To start your business in the United States, it is necessary to choose and formalize a legal structure. With the intention that your business idea is consolidated, we expose you what are the Steps to form an LLC in New Jersey.
The limited liability company is a hybrid business entity, because it combines the characteristics of the corporation with a single partnership. In other words, it separates personal assets from those of the company, giving protection that others do not have. That is why The first thing to do is to separate personal and business assets before formalizing it.
Steps to form an LLC in New Jersey
First, homeowners have limited personal liability when it comes to business debts. Furthermore, the Internal Revenue Service (IRS) now allows LLCs to choose between being taxed as a partnership or a corporation.
Tracking, filing, and paying taxes is simple. The income you receive is reported on the personal tax return, that is, you will not have double taxation problems. They have a tax treatment similar to sole proprietorships.
One of the most significant advantages of establishing an LLC in New Jersey is the STX program.. It is based on the sales tax exemption in which businesses can belong for a certain time. They are also excluded from paying other taxes.
This type of business structure is more expensive than forming a partnership or sole proprietorship. But it's quick and easy to do, you can complete the process online.
But they have more difficulty obtaining venture capital financing. Its members are required to pay high federal taxes for self-employment. They are not suitable for raising money from outside investors. Its members cannot receive a salary and all withdrawals depend on income tax.
1-Choose a business name
The name that the LLC will bear must be original and unique. No one else in the state should have it. To verify that they do not have it in use, enter the verifier of availability of names from the New Jersey Division of Revenue.
When verifying that it is available, the next step is to reserve it by completing a form which is sent to the New Jersey Secretary of State. The filing fee is $50. It will be reserved for 120 days.
Do not forget that the name has to carry the abbreviation LLC or "Limited Liability Company". It should not resemble anything carried by government agencies.
The company may also do business under an alternative name after receiving authorization to operate. Registration costs $50 and is valid for 5 years. It is done by completing the form C-150G.
It is advised to obtain the business domain for the website.
2-It has a commercial direction
LLCs must have a mailing address, this can be out of state, but not a post office box. Whether a virtual mailbox is supported.
3-Assign a registered agent
The registered agent will be in charge of carrying out the transactions on your behalf. You will receive tax forms, formation documents, notices and other correspondence from the New Jersey government. He will be responsible for filing the reports with the state Revenue Division.
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You must reside in the state and have a physical address. Likewise, companies with a main business address in the state are authorized to fulfill this function. This role can also be fulfilled by the business owner.
4-Request the EIN
El Employer identification number is requested from the Federal Internal Revenue Service (IRS) online or by mail. It is a requirement to pay employees' salaries, file taxes and even open a bank account.
To request it you will have to have a director or manager, the taxpayer identification number of the director or manager or personal identification number of the taxpayer. If you don't have any, proceed to fill the SS-4 form, if you process it by mail.
5- Presents the registration request Company
The business registration application process is conducted with the New Jersey Department of Treasury, Division of Wages and Business Services. This is done in order to receive tax information from the state government, these data are necessary for the tax return.
In the form To fill in online they will require the name of the company, the commercial data, purpose of the business and its address.
After forming the company you will obtain the Certificate of Formation or a Certificate of Authority with which you will have the entity identification number (Entity ID). This is used to identify business records.
Filing online is $125 and filing the annual report is $75.
6-Register the LLC for tax purposes
Forming an LLC in New Jersey requires completion of registration with the Division of Revenue and Business Services. You must comply with the process within 60 days of its formation to receive the tax identification number from the state. With this you will receive the declarations and notices.
It can be run online using the form NJ-REG. For this you will need the EIN, the code NAICS extension and business code. When the process is complete, you will get a New Jersey tax identification number and a Business Registration Certificate (BRC).
7-Permits and licenses
After completing the process of forming an LLC in New Jersey, proceed to open a commercial bank account. Request the business permits and licensesaccording to the type of business you are going to operate.
For the federal ones, consult the US Small Business Administration (SBA). While, for the local ones, investigate in the Secretary of the county where the business is located.
Get professional liability insurance with employee and business liability coverage. LLCs that exist in other states must register with the state as a foreign LLC.
Don't forget to file the report with the Division of Revenue every year.
The businesses that have developed the most in the state are pharmaceutical products, financial services, transportation and logistics. Another of the businesses that is seen the most these days is cleaning, that is why we made a guide on How to open a cleaning business in the United States –
Although the process is easy, it can take a while, which is why many people choose professionals in this field. If you find it too cumbersome, contact us for advice.
Remember that after registering and already running, your company must not forget the Local and state taxes for businesses in the USA