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New Jersey LLC Cost

You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.

And we’re not talking about renting office space or paying employees – before you sell a single product, there are startup costs associated with launching an LLC in New Jersey.

Make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common New Jersey startup fees here.

Bare Minimum Cost to Start an LLC in New Jersey

Optional: LLC Name Reservation Fee

    • $50 for a hard copy submission

Optional: LLC Formation Service

    • $39 for an LLC service like ZenBusiness and $79 for LegalZoom

Required:  Certificate of Formation Fee

    • $125 for online filings

Overall New Jersey LLC Formation Costs

LLC Name Reservation Fee

While reserving a business name isn’t required In New Jersey, it’s a good option to have if you’re worried about someone taking your name. A $50 fee will get you 120 days of exclusive rights to your desired name. But you should only file for a reservation if you won’t be starting your LLC for a while. If you’re ready to file the Certificate of Formation, that will automatically lock in your name, so you should go straight to that step instead.

To clarify, most states don’t require name reservations, and they’re rarely necessary. If you’re concerned about someone else registering the name you want, you could opt to simply form your LLC instead of reserving the name.

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Certificate of Formation Fee

This is the big one, the most important form that you’ll file to start your New Jersey LLC. When you file the Certificate of Formation, you’re officially putting your company on file with the state. You can’t do business until you’ve successfully submitted this form but will cost you $125. The standard processing time is only 1-3 business days, so it is almost certainly not a good investment to pay the $50 expedited processing fee for same-day service. Once you’ve successfully filed the Certificate of Formation once, you don’t have to do it again for the entire life of your business, so this is a one-time fee.

The information you’ll need to file your Certificate of Formation includes the official business name of your LLC, a brief description of your LLC’s purpose, the effective date of your LLC formation (if applicable), the name and address of your LLC’s registered agent, your LLC’s dissolution date (if applicable), the signature(s) of your LLC’s organizer(s), and the date.

If you would rather get some help for this step, you’re in luck! There are plenty of reputable LLC formation services that will prepare and file your Certificate of Formation on your behalf. You have plenty of options for this service, but we prefer ZenBusiness. They offer great low rates and well-rounded services, and with our exclusive discount code, you can get 20% off!

Business and Professional Licences

Along with your Certificate of Formation, your business may need additional licenses before commencing business in New Jersey. The costs and type of license required depend on your business and location. For example, an electrical contractor must obtain licensure through the Board of Examiners of Electrical Contractors. On top of that, certain cities and/or counties maintain their own licensure requirements, so your LLC may need multiple licenses, or it may need none. Find more information about licenses on the New Jersey Business Portal, and by contacting your local government.

What are some of the most commonly required business licenses for New Jersey LLCs? If your business operates in a regulated industry, you will probably need some sort of professional license to operate in compliance with state law. On the municipal level, things like alarm permits, building permits, and zoning permits are all very common.

LLC Formation Websites

Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for LLC formation websites. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.

Most of these services (like ZenBusiness or Northwest) offer basic LLC formation service like Certificate of Formation filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, operating agreements, and expedited filing.

There are many different companies offering LLC formation services these days, and it can be tricky to tell which one is the right choice for your needs. We think ZenBusiness and IncFile are the two best LLC formation companies, and we wouldn’t hesitate to recommend either of them to our families and friends.

Registered Agent Service

Appointing a registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with New Jersey business law. In short, you need an agent you can trust.

While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently, saving you from the penalties of delinquent filings and the stress of having to do it yourself.

Not all registered agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to registered agent services, Northwest also handles LLC formation — and they’ll include a registered agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our Best Registered Agent Services guide.

Attorney Fees

If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.

Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2,000.

Cost variations depend on the experience and location of the lawyer. Hiring a lawyer is an investment in your business, so you’ll want to make sure you find a good fit. But with so many options, how can you be sure? A site like Avvo offers access to a whole database of lawyers, making it easy to search, compare and contact New Jersey business attorneys, so you can be sure you find the perfect choice for your LLC.

If you don’t want to go digging for your own attorney, we compiled the following list of highly rated business lawyers in New Jersey. All of these attorneys are primarily focused on the business world, they all receive five-star ratings from clients, and they all have excellent Avvo ratings.

Foreign Qualification Fee

This only applies if your LLC was formed in another state and is now expanding into New Jersey. Sound like your business? If so, you will file a “Certificate of Authority” instead of the Certificate of Formation.

All foreign business entities are required to foreign qualify in New Jersey, or they could incur some pretty severe penalties. You can file the Certificate of Authority through New Jersey’s online filing portal. It costs $125, but this is not a recurring filing, so it’s a one-time $125 fee.

LLC Annual Fees

After you get past all the initial startup fees, your New Jersey LLC will also have recurring maintenance fees, namely the annual report. Annual reports ensure that the state has the most current and accurate information on each business entity. You must file an annual report online and pay a $50 fee every year by the end of your LLC’s anniversary month, so make sure to note the deadline on your calendar and the fee on your annual budget.

The information required to file your annual report includes your LLC’s business ID number, an indication that your business is an LLC, the date you originally formed your LLC, the name and address of your registered agent, your LLC’s business address and principal office address, the names and addresses of your LLC’s members, and proof of your LLC’s workers’ compensation insurance.

For more info on annual reports for New Jersey LLCs, check out our full article on this topic!

Taxes

New Jersey doesn’t have taxes like “franchise” or “privilege” taxes that apply to all LLCs. But there are certain circumstances that may impose specific taxes on your business.

Federally, LLCs are considered “pass-through” entities, so the business itself doesn’t file a corporate tax return. Instead, its owners report income and losses on their individual returns. But there are a couple of New Jersey taxes that your LLC might be required to pay if it meets certain conditions.

Does your LLC hire employees? If so, it will be subject to a withholding tax and an unemployment insurance tax. Does it sell merchandise? Then it will need to pay a Sales and Use Tax.

Or, if you’ve deliberately set up your LLC to be taxed as a corporation, it must file a corporate tax return and pay the corporate income tax between 6.5% and 9%, depending on its income.

What if I Don’t Pay?

Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.

If you don’t make the necessary startup filings (the Certificate of Formation or Certificate of Authority) and pay the associated fees, your LLC won’t be authorized to conduct business in the state. Then, if you fail to submit an annual report, it will lose its good standing with the state. Without good standing, businesses cannot foreign qualify in most other states, apply for most business loans, renew business licenses, and more. Fail to file two annual reports in a row and the LLC will be “voided” or “revoked,” unable to do business in the state.

Late tax payments may be charged 5% of the amount due as a penalty and will accrue 3% interest. If your outstanding payment goes to a collection agency, it will incur a referral cost recovery fee – 10.7% of the amount due.

Planning Your Expenses

By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in New Jersey.

Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees — like annual reports and business taxes — so your business doesn’t fall out of good standing.

Key Steps for Starting a New Jersey LLC

  1. The first step to forming a New Jersey LLC is to come up with a good name for your business. You’ll want to make sure the name you want is still available and hasn’t already been claimed by another business, so you’ll need to search the state’s business database to verify its availability.
  2. Next, you’ll need to choose your registered agent. While you can legally serve as your own registered agent in New Jersey, this role can actually be more of a hassle than you might expect. That’s why we always recommend hiring a reputable registered agent service that can handle the responsibility of this position on your behalf.
  3. The third step involves the preparation and filing of your Certificate of Formation. You’ll need to fill out the paperwork and pay a $125 fee. Once the state processes this document, your LLC will be officially open for business!
  4. That’s not the end of the road for the startup process though, as you’ll also need to create an operating agreement for your LLC. There is no legal requirement for New Jersey LLCs to have written operating agreements, but it’s still an extremely important element of any LLC. The operating agreement is an internal document that outlines how your LLC will operate, and there are several aspects of this document that can prevent messy ownership disputes down the line.
  5. You will also need to acquire a federal tax ID number (also known as an EIN, or employer identification number). This is essentially a Social Security number for your business, as it is a nine-digit code used to file taxes, hire employees, open business banking accounts, and more.
  6. Next, you’ll need to register for any relevant taxes with the New Jersey Division of Taxation, and also obtain all licenses and permits that apply to your business type. Keep in mind that, depending on the nature of your business, you might require licenses from the federal, state, county, and municipal governments.

Once you’ve finished all of these steps, you’re ready to operate a compliant business entity with the state of New Jersey!

Key Steps for Maintaining a New Jersey LLC

After you’ve completed all of the items in the previous section, you’ll need to focus on maintaining your LLC. The first step in this process is to open a business bank account. This will help you keep your business and personal expenses entirely separate, and it will also help immensely with your accounting and taxation responsibilities.

You should also keep detailed records of every financial transaction that takes place with your LLC. This means maintaining a file of invoices for every purchase and sale you make, along with information regarding your employees or contractors and the work they perform for your business.

As we already mentioned, annual reports are a key component of LLC maintenance in this state, and there are harsh financial penalties for delinquent reports. Additionally, you might want to hold an annual meeting to discuss goals and priorities for your LLC, although this is an optional step.

The Top 3 New Jersey LLC Services

If you want to hire a reputable LLC formation service to handle the heavy lifting on your behalf, these are the three companies we trust and rely on the most.

  • ZenBusiness ($39) – ZenBusiness offers a well-rounded LLC formation package at a great low rate. Their standard LLC package includes a full year of registered agent service, an accounting assessment, and a customizable operating agreement. ZenBusiness also receives stellar customer feedback.
  • IncFile (FREE) – That’s not a typo! IncFile really does form LLCs for free. Even better, they include 12 months of registered agent service in their free package. IncFile has a ton of experience and more than 500,000 satisfied customers, so they’re always a reliable choice.
  • Northwest Registered Agent ($225) – Northwest offers a bit more of a premium service, but if you have the money, we think it’s worth it. Like ZenBusiness and IncFile, Northwest also includes a year of registered agent service with the purchase of any LLC formation package. They also offer the best customer support in this industry, with knowledgeable representatives who are familiar with the details of business formation processes in every state.

Frequently Asked Questions

Before we wrap things up, let’s take a look at some of the most common questions we hear from readers regarding the LLC formation process in New Jersey.

What are the state business tax rates in New Jersey?

If your LLC is taxed like a sole proprietorship or general partnership, you’ll need to pay taxes on your business income at the state’s personal income tax rates (between 1.4% and 10.75%, depending on your income level). If your LLC is taxed like a corporation, you’re required to pay New Jersey’s 6.5-10.5% corporate income tax on your business revenue.

How quickly does New Jersey process LLC formations?

The Secretary of State should be able to process your LLC’s formation within 1-3 business days. If you’re in a hurry, you can pay a $50 expediting fee to shorten your turnaround time to same-day service.

How many small businesses are there in New Jersey today?

The state of New Jersey is home to more than 860,000 small businesses. Entrepreneurs of all backgrounds and business types find that New Jersey is a great place to own and operate a small business.

What are the top small business resources and websites in New Jersey?

The New Jersey chapter of the Small Business Development Center is a great place to start, as they offer a wide variety of tools and resources for New Jersey LLCs. The U.S. Small Business Administration’s New Jersey District Office is another valuable resource, and the state’s small business resource page also has plenty of good info.

Should I form my LLC in New Jersey, or choose a state like Delaware or Wyoming?

Some people like to form their LLCs in states with favorable legal settings. For instance, Delaware is often seen as the most business-friendly state, as it has an entire court system that’s dedicated solely to business matters. As for Wyoming, this state has some of the most generous anonymity laws for LLC ownership.

However, for most people, your best option is to simply form your business in your home state. Forming in a different state can be a tremendous hassle, and it can add some unnecessary complexity to tax issues as well.