How to start a New Jersey LLC

An LLC is a type of business that helps protect its owners (called members). This means that if the business owes money or gets sued, the members' personal assets, like their house or car, are usually safe. 

In the state of New Jersey, an LLC is defined as “an entity formed under this act” (NJ Rev Stat § 42:2C-2 (2022)). That means an LLC in New Jersey is a company created within the state or a company that becomes subject to New Jersey's state regulations surrounding LLCs (Title 42).

If that sounds like a lot of legal jargon - that's because it is! What you need to know is that LLCs are popular with business owners because they are simple and flexible to run. They have fewer rules compared to comportations and the owners can choose if they want to manage the business themselves or appoint managers to do it. 

Another benefit is how taxes work: LLC owners can pay taxes through their own personal tax returns, or they can choose to have the business pay taxes separately, like a corporation. This gives owners more choices in how they handle taxes as their business grows.

Why should I register for an LLC in New Jersey?

You may want to register for an LLC in New Jersey when:

• You own or want to start a business in New Jersey, or want to expand an existing business into New Jersey, and want to stay legally compliant. 
• You own or want to start a business, and want more flexibility on how you will manage the business or pay taxes than a corporation would provide.
• You want to protect your personal assets from potential liability resulting from business you conduct in the state of New Jersey. 
• You own or want to start a business, and want to register in New Jersey to open accounts, lease or buy property, secure funding, or hire employees.

Do I need to file my LLC in New Jersey if I live in another state?

Any LLC that does business in New Jersey must file with the State of New Jersey. New Jersey does not outline any specific actions that constitute transacting business, however, these actions, among others, are not considered to be doing business in New Jersey:

• Maintaining, defending, or settling an action or proceeding.
• Carrying on any activity concerning its internal affairs, including holding meetings of its members or managers.
• Maintaining accounts in financial institutions.
• Maintaining offices or agencies for the transfer, exchange, and registration of the company's own securities or maintaining trustees or depositories with respect to those securities.
• Selling through independent contractors.
• Soliciting or obtaining orders, whether by mail or electronic means or through employees or agents or otherwise, if the orders require acceptance outside this State before they become contracts.
• Creating or acquiring indebtedness, mortgages, or security interests in real or personal property.
• Securing or collecting debts or enforcing mortgages or other security interests in property securing the debts and holding, protecting, or maintaining property so acquired.
• Conducting an isolated transaction that is completed within 30 days and is not in the course of similar transactions.
• Transacting business in interstate commerce.

LLCs based in New Jersey are called "domestic LLCs," and out-of-state LLCs are called "foreign LLCs." Foreign LLCs and domestic LLCs may have different filing and compliance requirements -- Rocket Lawyer can help you navigate foreign LLC registration, regardless of where you live.

How to start an LLC in New Jersey

1. Find a unique name for your New Jersey LLC

The state of New Jersey requires that the names of all LLCs in the state:

• The name of a limited liability company shall contain the words "limited liability company" or the abbreviation "L.L.C." or "LLC." "Limited" may be abbreviated as "Ltd.," and "company" may be abbreviated as "Co."
• They are not too similar to existing LLCs in the state. You can search the state of New Jersey's database of business entities in the state to ensure your business' name is unique.

Rocket Lawyer can help you determine whether your business' name is eligible for registration in New Jersey and may be able to help you reserve the name before you file your LLC.

2. Include your other LLC members (if any)

In New Jersey, you can in fact form as a one-person LLC. In this case, the LLC would be referred to as a single-member LLC (SMLLC), whereas if there is more than one owner, the LLC may be called a multi-member LLC. 

The main difference between single-member and multi-member LLCs lies in ownership structure and management. With a single-member LLC, you have full control over the business. In contrast, a multi-member LLC has multiple owners, each with a specific percentage of ownership as defined in the operating agreement. This means that in a multi-member LLC, owners share profits, losses, and tax responsibilities based on their ownership percentage.

3. Provide a New Jersey address

This will be used as your official LLC address. The address that you list may either be your home, an office, or another physical location, but it cannot be a PO box.

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. Register your LLC with the state of New Jersey

Once you have a business name and registered agent, you can register your business as a New Jersey LLC with the state of New Jersey by filing your Certificate of Formation. In other states, this document may be called a "Certificate of Organization," "Certificate of Filing," or "Articles of Organization."

6. Get an Employer Identification Number (EIN)

New Jersey LLCs are required to have a Federal EIN tax number. Think of your tax ID as the social security number for your company. It will be important for business contracts, tax filings, and all manner of documents down the line. Every company should have one to remain in good standing.

7. Pay the state filing fee

Every state has different fees for forming an LLC, which can also vary from one year to another.

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

What to do after forming a New Jersey LLC

There are a few steps you need to take to maintain your New Jersey LLC:

1. Create an Operating Agreement: we can help you create your New Jersey LLC Operating Agreement online.
2. Hold a meeting: a first meeting with members of an LLC is not required by law, but it is highly suggested in order to get organized. Also, unlike corporations, LLCs are also not required to maintain Meeting Minutes, but these documents are also recommended as they provide records for important decisions made.
3. Submit a public records filing with the state: you'll need to submit a Public Records Filing for New Business Entity.
4. Pay taxes according to how you chose to be taxed: traditionally, LLCs are "pass-through entities." This means that you pay your business taxes on your personal tax form. That said, you can elect to be taxed like a corporation, if you choose to do so.
5. File an Annual Report: this is required of all New Jersey LLCs during the anniversary month of the LLC's formation every year..

What is needed to keep records for my New Jersey LLC

The State of New Jersey has no requirements for keeping any specific records pertaining to your LLC, but you may be required to provide to members any records kept by the company that pertain to its activities and financial condition, and other circumstances.

Still have questions? Rocket Lawyer can help you with the process of forming a New Jersey LLC. Get started today!

  

Key takeaways Registering an LLC in New Jersey can give you a lot more flexibility than a corporation, as well as protection for your personal assets from potential liabilities. Even if you live in another state, you must register your LLC in New Jersey if you do regular business there, like selling things or having employees. After starting your LLC, it's advisable to create an Operating Agreement and hold a first meeting. You'll also need to submit a public records filing and file an Annual Report every year. Keep records of your New Jersey LLC, like the names of all members, tax documents, and your business rules. These help you stay organized and follow the law.

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 an LLC
• How are LLCs taxed
• How to start an LLC
• Do I Need a Registered Agent?
• How and when to file an Annual Report