How to Form an LLC in New Jersey

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.

1. Choose a Name for Your 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.

2. Appoint a Registered Agent

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.

3. Complete the Public Records Filing

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 LLC's name
• the New Jersey three letter code for domestic LLCs--"LLC"
• the LLC's business purpose
• the LLC's dissolution date, if any
• the name and address of the LLC's registered agent, and
• the signature of any authorized representative.

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.

4. Prepare an Operating Agreement

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.

5. Comply With Tax and Regulatory Requirements

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.

6. File Annual Reports

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.