1. Create a legal entity.
In New Jersey the most popular business structures are partnerships, sole proprietorships, limited liability companies (LLCs), and corporations.
A general partnership consists of two or more people doing business together, and no formal filing is needed.
A sole proprietorship is an individual that goes into business alone. This is the easiest and least expensive legal entity to set up because there is no requirement to file papers for a sole proprietorship in New Jersey.
An LLC is a popular business choice that offers great tax flexibility, and it can be treated as a partnership or corporation for tax purposes. It can be owned by a person, persons, or a corporation. An LLC is regulated by State laws.
A corporation is a standalone entity with shareholders who annually elect a board of directors that appoints and oversees management of the corporation's day-to-day activities. A corporation is required to pay corporate taxes and needs to file an annual tax return.
If you are starting a limited partnership, corporation, or LLC in New Jersey, you need to file formation or authorization documents with the Department of the Treasury.
2. Register your business name.
Before choosing a name for your New Jersey business, you can review names with New Jersey's Department of the Treasury at 1 (609) 292-9292 for a cost of $15.00. Alternatively, you can do a name search here for free.
Before filing a formation/authorization document, you can reserve an available name. This service is not available for sole proprietorships and partnerships.
In New Jersey you can't register your business online if you have reserved or registered your business name.
If your business is formed outside of New Jersey, you need to use the name that's on the formation document in its home state. If that name is being used by another business entity in New Jersey, you need to establish a secondary or doing-business-as (DBA) name. In New Jersey only foreign (non-New Jersey) businesses may use a DBA name. If your business is designated a DBA name, you can't register online.
Foreign corporations need to submit a standing certificate from their home state within 21 days of filing for the name registration by fax at 1 (609) 984-6851. This certificate must be no older than 30 days.
Alternate or fictitious business names are allowed in New Jersey, but can't be registered online.
Trade names for sole proprietorships need to be filed at your County Clerk's office.
How long can I reserve my business name in New Jersey?
Up to the end of the calendar year
3. Get an Employer Identification Number (EIN).
Your EIN, also known as a Federal Employer Identification Number (FEIN) is your business's equivalent of a social security number. All businesses in New Jersey that hire staff are legally required to have an EIN.
As the legal name of your business needs to match the business name on the EIN application, you need to apply for an EIN after forming your legal entity. Registering an EIN is free and takes only a few minutes. Go to irs.gov to apply.
4. Open a business bank account.
You can open a business bank account once you receive your EIN.
A business bank account keeps your business funds separate from your personal funds, offering you limited personal liability protection in this way. It also secures your customers' personal information and offers them purchase protection, and it allows your employees to do your business's daily banking tasks.
Best Banks for New Jersey Small Businesses:
5. Register your business to pay tax.
To register your New Jersey business to pay tax, you need to register with the Department of the Treasury.
This is a very important step if you are planning to do business with the State or any New Jersey county, municipality, local board of education, or educational institution. In New Jersey you may need to submit a tax registration certificate as part of a public bid, or before issuing a purchase order to a contracting agency.
6. Apply for new Jersey licenses and permits.
In New Jersey your company or staff may need to hold professional or occupational licenses. You may also need construction or safety permits, as well as environmental licenses.
Go to the State of New Jersey's Business Portal to learn more about licenses and permits in this state. You can also get in touch with a business advocate at the New Jersey Business Action Center at 1 (866) 534-7789.
New Jersey Businesses That Need Permits, Licenses and Certifications:
7. Decide on your location.
Research found that small cities or towns in New Jersey are favorable for starting and growing a business. Eight of the 10 top cities to start your New Jersey business have a population under 25,000, and East Hanover, the top place to start a business in New Jersey, has less than 12,000 residents.
Top 10 Places to Start a Business in New Jersey:
- East Hanover.
- Red Bank.
8. Purchase insurance.
In New Jersey workers' compensation insurance is mandatory for businesses with one or more employees.
New Jersey is a mandatory vehicle insurance state. If your business uses motor vehicles, you are required by law to be covered through an approved vehicle insurance company.
What mandatory motor vehicle insurance does my New Jersey business need?
Covers your business for damages caused by you or your employees. Does not cover medical expenses.
Personal Injury Protection (PIP)/No-Fault Coverage
Covers medical expenses if you and/or your employees are injured in a motor vehicle accident. Often called No-Fault coverage, Pays you and/or your employees' medical expenses, regardless of who was at fault.
Uninsured Motorist Coverage
Covers you and/or your employees if you/they are in an accident with someone who doesn’t have proper insurance coverage.
There are other types of insurance you may want to purchase in New Jersey, for instance:
9. Hire employees and report them to a state directory.
Once you start hiring staff in New Jersey, it is important to know that all employers need to report newly hired and rehired employees to a state directory within 20 days, even if they work for only one day. This includes temporary employees, contractors, substitutes, and seasonal workers.
You can visit the New Jersey New Hire Reporting Center and register at the bottom left of the page to register your staff.
New Jersey offers resources to recruit talent and training grants for your current employees, which you can access here. They also offer information on your insurance, safety, and wage obligations as an employer here.
10. Keep up with ongoing requirements.
After you start your business in New Jersey, there are ongoing requirements you should pay attention to.
For instance, in New Jersey all legal entities need to file annual reports, which outline the status of a business. The Division of Revenue will send your business reminder notices three months before the due date.
Starting a Business in New Jersey FAQs:
How do I register a business in New Jersey?
If you want to register a business in New Jersey, you need to file formation or authorization documents with the Department of the Treasury. There is no need to register a general partnership or a sole proprietorship in New Jersey.
How do I start an LLC in New Jersey?
To form an LLC in New Jersey you need to choose a company name, appoint a registered agent, and file a Certificate of Formation with the State of New Jersey.
Where do I access the New Jersey business portal?
Access the State of New Jersey's business portal here.
How much does it cost to start a business in New Jersey?
Name availability inquiry
Name registration or reservation
Expedited service for name registration or reservations for corporations, non-profits and limited partnerships
Expedited service for name registration or reservations for LLCs and limited liability partnerships
Registration for profit businesses (domestic and foreign) and foreign nonprofits
Registration for domestic nonprofits
With its fast startup growth, a strong economy, and good support services, the Garden State is a good place to start your own business. If you are starting a business in New Jersey, follow the steps in this guide to realize your plans.
Also read How to Start a Business to learn more about starting your own business.