How to start a New Jersey corporation

It might seem like a lot at first, but once you understand the steps, it’s very doable. This guide will walk you through everything you need to know to start your New Jersey corporation.

How to start a corporation in New Jersey

Incorporating means registering your business as a corporation so the law sees it as its own entity, separate from you. Each state has its own rules for how to do this, so the process can seem confusing. Let’s go through each step: 

1. Choose a name for your New Jersey corporation

Your corporation’s name should be unique and make a statement about your business. Make sure it complies with the following New Jersey requirements

• Your name must be distinguishable from that of any other registered business in New Jersey. It must end with "Corporation," "Company," "Incorporated," or an abbreviation of one of these terms. You can also use the abbreviation "Ltd."
• Your name cannot be deceptive. If you're selling boats, don't name your company "Springfield's Jersey Shore Dry Goods."
• Ensure that your name is distinguishable from any other existing business names.

Need help coming up with a business name for your corporation? Try the Rocket Copilot™ AI Business Name Generator, a free tool to help you brainstorm business names and get started registering your corporation.

2. Decide between a New Jersey S-Corp and C-Corp tax designation

There are similarities between a New Jersey S-Corp and a C-Corp regarding personal liability, management, structure, and compliance. The differences, however, come down to the following:

• Ownership Rules: A C-Corp is taxed as a separate entity from its shareholders. Shareholders also report and pay taxes on what the corporation pays them. An S-Corp is taxed like a partnership with a "pass-through" tax structure. It's not doubly taxed because the corporate entity can pass income, losses, deductions, and credits to its shareholders for federal tax purposes. Corporate owners pay taxes on their shares of the corporation's profits at their individual tax rates.
• Documents: If you want to form an S-Corp, you must file IRS Form 2553 to elect this status. To qualify as an S-Corp, your business must be a domestic corporation, provide only one class of shares, have no more than 100 shareholders, and your shareholders can include only individuals, certain trusts, and estates.

3. Appoint directors and shareholders for your New Jersey corporation

Each state has its own personnel requirements for incorporating. In New Jersey, corporations must have at least one director, and directors must be at least 18 years of age. There must be a president, secretary, and treasurer. The names and addresses of the initial directors must be listed in your Certificate of Incorporation. There is no requirement that directors must live in New Jersey.

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have a New Jersey address) or choose one to do that service for you (if you are not located in New Jersey or would like an extra layer of privacy).

5. File your Certificate of Incorporation with the state of New Jersey

Once you have a business name and registered agent, you can register your business as a New Jersey corporation with the state by filing your Certificate of Incorporation. This document may be referred to informally as a corporation's "Articles," or in other states, it may be called a "Certificate of Organization," "Certificate of Filing," or "Certificate of Formation."

Your corporation must file an annual report with the New Jersey Department of State. The report is due on or before the last day of the anniversary month of your incorporation.

6. Get an Employer Identification Number (EIN)

Before opening your doors for business, apply to the IRS for an employer identification number, or EIN. All corporations with employees in New Jersey must have an EIN. An EIN is similar to your Social Security number, but it's for businesses. You'll also need an EIN to open your corporate bank account.

Congratulations! After you have completed all these steps, you have formed your New Jersey corporation.

What to do after incorporating in New Jersey

New Jersey requires that you create certain records to maintain your corporate status, including Bylaws and Corporate Minutes. Bylaws set forth your company's operating rules and define the responsibilities of your directors. They also explain the rights and powers of your shareholders, and they can address all other corporate matters. You don't have to file your Bylaws with the state in New Jersey, but you'll need them to demonstrate to banks, lending institutions, creditors, the IRS, and the courts that your corporation is valid and legitimate. Bylaws also help to establish rules so you can keep your corporate assets and debts separate from your personal ones.

New Jersey requires that corporations keep Minutes of director and shareholder meetings, their most recent annual report, a list of names and addresses of the directors and officers, the Certificate of Incorporation with any amendments, and their Bylaws at their corporate office. Corporate Minutes keep track of all votes on important business decisions and help secure your corporate status.

We have more detailed information about New Jersey's requirements for Bylaws and Corporate Meeting Minutes.

Still have questions? Learn more about how to start your own business with Rocket Lawyer and get started today!
 

Key takeaways Starting a corporation in New Jersey means following state rules, like choosing a unique name, filling out paperwork, and paying fees to make it official. One important choice is deciding how your corporation will be taxed in New Jersey, either as an S-Corp or a C-Corp. This affects how the business and owners pay taxes, and the differences between the two change from state to state. After forming the corporation, you must keep records like bylaws and meeting notes to stay in good standing with the state and prove your business is real and operating correctly.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is a corporation?
• What is an S-corporation?
• How are corporations taxed?
• How to start a corporation
• How to register a corporation by state