New Jersey emerges as a strategic hub for establishing a new business venture. The "Garden State" has recently witnessed a significant surge in new enterprises. Its strong economy and real estate market made it the most improved state for businesses last year.
Starting a new LLC in New Jersey is a life-changing decision, and this guide serves as a helpful compass should you choose Jersey as your LLC launchpad.
Essential LLC Steps To Follow
Knowing what to prepare before you start your business-formation journey is crucial. This proactive approach helps you sidestep potential time wasted and prevent delays in forming your LLC.
Step 1: Secure the availability of your LLC name
The swiftest method involves probing the tentative LLC name within the state's Department of Revenue search engine on their website. An alternative route is to scrutinize the business name repository of the State of New Jersey.
If the name is available but you need more time to register it officially, you can secure it by submitting Form UNRR-1, the Application for Name Reservation, and paying a $50 fee. This retains your LLC business name for up to 120 days.
Take note of New Jersey’s policing for naming LLCs:
- Your business name must include "Limited Liability Company," "LLC," or "L.L.C."
- Your chosen LLC name should differ from other already operating businesses within the state.
- Don’t use terms linked to the government.
- Terms like "bank," "lawyer," "attorney," or "credit union" may require additional paperwork and licensing credentials.
Verifying the availability of a URL is also important, even if creating a business website is outside your agenda. Securing a domain name early on is wise to secure your LLC name.
Step 2. Secure the employer's EIN
Before officially registering your LLC in New Jersey, secure your employer identification number (EIN). This number bars single-member LLCs from using the owner's Social Security number (SSN).
Single-member LLCs using EINs keep the business owner’s SSN safe from identity theft and ensure their privacy. You can get this online through the IRS website, which is entirely free. Once you’re done, you will immediately receive your EIN.
Step 3: Choose a registered agent
In New Jersey, your LLC needs a designated registered agent. This individual or entity assumes responsibility for receiving significant documentation, such as state forms or legal papers, on behalf of your enterprise.
You can be your LLC's registered agent by appointment. You can also choose a member within the LLC for this role. The designated member must be at least 18 and have a physical address in New Jersey.
Alternatively, engaging a third party to act as your LLC's registered agent is possible. Costs typically range between $49 and $300 annually, with various firms offering services around an average of $100 annually.
Before committing, understand the services covered—not solely upfront charges but any ongoing responsibilities.
Several complications arise if a process server cannot locate you or your assigned agent. This situation could occur if you or the designated agent is unavailable due to being absent from the office for meetings, going on vacation, or going out of commission due to an illness.
It can also happen if the agent relocates or resigns from their position and you overlook updating the registered agent details with the state.
Failure to maintain a registered agent has legal repercussions. Apart from potential penalties for non-compliance, it could render a process server unable to deliver legal documents in a lawsuit.
This circumstance might lead to legal proceedings without your awareness, denying you the opportunity to defend yourself in court.
Step 4: Prepare an operating agreement
While creating an operating agreement for your New Jersey LLC isn't obligatory, unlike in certain states, it is highly recommended as a crucial step in launching your new business.
Forming an LLC in New Jersey is just the initial phase of defining the dynamics among members and establishing the operational framework for your business.
An operating agreement serves as a proactive tool, defining the managerial framework and specifying the rights and duties of key stakeholders in your New Jersey LLC.
While you’re not required to submit this document to the state, every member must endorse it. Seeking legal counsel is recommended to guarantee its fairness and legitimacy.
Without an LLC operating agreement, all members are assumed to share the profits and obligations of the NJ LLC equally. An operating agreement specifies individual members' interests, delineating their share of profits, which might differ from equal distribution.
Step 5: Get a business license
Specific industries operating as LLCs in New Jersey need to secure a business license before commencing operations in the state. You can confirm whether your industry requires a business license by referring to New Jersey's licensing and certification guide.
Step 5: Complete and submit the Articles of Organization
You must complete a Public Records Filing for New Business Entity form when setting up a new business entity in New Jersey. You need to submit this form before filing your LLC paperwork.
To prepare your certificate, gather the following details:
- Your LLC's name
- The name and address of your registered agent
- A brief statement explaining why you formed the LLC
- Duration: Most LLCs are perpetual (existing indefinitely), but if yours has a specific end date or purpose, note that here
- Dissolution date (if applicable)
- Management structure: Specify if managers or members will oversee the LLC
- The individual establishing the LLC must sign the Articles
After submitting your Certificate of Formation, the Secretary of State will examine it. Once approved, your LLC obtains legal status as a business entity.
You only need to file the initial Certificate of Formation once. If any details from the original Certificate of Formation require updates, modifications, or expansions, you must inform the state about these changes. This involves submitting a New Jersey Certificate of Amendment and remitting the applicable filing fee.
Understand the Process to Launch Your LLC Seamlessly
One of the fastest ways to start your LLC business in New Jersey or other states is to grasp the entire process fully. With this, you’ll know what to prepare and anticipate. You can also assess the timeline to complete each step, maximizing the preparation and application phases. When things are clear, transitioning comes easy.
This article was written in cooperation with LLC University