A limited liability company (LLC for short) is a way to legally structure a business. It combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. Any business owner who seeks to limit his or her personal liability for business debts and lawsuits should consider forming an LLC.
Here are the steps you need to take to form an LLC in New Jersey. For more information on how to form an LLC in any state, see Nolo's article How to Form an LLC.
Under New Jersey law, an LLC name must contain the words "Limited Liability Company" or the abbreviation "L.L.C." Your LLC’s name must be distinguishable from the names of other business entities already on file with the New Jersey Division of Revenue & Enterprise Services. Names may be checked for availability by at the New Jersey Business Record Service business name database.
You may reserve a name for 120 days by filing an Application for Reservation of Name (UNRR-1) with the New Jersey Division of Revenue & Enterprise Services. The application must be filed online at New Jersey's Business Charter Amendment Service website. The filing fee is $50.
Every New Jersey LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. The registered agent may be a New Jersey resident or a foreign or domestic corporation authorized to do business in New Jersey. The registered agent must have a physical street address in New Jersey.
A New Jersey LLC is created by filing a Public Records Filing for New Business Entity with the New Jersey Department of Treasury, Division of Revenue & Enterprise Services. The filing must include:
The Division of Revenue has a preprinted form on its website that you can complete and file by postal mail or fax. Alternatively, you may file online through the Division of Revenue Business Formation web portal. The filing fee is $125. You must pay an additional $3.50 if you file online and pay by credit card.
An LLC operating agreement is not required in New Jersey, but is highly advisable. This is an internal document that establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates.
For help creating an LLC operating agreement, see Form Your Own Limited Liability Company, by Anthony Mancuso (Nolo) or use Nolo’s Online LLC. If an operating agreement is created, it need not be filed with the public records filing document creating the LLC.
All of the paperwork and procedural steps to start a limited liability company can be done online using Nolo's Online LLC Formation service.
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online EIN application on the IRS website. There is no filing fee.
Business Licenses: Depending on the nature of your business, the State of New Jersey may require that you either obtain a license, certification, or registration. For details, check the New Jersey Online License & Certification website. Your LLC may also need to obtain a local business license from the city or county. For local licenses, check with the clerk for the city or town where the LLC's primary place of business is located (or county if it is in an unincorporated area). For more information, see How to Get a Small Business License in New Jersey.
State Tax Registration: All New Jersey and foreign LLCs authorized to do business in New Jersey must register with the New Jersey Division of Revenue, regardless of whether they plan on collecting sales tax or having employees. To register, file a Business Registration Application, Form NJ-REG with the Division of Revenue. The form may be filed online or by mail. The initial Public Records Filing should be submitted before filing the Application, and the Application filed within 60 days thereafter. New Jersey LLCs must pay an annual minimum state tax of $125 per member. For more information, see New Jersey LLC Annual Filing Requirements.
All New Jersey LLCs and foreign LLCs authorized to do business in the state must file an annual report. The report must be filed each year on the anniversary month of the LLC's formation or authorization to do business in New Jersey. The report must be filed online through the New Jersey Division of Revenue Annuals and Change Services webpage. The filing fee is $50. For more information, see New Jersey LLC Annual Filing Requirements.
If you are just starting your business or have already been operating as a sole proprietor, you should consider forming an LLC. LLCs limit an owner's personal liability for business debts and lawsuits and offer a lot of flexibility when it comes to ownership, management, and taxation of the business. To learn more about LLCs and decide if it is the right business structure for you, see What is a Limited Liability Company (LLC)?
It is important to make sure that your LLC's name is distinguishable from the names of other existing businesses on file with the New Jersey Division of Revenue & Enterprise Services. You can conduct a name search for free on the New Jersey Business Record Service website to make sure your proposed name is available.
Filing yourself is often the cheapest option, but completing all of the forms and filing them yourself can be complicated. Hiring a lawyer is another option, but will often cost you hundreds, if not thousands, of dollars in the process. Nolo's Online LLC formation service can complete all of the paperwork and filings for you, with packages starting at just $79.00.
New Jersey does not require LLCs to have operating agreements, but it is highly advisable to have one. An operating agreement will help protect your limited liability status, prevent financial and managerial misunderstandings, and ensure that you decide on the rules governing your business instead of state law by default. For more information, see The LLC Operating Agreement.
To do business in New Jersey, all LLCs organized outside of the state must register with the New Jersey Division of Revenue. Foreign LLCs must appoint a registered agent for service of process physically located in New Jersey. To register, file a Public Records Filing for New Business Entity. The application may be filed by mail or online through the Division of Revenue Business Formation web portal. The filing fee is $125. You must pay an additional $3.50 if you file online and pay by credit card. The application must be accompanied by a certificate of good standing or similar document from the LLC's home state.
For most formation purposes, a New Jersey single-member LLC is considered the same as a multi-member LLC. The steps to form a single-member LLC in New Jersey are the same as those listed above.
Single-member LLCs do have additional flexibility when it comes to filing a tax return. To learn more, see Nolo’s article, How Single-Member LLCs Pay Federal Income Tax.
If you provide a licensed professional service in New Jersey and want to form an LLC, you will be required to form a professional LLC (PLLC). Examples of professional services include architects, attorneys, dentists, certified public accountants, and more. Generally, if you provide a service that requires you to obtain a New Jersey state license before practicing, then you are a professional service. Each member of the company must be licensed in order to form a PLLC. To learn more about forming a New Jersey PLLC, see our article, How to Form a Professional LLC in New Jersey.
If you reach the point where it is time to close your business and cease all operations, then you will want to properly dissolve your LLC to limit your liability for lawsuits and government fees. Learn about the steps you will need to take in How to Dissolve an LLC in New Jersey.