To start a company in New Jersey, you first need to have an idea for your business. To make this happen, you need to brainstorm and focus on a business that will solve a buyer’s problems. Concentrate on a business that you’re excited about beginning.
Choose a Name and Develop a Plan
Once you have the idea in mind, you can turn your concept into a reality. This is first accomplished by coming up with a business name and creating a plan – setting the groundwork for the milestones you hope to achieve.
If you’re creating a partnership, you generally won’t have to register with the state. You can begin operations right away. However, New Jersey partnerships do not have the tax and liability advantages of New Jersey corporations and a New Jersey limited liability company (LLC). This is important to keep in mind when you are selecting a business entity.
You can still form a partnership under an LLC and maintain liability protection while enjoying tax incentives. For example, according to the IRS, if you establish an LLC with more than one owner, you can accept the default classification of a partnership.
You can also add a partnership as an asset of an LLC, or become a member of an LLC. Again, as a partner, you’re exposed to personal liability. If you form an LLC and set up your partnership under an LLC, you’ll protect your personal assets. This keeps your business separate from your personal holdings.
You can also enjoy this advantage when setting up a New Jersey limited liability company (LLC) or a corporation in New Jersey. An LLC or corporation must be registered with the state and you must pay fees to enjoy these benefits.
Selecting a Business Name
To give your business a name in New Jersey, it must be unique. You’ll need to do this if you register yourself as a New Jersey LLC or corporation. Otherwise, you can run into trouble with copyright or trademark infringement.
Once you’ve determined your name is unique, you can submit your online application to register your business. An application form allows you to get the ball rolling faster and launch your company in New Jersey with fewer hassles and delays.
Creating Your Plan: What to Keep in Mind
When creating a basic business plan, you need to keep several factors in mind. You need to determine a target market and have a unique selling proposition (USP) to share. A USP represents a short phrase that catches the main mission for your company. For instance, if you’re a baker, you might make your message “Perfect Tasting Pastries.”
You’ll also need to create a one-page summarization, called a pitch. The pitch covers the key elements of your business–the USP, target audience, milestones, and marketing plan.
Selecting the Business Entity
Again, businesses in New Jersey that want to protect themselves from personal liability may set up a New Jersey LLC or elect to incorporate themselves.
Creating a New Jersey LLC
For most start-ups, an LLC offers the most basic and affordable way to get personal liability protection. Whether you choose an LLC or add your name to New Jersey corporations, you’ll need to do the following:
- Select a registered agent who will accept formation documents on behalf of your company. The registered agent should be available during normal business hours during the week and reside in New Jersey.
- You’ll also need to secure an Employer Identification Number (EIN) from the IRS. This number serves as a tax identification number, like an SSN. However, the EIN is designed for business use only.
Forming an LLC also involves the following steps:
- Choosing a unique business name
- Selecting a registered agent
- Creating the Articles of Organization
- Filing your LLC with the state using an online application form
- Drafting an LLC operating agreement to be kept in-house for resolving possible disputes
- Checking on licenses and permits
Incorporating in New Jersey
Creating a corporation in the Garden State involves the following process:
- Creating a unique name
- Obtaining the services of a registered agent
- Selecting the directors for your corporation
- Establishing the Articles of Incorporation
- Creating the bylaws for your corporation
- Filing a new business entity through a public records filing (this can be done online)
- Filing form NJ-REG
- Obtaining an EIN
Remember that the bylaws for New Jersey corporations are not the same as the articles of incorporation. The bylaws represent longer and more in-depth information about how a company operates. The articles, on the other hand, are used to form your business with the state. Bylaws are similar to the operating agreement established for an LLC.
Set Up the Accounting System and Business Bank Accounts
To keep your personal finances separate from your business, you’ll need to set up an accounting system and business bank accounts. Personal and business separation is critical to protecting your personal assets.
Combining your business assets with your personal assets increases the risk of exposing your cars or home to being taken in a lawsuit. In business terms, this is known as piercing the corporate veil.
Contact the Corporation Center Today to Start a Company in New Jersey
If you want to make things easier on yourself when establishing a New Jersey company, it’s best to contact an advisor that can take care of your business registration quickly and conveniently. Contact the Corporation Center now at (800) 580-4870. If you want to start a company in New Jersey, this is the best way to begin the process.