Quick facts about forming an LLC in New Jersey
| Item | Details |
|---|---|
| State filing fee (Certificate of Formation) | $100 |
| Online card processing fee | $3.50 |
| Processing Time | Online filings are usually processed quickly; expedited processing is available |
| Annual Report Fee | $75 (plus a $3 card processing fee online), due by the end of your LLC’s anniversary month each year |
| Registered Agent Required | Yes, with a New Jersey street address |
| State Franchise Tax | None for LLCs, but NJ imposes a minimum business tax for corporations only. LLCs taxed as partnerships with more than two owners pay a $150-per-owner partnership filing fee. |
| Business License | No statewide license, but most municipalities require local business registration |
| Managing Authority | New Jersey Division of Revenue and Enterprise Services |
How to start a New Jersey LLC in 6 steps
Establishing an LLC in New Jersey may help owners have limited personal liability for their business debt, even if they’re part of the company’s management. And, according to IRS rules, LLCs may be able to choose between corporation or partnership taxation methods.
It’s up to you whether you want to create an LLC for your business, and it can help to think about your business goals and objectives, and funding options such as New Jersey small business grants, before making this decision. If you want more information to help you make that decision, you can read our in-depth guide on how to start an LLC.
Here are the 6 steps to take to start an LLC in NJ:
- Name your New Jersey LLC
- Choose a registered agent
- File a certificate of formation
- Create an operating agreement
- Apply for an EIN
- Registering for New Jersey tax and employer purposes
Step 1: Name your NJ LLC
To create an LLC in the state, you have to have a name that can be registered under the state’s laws. Picking the name for your LLC may mean choosing something different from what you are currently using. New Jersey law requires that the business name is different from any other business entity in the state. That means you need to ensure your business name does not match any other name listed with the Division of Revenue.
You need to search New Jersey’s business name database to do this. It is very simple to use. Go to the website, type in your business name or desired LLC name, and click “search.” It then provides you with information whether the name you selected is available. If it is, you can proceed with the process.
You need to consider a few rules under New Jersey law before creating your name. First, your LLC’s name must include “Limited Liability Company,” “L.L.C.” or “LLC” (“Limited” can be shortened to “Ltd.” and “Company” to “Co.”) and must be distinguishable from other names on file (N.J.S.A. 42:2C-8). That may be in forms such as:
- Limited Liability Company
- LLC
- Ltd. Liability Company
- Limited Liability Co.
Also, words restricted by other New Jersey laws, such as “bank” or “insurance,” need approval from the relevant regulator. You can reserve a name for 120 days for $50. If you want to do business under a different name, you can register an alternate name (DBA) with the state.
Step 2: Choose a registered agent
A New Jersey registered agent is a company or person who agrees to accept legal mail for your LLC in situations in which the business is sued. Sometimes, this legal mail is called a service of process. Additionally, the Division of Revenue will also use the registered agent as the point of contact for any notices it sends to your company. They will help with handling all of your legal and tax documentation. They aim to keep your business in good standing with the state.
Under the state’s laws, the registered agent is either an individual or a business entity. If it is an individual, that party must be a resident of New Jersey with a physical address in the state. If you hire a registered agent service, that organization must be authorized to do business in New Jersey. Verify this if you choose to go this route.
Once you select one and add it to your Certificate of Formation, the registered agent’s information becomes a part of your legal public record for the LLC. For those selecting to go the individual route, the registered agent may be a person from the LLC, such as a member of it or a manager. If you do this, keep in mind that you must provide your address as a component of this, and the address will be listed on your public record for your business, meaning anyone can locate it. A P.O. box can’t be used as the registered office address.
To become a registered agent in New Jersey, there are three main requirements. Those include:
- Be a New Jersey resident, or a business authorized to do business in New Jersey
- Have a New Jersey street address (you can add a P.O. box, but not instead of a street address)
- Be listed by name and address in your certificate of formation
Professional registered agent services generally cost $50–$300 per year. Tailor Brands’ registered agent service is $199 per year.
Step 3: File certificate of formation
In New Jersey, the formation document is called the Certificate of Formation (filed as a Public Records Filing with the Division of Revenue and Enterprise Services). It allows you to get the LLC officially listed and authorized by the state as a business. With this, you are then allowed to conduct business in the state as an LLC.
State fees
You may be wondering, how much does an LLC cost in NJ? You’ll pay a $100 state filing fee, plus a $3.50 online card processing fee ($103.50 total). Local business licenses can add to your startup costs.
Requirements
The information that you will need to file your certificate of formation includes:
- Business name and entity type
- Registered Agent information (including email address to receive Registered Agent notifications)
- Good Standing Certificate from your home state (only for foreign entities)
- Credit Card or eCheck
Once your LLC is formed, you’ll also need to keep it in good standing by filing your New Jersey annual report each year. The annual report confirms your LLC’s address, registered agent, and members or managers, and is filed online with the Division of Revenue and Enterprise Services by the end of your anniversary month.
How to file
To complete the Certificate of Formation, you will need to gather key information. Then, you’ll need to visit the Business Registration website for the state of New Jersey to complete the online process. You will need your LLC name, the type of entity it will be (LLC), the purpose of the business, its duration, if applicable, and the registered agent information (more on that later). It also will ask for the business’s principal operating address.
The website is very easy to use. Simply complete each step by selecting an answer to the questions provided. The state encourages this to be done online. You can also file by mail (PO Box 308, Trenton, NJ 08646) or over the counter at 33 West State Street, 5th Floor, Trenton, where expedited service is available. Call DORES at 609-292-9292 with questions.
You can find more filing information and contact details on the NJ Treasury website.
Step 4: Create an operating agreement
An operating agreement is a valuable tool for most businesses. It is especially important as you work to build your business and gain credibility. Here’s what you need to know about it.
New Jersey doesn’t require a written New Jersey LLC operating agreement, and you don’t file one with the state. Under N.J.S.A. 42:2C-2, an operating agreement can be oral, implied, written, or a combination. Some states, such as New York, require a written one. Nevertheless, it is one of the most important tools you have in organizing your business.
While an operating agreement is important for all LLCs, it is essential for multiple-member LLCs to clearly outline the ownership structure. Some of the components that should be a part of the operating agreement include the following:
- Organization: The operating agreement should outline when the LLC was formed and list its members. It should also describe the ownership if it is divided. If there is division among members, how is it divided? For example, is there equal ownership among members? Do certain parties own certain units?
- Member Contributions: The operating agreement should outline any capital contributions each of the members made into the LLC. This should also list the business’s goals and expectations when seeking additional capital, such as if it aims to raise money in the future, where and how would that happen?
- Management: The operating agreement should describe how the business is managed. Is it managed by its members? Is there one person who is appointed as the manager?
- Voting: Outline the voting rights on business matters. Does each member get one vote? That’s common, but in some situations, you may wish to give more than one vote to some members to give them more power over others.
- Distributions: Use this document to outline the profits and losses and how they will be divided among members. Most of the time, profits divisions are equal among all members. However, if that is not the case, describe the process.
- Membership Changes: How does the membership of the LLC change over time? Can ownership or roles within the business transfer to anyone? What if someone leaves? How will that position be filled? Discuss how members are bought out.
- Dissolution: The operating agreement should outline the details for dissolving the LLC should that become necessary in the future. How would that occur and under what conditions?
Step 5: Apply for an EIN
Once your operating agreement is set up, you’re ready to obtain an employer identification number (EIN). This is done through the U.S. federal government, and it takes very little time to complete. First, you will need to work through these steps to complete the process online.
- Determine if you are eligible: To apply for an EIN, you must have a principal business that is located in the U.S. or in the U.S. Territories.
- Valid Taxpayer ID: The person applying on behalf of the LLC must have a valid Taxpayer Identification Number. This may include a Social Security number or an EIN.
- Limitations: It is only possible to create one EIN per responsible party each day. The IRS states that a responsible person is the individual who owns or controls the business and exercises the ultimate effective control over the business. The responsible person must be an individual and cannot be another business.
You’ll need your EIN to register your LLC for New Jersey taxes, because your New Jersey tax ID is based on it.
Step 6: Registering for New Jersey tax and employer purposes
New Jersey has very specific steps to take to register your business. It makes it clear that all businesses must register for state taxes, which is done separately from filing your business formation documents.
This registration is done through the New Jersey Department of the Treasury’s Division of Revenue and Enterprise Services (DORES). The registration process allows DORES to collect the necessary information to determine the taxes the business owes and any employer contributions necessary and responsible for by the business owner.
Failing to complete this step is not advisable. It can lead to penalties and fees for taxes owed, even if you pay your taxes with what you think you should.
During the process of registering with DORES, businesses need to provide some specific information. This may include:
- Your 10-digit Business Entity ID from your formation filing
- The NAICS Code, which is a six-digit number that is used to classify your business by the industry in which it operates in the U.S.
- Sales tax collection information (this includes information about how you plan to pay your taxes, such as if you are using accounting software or systems to facilitate the process)
- Date of first payroll withholding if that applies in your situation
- Business location and mailing address info
Once you complete the DORES registration, you’ll receive a Business Registration Certificate and, if you register for sales tax, a Certificate of Authority to collect sales tax. Your New Jersey tax ID is usually your EIN followed by a three-digit suffix, making a 12-digit number that identifies your business when you pay taxes. Registration is free. Complete it within 60 days of forming your LLC.
Depending on your city and industry, you may also need local licenses and permits.
FAQ
The New Jersey state fee to file a certificate of formation is $100, plus a $3.50 online card processing fee ($103.50 total).
Online filings are usually processed quickly. For filings submitted over the counter or by fax, expedited service costs $25 (within 8.5 business hours), $50 (same day), $500 (two hours) or $1,000 (one hour).
Yes, every New Jersey LLC must appoint a registered agent with a New Jersey street address.
New Jersey doesn’t require a written operating agreement. It can be oral, implied or written, but a written agreement is recommended to set out management and ownership.
Yes, LLCs must file an annual report and pay the $75 fee each year, due by the end of the LLC’s anniversary month.
New Jersey does not charge a franchise tax for LLCs, but corporations do have a minimum business tax.
New Jersey does not issue a statewide business license, but most municipalities require local business registration or permits.
Yes, all LLCs must complete Business Registration with the Division of Revenue, even if no employees are hired.
To close a New Jersey LLC, you file a Certificate of Cancellation with the Division of Revenue and Enterprise Services. The state fee is $100.
