Procedures to Form New Jersey LLC

A New Jersey Limited Liability Company (LLC) is a hybrid business structure offering personal liability protection in case of a lawsuit. If your LLC is sued, your assets (like your home, vehicles, and bank accounts) remain safe from creditors.

You can use your New Jersey LLC to run a business or your LLC to purchase assets, such as real estate, vehicles, boats, and aircraft.

A. New Jersey LLC Name

Before forming your Limited Liability Company with the Division of Revenue, you must search the state’s database to ensure your desired New Jersey LLC name is available.

Your New Jersey LLC name must be unique and distinguishable compared to all the existing businesses registered in the state.

New Jersey Business Search Tools

New Jersey has two search tools to check your desired LLC’s name availability: the Business Name Search and the Business Name Availability.

* New Jersey LLC Business Name Search

This search tool shows all the names of existing businesses in New Jersey.

* New Jersey LLC Name Availability

This search tool is more “intelligent” than the Business Name Search, offering a “yes” or “no” answer as to whether or not your LLC name is available.

We recommend using both search tools to ensure your desired LLC name is unique and available.

LLC Designator: As per New Jersey Statutes, Section 42:2C-8(a), your LLC name must end with a proper designator. You can use any of these designators for your New Jersey LLC:

* LLC

* LC

* Ltd. Liability Co.

* Limited Liability Co.

* Ltd. Liability Company

* Limited Liability Company

Tip: If you’re unsure which designator to use, “LLC” is the most common.

Your New Jersey LLC name cannot include a name that makes it sounds like a different type of legal entity. For example, you can’t use any of these:

* Co. (by itself)

* Company (by itself)

* Ltd. (by itself)

* Corp

* Corporation

* Inc.

* Incorporated

* LLP

* LP

* P.A.

* P.C.

* Professional Association

* Professional Corporation

* Non-Profit Corporation

Many filers rush to form their LLC and later want to change their New Jersey LLC name. While an LLC name change can be done, it’s a significant pain, and it’s better to solidify your choice before filing. Changing an LLC name in N.J. requires you to file an amendment with the Division of Revenue, update the IRS, update the bank, and update the Division of Taxation. It’s a lot easier to think of a solid LLC name from the start and not have to change it later.

B. New Jersey LLC Registered Agent

The New Jersey Division of Revenue requires you to list a New Jersey Registered Agent in your LLC’s Certificate of Formation (also known as your Public Records Filing).

A  New Jersey Registered Agent is a person or company designated to receive your LLC’s notices from the Division of Revenue and any legal mail (Service of Process) in case your business is involved in a lawsuit.

Your New Jersey Registered Agent should have a physical address within the state (P.O. Boxes are not allowed) where Service of Process and other documents can be received.

Who can be your LLC’s Registered Agent in New Jersey?

You have three options:

1. You can be your Registered Agent
2. friend or a family member can be your Registered Agent
3. You can engage a Commercial Registered Agent

Hiring a Commercial Registered Agent is a good idea if you don’t have an address in the state or if you prefer to keep your address off public records.

C. New Jersey Formation & Registration

In New Jersey, “formation” and “registration” mean entirely different things. The “formation” step is the New Jersey Public Records Filing, and the “registration” step is the Business Registration Application.

First, you must form your New Jersey LLC by filing a Public Records Filing for New Business Entity. Once approved, it’s referred to as your Certificate of Formation. This is filed with the N.J. Division of Revenue & Enterprise Services.

Then, you must register with the Division of Taxation within 60 days. This is mandatory for all New Jersey LLCs, with no exceptions.

The LLC Public Records Filing and the registration (called a Business Registration Application or NJ-REG) can be done online.

New Jersey LLC filing form: Public Records Filing (becomes the Certificate of Formation)

New Jersey LLC filing fee: $125 (one-time fee). This is for the formation step. There is no fee for the registration step.

(Learn more about the New Jersey LLC Costs)

Method of filing: You can both form and register your New Jersey LLC by mail or online. However, we recommend online filing. It’s much easier, and the LLC approval time is much faster.

Form your LLC online: New Jersey Online Business Formation

Approval times: If you file online, your New Jersey LLC formation will be approved within one business day. If you file by mail, your New Jersey LLC will be approved within 5-7 business days (plus mail time). Your registration will be approved in about two business days.

New Jersey LLC approval:

* The formation approval will be a stamped and approved Certificate of Formation.

* The registration approval will be a Business Registration Certificate and a Sales Tax Certificate of Authority (if applicable).

D. Apply for an EIN for your New Jersey LLC

A New Jersey EIN Number is obtained from the IRS after your New Jersey LLC is approved by the state.

Remember: You need to get your EIN in order to complete the LLC “registration” step mentioned above.

An EIN is also called an Employer Identification Number, FEIN, Federal Employer Identification Number, or Federal Tax ID Number. They all mean the same thing.

It’s helpful to think of your New Jersey LLC’s EIN Number as its “social security number.” It helps identify your LLC to the IRS for tax and filing purposes.

Your New Jersey LLC’s EIN will also be used when you open an LLC bank account, register your LLC with the Division of Taxation, file taxes, apply for a business license (if applicable), and to process employee payroll (if applicable).

How is a New Jersey LLC taxed: The IRS doesn’t have a specific tax classification for LLCs, and instead, a New Jersey LLC can be taxed four different ways with the IRS; 2 of which occur by default (they occur simply by obtaining your LLC’s EIN), and two require a special election be construct (a form must be filed after you obtain your LLC’s EIN). We recommend reading how an LLC is taxed before applying for an EIN for your LLC

Wait for LLC approval: Don’t apply for an EIN until your New Jersey LLC is approved by the Division of Revenue. Meaning making sure the “formation” step is complete, and your LLC is approved.

An EIN is free: The IRS issues EINs to LLCs at no cost.

EIN Responsible Party: This will be the IRS’s “contact person” when you apply for your New Jersey LLC’s EIN If you have a Single-Member LLC, you will be the Responsible Party. If you have a Multi-Member LLC, any LLC Member can be the Responsible Party. For more information, please see here: EIN Responsible Party for LLC

How to apply for an EIN: There are three ways to apply for an EIN for your New Jersey LLC:

* If you have an SSN or ITIN, you can apply for an EIN online

*  If you don’t have an SSN or ITIN, you can still get an EIN for your LLC by following these instructions: how to get an EIN without SSN or ITIN

E. New Jersey LLC Operating Agreement

A New Jersey LLC Operating Agreement is a written contract among the LLC Members that spells out who owns the LLC and how much of the LLC they own.

Both Single-Member LLCs and Multi-Member LLCs located in New Jersey should have an Operating Agreement.

The LLC’s Operating Agreement will also embrace information about how profits are split, how taxes are paid, and how the New Jersey LLC is managed.

Having an Operating Agreement for your New Jersey LLC also helps prove that the entity is a separate legal entity from yourself. This helps maintain the private asset protection provided by your LLC

“Internal Document”: Your New Jersey LLC’s Operating Agreement is an “internal document,” which stands for you only need to keep a copy with your business records and give a copy to other LLC Members (if applicable). You don’t have to send your LLC’s Operating Agreement to the Division of Revenue, the Division of Taxation, the IRS, or any other government agency.

Free New Jersey LLC Operating Agreement: We provide free Operating Agreement templates that you can download for your LLC on this page: New Jersey LLC Operating Agreement.

F. New Jersey LLC Annual Report

All LLCs must file a New Jersey LLC Annual Report every year with the Division of Revenue. This must be filed by all LLCs in New Jersey regardless of income or business activity levels.

New Jersey LLC Annual Report fee: $75 per year

(The Annual Report fee used to be $50 per year, but in July 2019, the state increased it to $75 per year.)

Due date: Annual Reports for New Jersey LLCs are first due the year after the LLC was formed. And they are due by the last day of the LLC’s anniversary month. For example, if your LLC was formed on April 12th, 2023, your first Annual Report will be due by April 30th, 2024. Then it’s due by April 30th every year going forward.

How to file an Annual Report: You can only file your New Jersey LLC’s Annual Report online.

Annual Report approval: After you file your New Jersey LLC’s Annual Report online, you’ll be able to download a filed copy from the Confirmation Page.

G. New Jersey Business Licenses and Permits

There is no state-level business license that you need to get in New Jersey. Instead, New Jersey business licenses and permit requirements are set at the municipal level. For example, depending on where your New Jersey LLC is located and what industry you’re in, your county, city, or town may require a certain business license (and/or permit) to operate.

After your New Jersey LLC is approved, you can contact your local municipality, describe to them what your business will do, and ask if you need a license and/or permit to operate. You can find the contact information using the state’s Municipal and County Government search tools.

Reseller Permit: If your New Jersey LLC buys goods from other businesses for the purposes of resale and/or manufacturing, you can avoid New Jersey sales tax by presenting the seller with your LLC’s Reseller Permit. If you are an in-state seller, you will use Form ST-3. If you are a non-New Jersey seller, you will use Form ST-3NR.

Sales Tax Certificate of Authority: This is also called a “Sales Tax Permit,” and it’s needed if you sell retail goods in New Jersey. You will get this Certificate after completing the LLC “registration” step mentioned a few steps above.

Sales Tax: If your New Jersey LLC sells retail goods, you’re required to collect sales tax from your customers. Then you’ll send those funds to the N.J. Division of Taxation. This is required for online businesses as well as brick-and-mortar businesses.

H. New Jersey LLC Taxes

First, we recommend reading how LLCs are taxed. And then, to learn more about New Jersey LLC Taxes, we can offer this overview of the different requirements.

Income tax: Income taxes are paid on three levels:

* federal

* state

* local

Federal income taxes: A New Jersey LLC is a pass-through entity which means the profits and losses “flow-through” the LLC, and it is the owners who are responsible for reporting them on their personal income tax return.

* By default, a Single-Member LLC is treated as a Disregarded Entity. This means the IRS “ignores” the LLC and looks at who the owners are. If your LLC is owned by an individual, the IRS will tax your LLC like a Sole Proprietorship. If your LLC is owned by another company, the IRS will tax your LLC as a branch/division of the parent company.

* By default, the IRS will tax a Multi-Member LLC like a Partnership.

We highlighted the words “like a” since this is just how the IRS treats your LLC for federal tax purposes. It has nothing to do with your legal business entity. Your LLC is still a separate legal entity from yours, and your personal assets are still protected in the event of a lawsuit.

Besides the default tax classifications, a New Jersey LLC can also elect to be taxed like a Corporation. There are two types of corporate taxation: C-Corp and S-Corp. The New Jersey Division of Revenue will honor your federal election if your LLC is taxed as a C-Corp. However, if you make the federal election to have your LLC taxed as an S-Corp, New Jersey doesn’t honor this, and you must also file CBT-2553 with the state. It’s also important to note that LLC/C-Corps have a minimum corporate tax of $500 per year, and LLC/S-Corps have a minimum corporate tax of $375 per year.

LLC Partner Tax ($150 per Member): If your New Jersey LLC has two or more Members (a Multi-Member LLC), along with your state Partnership Return (NJ-1065), you must also pay $150 per LLC Member. This is called the “LLC Partner Tax.” The LLC Partner tax is not required for LLCs with 1 Member (Single-Member LLCs).

Sales tax: As mentioned earlier, if you sell retail goods, you must collect sales tax from your customers and then file with the New Jersey Division of Taxation.

Other taxes: Besides taxes mentioned above, your New Jersey LLC may also be responsible for additional tax filing and reporting. It varies widely and depends on your industry and how you make money. Some examples of additional taxes are payroll tax, federal unemployment tax, state unemployment tax, workers’ compensation tax/insurance, capital gains tax, state franchise tax, gross receipts tax, dividend tax, sales tax, use tax, excise tax, and more.

Tax professional: We strongly recommend working with an accountant to determine all your tax filing and reporting requirements and make sure all your taxes are properly filed each year.

I. New Jersey LLC Bank Account

Once the IRS has issued an EIN Number to your New Jersey LLC, you can then start a business checking account.

Having a business bank account for your New Jersey LLC is the best way to keep your personal assets safe from business debts. Using a personal bank account for your LLC is called “commingling of assets,” and if you end up in court, this could make you personally liable for business debts.

Having a separate business bank account for your LLC also makes it easier to keep records for tax and accounting reasons.

Generally, business banking is very similar among banks. However, each bank has its own rules and regulations, so we recommend calling around to determine the following:

* minimum initial deposit

* minimum balance requirements

* monthly maintenance fees (if any)

Required New Jersey LLC paperwork: In order to open a business bank account for your New Jersey LLC, you’ll need to have the following:

* Certificate of Formation

* Business Registration Certificate

* EIN Confirmation Letter from the IRS

* Photo ID (driver’s license and/or passport)

* Operating Agreement (may not be needed, but best to bring it regardless.

Note: Call the bank ahead of time to make sure you have everything you need.

For more tips on how to find the best business bank account for your LLC, please see here: business bank accounts for LLCs.

LLC Members: If you have a Multi-Member New Jersey LLC, all Members that want to be on the bank account need to be present.

Non-U.S. residents: Even if you don’t live in the U.S. but have set up an LLC in New Jersey, you can still open a bank account in the U.S. Here is where you can find out more: starting an LLC bank account for someone who doesn’t live in the U.S.

When you open the account, the bank will give you a debit card.

You can also get a credit card for your business to earn points, miles, and other benefits.

J. Business Phone No.

Get a “virtual business number” for your New Jersey LLC, so you don’t have to give out your real cell phone number or home phone number. You can change the number so that it rings on your phone.

Getting a separate number for your New Jersey LLC is a good idea if you’d like to keep your actual phone number off of those annoying “public record” websites (and stop the spam phone calls).