ZenBusiness is our top recommended business formation service for its affordability, quick turnaround time, and seamless formation process. Sign up today and create your LLC for as little as $49 plus state fees.
A sole proprietorship makes sense for most business owners. If nothing else, starting a sole proprietorship is less expensive and more straightforward, and you don’t have to register a business name in some cases. However, there comes a time when the benefits of starting an LLC far outweigh operating as a sole proprietor.
An LLC allows you to enjoy personal liability protection, lets you onboard business partners, and you can choose how you would like to be taxed. Furthermore, an LLC is easier to form and operate than a corporation. This guide covers all the steps you need to take to create a Limited Liability Company (LLC) in New Jersey.
The Best LLC Services For Starting an LLC in New Jersey
Enlisting the help of a professional LLC service will help you avoid making filing errors, save you time, and provide access to a registered agent and other critical business tools and documents. We did our research and created an exhaustive review post discussing the best services for forming an LLC, which include:
- ZenBusiness — Best overall
- Incfile — Best for entrepreneurs on a tight budget
- Rocket Lawyer — Best legal consultation services for LLCs
- LegalZoom — Most popular LLC services
- LegalNature — Best for LLC documents and contracts
- MyCompanyWorks — Best same-day processing
- Swyft Filings — Best customer service
Start an LLC in New Jersey in 9 Simple Steps
Starting an LLC in New Jersey doesn’t have to be confusing if you know all the steps. If you’re ready to leap, here’s what you’ll need to do:
- Fill Out The ZenBusiness Questionnaire
- Name Your LLC
- Reserve Your Business Name (Optional)
- Appoint A Registered Agent
- Register An Employee Identification Number (EIN)
- File The New Jersey Certificate Of Formation
- Create An Operating Agreement
- Obtain A Business License
- Open A Business Bank Account
Although we tested more than a dozen LLC services, we recommend ZenBusiness as the top choice for most people. ZenBusiness has some of the lowest prices in the industry, coupled with unrivaled customer service. Furthermore, ZenBusiness offers numerous additional services, including business documents and templates, tax and accounting services, worry-free compliance, business funding, and more. Sign up today and create your LLC for as little as $49 plus state fees.
Here’s how to start an LLC in nine easy steps:
Step 1: Fill Out The ZenBusiness Questionnaire
Signing up for ZenBusiness during this step takes care of the rest of the process. We’ll still cover the subsequent steps to form an LLC in New Jersey if you want to go at it on your own. It’s also good to know what to expect when using a filing service like ZenBusiness.
Regardless, you won’t have to pay anything until the very last step, when you’re ready to let ZenBusiness handle the filing process for you. Simply visit the ZenBusiness website and click Start Now to fill out the questionnaire.
You’ll be redirected to the ZenBusiness questionnaire. Again, you don’t have to pay quite yet. The questionnaire will help the filing service assess your needs before coming up with an individualized quote for the services you might need.
Step 2: Name Your LLC
Unlike operating a sole proprietorship, you have to register a business name for your LLC. The business name has to be unique. That means that the name can’t already be registered in New Jersey. You’ll also need to comply with New Jersey naming requirements, including:
- The business name must include the words Limited Liability Company or the abbreviation L.L.C, or LLC
- A unique business name not registered with the NJ Division of Revenue
- You may require special permission to use words such as “insurance” or “bank”
- The business name shouldn’t contain words used by government agencies such as CIA, FBI, or State Department
You can visit the New Jersey Division of Revenue website to see the full list of naming requirements. The agency also provides a business name search tool to check if your desired name is taken.
Finally, ZenBusiness will perform the name search on your behalf if you opt to use its filing service. You’ll also get a basic name search while filling out the ZenBusiness questionnaire. The filing service will perform a more comprehensive name search later when you commit to the service.
It’s worth noting that the Department of Revenue search doesn’t guarantee trademark compliance. So again, you’ll have to ensure that your business name isn’t trademarked. It’s another good reason to use a filing service. ZenBusiness will ensure that your business name isn’t trademarked or copyrighted.
Step 3: Reserve Your Business Name (Optional)
Depending on your route, it might take time before your LLC is officially formed. So, you might want to reserve the business name in case it’s taken while you file your paperwork. You can book your business name with the State Treasurer’s Office.
Simply fill out the Application for Reservation of Name form and mail it to:
NJ Division of Revenue, PO Box 308, Trenton, NJ 08646
The Division of Revenue charges a $50 fee to reserve your business name for up to 120 days. You’ll have to write a check payable to TREASURER, STATE OF NEW JERSEY. Unfortunately, the agency does not accept cash payments.
Similarly, it’s also worth searching and reserving a domain name. It’s nearly impossible to run a successful business without a web presence. Ideally, your website URL should match your business name. So check if the domain name is available and reserve it.
Goddady lets you search your domain name for free. You can also purchase or reserve the name until you’re ready to set up your business website.
Step 4: Appoint a Registered Agent
Simply, a registered agent is the contact person between your LLC and the government. The agent is responsible for receiving legal documents on behalf of the company, including legal, tax, and government correspondence.
New Jersey has specific requirements for a registered agent. For example, the agent must:
- Have a physical address (not a P.O. Box)
- The agent must be available at the physical address during standard business hours
- Relay essential messages to the company owners promptly
New Jersey allows you to designate yourself or an employee as the company’s registered agent. However, this move could present some problems. For example, the agent must be available during business hours, which rules out vacations or other time off from the office.
Additionally, the agent receives service of process documents in case your company is sued. This situation means that you or an employee might be served legal documents in front of an esteemed client or partner.
Furthermore, the registered agent’s physical address is a public record. That means anyone can find your home or business address with a quick search with the Division of Revenue.
ZenBusiness offers professional registered agent services as part of the filing process. The company charges $199, subject to annual renewal. You can opt-in to the registered agent service while you fill out the ZenBusiness questionnaire.
Lastly, ZenBusiness doesn’t charge for the registered agent service upfront. Instead, you’ll be billed after the company is successfully formed.
Step 5: Register an Employee Identification Number (EIN)
An Employee Identification Number is a unique nine-digit code used to identify your company for tax purposes. The Internal Revenue Service (IRS) issues this number for free. You can apply for your EIN online or by mail.
Besides filing and managing taxes, you’ll also need this number to hire employees and open a business bank account. You’ll also need the number when applying for a business credit card or financing.
You can visit the IRS website to find out about the EIN requirements and apply for the tax number. Alternatively, you can let ZenBusiness file for an EIN on your behalf. Then, you won’t have to worry about paperwork and the application process. But, again, this optional service comes with a one-time fee of $99.
Step 6: File the New Jersey Certificate of Formation
The New Jersey Certificate of Formation is the primary document used to register an LLC in New Jersey. You’ll need to fill out the form and submit it to the New Jersey Division of Revenue for review. You can file the document online, in person, or by mail.
The Division of Revenue charges a $125 filing fee. This fee is non-refundable. So, ensure that all your details are correct and that you provide the relevant information. Some of the information you’ll be requested to provide includes:
- Entity name and type
- Business purpose
- Registered agent name and office address
Lastly, file the Certificate of Formation and wait for confirmation from the Division of Revenue. It takes 5-7 days to hear back about your status.
You don’t have to worry about filling out the Certificate of Formation or submitting it to the Division of Revenue if you choose ZenBuiness. The filing service will take care of the entire process. You only need to select the filing package your want. The packages include:
Starter Package – Costs $49 plus an extra $125 state filing fee. ZenBusiness will prepare and file the Certificate of Formation. In addition, the service will uncover possible tax deductions and take care of your annual report filings. This package renews at $199 per year.
Standard Package – Costs $199 plus the state filing fee. This package includes an expedited filing service between 4-6 days. You also get a Statement of Organizer, an Operating Agreement, and free tax consultation.
Premium Package – Costs $299, exclusive of the state filing fee. You get additional perks like rush filing, meaning you can register the LLC in just 1-2 days. You also get an Operating Agreement, Business domain name, website, and email. The package renews at $299 per year.
If successful, you’ll receive an instant printable certificate and confirmation of the filing if you apply online. You’ll also receive a Certificate of Formations via your registered agent in three to ten business days. After that, the Division of Revenue will mail the certificate to your registered agent.
Step 7: Create an Operating Agreement
An operating agreement establishes rules for your LLC. You don’t need it to create an LLC in New Jersey. However, it’s a critical document for putting important information into writing. In addition, courts and arbitrators may refer to this document when settling business disputes between partners.
Additionally, the operating agreement is vital for the company’s day-to-day running. It spells out who is responsible for what, how much of the company each partner owns, and how decisions are made. Some of the information to include in the operating agreement include:
- LLC details such as name, members, and registered agent
- Capital contributions
- Profit distributions
- Records, books, and tax returns
- Ownership percentages
- How to handle changes in membership
- Bank accounts
- Management structure
- How to handle voting
- Dissolution and liquidation
You can get free operating agreement templates online. This way, you don’t have to create one from scratch. The template also helps ensure you don’t miss any critical information or sections.
ZenBusiness offers a free custom operating agreement with its Standard and Premium packages. Otherwise, you let ZenBusiness create one for you for $125. But, again, it’s a good idea to have a professional complete the Operating Agreement to ensure you cover everything.
Finally, make sure all the members sign the operating agreement. Additionally, consider getting the Operating Agreement notarized. It’s not mandatory. However, it makes the document more official. It also ensures everyone is on the same page.
Step 8: Obtain A Business License
Successfully forming your LLC doesn’t mean you can legally operate a business in New Jersey. Instead, you will most likely need a business license, depending on the nature of your business. You can refer to the New Jersey Business Action Center to determine if your industry requires a business license.
Where you apply for your business license depends on your industry. For example, Accounting businesses can obtain a license from the Division of Consumer Affairs. Similarly, You’ll need to apply for a license from the Department of Environmental Protection if you deal with agricultural chemicals.
Again, you can refer to the New Jersey Business Action Center to learn where to apply for the necessary license.
Step 9: Open A Business Bank Account
Lastly, don’t forget to separate your personal and business finances. Separating your finances creates a clear distinction between what you own and what your company owns. It’s also the only way to enjoy personal liability protection.
Therefore, no one can come after your personal assets or finances in case of bankruptcy or litigation. Finally, failing to separate your bank accounts may offer lawyers a chance to pierce the corporate veil.
Final Thoughts About How to Start an LLC in New Jersey
There are many benefits to forming an LLC in New Jersey. You’ll enjoy personal liability protection, choose your businesses’ tax treatment, and avoid double taxation. In addition, the formation process is straightforward, mainly if you use a filing service like ZenBusiness.