Step-by-Step Guide to Forming an LLC in New Jersey

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New Jersey LLC Quick Facts

How much does it cost to form an LLC in New Jersey?

Initial LLC State Filing Fee – $125

 

Recurring State Fee: Annual Report – $75

How long does it take to get an LLC in New Jersey?

By Mail – 2-3 weeks

 

Online – less than 1 hour

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Quick Reference

The Limited Liability Company (LLC) is a popular entity structure for businesses starting in the state of New Jersey.  The LLC provides personal liability protection and has the potential to save money on taxes. With our step-by-step guide, you can learn how to form an LLC in New Jersey without an attorney.

Unlike a sole proprietorship or partnership where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting the business owner’s personal assets.

Related: How Does an LLC Protect You?

Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.

Costs to Form a New Jersey LLC

To form a Limited Liability Company in New Jersey, file the New Business Entity Form with the New Jersey Division of Revenue & Enterprise Services.  The LLC filing fee is $125.

Approval for the LLC typically takes less than 1-hour.

If you have questions, contact the New Jersey Division of Revenue & Enterprise Services.
609-292-9292

Steps to Form a New Jersey LLC

The steps for filing online or by mail are largely the same.  The screenshots show how to file online.

To file by mail, download the Public Records Filing for New Business Entity Form

How to Form an LLC in New Jersey

Step 1: Business Name Search

First, select the type of business you would like to form from the drop-down menu.  If it is an LLC, select “NJ Domestic Limited Liability Company.”

Next, enter the name you want for the LLC.  The name of the LLC has to differ from other business entity names registered with the state.  You can check New Jersey LLC name availability before filing to ensure the one you want is available or enter your name.  Otherwise, enter the name you want to use, and if it is available, you will be able to continue to the next screen.

You will not use a designator during the search, but if your name is available, you will pick one on the next screen.  A designator at the end of the business name indicates what type of business entity it is, such as LLC, Corporation, etc.

Before settling on a name, you may want to see if a domain name is also available to match your business name and website address.

There are a few other naming guidelines such as the name can’t include words the refer to a federal or state department, or words related to banking, trust, insurance, Olympic, Little League, realtor, unless the LLC is approved to do so.

If there is a name you want, but are not ready to register the LLC, you can file an Application for Name Reservation. The name reservation will hold a name for up to 120 days, at a cost of $50.

NJ LLC Business Name Registration

Step 2: Select a Business Designator

If the name you wanted is available, select the designator for your LLC.  Available designators include:

  • Limited Liability Company
  • Limited Liability Co
  • Ltd. Liability Company
  • Ltc. Liability Co.
  • L.L.C.
  • LLC

A comma may be used after the business name and before the designator.  “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.

NJ LLC Select a Business Designator

Step 3: Business Information

Employer Identification Number – This is optional, but you can enter the EIN of the LLC here.  If you don’t have an EIN, a link is available to the IRS to file one.  See our guide on filing an LLC EIN.

NAICS Code – This section is optional and asks for information regarding the business’s activities.  To do that, there is a number called NAICS (North American Industrial Classification System).  This code is a six-digit number that classifies and categorizes the different businesses.  This information is used in reporting statistical data for each of the industries in the U.S.  Remember this number as you will need it when filing annual tax returns.  Find your NAICS number here.

If the activities of your business aren’t specifically listed, choose one that is close.

Duration – If you intend the business to exist forever, which most businesses do, enter “Perpetual” or leave blank as, by default, all LLCs are set up with a perpetual duration.  If you have a specific end date in mind (typically used for investment-related businesses), choose a dissolution date.

Effective Date – If you want the LLC to start immediately, leave today’s date in the box.  Otherwise, choose a date in the future that you want the LLC to start. The main reason for delaying the LLC start date is when the filer is close to the end of a calendar year, and the business isn’t going to have any activity.  By delaying until the following year, they will reduce the number of end of year filings.

New Jersey LLC Business Information

Step 4: Business Purpose

Provide some basic information about what the business does.  If you want to keep the business purpose more open-ended, you can just have “Any lawful business activity for which a Limited Liability Company may be organized in New Jersey.”

Related: How to Answer the Business Purpose Statement.

NJ LLC Business Purpose

Step 5: Main Business Address

In this section, enter the street address, city, state, and zip code of the initial principal office to receive mail from the state.  This address can be the LLC’s physical address, or it can be the address where the business records are stored.  The address does not have to be located in New Jersey, but you may not use a PO Box.

Step 6: Registered Agent

New Jersey Registered Agent must be identified before forming the LLC.  The Registered Agent can either be a resident of New Jersey (Click “Enter a Registered Agent/Office”) or a Resident Agent service (Enter the Registered Agent Number in the field).  The agent must have a physical street address in the state (PO Boxes are not allowed), be available during normal business hours, and act as a point of contact to receive legal and tax documents, summons, subpoenas, etc. on behalf of the LLC.

You are not required to pay for a registered agent. Any individual meeting the requirements can be the agent; however, the agent’s name and address become public record, and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when doing business from home or still employed.  Hiring a registered agent service like Northwest Registered Agent to be the Registered Agent will reduce unwanted phone calls and mailings.

New Jersey Registered Agent

Step 7: Members / Managers

Enter the names of up to 10 Members and Managers.

Member-Managed LLCs have an active involvement in the management of the LLC.
Manager-Managed LLCs are hired by the members to run the LLC, similar to a CEO of a corporation.

Related: What is the Difference Between a Member-Managed LLC and Manager Managed LLC?

At least the name and address of one member or manager must be entered.

NJ Manager Member-Managed LLC

Step 8: Other Provisions / Additional Information

This is an optional section and not used by most LLCs.  Here you would include additional rules for the operation of the LLC.

One provision that is listed is the duration, just as was asked in Step 3.  If the LLC will have a perpetual existence, leave the field blank.  Otherwise, enter the date the LLC will dissolve.

NJ LLC Other Provisions

Step 9: Signatures

Have an authorized representative forming the LLC to sign indicating the certificate’s acceptance and the intent to execute the filing formally.  At least one person has to sign, but no more than 10.  Signatures can come from members, managers, or people helping with the LLC formation.  Click the “Continue” button to save the information and proceed.

New Jersey LLC SIgnature

Step 10: Review

Review that all of the information is correct.  If there are no corrections, click “Continue.”

Step 11: Additional Certificates and Certified Copies

This is optional, but if you would like to order a Certificate of Standing ($50) or a certified copy of the Certificate of Formation ($25), indicate by clicking on the boxes.  These can both be ordered at a later date if needed.

Step 12: Contact Information

Enter a name and phone number contact should there be any issues with the LLC filing.

Step 13: Pay and File

After payment, the LLC is immediately approved, but the New Jersey Certificate of Formation will take several minutes before it is ready to download.

If mailing, send the Public Records Filing for New Business Entity form and state fee to:
State of New Jersey Division of Revenue
33 West State St., 5th Floor
Trenton, NJ 08608-1214

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Tasks After Forming Your LLC

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare a New Jersey LLC Operating Agreement

The operating agreement is a document that governs the framework of an LLC.  This document covers items like ownership rights, member responsibilities, how profits and losses are distributed, and more.

Most states do not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:

  • The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
  • Member’s personal liability protection may be diminished.
  • Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.

Related: New Jersey operating agreement template

Obtain an EIN

The EIN or Employer Identification Number (also called a Federal Employer Identification Number, FEIN or Federal Tax Identification Number) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to a social security number for an individual, the EIN identifies business entities for tax purposes. The EIN will be needed to hire employees, open a bank account, build business credit, register for business licenses and permits, file federal and state taxes, and more.

There is no cost for the EIN when registering through the IRS. The number is available immediately when applying through the IRS website; however, you can also register by phone, fax, or mailing IRS Form SS-4.

Related: How to Apply for an EIN

Elect the LLC’s Form of Federal Income Taxation

One of the significant benefits of the Limited Liability Company is the tax flexibility it provides.  When applying for the Employer Identification Number, you will choose how the entity will be taxed for federal income tax purposes. While there are some limitations, an LLC may be classified for federal income tax purposes as a:

  • Sole proprietorship
  • Partnership
  • C-corporation
  • S-corporation

While this may sound confusing, this refers to how the LLC is taxed, not the legal structure.

Related: How can an LLC be taxed?

By default, the taxation of an LLC is called pass-through taxation, which means the profits or losses of the LLC flow through to the members.

Single-member LLCs will, by default, be taxed as a sole proprietorship. The members can also elect to change the taxation to a C-corporation or an S-corporation.

Multi-member LLCs will, by default, be taxed as a partnership. The members can also elect to change the taxation to a C-corporation or an S-corporation.

In general, the difference between being taxed as a corporation and being taxed as a sole proprietorship or partnership the profits and losses are passed to the member’s federal income tax returns based on their percentage of ownership.  As a result, the owner will pay self-employment taxes on all business profits.  As an alternative, electing to be taxed as a corporation allows the members to take a reasonable salary and then pay payroll taxes.  Any remaining profits are distributed and aren’t subject to payroll taxes, resulting in potential tax savings.

Before electing how your LLC will be taxed, consider talking with an accountant to assess which one will be best for you. Some tax elections, such as the C corporation, may be detrimental for some people due to double taxation.

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

  • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the original formation paperwork from the state showing the creation of the LLC.
  • Driver’s licenses of the members.
  • Occasionally, the bank will request a Good Standing Certificate to prove the LLC is active and in good standing with the state.

Related: How to Open a Business Bank Account for your LLC 

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, there will likely be various business licenses and permits needed before starting your business. Some common registrations include:

  • Business Registration Application – Every LLC is required to file the Business Registration Application (also referred to as the New Jersey LLC Registration for Taxes) Form NJ-REG with the New Jersey Division of Revenue and Enterprise Services within 60 days for formation. This application combines several business registrations such as the sales tax permit and employee withholding with the Division of Taxation.
  • Local Business License – Some cities required businesses to obtain licensing.
  • Professional License – Certain services such as barbershops, accountants, salons, and others must be licensed.

Related: What Business Licenses are Needed in New Jersey?

Get Business Insurance

Even with the liability protection of the LLC, business insurance is important to protect the business. The most common types of insurance include:

General Liability Insurance – covers damages owed and medical expenses for accidents that happen at your place of business.
Business Property Insurance – replaces damaged, stolen, or lost business property. This includes your physical business location, equipment, supplies, and anything else you used to run your business.
Business Vehicle Insurance – covers company vehicles and may also include coverage for personal vehicles used for business-related activities. Many personal policies won’t cover your vehicle if there is an accident while being used for business purposes.
Workers Compensation Insurance – mandatory in most states if you have employees, this insurance covers medical expenses that occur because of an accident or injury that happens to one of your employees while they’re at work.

Related: 7 Types of Insurance Your Business May Need

File the Annual Report

LLCs are required to file an annual report with the New Jersey Department of Treasury.  The annual report fee is $75 each year and is due the last day of the LLC’s anniversary month. For example, if the LLC were formed on November 1st, 2020, the annual report would be due November 31st, 2021.

Related: How to File a New Jersey LLC Annual Report

 

Common Questions When Starting An LLC

You can act as your own registered agent, provide you are a resident of the state and are generally available during normal business hours. 

It’s sometimes thought that the LLC and business license are the same, which they aren’t.  Business license requirements vary by location and the type of business being operated. 

An out-of-state LLC wanting to do business in another state will have to register as a foreign LLC with the new state’s Secretary of State.

Businesses that require state licensing and offer professional services such as accountants, attorneys, podiatrists, physical therapists, acupuncturists, etc. often must file as a Professional Limited Liability Company (sometimes referred to as a Professional LLC or PLLC) instead of an LLC. Filing for a PLLC is very similar to that of the LLC.

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