How to Start a Business in New Jersey
- New Jersey Business Facts and Environment
- Step 1: Decide on a Business Structure
- Step 2: Pick a Business Name
- Step 3: Register the Business
- Step 4: Obtain Your Federal Employer Identification Number
- Step 5: Open Company Bank and Credit Accounts
- Step 6: Set-up An Accounting System
- Step 7: Obtain Licenses and Permits
- Step 8: Hire Employees (if applicable)
- Step 9: Obtain Business Insurance
- Step 10: Systemize and Organize
- Step 11: Branding and Marketing
- Step 12: Annual and Ongoing Requirements
- Important New Jersey Contacts
New Jersey Business Facts and Environment
NJ Business Facts
New Jersey’s nickname, The Garden State, is said to have been coined by Abraham Browning of Camden, who first referenced it by that name at the Centennial Exhibition in Philadelphia on New Jersey Day, August 24, 1876.
New Jersey has the most diners of any region in the world, and is often referred to as the world’s Diner Capital.
With 90% of its residents living in urban centers, New Jersey has the highest urban population in the United States. It is the only state where all of its counties are classified as metropolitan areas.
New Jersey has the densest system of highways and railroads in the US. The Garden state also has the densest concentration of shopping malls in the world, with seven major shopping centers situated in a 25 square mile radius.
Major Companies in New Jersey
Currently Johnson & Johnson holds the top employer position in the Garden State. Other large corporations are Conduent, Merck & Co., Bed Bath & Beyond, Toys R Us and Automatic Data Processing.
Startup Environment
Although the tech and startup scene in New Jersey is experiencing a period of growth, many New Jersey startups currently have a difficult time finding investors and acquiring funding. Part of the reason behind this is tied to New Jersey’s capital gains tax, which applies to all exchange of property, shares, and stock.
Step 1: Decide on a Business Structure
There are 3 basic options: a DBA, a Corporation or an LLC. Click here to learn more about business entities.
- A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
- A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
- An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.
Step 2: Pick a Business Name
Picking a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that, the better).
- Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
- Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
- Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if you’re name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use google at a fairly advanced level you can reasonably clear a name yourself.
TIP: search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered. - Make sure your company name choice is available by searching the New Jersey Business Entity Database and doing a name search on the State of New Jersey website. Note: 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).
Step 3: Register the Business
Each state has it’s 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.
How to form an LLC in New Jersey
- Complete a Public Records Filing for your business. These forms must be filed with the New Jersey Department of Treasury, Division of Revenue & Enterprise Services.
- Hire a professional Registered Agent.
- File a Certificate of Formation with the New Jersey Division of Revenue and Enterprise Services.
- Optional: Elect S-Corporation status with the IRS by filing IRS Form 2553. Yes, an LLC can choose to be taxed as an S-Corporation (or even a C-Corporation).
TIP: Speak to your tax advisor about this important issue because it adds complexity to your LLC most people would rather avoid. - Hold an Organizational Meeting (yes, even for 1 person LLCs).
How to Incorporate in New Jersey
- Complete a Public Records Filing for your business. These forms must be filed with the New Jersey Department of Treasury, Division of Revenue & Enterprise Services.
- Hire a professional Registered Agent.
- File a Certificate of Formation with the New Jersey Division of Revenue and Enterprise Services
- Optional: Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.
- Hold an Organizational Meeting.
Notes about Incorporation and forming an LLC in New Jersey
- A Registered Agent is required for every New Jersey Corporations and LLC. The chosen registered agent must have a physical street address in New Jersey. A professional Registered Agent will provide their address and forward any important documents to you. This is convenient if you have to move, since you won’t have to file forms or pay fees, (just update your address with your agent).
- An “Organizational Meeting” takes contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more. Many people simply do steps 1 and 2 above but this leaves your company unorganized and possibly exposed to legal, tax and compliance issues. Save time and money now by properly organizing the company.
How to File a DBA in New Jersey
- Search your desired business name in the New Jersey Business Entity Name Search.
- Register your name with the New Jersey Department of Revenue & Enterprise Services.
Ready to register a business in New Jersey?
Our formation package includes everything you need to get started
- Preparing and submitting Articles of Organization to the state of New Jersey.
- All the necessary post-formation documents completed and personalized to you “ready for signature.”
- Our exclusive Startup Wizard – which guides you through the complete startup process from formation to bank accounts, logos and more.
Ready to Start Now? Let Us Do The Work
Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.
- Learn more about our business formation service
- Read our verified reviews and 100% Satisfaction Guarantee
- Contact our friendly support team if you have any questions
Step 4: Obtain Your Federal Employer Identification Number
Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.
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 you we form your company.
Step 5: Open Company Bank and Credit Accounts
To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork b) your EIN c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).
TIP: Our business formation service includes a free banking resolution for your use.
Step 6: Set-up An Accounting System
Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.
Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.
Step 7: Obtain Licenses and Permits
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.
TIP: We work with a company that can obtain and prepare business licenses and permits for you. Click here to learn more.
Step 8: Hire Employees (if applicable)
If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.
Step 9: Obtain Business Insurance
There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection. Click here to view our preferred provider of business insurance online.
Step 10: Systemize and Organize
Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.
Step 11: Branding and Marketing
Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.
Step 12: Annual and Ongoing Requirements
DBA: Your Fictitious Business Name should be valid for 5 years (unless you change company name or other information listed on the FBN) at which point you’ll need to renew it with the county.
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 $53, and the report must be filed online.
Corporation: Your business must keep corporate records at its principal place of business. Every year, an officer of your corporation must file an annual report on or before the last day of the anniversary month of incorporation. The fee is $53 ($25 for non-profits). The annual report filing may be used to change the business’s registered agent or registered office. This report must be filed online.
Franchise Taxes: New Jersey businesses must file an annual franchise tax, submitted quarterly, based on a percentage of total revenue. Interestingly, LLCs do not pay income taxes – only their members do.
Ready to start a business in New Jersey?
Our New Jersey filing services will help you get started as quickly as possible.
Important New Jersey Contacts
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.
- New Jersey Business Portal
- New Jersey Small Business Development Center
- New Jersey Career Connections
- Tax Information For New Jersey Businesses
3. New Jersey State Legal Statutes:
- New Jersey Business Corporation Act
- New Jersey State Limited Liability Companies – the specific act that applies to New Jersey State LLCs.
- New Jersey State Businesses and Professions – includes regulations on topics such as business and professions codes.
4. New Jersey State Chambers of Commerce
5. Angel.co New Jersey State Startups
6. New Jersey Business News
7. New Jersey State Small Business Development Center
