Forming an LLC NJ: A Step-by-Step Guide – From Ask

Forming a Small business LLC NJ

LLC NJ

Fromask.com guide on how to set up a Small business LLC NJ will walk you through everything without any hassle in choosing the right business lawyer. Choosing a good attorney and working closely with them is vital. Act of not doing so definitely will lead you down the route of failure for your business and perhaps costly mistakes or gaps in what you need to do for tax refunds etc. The key when choosing an attorney is to make sure they have experience in the field and will properly understand what it is that you need by way of tax return preparation, planning, management accounting services, etc.

An inexperienced lawyer may not realize they’re signing off on something incorrect or miss a deadline that could cost you financially. There’s a lot more information out there on different companies offering company formation New Jersey services but my advice might always be to choose someone who has experience in small business formation which can make all the difference for your financial wellbeing and safety.

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LLC stands for Limited Liability Company. It is a form of business entity owned by members, just like in a partnership or sole proprietorship, where the owners are protected from business losses from lawsuits by other people. Owners can be single people or multiple people with some documents listing names of owners and having their signatures for each document using power of attorney.

Select a name for your NJ LLC

State agencies require businesses seeking to establish an LLC to register. This helps consumers identify the business. New Jersey laws regarding LLC names include requirements such as limiting words that may be used and other aspects of forming an LLC. Only certain words may appear in the name of the company including “bank,” “insurance,” and so on. Certain words are not allowed. Businesses must register with state agencies and use specific language ending in “Limited Liability Company,” “LLC” or “L.L.C.” as well as terms such as Limited or Corp. The abbreviation LTC or LTD can also be used along with words including Co for Company and Incorporated or Inc for limited liability company (LLC).

The state of New Jersey checks whether your business name is available before you can officially register it to be a limited liability company. Otherwise, you might run into some complications later on. For a list of examples, please see the following link which provides examples of names already in use as well as relevant periods. Although many awesome names haven’t been taken yet.

Select a registered agent in NJ

When forming an LLC in New Jersey, a state resident can fulfill the role of a registered agent as long as they are a member or manager of the LLC. Alternately, if the business is authorized to operate in NJ, the owner or director may be listed as the chief operating officer and function as that entity’s registered representative. The registered representative must possess a physical address within the state (PO boxes are not permissible), and this is called the registered office (Small Business LLC NJ).

Incfile LLC also provides licensed services for all 50 states regardless of where you land on the map. If you form your LLC with Incfile through our self-service platform and maintain your membership with us over time, we’ll even provide free registered agent service for one year (Small Business LLC NJ).

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Obtain an NJ business license

You might realize that you need a business license if you’re setting up a shop in New Jersey or want to sell goods or services. It will be useful to check that your industry only needs this if you plan on offering services that might make it mandatory, though the list of industries is clear and easy to navigate so there’s no excuse! For example, most construction businesses will have to pay tax regardless of whether they have any licenses required as it is an Army-run operation (meaning federal). In this case, many states maintain specific accounts for appropriate taxes due and these should also be checked against the type of product or service being offered (Small Business LLC NJ).

File your certificate of formation

The next step when we form an LLC in New Jersey is to file our articles of organization. The Articles of Organization will establish our authority to operate officially as a New Jersey LLC. Although you can request a paper copy of the form, the quickest option is to fill out the Articles of Organization online. The filing fee for Articles of Organization is $125.

To start a new LLC, you’re required to have the most basic information needed. You’ll find this information as part of your online application or as part of the free do-it-yourself guides that are available online. If you are filing your certificate in person with the Division of Revenue, it is recommended that you take a copy of your LLC’s certificate of formation with you to present to them when turning in your paperwork (Small Business LLC NJ).

Draft an LLC operating agreement

Although New Jersey companies don’t need to create a formal operating agreement when forming an LLC, IncFile still recommends creating one. This agreement works as a roadmap for how the company will be run day-to-day and allows for Co-Owners to have a written document that states their roles, obligations, and responsibilities within the business. IncFile does recommend reviewing this document with all of your members so everyone is on the same page. Make sure to keep a copy in storage so you can provide it if any questions or disputes regarding your LLC arise (Small Business LLC NJ).

File annual reports

New Jersey LLCs also have to file an annual report. The report is due on the last day of the anniversary month in which the business was formed. For example, if you filed your certificate of formation using our company on March 3, your annual report would be due by March 31 of the subsequent year and each following year. Additionally, every licensee must maintain accurate records to monitor their assets (Small Business LLC NJ).

Pros and cons

Pros

 
  • Members of an LLC are not personally liable for business debts and lawsuits (as long as separation is maintained between the business and personal finances).

  • LLCs have fewer recordkeeping requirements than corporations.

  • LLC members can choose their business’s tax treatment.

  • By default, LLCs are pass-through entities for tax purposes and avoid the double taxation of C-corporations.

Cons

  • LLC members must pay high federal self-employment taxes.

  • Corporations are better suited than LLCs for raising money from outside investors.

  • LLC members can’t take a salary, and all draws from the business are subject to income taxes.

 The Bottom Line

Whether you’re protecting your home business from creditors or managing your estate planning, it may be wise to look into the legal option of setting up a family LLC. You need experienced legal expertise if you want to set up a family LLC. If you want to make sure that you’ll protect your family and that they’ll inherit after your death, this is also good asset protection. The best choice would be a state with protective laws for families like New Jersey.

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