How to Form an LLC in New Jersey
Forming an LLC in New Jersey is a straightforward process that provides liability protection and tax flexibility for business owners. The initial filing fee is $125, filed with the New Jersey Secretary of State.
Step 1: Choose Your Business Name
Your LLC name must be distinguishable from existing business entities registered in New Jersey. The name must include "LLC" or "Limited Liability Company." Check name availability through the Secretary of State's website before filing.
Step 2: File Articles of Organization
Submit your Articles of Organization to the New Jersey Secretary of State with the $125 filing fee. This document establishes your LLC as a legal entity. Processing times vary but typically take 5-10 business days.
Step 3: Obtain an EIN
Apply for a federal Employer Identification Number (EIN) from the IRS at no cost. This is required for tax filing, opening a business bank account, and hiring employees.
Step 4: Register for State Taxes
Register with the New Jersey Division of Taxation for applicable tax accounts. You will need a sales tax permit to collect the 6.625% state sales tax. New Jersey has a state income tax that affects LLC pass-through taxation.
Ongoing Costs
New Jersey does not impose an annual franchise tax on LLCs, keeping ongoing costs low. An annual report fee of $75 is also required.
New Jersey LLC Tax Advantages
While New Jersey does impose a state income tax, the LLC structure offers flexibility in how income is taxed. The 6.625% state sales tax requires proper collection and remittance procedures.