Many New Jersey entrepreneurs choose to form a limited liability company (LLC) because of the many benefits of this business entity type. An LLC provides liability protection, for instance, so your assets are not at risk if your business is sued or cannot pay debts.
An LLC is a “pass-through entity” for tax purposes, meaning that the LLC itself is not taxed. Instead, income passes through the business to the LLC owners or members, who report it on their tax returns. LLCs also offer flexibility in terms of management and taxation.
Creating an LLC is relatively straightforward, but ensuring it’s done correctly is crucial to getting your New Jersey business on the right foot. The most critical step is filing a certificate of formation.
What Is a Certificate of Formation for an LLC?
The certificate of formation (also known as Articles of Organization in other states) is a legal document filed with the New Jersey Division of Revenue and Enterprise Services to form an LLC officially. It will include your business name, address, registered agent information, and more, as detailed below.
First, Select a Registered Agent for Your New Jersey LLC
New Jersey requires LLCs to appoint a registered agent, a person or company authorized to accept and respond to official business correspondence, such as legal, tax, or financial documents.
The registered agent ensures all required notices and documents are received. In New Jersey, the registered agent can be an LLC member, individual, or entity that meets state requirements. In New Jersey, a registered agent must:
- Be 18 years or older
- Have a physical address in the state
- Be available during regular business hours
- Be registered to operate in the state, if it’s a business
Many business owners hire a registered agent service to ensure their LLC stays fully compliant and for convenience.
If you choose to be your registered agent, you must be at your registered agent’s address for all business hours. A registered agent service allows you to be wherever you need to be to run and grow your business.
How to Submit a Certificate of Formation in New Jersey
To start, visit the New Jersey Division of Revenue and Enterprise Services website to access the certificate of formation online.
Note that New Jersey has one form for all business registrations, so you’ll need to follow the instructions for an LLC. On the first page, you’ll do a business name search to make sure your desired LLC name is available.
In New Jersey, the certificate of formation requires the following information:
- LLC name
- Principal office address
- Registered agent information
- Registered office address
- Business purpose
- NAICS code
- Member or manager information
After the name search, select “NJ Domestic Limited Liability Company (LLC)” from the drop-down menu and enter your business name. You’ll fill in all the required information on several screens and electronically sign the form.
You’ll have a chance to review the information before payment. The filing fee is $125. You should receive a confirmation online. The turnaround time for filing by mail is up to three weeks.
Some entrepreneurs hire an LLC formation service like ZenBusiness to handle this step, saving time and ensuring the process is done correctly.
Draft an Operating Agreement
New Jersey does not require an operating agreement, but it’s a crucial document that defines members’ ownership percentages and profit allocations. Those are the two key elements, but it should also include the following:
- Each member’s rights and responsibilities
- Management structure and roles
- Voting rights of each member
- Rules for meetings and voting
- What happens when a member sells their interest, becomes disabled, or dies
You can find operating agreement templates online, but it’s best to have them drawn up or reviewed by an attorney. The language of an operating agreement is crucial and can often help determine how member disputes will be resolved. Here you can obtain a free operating agreement template for your New Jersey LLC.
Contact Information for the New Jersey Division of Revenue and Enterprise Services
New Jersey Division of Revenue & Enterprise Services Website
Online portal website: New Jersey Business Formation Services
New Jersey Division of Revenue
P.O. Box 252
Trenton, NJ 08646
New Jersey Division of Revenue
33 W. State St.
Trenton, NJ 08608
There’s only one way to create an LLC in New Jersey, and that’s by successfully filing a certificate of formation. If you make any mistakes, you’ll likely have to refile, so be sure to do it right the first time and set your business up for serious success!