If you’re looking for a reliable DIY guide for starting an LLC in New Jersey, look no further.
Below you’ll find all the information you need to launch your business and handle any associated costs. Follow each step carefully and your LLC will be established and ready to hit the ground running.
That said, the process can be complex, with various filings and costs, so if at any point you need help, you can hire an LLC creation service.
Need Help Starting Your LLC?If you want to make sure your LLC is formed correctly, hire an LLC service. Below are the top two that will take care of all the legal paperwork:
ZenBusiness – $39: If getting the most value out of an LLC service is your priority, choose ZenBusiness. They charge one of the lowest rates online and include all the most important features when starting a business. IncFile – $0: If you're on a strict budget and prefer using the cheapest LLC service, choose IncFile. They will form an LLC for free (plus state filing fee) and give you great features along the way.
ZenBusiness – $39: If getting the most value out of an LLC service is your priority, choose ZenBusiness. They charge one of the lowest rates online and include all the most important features when starting a business.
IncFile – $0: If you're on a strict budget and prefer using the cheapest LLC service, choose IncFile. They will form an LLC for free (plus state filing fee) and give you great features along the way.
Step 1: Name Your LLC
What’s in a name? Quite a bit, actually. Your business name is your New Jersey LLC’s identity, its personality, its reputation. Find a name that sticks in customers’ minds – while conveying your brand qualities – and you’ve struck gold. A unique, memorable name can draw in new customers and keep existing ones coming back.
Your LLC name is going to appear everywhere: business cards, marketing collateral, websites, legal contracts, bank accounts, invoices, directories, and much more. So be sure that it conveys your product, service, brand, and values.
While you can (and should) be creative with your business name, there are certain state requirements that it must follow.
Any name you choose must include a term that designates its business type, like “Limited Liability Company,” “LLC,” “L.L.C.,” or “Ltd.” Plus, it cannot use any of the state’s restricted or prohibited words, nor can it contain any profanity. On top of all that, it must not already be reserved or registered with the Division of Revenue and Enterprise Services.
If your name is unavailable, you may be wondering how to distinguish it. Before you start making changes, know that the following alterations will not be enough:
- Articles (“a,” “an,” and “the”)
- The words “and,” “or,” and “of”
- Singular vs. plural forms of the same word
In short, you must make significant changes to key words, not just small or syntactic changes, to effectively distinguish your name.
Consider this: your friend Fanny wants to open a flower shop in Trenton, New Jersey. The name she is considering, Flowers by Fanny, LLC is already in use. So she comes up with a new one: Fanny’s Florals and Design, LLC. This name is similar to the original but includes new words, distinguishing it in the Division of Revenue and Enterprise Services’ records.
Determine the Name is Available
Of course, you will only need to make distinguishable changes if your name is already taken. Don’t make the mistake of ordering business cards, creating advertisements, and using a name on documents like the Certificate of Formation without first confirming it’s available. Use the state’s Business Entity Name Search to see if there’s an existing business using your desired name.
Maybe you pegged a distinguishable name right away, or maybe it took some modifications, but either way, once you have a unique name, you can lock it down by filing a name reservation.
Optional: Name Reservation
You may have fallen in love with a particular name, but still have some preparation and paperwork to sort out before starting your LLC, and you’re worried that someone will swipe it in the meantime. To calm your nerves, you can reserve that name in New Jersey for a total of 120 days.
Think about Fanny. After making her name distinguishable, she’s ready to make it official, but if she’s waiting on some paperwork to start her LLC, she can place a hold by filing an Application for Reservation of Name online.
From the online filing portal, click “Start the Filing Process” under “File a Business Name Reservation” and then choose “Form UNRR-1” and you’ll be on your way to claiming that name.
However, if your LLC is ready to go, you’re better off skipping the reservation and using the name on your Certificate of Formation, which will register it automatically.
Step 2: Choose a Registered Agent
Fanny’s LLC is quickly taking shape, and if it’s going to operate in New Jersey, she’ll need a go-between for state and legal communications. This is called the registered agent.
A registered agent is a key component of your budding LLC, handling all of its sensitive communication with the state so you don’t have to. But maintaining an agent isn’t just a convenience, it’s required.
New Jersey Statutes 15A:4-1 says “Every corporation organized under this title and every foreign corporation authorized to conduct activities in this State shall continuously maintain a registered office in this State, and a registered agent having an address identical with the registered office.”
Simply put, the process agent receives communications or documents from the state involving such things as taxes or lawsuits and communicates them to the LLC.
Some may wonder why a New Jersey registered agent is necessary. The importance of the agent is to ensure that someone is always available to receive important documents even if the business owner leaves the office, goes on vacation, or is otherwise away. Also, having a registered agent is especially important if a physical office does not exist in New Jersey.
The owner of the LLC can designate a registered agent on the Certificate of Formation application.
Individual as Registered Agent
You may think that an individual registered agent would need specialized training or experience, but this isn’t the case. Anyone can serve as your registered agent, as long as they are a New Jersey resident, have a physical address in the state (no P.O. boxes), and are at least 18 years old.
Third parties like accountants or attorneys can be good options, but friends and family are also valid. You can even appoint yourself if you meet these requirements and don’t mind taking on the responsibilities.
Registered Agent Service
It can be a lot easier, though, to use an LLC formation service like ZenBusiness (or even IncFile and Northwest Registered Agent), so we highly recommend it. Not only will they take care of business formation requirements, but they’ll also include a free registered agent service. Or, if you’d rather start your LLC in NJ on your own, you can use a national registered agent service to cover your agent duties.
During the life of your LLC you may, at some point, need to change your registered agent. Perhaps you want to switch from an individual to a professional service, or maybe your existing registered agent resigns. Either way, you’ll want to make the change as soon as possible because operating without an agent on file can lead to administrative dissolution.
Step 3: File the Formation Documents with State
This is where the LLC formation process kicks into high gear. Let’s check back in with Fanny.
She’s reserved her unique business name, designated a registered agent, and she’s ready to get her LLC off the ground. It’s time for Fanny to take on the most important LLC document: the Certificate of Formation (also called a Public Record Filing). This filing creates a record for Fanny’s Florals and Design, LLC with the New Jersey Secretary of State, giving it the authorization to commence business in the state.
The Division of Revenue and Enterprise Services is pretty flexible with how you submit your Certificate of Formation. You can file online, by mail, by fax, or in person.
Pay a visit to the state’s business registration portal. Click the orange “Get Started” button, and you’ll be directed through a series of pages, where you’ll enter your LLC information. If you’re short on time, use this method. Your application will be processed as soon as it’s complete.
Complete the hard copy application. When finished, you can send it with your payment to:
New Jersey Department of the Treasury
Division of Revenue & Enterprise Services/Corporate Filing Unit
PO Box 308
Trenton, NJ 08646-0308
If you live near Trenton, you can drop off your finished application at 33 W. State St, 5th Floor Trenton, NJ 08611
Or, you can fax your application to (609) 292-4291. You must accompany it with a cover sheet titled: New Jersey Department of the Treasury Division of Revenue and Enterprise Services Facsimile Filing Service Request. It should include your name, the date, bank account or credit card number, description of service requested, the LLC name, number of pages, and return fax number. Each page will add $1 to the filing fee.
Standard processing time for hard copy filings is 15 days. But you may not have that kind of time. If you’d prefer not to file online (the fastest option), you can request one of two expedited filing options: 8.5 business hours service for $25 or same-day service for $50. Expedited requests must be filed in person or via fax.
Step 4: Create an Operating Agreement
The operating agreement is the framework that holds up an LLC, the vital underpinning that establishes processes for its procedures, activities, and conduct. Essentially, it serves as your company’s bylaws.
There’s no law that requires your LLC to adopt an operating agreement in New Jersey. But that doesn’t mean you shouldn’t create one. Your operating agreement is a framework that facilitates your LLC’s success, giving it stable procedures, legitimacy to banks and courts, and legal protection for your assets. Among all the other LLC formation steps, it might not seem important, but proceeding without one puts your business at a disadvantage.
Let’s say our friend Fanny sells a percentage of her company to two other owners. Her operating agreement could stipulate how the LLC’s assets would be distributed among them in the case of dissolution. But if she decided to maintain sole ownership, the agreement could be used in court as evidence that the LLC’s assets are separate from her personal ones. These are just two examples, but the operating agreement governs everything from member duties to tax structure.
If you’ve decided to draft an agreement, there are two ways to go about it:
- Write it yourself. Don’t be intimidated by this option. There are plenty of free online templates that serve as helpful guides. You can create an effective document from most of the templates out there, but we recommend getting one through ZenBusiness, which includes a free LLC operating agreement with every package. This will save you a lot of time and money.
- Hire an attorney. If you want to be absolutely sure that you don’t miss any important details, an attorney can write or review the agreement for you, ensuring that it complies with state law, includes all necessary information, and avoids the state’s default laws.
What are default laws?
Each state has its own set of generic, baseline laws for how LLCs should operate. These laws, however, only govern matters not included in your operating agreement. Take dissolution, for example. If your LLC ever dissolves, your operating agreement would determine what happens to its remaining assets and debts. But if you fail to include it in the agreement, the state will make that decision for you.
Because default laws are broad and not tailored to your specific business, they often aren’t in your LLC’s best interest, so it’s best to avoid them by being as comprehensive as possible in your agreement.
Step 5: Get an EIN
There’s simply no way to avoid taxes. In fact, it’s illegal to try, so don’t do it.
Federally, LLCs are classified as “pass-through” entities, businesses that don’t file corporate tax returns, but whose owners include income and losses on their individual returns. Still, there are certain circumstances that require LLCs to pay federal taxes, like classifying as a corporation or partnership, hiring employees, or selling merchandise. So, in Fanny’s case, if she plans on hiring additional florists and selling bouquets, she will need to apply for an EIN.
The Employer Identification Number (EIN) is a nine-digit number that the IRS will use to identify your company’s tax accounts, so if you pay any business taxes, it’s extremely important to have one. Click the “Do I need an EIN?” link on this page to see if you fall into this category. If so, apply for an EIN one of three ways:
Need to get this done quick? File online – it’s by far the most efficient method. You can only complete the process between 7 a.m. and 10 p.m. EST, Monday through Friday, but you’ll receive your number immediately upon finishing the digital form. Keep in mind that you will need to provide a valid individual taxpayer number (like a Social Security Number) as part of the process.
You might prefer the feel and security of a paper form. In this case, download Form SS-4, complete it, and fax it to (855) 641-6935. You will receive your EIN within four business days.
Or, there’s always trusty postal mail. However, this is the slowest option, as processing typically takes around four weeks. If that doesn’t deter you, fill out Form SS-4 and send it to:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
Okay, so you’ve filed the Certificate of Formation, designated a registered agent, adopted an operating agreement, and filed for an EIN. Time to start doing business, right? Sorry, there are a couple of additional steps you may need to take first. But don’t worry, you’re almost there!
Step 6: Taxes, Licensing & Income Reporting
For all intents and purposes, most LLCs will be official after completing all the prior steps. Still, it’s important for business owners like Fanny to keep looking ahead, as there are certain maintenance requirements to keep a New Jersey LLC running smoothly and in good standing with the state.
Before you start doing business, create a plan for the following potential LLC requirements:
As mentioned earlier, LLCs are almost always classified as “pass-through” entities, which means that they don’t pay income taxes directly to the federal government. That responsibility falls instead on the owners, who must include business income and losses on their personal 1040 tax returns and/or Schedule C. LLCs are flexible with tax structure, so you can choose to have yours taxed like a corporation instead. In this case, it would need to file a separate corporate tax return.
Like federal income taxes, state ones also “pass-through” to owners’ personal tax returns (unless the LLC adopts a corporation tax structure). And unlike some other states, New Jersey doesn’t impose a franchise or privilege tax on its LLCs. So, your state tax situation is looking pretty good! But you’re not quite in the clear yet.
Your LLC may owe specific business-related taxes if it meets certain conditions. Do you sell any merchandise? If so, your LLC will owe a Sales Tax and Use Tax through the Division of Taxation. Have any employees? Then you will be responsible for a Withholding Tax through the Division of Taxation and an Unemployment Insurance Tax through the Department of Labor and Workforce Development.
Plus, depending on your LLC’s location, it may owe a local tax to its city, municipality, or county. Consult your local government’s website to find out.
The Certificate of Formation may have already made your business legitimate, but your LLC might still need to obtain a license before doing business. This all depends, however, on the type of business you run.
Take our friend Fanny, for example, who may need a Nursery Certificate from the Division of Plant Industry before starting her flower shop. And if she wanted to serve snacks to her customers, she may need additional licensure from the Department of Health. To find out which licenses/permits your business needs, check out the NJ License & Certification Guide and the the Licensing Boards and Committees page.
Certain cities and counties require their own specific licenses on top of any state ones. Contact your local government for more information.
Once you’ve taken all the steps to start your LLC, you’ll be off and running, making deals and growing the company. But when things are moving 100 miles per hour, don’t forget that new Jersey requires all of its businesses to submit one important recurring filing: the Annual Report.
Each year, your LLC must file an Annual Report by the last day of its anniversary month. It costs $50 and you must file it online. The state will mail you a reminder three months prior to your Annual Report due date. But if you need multiple notices, you can also receive them via email and/or text through the gov2go service.
Missing Annual Report can have severe penalties. Miss two in a row and the state will administratively dissolve your LLC, so don’t forget!
And we’ve come to the end. It’s a long process, and not always easy, but the reward is well worth it. If you’ve made it this far, congratulations! Your New Jersey LLC is ready for takeoff. So go ahead and start with that big sale, promotional campaign, or business deal. Maybe you’ll see Fanny out there in the business world, selling her beautiful floral creations.
Need Help Creating Your LLC?
If you even skimmed this guide to look over the steps, you likely got a sense of how many moving parts there are when starting an LLC. Can you do it all yourself? Absolutely. We have complete confidence in you.
But if you’d rather hand it off to someone else and not have to worry about it again, we recommend using an LLC creation service. This way, you can go about your other business responsibilities with the confidence that everything will be submitted correctly and punctually.
Plus, an LLC formation service can handle maintenance items like Annual Reports, so you can take them off your to-do list. And on top of that, many services also provide a registered agent.