Start LLC in NJ: Everything You Need to Know
Business owners may start an LLC in NJ to take advantage of the easy operation, beneficial tax treatment, and personal asset protection of an LLC.3 min read
Business owners may start an LLC in NJ to take advantage of the easy operation, beneficial tax treatment, and personal asset protection of a limited liability company. This business structure provides the benefits of a corporation without the strict managerial regulations.
Naming Your LLC
One of the first steps in the process of creating an LLC is choosing an appropriate name. You should pick something that is easy for clients to remember and describes your business venture. When you have a name in mind, you can conduct a free search online through the NJ Division of Revenue and Enterprise Services to make sure another business hasn't already registered that name. You can also use the fee-based phone search service by calling 609-292-9292. You should also make sure a domain name is available so you can create a website for your LLC.
In New Jersey, the name of your LLC must:
- Contain the words L.L.C, LLC, or Limited Liability Company
- Not contain certain words such as bank or attorney unless you've filed additional paperwork for approval of these terms
- Not contain words that may cause your business to be confused with a state or federal agency, such as secret service or treasury
- Not be similar enough to the name of another business in the state that confusion would ensue
Once you decide on a name, if you're not yet ready to register your LLC, you can reserve it by filing the Application for Reservation of Name form and paying a filing fee of $50 to hold the name for 120 days. This can be done online or by mail or fax.
Choosing a Registered Agent
New Jersey law requires your LLC to designate a registered agent. This individual or business agrees to accept process service, state filings, and other legal paperwork on behalf of your business. The registered agent must live or be authorized to do business in New Jersey; it can be a member of the LLC.
Filing Articles of Organization
To register your LLC in New Jersey, you must file a form called Public Records Filing for New Business Entity, which includes the name and address of the LLC, the registered agent's name and address, the purpose of the business, and the names and addresses of members and managers. This form can be filed with the Department of Treasury's Division of Revenue and Enterprise Services either online or by postal mail or fax. The fee to create an LLC is $125 and you can add $50 for same-day rush service. The convenience charge is $3.50 for filing online. If you mail or fax your form, you should make a check, money order, or cashier's check payable to the NJ Secretary of State.
Creating an Operating Agreement
NJ state law doesn't require your LLC to create an operating agreement, but having one outlines the members' rights and responsibilities to prevent disagreements. It also details how business is conducted and decisions made. If your LLC does not have an operating agreement, it will be subject to the state's default rules for LLCs.
The employer identification number (EIN), also called a federal tax ID number, serves as a Social Security number to identify your business. This number is required to file state and federal taxes as well as to open a business checking account. You must complete the tax registration form within 60 days of filing your articles of organization, though you can file both documents at the same time. You can either apply for your EIN online with the IRS or print the registration form and mail it in.
To protect your limited liability, it's critical to keep business and personal finances separate. Once you have your EIN, you can use it to open a business bank account. Establishing a separate credit card for your business also allows you to maintain this separation as well as begin to build a separate credit history for your business.
If you have employees, you'll need to register with the state for employee withholding and unemployment insurance tax. If you sell products you'll need to register for sales tax.
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