You have the business idea, the capital, and the drive to start a business in New Jersey. Now, you just need to figure out how to file your LLC (limited liability corporation) to get officially started. It helps keep your business liabilities and finances separate, and is often needed to apply for business loans, credit, or a bank account.
While the process may seem cumbersome, it doesn’t have to be complicated. We’ve done the painstaking research to figure out what you need to know, what order to complete tasks, and how to make it as simple and straightforward as possible. Read our seven steps to get started.
7 Steps to Start an LLC in New Jersey
1. Name Your LLC
You may already have an idea for a name for your business in mind. The first step is to ensure it’s available. That’s because, under NJ state law, two businesses cannot have the same name, to prevent confusing consumers.
If your name is unavailable, you can register your business under a different name and once approved, also register an alternative name. For instance, you could register as Kelly’s Food Importer LLC, but also register an alternative name as Kelly’s Kebabs to put on your storefront. This is perfectly legal in most cases, and a common practice among franchises and businesses with multiple stores.
To check if your name is already taken, you can search NJ’s Business Name Database. It’s important to note that your business name must end in either LLC, Ltd. or Co. If your chosen name is available, you can reserve that name for 120 days by filing an Application for Reservation of Name and paying a $50 holding fee.
2. Check If You Need a Business License
For certain industries operating in New Jersey, it may be a requirement to obtain a business license before opening for customers. The list of places that need some sort of license is extensive, but these are some of the main ones:
- Medical professionals (family doctors, chiropractors, dentists, etc.)
- Law firms
- Financial services (accountants, financial advisors, etc.)
- Educational services (for-profit education, daycares)
- Food and beverage services (manufacturing, restaurants, bars)
You can check online to see if your specific business will need a license. Licenses are provided by various government agencies, and may involve paying a fee, performing annual inspections, or taking competency tests to ensure compliance.
3. Choose a Registered Agent
All New Jersey businesses must have a registered agent in order to file for an LLC. A registered agent is someone that will accept legal and official mail on the LLC’s behalf, such as government correspondence or legal issues that arise with the business.
The main requirement is that a registered agent must have a physical address in the state – P.O. boxes don’t qualify. Some business owners choose to be the registered agent, but many businesses use third-party registered agency services for a yearly fee. The agency service acts as an intermediary on the business’s behalf.
If you operate multiple store locations or often work out of state, having a hired registered agent can be hugely beneficial and generally costs between $50-200 a year. Ultimately, it depends on your business structure.
4. Obtain an EIN
To pay business taxes at the federal level, your LLC will need an Employer Identification Number (EIN) from the IRS. This is a nine-digit unique identifier that is similar to a social security number in that it only needs to be issued once and will never expire.
An EIN is a crucial part to starting an LLC in New Jersey as it will be used to file taxes, open a business bank account or obtain a loan. You’ll also need it to register for New Jersey taxes, which we’ll discuss below.
To obtain an EIN, you can either apply online, by fax, or by mail. We recommend filing online, as this is the fastest way and you’ll often receive your EIN in 15 minutes or less. You’ll need to provide some personal information (or that of the business owner if it's not you) including your name and social security number.
5. File Your LLC Articles of Organization
Once you have determined your business name and figured out who your registered agent will be, now is the time to obtain your Certificate of Formation, also called a Certificate of Authorization. This essentially makes your LLC legitimate in the eyes of the government.
You can complete the application online, which will be the quickest and easiest way for most people. You can also apply by fax or mail, but these channels can take up to four weeks for approval.
To file, you’ll need:
- General information about your business (name, address, business purpose)
- The type of legal structure you wish to obtain (in this case an LLC)
- Your EIN
- A registered agent
- A credit card or eCheck for the filing fee.
The filing fee for this is $125 for the first year, and $75 for subsequent years. If you file online, you should receive your certificate in as few as 1-2 business days.
6. Create an LLC Operating Agreement
For businesses that have multiple owners, it is highly recommended to have an LLC Operating Agreement. This isn’t an official document that must be filed with any government agency, but is instead a legally binding, internal framework that lists how the business operates.
While you may think you’ll never need this type of agreement, the truth is that business relationships often do fall apart and it can be costly if there isn’t a plan already in place. It can also lay out crisis management procedures, if an external event like natural disaster were to affect the business.
You can find templates online to get started, but in simple terms, an operating agreement should lay out the members and their responsibilities, as well as general management, compensation, and financial structures within the business.
7. File the Tax/Employer Registration Form
To operate in New Jersey, you must register for state taxes with the New Jersey Department of Taxation’s Division of Revenue and Enterprise Services (DORES). Registering is a straightforward process – you simply need to fill out “Form NJ-REG,” which you can do online.
For this step, you’ll need your:
- Business entity or corporate ID number
- Federal EIN
- NJ Business code
- North American Industry Classification System (NAICS) code
- Sales tax collection information
- Anticipated first payroll withholding date for employees – if applicable
Once you’ve completed the form, you’ll receive your New Jersey Tax ID and a Certificate of Authorization to Collect Sales Tax. This step is crucial because it sets your business up to withhold state taxes, which are separate from federal ones. If you fail to register with the state, they will impose penalties and fines on taxes owed.
The Next Steps After Forming an LLC in New Jersey
Once you’ve gotten your LLC formed, it’s time to get ready to launch your business. Before you can open to customers though, there are a few more steps to take to ensure your finances are in line and your business is prepared.
1. Open a Business Bank Account
It’s important to keep your personal and professional finances separate, even if you’re operating the business alone. A business bank account will be crucial to building business credit, taking out business loans, and keeping track of your expenses for tax time.
2. Set Up a Payment System
No matter what type of business you plan to operate, you’ll need a clear and easy way to accept payments from your customers. Pay.com is a full payment service provider that offers several ways to accept payments. If you’re opening an ecommerce business, you can use a customized checkout page integrated directly into your site.
If your business is going to offer services, you can send direct Pay Links via email or SMS or even take payment information over the phone. Offering all of these options and more, Pay.com is a convenient and simple payment system solution for New Jersey LLCs.
Don’t wait till the last minute – click here to create your account now!
3. Get Business Insurance
Another crucial step to take before opening your business is to get business insurance. Depending on the type of business you have, this might be commercial property insurance that protects against fire or theft, general liability insurance in case something goes wrong, or insurance that protects yourself and your employees from harm or health damages.
The Bottom Line
Forming an LLC in New Jersey is an important step to operate a business within the state. The process itself isn’t too complicated, but it is crucial to have all your paperwork in order to ensure there are no delays in the process.
If you’re filing online, the process is extremely quick and will help expedite your business opening. However, you can also apply for an LLC through the mail or even via fax, though we don’t recommend these options as they are slower.
To get your business venture off to a great start, you can use Pay.com to easily accept payments online, through direct Pay Links, or even over the phone. With quick and easy onboarding, Pay.com makes it simple to accept multiple payment methods in no time.