Whether you’re a New Jersey resident or coming from out of state, starting an LLC in New Jersey is a smart move.
New Jersey’s close proximity to New York provides access to big-city opportunities without the sky-high cost of living. Plus, the state is attracting more residents, boosting the local talent pool and customer base. Forming an LLC in New Jersey positions your business to serve this growing market while giving you personal liability protection and simplifying your taxes.
Ready to take the first step? Let’s dive into how you can start your LLC in New Jersey!
Steps to Create an LLC in New Jersey:
- Step 1. Pick a Name for Your New Jersey LLC
- Step 2. Appoint a Registered Agent
- Step 3. Draft and Submit the Certificate of Formation
- Step 4. Get a Certificate of Formation Copy from the State
- Step 5. Create an LLC Operating Agreement
- Step 6. Get an Employer Identification Number (EIN)
- Costs to Set Up an LLC in New Jersey
- Further Steps
Step 1. Pick a Name for Your New Jersey LLC
LLC formation in NJ begins with name selection.
Business naming is full of creative ideas and marketing concerns, but you must also mind the legal requirements.
Generally, the name of your New Jersey LLC must be different from other businesses. You want to avoid anything too similar to existing companies.
Your LLC name must also include Limited Liability Company, LLC, or a similar abbreviation. People need to know they are doing business with an LLC.
All New Jersey LLC names must avoid:
- Terms related to government agencies, like the FBI, IRS, or Treasury
- Restricted words such as bank, trust, or insurance, unless you have the required permission
- Other prohibited names with obscenities or criminal activities
New Jersey has two tools to help you pick a name. The Business Name Search on the NJ Secretary of State’s website that lists existing business names. The Business Name Availability helps determine if a specific name is available for your use.
Step 2. Appoint a Registered Agent
In New Jersey, an LLC is required to have a registered agent. Here are the requirements:
- Must be either an individual resident of New Jersey or a business entity authorized to do business in the state.
- Must have a physical street address in New Jersey. P.O. Box addresses are not acceptable.
- Must be available during normal business hours to receive legal documents, service of process, and official state communications on behalf of the LLC.
- Must consent to their appointment. This means they must agree to serve as the registered agent for the LLC.
These requirements ensure that there is a reliable point of contact within the state for legal and official communications.
If you don’t want to be your own registered agent, you can hire one for about $89-$175/year in New Jersey.
Step 3: Draft and Submit the Certificate of Formation
When you’re ready to get down to business, it’s time to file your Certificate of Formation. This exciting step is what legally forms your LLC. Other states call it the articles of organization.
To tackle this monumental task, submit a Public Records Filing for New Business Entity to the New Jersey Division of Revenue. Corporations and limited partnerships use this form too. So to form an LLC, you will skip over some fields.
You can complete and submit this form online, by mail, or by fax. Online filing is done through New Jersey’s Online Business Formation portal:
You will need to provide the following information:
- LLC’s name (must be unique)
- Name and address of each LLC organizer
- Street address of the New Jersey registered office
- Street address of the principal place of business
- Name and address of the registered agent
- LLC duration (perpetual unless you provide a different period)
Step 4: Get a Certificate of Formation Copy from the State
After New Jersey approves your LLC formation, you’ll get a Certificate of Formation. This is also called a Certificate of Authority for foreign (out-of-state) businesses.
This is an important document that you want to keep with your business records.
It also provides your Entity ID, a 10-digit number used in New Jersey to identify your business records. These records are public information. They are separate from your confidential tax records.
Step 5: Create an LLC Operating Agreement
An operating agreement governs the LLC. It’s an internal contract between members that lays out a lot of details about how the LLC functions and handles situations. It should be signed and dated upon forming the LLC.
An operating agreement also establishes:
- The rights and duties of members and managers
- Ownership percentages and contributions
- Activities of the LLC, including distribution of profits or losses
- Ways to add or remove members
- Method for dissolving the LLC
- Procedure for handling various disputes
A well-drafted agreement serves as the primary set of rules for your LLC. Your LLC will use New Jersey law when the operating agreement doesn’t address an issue. It’s also possible New Jersey law will override the operating agreement in certain circumstances.
Step 6: Get an Employer Identification Number (EIN)
While obtaining an EIN from the IRS is free and straightforward, it is not mandatory for single-member LLCs without employees. However, having an EIN can be beneficial for banking and other business purposes.
You can get an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). New Jersey requires you to provide this detail when forming your LLC.
An EIN is the business equivalent of a Social Security number. It is necessary to hire employees and handle certain taxes.
The application process is free and straightforward. You can get an EIN online in minutes.