You have a big idea, truckloads of ambition, and dreams of a thriving New Jersey LLC, plus you’re mentally prepared to make it happen.
But the Chinese philosopher Lao Tzu once said, “a journey of a thousand miles begins with a single step,” and for you, that first step is filing the Certificate of Formation.
With such grand plans, the last thing you might want to do is file paperwork, but completing the Certificate of Formation is what authenticates your LLC, making it official in New Jersey. It’s perhaps the most important step in starting your New Jersey LLC. Following this guide will help take the tedium out of paperwork and get your business started quickly.
But before you dive into the Certificate of Formation, you should have a few pieces of information ready to help streamline the process.
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Choosing an LLC Name
Before anything else, you will need to decide on an LLC name. You must include a business name on your Certificate of Formation, and if the Division of Revenue and Enterprise Services deems that name unacceptable or unavailable, the document will be rejected, so make sure you nail down a good name right away.
As you narrow down your name choices, make sure that your final selection adheres to the state’s requirements. It must contain the words “limited liability company” or the abbreviations “L.L.C.” or “LLC,” and not use any of New Jersey’s restricted or prohibited words, or any profanity. Most importantly, your name cannot already be in use. Perform a name search to confirm that it’s distinguishable from all other names on record with the Division of Revenue and Enterprise Services.
Once you’ve found your perfect name, include it on your Certificate of Formation to automatically register it. In the event that you’re not quite ready to file an LLC, you can place a 120-day hold on your name by submitting a name reservation request.
Choosing a New Jersey Registered Agent
A registered agent is your LLC’s liaison to the state, the mediator who takes care of all your important legal, tax, and compliance documents, keeping your business in good standing. Your Certificate of Formation will not be complete without registered agent information, so have a valid agent lined up before you start.
Your registered agent can fall into one of two broad categories: an individual or a business entity. Every individual agent must be a New Jersey resident with a physical address in the state, and business entity agents – like registered agent services – must be authorized to do business in New Jersey.
Once you submit your Certificate of Formation, your registered agent’s information will be part of your public record.
Quick Note: If your first choice doesn’t work out, don’t worry. You can always change your registered agent in the future.
Preparing to File Your New Jersey Certificate of Formation
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Now for the main event: the Certificate of Formation. Here’s your opportunity to get your LLC officially on record and authorized to conduct business in New Jersey.
However, we will note that New Jersey has a unique qualification for LLC formations in that they require you to obtain a federal tax ID number (EIN) from the Internal Revenue Service before you file your Certificate of Formation. Other than that, here’s everything that you’ll need:
- LLC name
- Business entity type
- Business purpose
- Duration (if applicable)
- State and date of formation (foreign entities only)
- Registered agent name
- Registered office address
- Principal business address
Not bad at all. The last thing you need to arrange is payment. The Certificate of Formation comes with a $125 filing fee, so have a check or credit card ready when you file.
It’s important to note that there’s another document you’ll need to file right after your Certificate of Formation. This filing is known as the Business Registration Application, and you must file it with the Division of Revenue. This document registers your LLC for state taxes, and you cannot receive your Business Registration Certificate without it. To complete the Business Registration Application, fill it out online here.
New Jersey used to have four different options for filing methods, but the state recently streamlined its business formation services to an entirely web-based process. Here’s how you can file your Certificate of Formation with the New Jersey Division of Revenue and Enterprise Services.
Head over to the business filing portal and click “Get Started.” Follow the instructions and you’ll be finished in no time.
What About Foreign LLCs?
The process outlined above works for domestic LLCs (those formed in New Jersey), but what if your business is expanding to New Jersey from another state? In this case, don’t worry about the Certificate of Formation or the previous instructions.
Instead, you will need to foreign qualify your LLC before doing business in the state. Do this online and don’t forget to file a Business Registration Application at this link. Don’t conduct any business activities before foreign qualifying, or your LLC will face some serious fines and penalties.
But after you’ve successfully submitted your form and received authority from the state, you’re free to kick off your business activities in New Jersey.
Want Help Filing Your Certificate of Formation?
Let’s be honest: you’ve got a lot on your plate. Filing paperwork can take time away from your other tasks, ones more focused on setting your budding LLC up for success.
The good news is that you don’t need to file the Certificate of Formation yourself. But if an attorney is out of your price range, hiring an LLC creation service is a great option.
There’s no shortage of business incorporation services out there, but not all of them are equal. Each one offers different packages, costs, and processing times, so it’s important to find the right fit for your LLC.
While each service has optional upgrades and feature packages, on the most basic level, they will review your business information, prepare your formation documents, and submit them to the Division of Revenue and Enterprise Services. They will complete everything outlined in this guide and notify you when your Certificate of Formation has been filed. You won’t have to lift a finger.
There are other benefits too. Some services will include a year of free registered agent service when you hire them. Other services offer order tracking, notifications on future documents (like annual reports), assistance drafting your operating agreement, or coverage of certain LLC formation costs.
Important Post-Formation Compliance Issues
Once you’ve acquired your EIN, filed your Certificate of Formation, and received your Business Registration Certificate, your LLC is an official business entity in the state of New Jersey. However, this doesn’t mean that your responsibilities have come to an end. There are several other steps you’ll need to take if you want to operate a compliant LLC for years to come.
Set Up a Financial Infrastructure
One other crucial step is to solidify the financial aspects of your LLC, first by opening a business bank account. You must have separate bank accounts for your personal use and for business purposes, as this will help you keep your personal and business assets separate, a vitally important consideration for any entrepreneur. If you commingle these assets, you leave yourself wide open for lawsuits, as it would be easy for someone to claim that your business is simply an extension of your own personality and not a separate entity from you as a person.
The other portion of this step is to set up an accounting system. This can either mean that you hire an accountant to take care of your LLC’s bookkeeping, or you could acquire high-quality accounting software like QuickBooks. Either way, you need a reliable means of keeping detailed records for each financial transaction your LLC executes. This is another vital part of keeping your personal and business assets separated, and it will also be enormously helpful come tax time.
Acquire Licenses and Permits
The next step involves obtaining any industry-specific licenses and permits your LLC may need to operate in compliance with state laws. Depending on the nature of your LLC’s business, you may require several permits or you may be able to operate your LLC with only a New Jersey Business Registration Certificate.
Thankfully, New Jersey makes it very easy to figure out your business’ licensing needs. All you need to do is visit the state’s Licensing & Certification Guide and you’ll find the license and permit applications you require. Make sure to check with your county and locality as well, as there may also be licensing requirements for your business on these levels.
Obtain Business Insurance
This step isn’t a requirement, but it is a strong recommendation. The exact insurance policies your business needs will vary based on the type of products and services you offer, but most LLCs should at least have a general liability insurance policy to protect against common perils like slip-and-fall accidents. In some industries, you might need several different insurance policies to cover all of your financial bases, so do your research ahead of time to determine which types of insurance you should purchase.
File Your Annual Reports
Each year, every LLC in New Jersey must file an annual report. This report includes some basic information about your business and keeps the state updated regarding any important changes to your LLC’s structure. The information you’ll need to file this report typically includes your LLC’s state business ID number, your business entity type (LLC), the date you formed your business, the name and address of your registered agent, your principal business address, your LLC members’ names and addresses, and proof of your workers’ compensation insurance (if you have employees).
Frequently Asked Questions
About Filing the New Jersey LLC Certificate of Formation
How long does it take New Jersey to form an LLC?
Because New Jersey processes all LLC formations online, this state has some of the fastest turnaround times in the nation. In fact, when you submit your Certificate of Formation online, you will receive confirmation immediately and the state will provide you with a certificate that you can print off for your records.
Should I file my own Certificate of Formation, hire an attorney, or use an online service?
This question largely comes down to personal preferences, but we do have some general insights. The DIY route can be quite a bit of work, as you’ll need to complete each step of the formation process on your own with no assistance. As for hiring an attorney, this can be prohibitively expensive for new businesses, as a lawyer can charge hundreds or even thousands of dollars to form your LLC.
You can think of business services companies as a middle ground between these options. While most of these companies charge a fee to form your LLC, that fee will be significantly less expensive than an attorney’s fee. At the same time, you still aren’t going it alone. Instead, you have an experienced professional guiding you through the entire process.
What does New Jersey require for LLC formations other than the Certificate of Formation?
In New Jersey, there are a couple of crucial components of LLC formation in addition to the Certificate of Formation itself. First off, New Jersey is the only state that requires entrepreneurs to acquire a federal tax ID number (EIN) before forming an LLC. Most states don’t require an EIN at all, although we always recommend obtaining one. In addition, New Jersey also requires a Business Registration Application for taxation purposes.
How many small businesses are there in New Jersey?
New Jersey is currently the home to more than 900,000 small businesses. Entrepreneurs in a wide variety of industries find New Jersey to be a great place to conduct business.
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