What Documents Do You Need to Open a New Jersey Business?

When forming a New Jersey business, there is a daunting amount of paperwork involved...

When forming a New Jersey business, there is a daunting amount of paperwork involved. Many of the documents are required by regulators, such as the New Jersey Secretary of State, while others are simply good practice.

Filing Requirements

For sole proprietors and partnerships, the filing requirements are fairly limited. However, if your business name does not include the first and last name of the owner(s), you must register it as an assumed name, i.e. Back Street Yoga Studio, with the county clerk’s office.

On the other end of the spectrum, forming a limited liability corporation (LLC), limited liability partnership (LLP) or corporation requires additional paperwork. An LLC, C-Corp, S-Corp, LP, or LLP needs to form a business entity with the New Jersey Department of Treasury’s Division of Revenue and Enterprise Services. To complete the business formation filing, you will need to have the following information:

• Corporate name and address.
• The name and address of a registered agent with a New Jersey address at which the agent will be available to receive official documents related to the business.
• The date the business will end its tax year.
• The purpose of the business organization.
• If the business entity is a corporation, the number of shares of stock it will be allowed to issue.
• A list of names and addresses of initial directors appointed to run the corporation.
• The name and address of every person undertaking to form the business entity.

After you form your business, you will obtain a Certificate of Formation or Certificate of Authority which will display your Entity ID, which is a 10-digit number used to identify your corporate business records. 

Governing Documents

Every New Jersey business also needs governing documents. The exact nature of the document depends on your business structure, i.e., whether you are starting a partnership, limited liability company, or corporation. 

Partners should always execute a partnership agreement, even though not required by law. The partnership agreement should minimally address crucial issues such as the financial contributions of the partners, the allocation of management duties, the distribution of profits and losses, and the procedures for resolving disputes and rights upon termination. Having an agreement in place not only allows the business to run more smoothly but also helps avoid partnership disputes and other commercial litigation.

More sophisticated business entities like LLCs require an operating agreement. The binding contract provides the structure for the company’s management and financial decisions. Most importantly, the agreement formalizes that the members will have no personal liability to the LLC. Like a partnership agreement, the operating agreement should also describe the ownership shares of the members, the responsibilities of each member, the management structure of the company, the rules for holding meetings and taking votes and the procedures for transferring ownership if a member leaves, dies or becomes incapacitated.

For corporations, bylaws are an essential formation document. A company’s bylaws set forth the structure of the business and establish the basic ground rules that will govern a corporation’s operation. Issues addressed in corporate bylaws include basic corporate information, a statement of purpose, information about the officers and board of directors, shareholder ownership rights, and procedures for keeping and managing corporate records, removing officers/directors and amending the bylaws.

Tax Documents

All New Jersey businesses, including sole proprietorships and partnerships, must register for tax purposes with the New Jersey Division of Revenue & Enterprise Services. Additionally, businesses that have employees, have more than a single owner or are organized as a corporation, must obtain a Federal Employer Identification Number (EIN), commonly referred to as a Federal Tax ID, from the Internal Revenue Service (IRS).

All businesses must also file Form NJ-REG to register the business with the State for employment and tax purposes. The NJ-REG can be submitted along with the initial business formation filing. If filed separately, the NJ-REG is due within 60 days of the Certificate of Formation. In any event, the form must be filed no less than five days before beginning operation of the business. Additionally, if the business will be collecting sales tax, the NJ-REG must be filed no less than 15 days before the business’s first sale.

Business Licenses

Certain businesses, professions, or occupations may require specific licenses or certifications. Examples include accountants, architects, beauty salons, childcare providers, and landscapers. To determine the specific requirements for your business, check out New Jersey’s Licensing & Certification Guide.

Key Takeaway

Starting a New Jersey business can be a daunting task. However, it is imperative to file the proper paperwork and obtain legal authority to operate your company in New Jersey before engaging in any business transactions. Having an experienced and knowledgeable business lawyer on your side can help your startup succeed.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact Ashley Brinn or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.