Start Your Own Business in New Jersey: Seven Steps You Need to Take

From licenses and permits to taxes and insurance, learn what you need to do to start a business in New Jersey.



Here’s an overview of the key steps you’ll need to take to start your own business in New Jersey.

Step 1. Decide on a Legal Structure

The most common legal structures for a small business are:

  • sole proprietorship
  • partnership
  • limited liability company (LLC), and
  • corporation.

There also are special versions of some of these structures, such as limited partnerships and S corporations. You’ll want to consider which business entity structure offers the type of liability protection you want and the best tax, financing, and financial benefits for you and your business. Check  Choose Your Business Structure  on Nolo’s website for more information on how to choose the best ownership structure for your business.

Step 2. Choose a Name

For LLCs and corporations, you will need to check that your name is distinguishable from the names of other business entities already on file with the New Jersey Department of Revenue and Enterprise Services (DORE). You can check for available names by doing a  business entity name search  on the DORE website. You can reserve an available name for 120 days by filing an  Application for Reservation of Name  with the New Jersey DORE. There are certain name requirements for LLCs and corporations (like including a word such as “L.L.C.” for LLCs or “Company” for corporations). See  How to Form an LLC in New Jersey  and  How to Form a Corporation in New Jersey  for more information.

A New Jersey sole proprietorship or general partnership should file a registration for a trade name (also known as an assumed name) at the county level if it uses a business name that is different from the name of the business owner (sole proprietorship) or partners (general partnership).

If you plan on doing business online, you may want to register your business name as a domain name. See  Choose and Register a Domain Name  for more information. In addition, to avoid trademark infringement issues, you should do a federal and state trademark check to make sure the name you want to use is not the same as or too similar to a name already in use. See  How to Do a Trademark Search  for more information.

Step 3. Create Your Business Entity

  • Sole proprietorship:  To establish a sole proprietorship in New Jersey, you don’t need to file any organizational documents with the state. For more information, see  How to Establish a Sole Proprietorship in New Jersey.
  • Partnership:  To create a general partnership in New Jersey, you don’t need to file any organizational documents with the state. Although not legally required, all partnerships should have a written partnership agreement. The partnership agreement can be very helpful if there is ever a dispute among the partners. For more information, see  How to Form a Partnership in New Jersey.  To form a  limited liability partnership  (often used by professionals), you must file a Statement of Qualification (also known as a Public Records Filing) with the New Jersey DORE. For more information, see  How to Form a Limited Liability Partnership in New Jersey.
  • LLCs:  To create an LLC in New Jersey, you must file a public records filing with the New Jersey DORE. You may complete the filing  online  or  on paper. You will also need to appoint a  registered agent  in New Jersey for service of process. In addition, while not required by law, you also should prepare an  operating agreement  to establish the basic rules about how your LLC will operate. The operating agreement is not filed with the state. For more information, see  How to Form an LLC in New Jersey  and  How to Form a Professional LLC in New Jersey  (for professionals).
  • Corporations:  To create a corporation in New Jersey, you must file a  certificate of formation  with the New Jersey DORE. You may complete the filing  online  or  on paper. You will also need to appoint a  registered agent  in New Jersey for service of process. Although not legally required, you also should prepare  bylaws  to establish your corporation’s internal operating rules. Bylaws are not filed with the state.  S Corporationsmust also file IRS Form 2553,  Election by a Small Business Corporation,  with the IRS. For more information, see  How to Form a Corporation in New Jersey.

Step 4. Licenses and Permits

Tax Registration.  If you will be selling goods in New Jersey, you must register to collect sales tax with the New Jersey DORE. If you will have employees in New Jersey, you must register with the DORE for employer withholding tax. For both types of tax, you can register online using the DORE’s  NJ Business Gateway Services  or on paper using  Form NJ-REG.

EIN.  If your business has employees or is taxed separately from you, you must obtain a federal Employer Identification Number (EIN) from the IRS. Even if you are not required to obtain an EIN, there are often business reasons for doing so. Banks often require an EIN to open an account in the business’s name and other companies you do business with may require an EIN to process payments. You can get an EIN by completing an online application on the IRS website. There is no filing fee.

Regulatory licenses and permits.  These cover areas such as:

  • health and safety
  • the environment
  • building and construction; and
  • specific industries or services.

For regulatory licenses and permits issued by the state, check the  Licenses and Permits  section of the New Jersey Business Portal, which has links to information about all the latter kinds of licenses and permits, and many others besides. For information about local licenses and permits, check the websites for any cities or counties where you will do business.

Professional and occupational licenses.  These cover people who work in various fields. You can get information about the state agencies that license and regulate many professions and occupations, as well as at least the basic licensing requirements, from either of the following sources:

In addition, the Division of Consumer Affairs website has a  Licensing Boards and Committees  section that provides similar information.

Step 5. Business Location and Zoning

You’ll need to pick a location for your business and check local zoning regulations. That includes if you work from home. You may be able to find zoning regulations for your town or city by checking  municode.com.

Step 6. Taxes and Reporting

New Jersey taxes every kind of business. See  New Jersey State Business Income Tax  for more information on state business taxes in New Jersey.

Sole proprietorships.  Pay state taxes on business income as part of their personal state income tax returns (Form NJ-1040).

Partnerships.  Partners pay state taxes on partnership income on personal tax returns. In addition, most partnerships also must file  Form NJ-1065,  Partnership Return.

LLCs.  Members pay state taxes on their share of LLC income on personal tax returns. In addition, most LLCs also must file  Form NJ-1065,  Partnership Return. Furthermore, the LLC must file an  annual report  with the New Jersey DORE. See  New Jersey LLC Annual Report and Tax Requirements  for more information.

Corporations.  Shareholders must pay states taxes on their dividends from the corporation. A shareholder-employee with a salary also must pay state income tax on his or her personal state tax return. Moreover, the corporation itself is subject to New Jersey  corporation taxes. Finally, corporations must file an  annual report  with the New Jersey DORE.

If you have employees, you must also deal with state  employer taxes.

And, apart from New Jersey taxes, there are always federal income and employer taxes. Check IRS Publications 334,  Tax Guide for Small Business, and 583,  Taxpayers Starting a Business, available at irs.gov.

Step 7. Insurance

Insurance is a good idea for most kinds of business. While insurance often is regulated at the state level, the types of business insurance available are usually similar across the fifty states. Check  Obtaining Business Insurance  for more information.

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