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Before being colonized, New Jersey was home to Native American Indians who fed on clams from the shore, animals from the woods, and produce like corn, beans, and sweet potatoes. Since then, New Jersey has been home to all sorts of entrepreneurs, from Thomas Edison the inventor to Bruce Springsteen the rock ‘n roller. The state inherited its nickname “The Garden State” from its leading production of blueberries, cranberries, and tomatoes, but is also a major hub for industries like logistics, transportation, and healthcare. Currently, the Garden State is the location for over 84,000 small businesses, which employ about 1.8 million employees.
As of 2022, the largest companies doing business in New Jersey are names such as Cognizant at the top for employment, followed by Panasonic, Johnson & Johnson, Merck, and Bed Bath and Beyond.
Higher labor and office space costs can make the New Jersey business environment a challenge. Paired with higher taxes than many states, it could be an uphill climb to find good help and the right place to operate while maintaining a lean business budget.
This may seem like a simple step, but giving thought and doing research for your business name can save loads of tax, legal, and financial trouble in the future. A unique business name will separate you from other New Jersey businesses, and also identify your company nationally and internationally. We recommend taking the following steps to establish a unique business name.
The name you choose for your business should tell customers what you sell or do, be easy to say and easy to remember. A business name should also be one you can use for the life of your business. What are the products or services you offer? If you’re selling boats, for instance, you would want to include that word or something about boating in your business name. You may offer a variety of products or services, so you’ll want to select a business name that represents the entire business. Example: Tom is well-known for his custom boats, but he also sells boating equipment, fishing tackle, and snacks for boat trips. So instead of just naming his business Tom’s Custom Boats, he could name it Tom’s One-Stop Boat Shop to tell customers that he sells more than just boats. The name will also be relevant for the life of the business.
When you have a name or even a few, say them to your family and friends, and pretend to answer the phone using a greeting with the proposed business name. If it tells customers about your business and is easy to say and remember, you’re ready for the next step.
Now you’re ready to search your business name for potential conflicts with other businesses. Great minds think alike, so make sure your name is unique and not easily confused with other companies by scanning Google, Bing, Yahoo, and other major search engines. Ideally, you won’t find your name being used, and you can move on to Step 2. If you do find that your name is in use with another business, the best practice would be to just choose a different name. You can still use the same words, but they’ll have to be arranged to be completely unique from other businesses. Remember, choosing the right name before you start doing business is the best defense against being confused with other companies and preventing tax and legal issues. It’s also a good idea to trademark your name for added protection.
The last step to securing a unique business name is to check the New Jersey Business Entity Database and do a name search on the State of New Jersey website.
TIP: Make sure to search variations of spelling, plurals and misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).
Trademarking your business name is not required, but it’s highly recommended, especially if you run a national or international business. You can search your intended business name with the US Patent and Trademark Office (USPTO). If there are potential conflicts, you should be able to find them in their database. Some entrepreneurs choose to hire a trademark specialist to ensure there won’t be any problems, but it can be costly. We have found that by searching the Internet and USPTO database yourself is sufficient, as long as you are thorough with your searches. Search variations like misspelled words, plurals, and various versions of your intended name to rule out similar name registrations.
The most common New Jersey business structures are the LLC, Corporation, and the DBA, or Doing Business As (also called a trade name or alternate name in the Garden State). The type of business you form will determine how your business is taxed and whether or not you can hire employees. Here’s a quick breakdown of each business type.
Filing a DBA does not form a separate business structure, but rather gives an individual or partners a name to separate business from personal matters. Sole proprietors and general partnerships are required to file a New Jersey DBA, otherwise called an Alternate Name with the county where they do business.
The Limited Liability Company (LLC) business structure has only been around since 1977. This business type is an ideal combination of pass-through taxation from Partnerships and Sole Proprietorships and the limited liability of a corporation. Managing an LLC costs less and requires less paperwork than a traditional corporation. There’s also flexibility with profit distribution among members of a Partner LLC. Because of these benefits, the LLC has become the preferred choice among solo owners and small businesses.
There are different types of Corporations, the most common being the C-Corp and S-Corp. Usually, larger companies form as C-Corporations, which is ideal for companies with a number of employees. A C-Corp becomes its own entity, so it is taxed, and even sued without involving the owners, or shareholders.
The S-Corporation or S-Corp has a structure similar to the C-Corp, but the “S” signifies that a company is a small business. A small business designation from the IRS exempts a company from paying corporate income tax, in addition to personal income taxes. Owners of an S-Corp are also called shareholders like C-Corp, but there are limitations on the number of shareholders and type of stock that can be issued.
Contact one of our Tax Partners if you need help deciding which business type is best for your company.
Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and picked your business name, here are the requirements to register your business in New Jersey.
Save time and money with MyCompanyWorks’ online LLC and Incorporation system.
Your EIN is like your Social Security Number for your company. It’s required for New Jersey Corporations and LLCs and optional for DBAs unless you want to hire employees. Even with a DBA, applying for an EIN is recommended to prevent using your personal social security on business, legal, and tax documents. Using an EIN instead will help reduce the risk of identity theft, so it’s best to separate your business and personal identities as much as possible.
To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.
TIP: We will obtain your EIN for you if we form your company.
As we mentioned in step 4, keeping your business and personal identities separate helps to prevent identity theft. Keeping separate bank and credit accounts will prevent co-mingling of funds and future troubles with the IRS. It’s easier to prove that you’re keeping funds separate if you have accounts just for your business. It’s also the only way to establish business credit. With an LLC or Corporation, you can apply for credit and banking accounts in your business name. Once you have established your business, it should be easy to qualify for loans and larger credit lines.
You can call local banks or search for online financial institutions to get started. Most banks will require filed state paperwork, a company resolution signed by all owners, and your EIN. Depending on your current personal credit or residency status, there may be additional requirements.
TIP: Our Online Business Formation System includes a free banking solution.
Our Recommended Banking Partners can make opening New Jersey bank and credit accounts for your business simpler and faster.
Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).
The State of New Jersey Business Portal has information regarding business licensing in New Jersey.
Our Business Licensing Partners can help you file for the proper New Jersey business licenses.
The State of New Jersey requires all businesses with employees to carry what is called Workers’ Compensation insurance. It covers a portion of an injured employee’s missed wages, related medical expenses, and attorneys if there’s ever a lawsuit.
If your company owns a vehicle, you must also carry commercial auto insurance. Companies with large vehicles, like trucks may require additional coverage, and personal vehicles that are driven for business should also have at least a minimum auto policy (although not required).
Other insurance policies that are not required are still recommended to protect you in lawsuits. You can get owner and liability policies for a few hundred dollars each year. Find out more about affordable business insurance policies from our Insurance Partners.
An organized accounting and record-keeping system are critical for every small business. There are plenty of entrepreneurs who blow off this step and find themselves agonizing over working backwards to be able to file tax returns, or worse, answer to the IRS for an audit. Businesses are encouraged by the IRS to keep financial and tax records for seven years. You should also hold onto employment tax documents for at least four years after taxes are paid and most other records for three years.
There are all sorts of apps and software online to manage finances, but if you’re taking the DIY approach, read our Accounting and Financial Management guide for more information and tools to set up your accounting system.
Automating your business means setting up everything from paying bills to filing annual tax reports. Even in a small business, there can be a lot of moving parts. By documenting and automating your processes, you can easily train new hires and empower someone besides yourself to take over if and when the time comes. We have a lot of tools and helpful resources available to make managing and automating your company easy.
In Steps 4 and 7 we mentioned that you must have an Employer Identification Number and Workers’ Compensation insurance to hire employees in the Garden State, so make sure you secure the EIN and insurance policy before hiring employees.
Once you have your EIN and insurance policy, you can register as an employer with the State of New Jersey Department of Labor and Workforce Development. You’ll need to collect an I-9 Employment Eligibility Verification form, appropriate ID, and Form W-4 from the IRS for each employee. New Jersey also requires all newly hired and rehired employees to the New Jersey New Hire Reporting Center within 20 days of employment.
NOTE: You’ll need your IRS and state employer IDs and paperwork to complete the New Jersey new hire and rehire reports.
Keeping organized employment records saves a lot of time since you’ll need to access them throughout the year.
Our Vendor Network is full of affordable tools to help you manage employees and payroll.
Remember all the time you spent choosing a unique business name? Now it’s time to put it to use and let the world know you’re open!
Try our logo maker to create a logo and brand that stands out from the crowd.
Just like your business name, your logo and business identity should relate to the products and services you offer. If you have time, we suggest searching the Internet for current color schemes, themes, and ideas to brand your business. Our Design Partners can also develop a professional and polished business brand for you.
Marketing can be done in print, online, via email, or even in person. When your business brand is ready to go, our Startup Marketing Plan and Checklist will help you develop a marketing plan to identify customers, work your plan, and measure results.
DBAs or Alternate Names: In New Jersey, the DBA or Alternate Trade name is valid for 5 years unless changes are made to the name or information that was submitted on the initial application. If no changes have been made you’ll need to renew every five years to keep the name.
LLC: New Jersey LLCs are required to file an annual report on or before the last day of their anniversary month. The filing fee is $75 + $3.00 for credit card processing. New Jersey requires online filing for annual reports.
Corporation: Your business must keep corporate records at its principal place of business. New Jersey Corporations are required to file annual CBT-100 tax returns with the NJ Division of Taxation and annual reports with the Division of Revenue and Enterprise Services on or before the last day of the anniversary month of incorporation. The fee is $78 ($33 for non-profits). Annual reports must also be filed online.
Franchise Tax for All New Jersey Businesses: New Jersey businesses must file an annual franchise tax return and if your tax liability is $500 or more, you’re required to submit installment payments of estimated tax each quarter. Quarterly estimated tax payments are due on the 15th day of the 4th, 6th, 9th, and 12th month of your tax year.
If the tax liability is under $500, you can opt to either make quarterly payments or make one payment that is 50% of the total tax liability.
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New Jersey Department of State
NJ Department of State
PO Box 300
Trenton, NJ 08625
New Jersey State Taxation Departments
New Jersey State Labor and Employment Departments
New Jersey Startup Resources
1. New Jersey Small Business Administration
Small Business Administration (SBA) New Jersey State District Office
2. SCORE Mentors
SCORE is a resource to connect with active and retired business people who volunteer time to support startup businesses. Connecting with a local SCORE mentor can help you avoid costly startup mistakes.
3. New Jersey State Legal Statutes:
4. New Jersey State Chambers of Commerce
5. New Jersey Angel Investors
6. New Jersey Business News
7. New Jersey State Small Business Development Center
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