If you own a business that was created in a state other than New Jersey, you will need to qualify or register that business in New Jersey if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-New Jersey) limited liability company (LLC) to do business in New Hampshire.
For New Jersey purposes, if your LLC is formed in another state, then it is known as a foreign LLC in New Jersey. In other words, foreign doesn’t mean from another country. Instead, it means your business was organized under the laws of another state. A domestic LLC, on the other hand, is one that is formed in the state where it is doing business. This is common usage throughout the United States. For example, an LLC formed in Wisconsin is a foreign LLC in Minnesota.
According to New Jersey’s LLC Act, you are required to register your foreign company with the state of New Jersey if you are “transacting business” or “doing business” in New Jersey. (The Act uses the both phrases.) What does this mean? Well, like most states, New Jersey does not specifically define what “transacting business” or “doing business” means in relation to foreign registrations.
However, state laws governing when foreign companies must collect state sales tax in their state provide some guidance on the issue. Under these laws, a business must have a physical presence in—or nexus with—the state in order to be required to collect state sales tax on sales to that state’s residents. Generally speaking, physical presence and nexus are synonymous, and mean having:
Certain exceptions may apply and the rules can get more complicated with things like Internet sales. Nevertheless, in general, if you have an office, a store, a warehouse, or employees in another state, you will need to qualify your LLC as a foreign company in that state. For more details, including some possible distinctions between physical presence and nexus, check Nolo’s articles on Internet Sales Tax: A 50-State Guide to State Laws.
Like many states, New Jersey law specifies certain activities that do not constitute transacting business in the state. The items listed include:
The LLC Act also states that owning income-producing New Jersey real estate or personal property, if not otherwise excluded under the foregoing rules, constitutes transacting business in New Jersey. For the actual legal description of each of the listed items, check Section 42:2C-59 of the New Jersey Statutes.
If your LLC’s only activity in New Jersey is one or more of the listed items, you should not need to register with the state.
To register your foreign business in New Jersey, you must apply for a so-called certificate of authority. Do this by filing a Business Registration Application with the New Jersey Department of Treasury (DOT). Beyond the certificate of authority, the application is used for multiple other purposes, including tax registration.
Unlike most other states, New Jersey does not have a paper version of the registration form that is specific to LLCs. Instead, one form is used for all types of businesses (corporations, partnerships, etc.).
You can file on paper or online. A copy of the application form (Form NJ-REG) is available from the DOT website.
While the paper registration application asks for many pieces of information, only a few are required specifically for the certificate of authority:
The online registration process can be less confusing. However, if you are using an alternate name (dba), you will not be allowed to file online and must file on paper. For all applications, you must include a Certificate of Good Standing from the state where your LLC was formed. If you apply online, you must fax the Certificate of Good Standing. The filing fee is $125.
If your LLC transacts business in New Jersey without a Certificate of Authority, it cannot bring a lawsuit in the state. However, not having a Certificate of Authority does not invalidate your LLC’s contracts or prevent your LLC from defending a lawsuit in New Jersey. Also, a member or manager of your LLC is not liable for the debts, obligations, or other liabilities of the company solely because the company transacted business in New Jersey without a Certificate of Authority.
If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in New Jersey are similar. You will use the same paper application form or the same online application system and pay the same fee.