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by Mike Vestil 

Protecting Your New Jersey LLC: Cost, Liability, And More

Starting a business in New Jersey can be an exciting and rewarding experience, but it is also essential to understand the legal requirements. 

In this article, I'll provide an overview of the essential steps you'll need to take to form an LLC in New Jersey.

Everything You Need To Know About Starting An LLC In New Jersey

Here are the main steps to take when forming an LLC in New Jersey.

  • Registering Your Business Name: The first step to establishing an LLC is registering your business name with the state. To do this, you must complete an Application for Reservation of Name form and submit it to the Division of Revenue with a fee of $50. Before completing this application, check that no one else has already claimed your desired name by using the Business Name Search portal available on their website.
  • Ordering Certified Copies: After your LLC is registered, there are other documents you will need certified copies of to keep as records. The Division of Revenue offers official copies ranging between $25 or up $50, depending on what type is needed. Do not wait too long after submitting these applications, as these orders may take several weeks to process and deliver.
  • Taxation Requirements: One crucial element when starting an LLC is understanding taxation requirements. Utilizing the state’s multiple options for filing taxes can simplify the process, including online filings or even partnering with third-party vendors.
  • Business Name Availability & Reservation: Before submitting Articles of Organization, check that the desired business name is available & not already taken! If all looks good, then be sure to reserve your chosen name for 120 days through the filing form ‘Name Reservation Request,’ which costs a $50 fee. You can do this via the Secretary of State website under the Business Filings Search tab or contact NJ Division Corporations directly at 609-984-3880 for assistance. Business entities like corporations and Limited Liability Companies (LLC) need not worry about trademarking their names as those are more specific intellectual property matters which require additional steps beyond simply registering a company. 
  • Certificate of Formation: The next step to starting an LLC in New Jersey is filing a Certificate of Formation with the Secretary of State. This document outlines the name; registered agent's name & address; the purpose for forming it; length of time you plan for its existence; how it is managed & finally, the signature from the person organizing said LLC! Once submitted to Department Treasury’s Division Revenue/Enterprise Services Commission and approved by the Secretary of State – viola! You are now issued a certificate that confirms legal legitimacy allowing further progress like securing EINs plus other licenses or accounts essential towards doing business in NJ.

What To Consider When Naming Your New Jersey LLC

Starting a business in the state of New Jersey requires that you come up with an official name for your LLC. There are several things to consider when choosing the perfect name.

Uniqueness And Restricted Words

When deciding on a name for your LLC, you must ensure that it is unique and does not conflict with any existing businesses in the state of New Jersey. This means you cannot use words like bank or lawyer without providing additional documents, such as proof of licensure if required. 

It is also important to note that all names must include some form of “limited liability company,” “LLC,” or “L.L.C.,” as these will help distinguish your business from other entities operating in New Jersey while protecting from personal liability should legal action be taken against the company at some point in time.

URL Availability

To protect yourself from future conflicts of interest when naming your LLC, it is essential to check the availability of URLs associated with each potential choice before settling on one you like best. Once you have decided on a particular name, you can reserve it by submitting the necessary forms and a fee if required - up to 120 days! This will ensure that no one else can register this exact name until after those 120 days have elapsed. This gives you plenty of time to finalize matters and ensure everything is set up correctly before going live with your new business entity's official title.

Essential Fees And Filings For Starting An LLC In New Jersey

One of the most critical steps is ensuring you have all the necessary fees and filings when forming an L.L.C. in New Jersey. 

Here's what's involved.

L.L.C. Formation Fees

The first step in starting an L.L.C. is to file with the Secretary of State. Depending on your residence, additional fees may be required for filing your paperwork. In New Jersey, a flat fee of $125 for filing your L.L.C. formation documents. Make sure to keep this cost in mind when creating your budget! Additionally, you may want to consider reserving the name of your L.L.C. for $50 if another company has not already taken it. This will ensure that no one else can use the same name as yours before you officially register it with the state.

Document Copies/Certificate Of Standing

After you’ve filed all the paperwork and paid any necessary fees, you’ll need proof that everything has gone through properly. This can be accomplished by ordering copies of all documents related to your L.L.C. formation or requesting a Certificate of Standing from the Secretary of State office in New Jersey. Both items are essential for ensuring everything has gone through correctly and officially marking your new company as official! Document copies cost just $10 each, while Certificates of Standing cost only $35 each.

D.B.A. Registration

If you plan on doing business under any other name than what was registered with the Secretary of State, then D.B.A. registration is also required in New Jersey. This ensures that customers and creditors know who they are dealing with when interacting with your business under its alternate name(s).

Insurances To consider In New Jersey

One of the most critical considerations for L.L.C.s in New Jersey is workers’ compensation insurance and liability insurance. Let's explore these policies further.

Workers' Compensation Insurance

Workers’ compensation insurance is mandatory for employers in New Jersey. This type of insurance protects employees who may become injured or ill by covering a portion of their medical expenses and lost wages due to their injury or illness. 

This type of insurance also protects employers from being sued by employees who have been injured while working. While opting out of this requirement is an option, being adequately insured still proves beneficial for those working within the business as they have access to medical care without having to bear the entire financial burden themselves.

Liability Insurance

Liability insurance can help protect a company from any legal repercussions should one of its customers get hurt - depending on the type of industry it deals in, rates may vary accordingly. This form of insurance covers any damages or losses resulting from an accident on your property. 

It also covers incidents caused by your products or services and any legal fees associated with defending against a lawsuit brought forward by a customer who has been harmed due to negligence on your part. 

Without liability coverage, companies could be personally liable for any claims made against them and face significant financial losses.

Appointing A Registered Agent For Your New Jersey L.L.C.

Establishing an L.L.C. in New Jersey requires the appointment of a registered agent. This could be either a person (even the owner) or an entity, so long as they are licensed to provide services, have their address within N.J. state borders, and assure availability during regular working hours.

The appointed registered agent will receive all official documents such as tax notices, summonses, subpoenas, service of process documents, and lawsuits on behalf of your company. If such documents are not served properly, you may be liable for penalties or fines imposed by the state. An appointed registered agent can help protect your business from potential tax problems since they can ensure that all necessary paperwork is handled promptly. Furthermore, having a designated registered agent allows you to keep your personal address private.

This eliminates unwanted solicitations and protects your privacy.

Any person or entity that meets the following requirements can act as a registered agent:

  • They must have their address within N.J. state borders
  • They must be available during regular working hours
  • They must be licensed to provide services in N.J. (if applicable)

The most common types of entities that serve as registered agents are professional services companies such as attorneys or C.P.A.s.

However, you can also serve as a registered agent if you choose. No matter who serves as your Registered Agent - whether an individual, an entity, or yourself, they should always have reliable contact information listed with the Secretary of State.

This includes their name, address, and phone number – so anyone looking for them can quickly locate them if needed.

Filing Fees & Taxes

Although filing fees vary depending on your situation, they remain fairly low in New Jersey compared with other states at $125-150 per application. You will also need to pay taxes such as property or sales tax if applicable - although this will depend largely on where exactly you are operating within N.J. borders! Additionally, additional fees may be associated with obtaining permits or licenses required by local governments, which should not be overlooked when budgeting expenses related to forming an L.L.C. within Garden State boundaries!

The Benefits Of Having An Operating Agreement

While not everyone wants to spend the time, money, or energy on creating an operating agreement for their L.L.C., it can be a handy document that sets out the rules and regulations everyone involved in the business is expected to follow.

An operating agreement is a document that contains all the details of your L.L.C., including who owns it and how profits/losses are divided among members. It also outlines management procedures, indemnification & liability coverage, registered agent details, and contributions from all members. Additionally, it should cover topics such as how decisions will be made, how meetings will be conducted, and what happens if a member needs to leave the L.L.C. or if new members join. Lastly, it should include clauses about when changes can or cannot be made to the agreement.

This document will help protect your interests and those of other people involved with your business if there’s ever a dispute among stakeholders or legal issues arise. 

Having an operating agreement helps ensure that everyone involved with your L.L.C. is on the same page about how things work and that all members are held accountable for their responsibilities within the company. Additionally, this document can help keep you out of court by providing clear rules and expectations on all sides, which could save you time and money in potential litigation costs.

Annual Reports

You must also remember that all L.L.C.s registered in New Jersey must submit an annual report each year. This report must be presented at the end of the month your formation papers were originally filed. The cost for this annual report is $75. Pay attention to when your first annual report is due so you don’t miss any critical deadlines.

These annual fees keep your L.L.C. in good standing with the state and help to ensure that all information on record remains up-to-date. Failing to submit your annual report can result in hefty fines and suspension of business privileges until all fees are paid and words are filed. Therefore, you must be aware of this requirement and ensure you meet the deadline each year to avoid any issues.

How To Establish A Business In New Jersey From Abroad

Starting any type of business can be daunting, especially if you are based outside the state you want to register it in. It can be even more challenging if you do not know the rules and regulations of the state where you intend to set up your business. In this section, I'll explore the essential steps of forming a company in New Jersey from abroad.

The first step is to pay the $125 filing fee for your foreign L.L.C. registration and submit the required Certificate of Authorization. After that, additional permits or licenses may be necessary depending on the industry you work in and where it resides. These permits or approvals must come from federal, state, and local governments to ensure the entire legal operation within New Jersey.

Some of these permits or licenses include:

  • a liquor license if you are running an establishment that serves alcohol
  • an occupational license if you are engaging in any professional services
  • a tax identification certificate, which is obtained by registering with the State of New Jersey Division of Revenue/Taxation

Additionally, other permits or licenses might be required depending on your type of business, such as those for food service establishments, massage therapy establishments, and sign shops.

Keeping track of changes in the laws and regulations concerning businesses operating in New Jersey from abroad is also essential. Changes can range from simple updates, such as changes in prices or fees associated with certain permits or licenses to more complicated matters, such as changes related to taxes or labor laws. Keeping up with these changes will help ensure your business stays compliant with all applicable laws and regulations governing its operations within New Jersey.

Conclusion

Starting an L.L.C. in New Jersey requires you to follow the above steps when establishing a business. Failure to adhere to the filing fees, permits or license requirements and tax obligations can lead to fines, penalties, or interest charges from the state. 

Be sure to understand all of the rules and regulations related to business ownership in New Jersey to remain compliant with the law. Doing so will help you successfully start and operate your LLC.

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About the author 

Mike Vestil

Mike Vestil is the author of the Lazy Man's Guide To Living The Good Life. He also has a YouTube channel with over 700,000 subscribers where he talks about personal development and personal finance.

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