- [Narrator] How to form an LLC in New Jersey.
If you are interested in starting an LLC
in the Garden State, you have good reason.
New Jersey has a highly-educated population
and ranks third in fastest start-up growth in the country.
Every state has slightly different requirements
for forming an LLC.
Follow along closely to learn the required steps
for creating your own limited liability company
in the state of New Jersey.
(gentle music)
There are two ways to form an LLC in New Jersey.
You can form one yourself
or you can hire a service to do it for you.
Let's start by looking at the six basic requirements
to form an LLC in New Jersey on your own.
You can also find these steps in more detail
on our website linked in the description below.
One, name your LLC.
Every state has its own rules
about what kind of names are allowed for LLCs.
In general, you will need to observe
these naming guidelines.
Your name must include the phrase
Limited Liability Company, or one of its abbreviations,
LLC or L.L.C. with a period following each letter.
Restricted words such as bank, attorney, law office, etc.,
may require additional paperwork
and may also need a licensed professional
to be part of the LLC.
Your name cannot include words that could confuse your LLC
with a government agency, such as FBI, Treasury,
State Department, etc.
You cannot use a name that has already been registered.
To see if your name is available in your state,
you'll need to do a name search.
This free service is available
on your state Secretary of State website.
Check out our free guide for finding the direct link
to your state.
We also recommend that you check to see
if your business name is available as a web domain.
Even if you don't plan to make a business website today,
you may want to buy the URL
in order to prevent others from acquiring it.
Two, choose a registered agent.
New Jersey requires that you nominate
a registered agent for your LLC,
who is your business's point of contact with the state.
The registered agent can be an individual
within the company, including yourself,
or you can hire a professional service
authorized to do business in New Jersey.
They will send and receive legal papers on your behalf.
These documents include official correspondence
like legal summons and document filings,
which your registered agent will receive and forward to you.
Your registered agent will help remind you
to file the necessary reports.
Failure to properly maintain your LLC
can result in fines and dissolution,
so this assistance is valuable.
Three, file the Certificate of Formation.
To register your LLC,
you will need to file the Certificate of Formation
with the state of New Jersey.
This can be done online, by mail, or in person.
When forming your LLC,
it's a good time to consider whether your LLC
will be member-managed or manager-managed.
Member-managed means all members of the LLC
manage the company.
This is good for small organizations
where everyone is involved in day-to-day operations.
The second option is manager-managed,
where individuals are appointed to manage the LLC.
This is appropriate for large organizations
where not everyone is involved
in the day-to-day affairs of the business.
Four, register your business for tax and employer purposes.
All LLCs in New Jersey are required to register
with the New Jersey Division of Revenue
and Enterprise Services for business entity and tax filings
within 60 days of formation.
This filing will make sure your business receives
a New Jersey Tax Identification Number,
allowing you to receive all proper returns and notices.
You can do this either online or by mail.
Five, create an operating agreement.
Although not every state requires it,
you should always create an operating agreement
to establish ownership terms and member roles for your LLC.
This foundational document is the core of your LLC
and will help you maintain your organization,
as well as further establish your LLC
as a separate legal entity.
There are six main sections of an operating agreement.
Organization outlines when
and where the company was created,
who the members are, and how the ownership is structured.
Management and voting addresses how the company is managed,
as well as how the members vote.
Capital contributions covers
which members financially support the LLC
and how more funds will be raised in the future.
Distributions outlines how the company's profits and losses
are shared among members.
Membership changes describes the process for adding
or removing members,
as well as if and when members can transfer
their ownership shares.
And dissolution, which explains the circumstances
in which the LLC may be dissolved.
An operating agreement is an internal document.
It does not need to be filed with the state.
However, it should be updated
every time there is a change in membership
or management at the company.
You can download a free sample operating agreement
or create a custom one
using our free operating agreement tool
at howtostartanllc.com.
Six, obtain an EIN.
Lastly, you'll need to get
an Employer Identification Number, or EIN, from the IRS.
Also known as a Federal Tax Identification Number,
your EIN is like a social security number for your LLC
and is how the IRS tracks your business for tax purposes,
and the EIN is also necessary
to open a business banking account
and legally hire employees.
EINs are free of charge
and can be obtained from the IRS online or through the mail.
And with that,
you will have formed a New Jersey LLC on your own.
Option two: hire a professional service.
The second way to create a New Jersey LLC
is to hire a professional service
to create your LLC for you.
Hiring a professional service to file your forms
and act as your registered agent for the LLC
will cost you an additional 50 to $150.
However, there are several benefits to working with a pro.
A hired registered agent
helps with getting your reports filed on time,
helps you stay organized
by keeping your business mail separate,
and is available at all regular business hours
to accept official mail and legal papers
on your LLC's behalf.
A final and important additional benefit
of using a service is privacy.
A professional service will provide a level of privacy
by withholding your personal name and home address
from the LLC's contact information.
There are many reasons
you might not want your personal information
easily accessible and associated with your business.
Hiring a professional LLC formation service
is an easy way to accomplish this.
Now that you've seen the different requirements
and ways you can form an LLC in New Jersey,
visit our site and take some time to research your options
and establish a solid foundation
for your business activities.
Click on the links in the description below
to research the top five professional formation services
or get more information
on how to form a New Jersey LLC on your own.
Now you know all the steps to form an LLC in your state.
For a more detailed guide, go to howtostartanllc.com.
You can also create an operating agreement
and use our business plan tool free of charge.
Give the video a like if you found it useful
and subscribe if you'd like to see more.
And if you have questions or encounter any roadblocks,
leave a comment below.
Good luck in starting your small business.
(suave music)