Starting a business can be daunting, and the cost of filing the necessary paperwork and meeting other legal requirements can be overwhelming.
If you're forming an LLC in New Jersey, this article will give you all the cost details you need to know before you start.
LLC In New Jersey Cost
Registering a foreign LLC in New Jersey requires filing a Certificate of Authorization with the Secretary of State at the cost of $125.
Depending on the business being operated, one might have to fulfill additional licensing requirements before starting operations legally within state borders.
How To Form An LLC In New Jersey
Here are the broken-down steps when forming an LLC in NJ.
Choose A Name For Your LLC
The first step is to choose a name for your LLC that complies with the New Jersey Division of Revenue and Enterprise Services requirements.
You must ensure that your desired name is not already taken, including either "Limited Liability Company" or one of its abbreviations (LLC or L.L.C). Additionally, the name cannot imply government affiliation or contain any restricted words or phrases such as "bank" or "insurance" unless you are authorized by state law to use them.
File A Certificate Of Formation
Once you have chosen a name for your LLC, you need to file a Certificate of Formation with the Division of Revenue. This document must include the LLC's business purpose, registered agent information, and management structure. If your application is approved, you will be issued a certificate confirming your formation.
Create An Operating Agreement
An Operating Agreement lays out the rights and responsibilities of each company member. It's like having all members sign a contract outlining how they will make decisions and how profits will be divided between members. While this document is not required to form an LLC in New Jersey, it is highly recommended as it will provide protection should any disputes arise between members.
Register Your LLC With The State Department Of Treasury
Once your Certificate of Formation has been approved by the Division of Revenue and Enterprise Services, you need to register your LLC with the State Department of Treasury's Business Registration Unit and obtain a Certificate of Authority from them. This document officially recognizes that your company exists within New Jersey and legally allows it to conduct business within state borders.
Obtain Any Licenses Or Permits Required By State Or Local Authorities
Finally, depending on what business activity you plan on carrying out with your new LLC, state or local authorities may require specific licenses or permits to operate legally.
These could include particular tickets related to food service businesses, construction companies, or other activities regulated by state law. You must research these requirements before getting started so that you can avoid any legal issues.
New Jersey requires LLCs to file an annual report with the Division of Revenue & Enterprise Services. The filing fee for this form is currently $50 per year and must be paid within 45 days after submitting your initial filing.
The form is due by the end of the month the LLC was formed and can be submitted through their website. Failure to submit your annual report on time may result in a late fee or even the dissolution of your company.
In addition to these two fees, there are a few other costs associated with starting an LLC in New Jersey that you should consider.
These include registering your business name with the state ($50), obtaining a federal employer identification number (EIN) from the IRS ($0), obtaining any necessary licenses or permits (varies), and purchasing any essential insurance policies (varies). While one may not require these costs for all businesses, they are important considerations that should be considered when setting up your new business venture.
Registering A Foreign LLC In New Jersey
The process is relatively straightforward and requires filing a Certificate of Authorization with the Secretary of State. The cost is currently $125. However, depending on your business type and the services you provide, you may need to obtain additional permits and licenses from the federal and state governments and local municipalities.
Let's break this down into smaller steps.
Permits & Licensing Requirements
As mentioned, this depends on the type of business you are operating.
For example, suppose you are selling goods or services online. In that case, you may need an e-commerce license from local authorities and applicable professional organizations, such as accountants or attorneys specializing in corporate law matters.
Additionally, special permitting may be needed from environmental agencies like DEP (Department of Environmental Protection) if your business produces hazardous materials.
Lastly, if you plan on hiring employees, you may need particular licensing from labor departments or government bodies responsible for regulating employment activities within their jurisdiction.
These include labor standards boards or workers' compensation insurance programs offered by states/localities where your business operates.
One must research these requirements before finalizing registration documents with government agencies so that they do not cause unexpected delays during later stages of operations.
This delay can happen when attempting to obtain necessary permits/licenses after officially finalized registration by authorities.
Name Reservation & Alternate Names (DBA)
One of the first things you will need to do as an LLC is to file for a name reservation, valid for 120 days. This will cost you $50.
You can also file for an alternate name, a DBA, which costs $50. This is useful if you want to operate under multiple terms or create a memorable brand presence.
How Much Does An Llc Cost In NJ: Other Certificates You Might Need
When registering and operating a foreign LLC in New Jersey, you may need other certificates, including the following.
Certified Copies Of Business Documents
Suppose you need certified copies of business documents, such as formation documents or other legal filings for your LLC.
In that case, you will need to order through the Division of Revenue & Enterprise Services and pay $50 plus $0.10 per page. This document will be used when opening bank accounts and setting up merchant accounts related to your LLC business.
Certificate Of Standing
A certificate of standing—also called an NJ certificate of good character—can be ordered from the same department for $50.
This certificate is essential if your LLC wants to enter into contracts with other businesses or apply for loans from financial institutions in New Jersey. A standing certificate serves as proof that your LLC has followed all applicable laws and regulations that govern it in New Jersey and has paid all necessary taxes and fees required by law.
If you require financing from banks or investors, you'll likely need to present them with a Standing Certificate. It's good to note there are two types: Short Form ($50) and Long Form ($100). Both documents come from the Secretary of State and are valid four years after issuance.
Getting An EIN
Getting an Employer Identification Number (EIN) from the IRS means you can open a business bank account and file taxes under your company's name instead of your own Social Security Number (SSN).This number is free to obtain via their website or by calling 1-800-829-4933. Once received, keep it safe since it will be necessary for various purposes throughout owning/operating your business.
Certificates Of Formation & Annual Reports
The first requirement for any LLC owner in New Jersey is filing a Certificate of Formation with the Secretary of State (SOS). The fee for this certificate is relatively small at $125. Your LLC must also file an Annual Report with the SOS every year after formation. The cost of this report is $50 each year.
In addition to these two documents, your business may need to file other registrations or forms with the state, such as tax registrations or a certificate of authorization.
How To Stay Compliant As An LLC In New Jersey
As a business owner in New Jersey, it is essential to stay up-to-date with the state's requirements.
One of these involves filing an Annual Report on the last day of the month you filed your Certificate of Formation.
The state can take away your business if you fail to file and pay the associated fee.
Hiring An Attorney
Depending on the complexity of your business structure, you may have to hire an attorney to draft documents such as operating agreements or corporate resolutions.
Having a lawyer review your paperwork before submitting it ensures that everything is correctly filled out and complete. This ensures that filing with the state's Division of Revenue has no delays or unexpected issues.
It also helps ensure that all legal requirements are met so that your business remains compliant with local laws and regulations.
So how much does it cost to form an LLC in New Jersey?
The answer lies in keeping up with all these requirements.
With some research and preparation, setting up and maintaining your LLC in New Jersey can be done quickly and easily without missing any critical deadlines or incurring unnecessary fees.
Following the above steps ensures that your LLC remains compliant and enjoys limited liability protection for years.
Further reading on MikeVestil.com: Knowing the costs of forming an LLC in various states can help you decide the best state to start an LLC.
Here are some articles to check out:
Finally, here's all you need to know about opening a bank account for an LLC.