Starting a Business in New Jersey

Starting a business in New Jersey takes 7 steps:

1. Choose a name for your business
2. Choose the right type of business entity
3. Register your business with the New Jersey Division of Revenue
4. Get your EIN Number (Federal Tax ID Number)
5. Open a bank account and get a debit/credit card
6. Get a state business license
7. Register with the New Jersey Division of Taxation

We’ll show you how to complete each step. We will also give you some tips to make starting your business in New Jersey easier.

Step 1: Choose a Name for Your Business

Choosing a name for your New Jersey business is not something you want to breeze through. In fact, rushing the process of choosing your business name can be a big mistake.

You should take some time to choose a name people will remember and associate with your business.

To make sure your business is worth remembering, you should choose a name that:

• rhymes or contains alliteration (ex: Piggly Wiggly, Dunkin’ Donuts)
• speaks about the benefits of your business
• you can say with pride
• is easy to pronounce
• has a positive connotation for your potential customers
• is available as a “.com” domain name

By the way, the first bullet point above refers to the phonological loop. Your brain can better remember words that rhyme and sound similar. For additional steps and some good business naming “hacks”, check out how to choose a good business name.

After you’ve thought of a few business names, you should search them on the New Jersey Business Name Search pages.

New Jersey offers two ways to search for business names in the state. You can use the Business Name Search tool (to search existing names) and you can also use the Name Availability Search tool to get a “yes” or “no” answer on whether or not your desired business name is available to use.

Bonus Tip on Finding a Good Domain Name: Check out TRUIC’s Business Name Generator. Just type in keywords relevant to your business, and the tool will come out with a list of suitable domain names.

Step 2: Choose the Right Type of Business Entity

Next, you’ll need to decide the best type of legal structure for your New Jersey business.

The most common are a Sole Proprietorship, Partnership, Corporation, or Limited Liability Company (LLC).

A Sole Proprietorship in New Jersey happens when you operate your business as yourself (you actually don’t even need to register). There is no separate legal entity created; the law treats you and your business as one person. You are responsible and personally liable for any business activity or wrongdoing.

A New Jersey Partnership is the same as a Sole Proprietorship, but just with 2 or more people. Like a Sole Proprietorship, a Partnership doesn’t create a separate legal entity and the partners are responsible and personally liable for any business activity or wrongdoing.

A New Jersey Corporation is a more complex legal structure that requires a board of directors, corporate officers, and shareholders. Corporations don’t work for most small business owners since they face double taxation. Corporations can be beneficial to companies that are looking to raise capital investment, take the company public, or have large healthcare expenses for their employees. The most common types of companies that form Corporations are high-growth technology and startup companies.

Unlike a Sole Proprietorship or Partnership, a Corporation is a separate legal entity. It provides personal liability protection for its owners (shareholders).

An LLC in New Jersey is a hybrid entity that combines the benefits of a Corporation and a Sole Proprietorship (and a Partnership).

A New Jersey LLC is a separate legal entity under the law. And like a Corporation, it provides personal liability protection for the owners. If the LLC is sued, the owner’s personal assets – like their home, cars, and bank accounts – are protected. And like a Sole Proprietorship, an LLC also has pass-through taxation (so no double taxation).

An LLC is the most popular option and a good choice for people who want to run a business for two reasons:

• Personal liability protection (personal assets are kept safe)
• No double taxation

Unlike a Sole Proprietorship (and a Partnership), your New Jersey LLC’s assets are separate and distinct from your personal assets. In the event your LLC gets sued, your personal assets are protected.

And unlike a Corporation, your LLC is not subject to double taxation. Instead, your LLC’s profits will “flow through” to your personal tax return.

For more details, we have a video on LLC vs Sole Proprietorship vs Corporation.

If you want to form an LLC in New Jersey, we have instructions here: New Jersey LLC formation.

If you prefer to hire a company for help, check out this best LLC services review page.

If you want to form a Corporation in New Jersey, you can file it yourself or you can hire a filing company.

Step 3: Register Your Business Entity with the NJ Division of Revenue

You’ll need to file your business’s formation documents with the New Jersey Division of Revenue.

If you’re forming a New Jersey LLC:

This can be done online or by mail, but we recommend forming your LLC online. The cost to form a New Jersey LLC is $125 (one-time fee).

How much is an LLC in New Jersey explains all the fees.

The form to start an LLC is called a Public Records Filing for New Business Entity. Once it’s approved, it’s then referred to as your Certificate of Formation.

If you’re forming a New Jersey Corporation:

The filing fee is also $125 and the document has the same name: the Public Records Filing for New Business Entity.

If you’re operating as a Sole Proprietorship or Partnership in New Jersey:

You don’t have to register with the New Jersey Division of Revenue since you’re not creating a distinct legal structure. However, you will need to register with the New Jersey Division of Taxation.

If you want to do business under a name that is different than your first and last name (or you and your partner’s first and last name), you will need to file an Alternate Name (aka Fictitious Name).

The form is called the Registration of Alternate Name (Form C-150G). The filing fee is $50.

Note: If you’re going to form an LLC in New Jersey and operate under the LLC’s legal name, you don’t have to file an Alternate Name.

If you have any questions, you can contact the New Jersey Division of Revenue or the Division of Taxation below.

NJ Division of Revenue
Phone: 609-292-9292
Email
Website

NJ Division of Taxation
Phone: 609-292-6400
Email
Website

Step 4: Get your EIN Number

An EIN Number is also known as an Employer Identification Number or Federal Tax ID Number. It is used by the IRS to identify your New Jersey business for tax purposes.

Think of your EIN Number as your New Jersey business entity’s “social security number”.

Your EIN Number is used to open a business bank account, file taxes, get financing, and handle employee payroll (if applicable).

You can get your NJ business EIN by mail, fax, or online. Getting your EIN online is the fastest option, since it only takes about 15 minutes.

You can access the IRS EIN Online Application here: IRS EIN Online Application.

For instructions on how to complete the EIN application for a New Jersey LLC, please see instructions on the New Jersey EIN Number page.

Note: Make sure your LLC or Corporation is approved before applying for your EIN Number.

Step 5: Open a Business Bank Account

A separate business bank account and debit/credit card for your New Jersey business is important because:

• your personal assets are kept separate from your business assets
• accounting and finances will be easier to manage

One of the main reasons courts are able to “pierce the corporate veil” is due to the commingling of assets. This is when business and personal finances are mixed together.

Keeping the assets of your New Jersey business separate from your personal assets also helps to keep clean records.

To learn how to open a bank account for your New Jersey LLC, you can read this lesson: LLC business bank account

Your bank will provide a debit card after the account is open. For additional credit and to earn cash back or other rewards, you can also get a business credit card.

Step 6: Business License & Permits

After forming your business with the NJ Division of Revenue (LLCs and Corporations), you’ll want to check with your local municipality (county, city, or town) to see if you need a business license or permit to operate.

You can use the State’s Municipal and County Government search page.

The State of New Jersey has also put together a License & Certification Guide.

If you want to save time, you can use a company like IncFile. They’ll do the research for you and/or prepare your license and permit applications. Just fill out their 3-minute questionnaire to get started.

Step 7: Register with the New Jersey Division of Taxation

After your business is formed in New Jersey, you are required to register with the NJ Division of Taxation within 60 days.

This can be done by mail (using the NJ-REG), but it’s easier to apply online via the Business Registration Application.

We also recommend speaking with an accountant to make sure you properly file your federal, state, and local tax returns.

If your New Jersey business will sell retail goods, you’re required to collect sales tax from your buyers. Those collected taxes are then sent to the NJ Division of Taxation (they can be paid online).

You’ll first need to obtain a Sales Tax Certificate of Authority though. This can be obtained during registration via the Business Registration Application.

After Your New Jersey Business is Started…

1. Meet with a Local New Jersey Business Expert for Free Consulting

Getting advice from others who’ve been there can be helpful in your entrepreneurial journey.

Here are some great organizations in New Jersey:

• New Jersey SBDC Consulting
• SCORE
• Office of Small Business Advocacy
• New Jersey Business Action Center
• Rutgers University School of Business
• Small Business Administration NJ Office

2. Start a Website

Having a website these days is very helpful for your New Jersey small business. It gives your company a professional feel and allows people to learn about your products and services.

Building a website can seem like a complicated process… and it will be if you don’t have the right information.

However, I’ve built over 130 websites and used to teach people how to use WordPress to build their website. WordPress (which is free) is the tool I use and recommend. It can be used to build simple websites or it can be used to build more complicated websites.

There are 4 components to starting a website:

• Domain registrar
• Website hosting
• WordPress
• WordPress theme

Let’s use the housing analogy:

The domain registrar is where you purchase your domain name. Think of this as the label on the mailbox or your street address.

A website hosting company is where all the code, images, graphics, and text are stored that gets provided to the world. Think of this as the foundation of your home. It gives you the ability to build on top of it and display information to others.

WordPress is a CMS (content management system) which makes it easy to build a website. Rather than constructing your home from scratch, think of WordPress as a prefabricated home where you can easily resize rooms, move walls, and have complete flexibility in design and customization. WordPress – or the prefabricated home – “sits on top of” your foundation (the website hosting).

A WordPress theme is a “design skin” that sits on top of the WordPress CMS. If the WordPress CMS is the prefabricated home, think of the theme as all the interior decorations and painting. There are free WordPress themes, but I recommend against them for various technical reasons. Instead, I recommend using a premium WordPress theme. The difference between a free WordPress theme and a premium one is the difference between an amateur designer and a world-class professional designer.

Here are some links and prices to get you started:

Domain registrar: I recommend NameSilo.com which is $10 per year (per domain name). This is the service we use as it includes domain privacy for free to keep your address and phone number off those public record websites. It’ll also help prevent those annoying telemarketing phone calls!

Website hosting: SiteGround.com ($10 per month)

WordPress: This is automatically included (again, for free) with nearly every hosting company these days. After you sign up with SiteGround, just call them to help you install it. They’ll walk you through the steps.

WordPress theme: ThemeForest.net (one-time fee of $40 to $60)

Note 1: Make sure you’re using the “wordpress.org” self-hosted version. Not the “wordpress.com” version, which is stripped down and comes with limitations on how much you can customize your website.

Note 2: If you need help selecting a theme from ThemeForest, check out this video I made:

3. Design a Logo and Get Business Cards

Designing a logo doesn’t have to be too complicated.

We recommend starting off with a “words only” logo to keep things simple (no need for super fancy graphics just yet). You can choose the font family and color yourself, or get help from 99 Designs. A cheaper option is to use Fiverr.

For some great tips on using a tagline with your logo, check out Neville Medhora’s article.

And for business cards, I like using Moo.com.

4. Get a Business Phone Number

Instead of giving out your actual cell phone number (or home telephone number), it might be a good idea to get a “virtual business number” for your New Jersey business. You’ll be able to customize the number so it forwards to your cell phone.

Our favorite company is Phone.com. They have the cheapest plans and the best customer support.

You can get a local New Jersey telephone number or you can get a 1-800 number for your business. Phone.com lets you easily setup call forwarding to any number you like, create pre-recorded messages, and you can get your voicemails sent right to your email.

Getting a separate phone number for your New Jersey business is a good idea if you’d like to keep your actual phone number off of those annoying “public record” websites (and stop the spam phone calls).

I hope this guide has been helpful for you.

Matt Horwitz

Founder & Educator, LLC University®

Matt Horwitz has been the leading expert on LLC education for the past decade. He founded LLC University in 2010 after realizing people needed simple and actionable instructions to start an LLC that other companies weren't offering. He's cited by Entrepreneur Magazine, Yahoo Finance, and the US Chamber of Commerce, and was featured by CNBC and InventRight.
 
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.