local level: Contact your local Chamber of Commerce
You can also use a professional service or lawyer to help you obtain the proper business licenses and permits. Keep in mind that additional requirements may be necessary depending on the line of industry in which your LLC operates, as well as the local requirements. There are also additional fees associated with obtaining such permits and licenses.
Step 11: Get Insurance
We’ve all heard of the term “Workers Compensation.” This type of insurance is required for most companies that have employees.
Step 12: Employee Hiring
Once you decide to hire employees, whether you choose to hire one, a hundred, or more, you have the following legal obligations to abide by:
- Ensure that all employees are eligible to work in the U.S.
- Report all new hires to the State of N.J.
- Provide workers compensation insurance for all employees
- You are required to withhold income tax
- Ensure that employee income is paid to the employees in specific increments required by the State (once every week, bi-monthly, etc.)
If you need help with creating an LLC in N.J. or would like to speak to a qualified attorney in this area, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.