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Cost to Start an LLC in New JerseyThink about your LLC a year from now: raking in profits and taking New Jersey by storm. 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.

While you’re making plans and dreaming big, 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.

Quick Note: If you’d like to keep your costs of starting an LLC as simple and low as possible, consider hiring ZenBusiness – a reliable business formation service. To get a better idea of the value they offer and how it works, we compared them to the two most well known services:

IncFile vs ZenBusiness or LegalZoom vs ZenBusiness

 

Bare Minimum Cost to Start an LLC in New Jersey

  • Optional: LLC Name Reservation Fee
    • $50 for a hard copy submission
  • Required: Articles of Organization Fee
    • $125 for paper applications, with an additional $50 fee for expedited processing

 

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 Articles of Organization, that will automatically lock in your name, so you should go straight to that step instead.

 

Articles of Organization Fee

This is the big one, the most important form that you’ll file to start your New Jersey LLC. When you file the Articles of Organization, 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. Standard processing time is six to eight weeks, so it may be a good investment to pay the $50 expedited processing fee for same-day service. Once you’ve successfully filed the Articles of Organization once, you don’t have to do it again for the entire life of your business, so this is a one-time fee.

 

Business and Professional Licences

Along with your Articles of Organization, 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.

 

LLC Formation Service

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 an LLC formation service. 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 and Northwest) offer basic LLC formation service like Articles of Organization 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.

 

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 and on-time, 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 $500-2000.

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.

 

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 “Business Registration Application” instead of the Articles of Organization.

All foreign business entities are required to foreign qualify in New Jersey, or they could incur some pretty severe penalties. You can file the Business Registration Application through New Jersey’s online filing portal or by submitting a Form NJ-REG. Either method 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 fee on your annual budget.

 

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 Articles of Organization or Business Registration Application) 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.