NJ LLC Formation: 7 Steps You Need to Complete.
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Key Takeaways.
- Choose a Name for Your NJ LLC: Ensure your LLC name complies with NJ naming requirements and is distinguishable from existing businesses.
- File the Certificate of Formation: Submit the required documents and filing fee to officially establish your NJ LLC with the state.
- Obtain an Employer Identification Number (EIN): Secure an EIN from the IRS to facilitate tax filing, banking, and other business functions.
- Register with the NJ Division of Revenue: Complete state registration to ensure compliance with tax and business regulations.
- Draft an Operating Agreement: Define ownership, management, and operational guidelines to protect your LLC and its members.
A NJ Limited Liability Company (LLC) is a legal entity created under NJ state law that can help protect your personal assets from business liabilities and in certain circumstances minimize taxes.
For NJ LLC formation, you’ll need to file a Certificate of Formation with the State of New Jersey, obtain an Employer Identification number (EIN) for the new LLC from the IRS, register the formation and EIN with the NJ Division of Revenue, and finally you’ll also need to create an Operating Agreement. (An Operating Agreement outlines how your LLC will be run and sets forth the rights and responsibilities of each member.) Once you’ve completed these steps, you’ll be able to obtain a bank account, a NJ business license and start doing business in the state.
If you’re thinking about forming a NJ LLC, there are a few things you should know about the process. Here’s the seven things you need to know about NJ LLC formation:
#1 Choose a Name Before NJ LLC Formation.
The first step in NJ LLC formation is choosing a name for your new business. The name of your NJ LLC must include the phrase “Limited Liability Company” or one of its abbreviations (“LLC” or “L.L.C.”). You can also use certain variations of these phrases in your NJ LLC’s name, as long as it’s clear that your business is an LLC.
Your NJ LLC’s name must be distinguishable from the names of other businesses registered with the State of New Jersey. This means that you’ll need to check the state’s business entity database to make sure that no other NJ LLC has already registered the name you’ve chosen. If the name you want is available, you can reserve it for 120 days by filing a Name Reservation Request with the New Jersey Division of Revenue. However, I usually do not recommend reserving the name prior to NJ LLC formation, as it is more efficient to simply alter the name slightly on the day upon which you want to form your New Jersey LLC.
#2 Filing the Certificate of Formation.
The next step in NJ LLC formation is to file a Certificate of Formation with the State of NJ. (In other states the Certificate of Formation is also sometimes called the Articles of Organization or the Articles of Formation.) The Certificate of Formation is the document that officially forms your NJ LLC (think of it as your NJ LLC’s birth certificate). This document must include the name and address of your LLC, the names and addresses of your LLC’s organizers, and the LLC’s purpose.
Who should be the registered agent for your NJ LLC formation? The State of NJ requires a name and address to communicate with the LLC. If you want to form an LLC in New Jersey, you’ll need to appoint a registered agent. A registered agent is an individual or business that agrees to accept legal papers on behalf of your LLC. This person must have a physical address in New Jersey and be available during normal business hours.
You can appoint yourself as the registered agent for your NJ LLC. However, many people choose to appoint a professional service because it can provide additional protection from liability and confidentiality. (There is no 100% way to keep the owners secret, because NJ requires you list the name and addresses of the owners, however only the certificate of formation is the public document which reflects the registered agent name and address. So if you want to increase confidentiality you can hire a registered agent service to receive the mail and be the public address of the business.)
The LLC Business Purpose for NJ LLC Formation: Usually for LLC purpose you will want to list the the main purpose of your business PLUS that you can do any work permitted by the State of New Jersey…. Like the below:
“THE PURPOSE OF THE LIMITED LIABILITY COMPANY IS TO ENGAGE IN: I) PROVIDING _________________ SERVICES; AND II) ANY LAWFUL ACTIVITY FOR WHICH A LIMITED LIABILITY COMPANY MAY BE ORGANIZED IN THIS STATE.”
You can file your Certificate of Formation online, by mail, or in person at the NJ Division of Revenue. To file your NJ LLC’s Certificate of Formation, you’ll need to submit it to the New Jersey Division of Revenue along with the filing fee, which is currently $125. You can file your Certificate of Formation online, by mail, or in person. The easiest and quickest method is via the online system. Once you’re logged in, you’ll be able to fill out the Certificate of Formation and submit it electronically. (If you have all of your information at hand it should take you 45-60 minutes to file and then instantly download your filed NJ Certificate of Formation for your LLC.)
When you receive the filed Certificate of Formation, take note of the NJ identification number assigned to your NJ LLC. (Please note this number is specific to NJ and is NOT the same number as your EIN (which is explained below and received from the IRS).
#3 Obtain an Employer Identification Number (EIN).
The next step in NJ LLC formation is to obtain an Employer Identification Number (EIN) for your NJ LLC from the IRS.
You’ll need this number to open a business bank account and to file your LLC’s taxes. (Where the NJ Certificate of Formation acts as your LLC’s birth certificate, think of the EIN as the social security number for your LLC.) This is a nine-digit number that is used to identify your business for tax purposes. You can apply for your NJ LLC’s EIN online, by fax, or by mail. If you have a Social Security Number, the easiest way to get your NJ LLC’s EIN is to apply for it online. Be advised that you (or the actual owner) will be required to enter their personal information (accurate name, address social security number (or TIN)). The entire process takes about 15 minutes and you’ll be able to download and print out your NJ LLC’s EIN confirmation notice immediately.
One caveat here… Every once in a while the online system denies the online EIN application and specifies an error and that the application cannot be processed. This usually happens when the applicant’s social security number or address is not as it is listed in the IRS’s database. To remedy the issue a letter must be written to the IRS with a signed copy of the SS-4 form and 99% of the time the IRS (after receiving that letter) will provide a EIN number. (However, the downside is that it usually takes 45-60 days to obtain the EIN this way, and recall that you cannot open a bank account until you have received the EIN (so that can be a HUGE concern)).
#4 Register Your NJ LLC Formation & Employer Identification Number (EIN) with NJ Division of Revenue.
After you have received your LLC’s EIN, The next step in NJ LLC formation is to register both your formation and your EIN with the New Jersey Division of Revenue. Again, you can register online, by mail, or in person. Registering requires answering many very specific questions about the business of the entity. Once this is done, you should keep a screen shot or picture of the proof of registering. (The NJ DOR does not mail out any correspondence to confirm that a business has registered, so the only way to know for sure that your LLC is properly registered with the NJ DOR is to keep this screenshot or picture.)
#5 Draft an Operating Agreement.
The NJ LLC Operating Agreement is an important document for your NJ LLC. It sets forth the rules and regulations for the management of your NJ LLC and establishes the relationships between the members (i.e. owners) of your NJ LLC. Without an Operating Agreement, your NJ LLC will be governed by the default rules set forth in the New Jersey Limited Liability Company Act and you do not want that (especially if you have more than one owner of the LLC).
An Operating Agreement can be as simple or as complex as you want it to be. Just make sure that you tailor the agreement to fit the specific needs of your NJ LLC. Some of the things that you may want to include in your NJ LLC Operating Agreement are:
- The name, address, and contact information of your NJ LLC.
- The names, addresses, and contact information of the members (i.e. owners) of your NJ LLC.
- The percentage ownership interest of each member in your NJ LLC.
- The management structure of your NJ LLC (e.g. whether it will be managed by one member or by all members).
- The roles and responsibilities of the members and managers of your NJ LLC.
- The decision making process for your NJ LLC (e.g. what kind of majority is required to make decisions) .
- The procedures for admitting new members to your NJ LLC.
- The procedures for removing members from your NJ LLC.
- The buy-sell provisions of your NJ LLC (i.e. what will happen if a member wants to sell their interest in the NJ LLC).
- The dissolution provisions of your NJ LLC (i.e. what will happen if the NJ LLC wants to dissolve).
It is important to note that the Operating Agreement is a flexible document and can be modified at any time by the members of the NJ LLC (if they all agree and are on good terms). However, it is always best to have an Operating Agreement in place from the beginning so that everyone is on the same page regarding the management and operation of the NJ LLC before any conflict between owners can arise.
#6 Open a Business Bank Account.
The next step is to open a business bank account for your NJ LLC. You’ll need your NJ LLC’s Employer Identification Number (EIN) to open the account. Most banks will require that you come in person to open the account and will ask to see your NJ Certificate of Formation, your EIN certificate, and your NJ LLC Operating Agreement. When you have all of the required documents, just go to your chosen bank and they’ll take care of the rest. Once you have opened the account, be sure to keep good records of all deposits and withdrawals.
#7 Get a Business License or Permit (if necessary).
The final step in the initial NJ LLC formation is obtaining all necessary business licenses. If you plan on doing business in New Jersey, you may need to obtain one or more business licenses or permits from the state or local government. The type of business you are operating will determine which licenses and permits you need to obtain. For example, if you are selling food products, you will need to obtain a permit from the NJ Department of Health. If you are selling alcohol, you will need to obtain a liquor license from the NJ Division of Alcoholic Beverage Control. The best way to find out which licenses and permits you need is to contact your New Jersey attorney.
Next Steps.
If you complete the above, you have completed the basics of NJ LLC formation. The next steps can include the following; leasing space from a landlord for your business, hiring employees, engaging independent contractors, and contracting with your clients!
Frequently Asked Questions.
Q: How long does NJ LLC Formation take?
A: If filing online, the Certificate of Formation is typically processed immediately. Filing by mail can take several weeks.
Q: Do I need a registered agent for NJ LLC Formation?
A: Yes, every NJ LLC must designate a registered agent with a physical address in New Jersey to receive legal documents on behalf of the business.
Q: What is the cost of NJ LLC Formation?
A: The state filing fee for a Certificate of Formation is currently $125 (+$3.50 for using CC). Additional fees may apply for name reservations or registered agent services.
Q: Is an Operating Agreement required for NJ LLC Formation?
A: While New Jersey does not legally require an Operating Agreement, having one is strongly recommended to establish clear rules for ownership, management, and dispute resolution.
Q: Can a single person complete NJ LLC Formation?
A: Yes, New Jersey allows single-member LLCs, which provide liability protection and flexibility similar to multi-member LLCs.
Q: Do I need to renew my NJ LLC annually?
A: Yes, NJ LLCs must file an annual report with the state and pay a $75 fee to remain in good standing.
Q: Can I use a PO Box as my business address for NJ LLC Formation?
A: No, the registered agent must have a physical street address in New Jersey. However, the business mailing address can be a PO Box.
Q: Do I need a business license after NJ LLC Formation?
A: Depending on your industry and location, you may need state or local licenses or permits to legally conduct business in New Jersey.
Q: What taxes apply after NJ LLC Formation?
A: NJ LLCs may be subject to state business taxes, sales tax, and employer taxes, depending on their structure and operations. Single-member LLCs typically report income on their personal tax returns, while multi-member LLCs may need to file partnership tax returns.
Q: How do I open a business bank account after NJ LLC Formation?
A: You will need your LLC’s Certificate of Formation, EIN from the IRS, and an Operating Agreement (if applicable). Most banks require the account holder to visit a branch in person.
Conclusion.
NJ LLC Formation is a straightforward process that provides business owners with liability protection, tax advantages, and operational flexibility. By following the necessary steps—choosing a business name, filing the Certificate of Formation, obtaining an EIN, registering with the NJ Division of Revenue, and drafting an Operating Agreement—you can establish a strong legal foundation for your business. (It is not difficult, but time consuming to do properly.)
While the process can be completed independently, seeking legal guidance ensures compliance with state requirements and helps you avoid costly mistakes. Whether you’re starting a small business or expanding an existing one, proper NJ LLC Formation sets the stage for long-term success
John M. Shari is a seasoned business and real estate attorney with over 20 years of experience. As the founder of Law Offices of John M. Shari, LLC, he represents clients in complex real estate transactions, commercial leasing, business acquisitions, private placements, secured financing, and entity formations. His background includes serving as Lead Acquisitions Counsel at Diamond Communications and practicing at respected law firms, where he honed his skills in structuring and negotiating high-value deals. John is committed to providing legal guidance tailored to each client’s needs.