New Jersey ranks 11th in the number of small businesses in the US. That’s over 861,000 small businesses, making them an important part of New Jersey’s economy. If you are in the process of starting your own business, you may be wondering what type to form.
If you are considering an LLC, read on to learn more about how they work in New Jersey and how you can access a New Jersey LLC operating agreement template.
Is an LLC Operating Agreement Required in New Jersey?
New Jersey does not require an operating agreement. Even though the state doesn’t require it, most business experts recommend that you complete one anyway to lay out the blueprint for how your LLC will operate, each owner’s stake in the company, and dissolution procedures, among other things.
New Jersey Operating Agreement Laws
Because New Jersey doesn’t require you to create an operating agreement when you form an LLC, you automatically adopt the state of New Jersey’s LLC operating rules. You can read the laws in § 42-2C-11.
If you want to specify your own terms, you’ll need to write your own operating agreement. There are many advantages to creating your own LLC, some of which are described above. Another advantage is that any legal disputes between members are typically resolved easier when a written operating agreement is in place.
How Much Does It Cost to Form an LLC in New Jersey?
It costs $125 to file a certificate of formation/authorization for your LLC (the foreign filing fee is $200). You also must file an annual report and pay a $75 fee. This report is due annually at the end of the month during which the LLC was formed.
There are a few optional fees as well: if you want to reserve your LLC’s name up to 120 days before filing your certificate of formation, you’ll have to pay a $50 fee. You may also need a certificate of good standing, which is often required by lenders. This certificate is $50.
How to Start an LLC in New Jersey
If you’re ready to get started, these are the steps you’ll take to form your New Jersey LLC.
Step 1 – Choose a Name
The first thing you should do is choose a name. You cannot choose the same name as an existing business in the state. The name you choose also must end with ‘Limited Liability Company’, ‘LLC’, or ‘L.L.C.’. You are permitted to use abbreviations, like ‘Ltd.’ or ‘Co.’.
When you decide on your name, use this search tool to do a business name search to ensure that the name you want is available. If the name is not in use, you can reserve it for up to 120 days while you prepare your certificate of formation.
Step 2 – Choose a Registered Agent
All LLCs in New Jersey must designate a registered agent. A registered agent can accept legal mail or official mail on behalf of the LLC. You can choose an individual or a company to act as your registered agent.
If you choose a company to serve as a registered agent, they must have a physical address in the state of New Jersey (a P.O. box is not considered a physical address). If your registered agent is an individual, they must be a resident of the state and have a physical address in New Jersey.
Many LLCs choose to use a registered agent service to act as their registered agent. These companies are typically licensed to act as registered agents in all 50 states. While you will have to pay for this service, they are typically affordable.
Step 3 – File Your Certificate of Formation
This is the most important step in creating an LLC. The certificate of formation is filed with the New Jersey Division of Revenue and you can file online or on paper. The information required for the certificate of formation includes:
- The name of the LLC and its purpose
- Date of formation
- The name, email, and address of the registered agent (the address must be located in New Jersey)
- Name and signature of the person completing the certificate
Additionally, foreign LLCs must submit a certificate of good standing from their home state.
When you file online, you’ll receive an immediate confirmation of your filing and a printable certificate. You can use easy, customizable templates to create your certificate of formation.
Step 4 – Create Your Operating Agreement
The operating agreement is optional, but you should strongly consider creating one that all parties review and agree upon. Information that should be included in the operating agreement includes:
- The purpose of the LLC
- Purpose of the business
- Names and contact information for each member of the LLC
- Financial contributions of each member of the LLC
- The ownership stake of each member
- Voting rights of each member of the LLC
- Procedures for dissolution of the LLC if that time comes
The operating agreement should be kept with your important business papers and your certificate of formation.
Step 5 – Follow State and Federal Rules
There are certain state and federal rules that you must follow once your LLC is created. If you have any employees or multiple members of your LLC, you must apply for an employer identification number (EIN) from the IRS.
New Jersey also requires you to file an annual report. There is a $75 filing fee and the report must be filed by the last day of the anniversary month of the creation of the LLC. The report provides updated information to the state, such as your business name and address and the contact information for your registered agent.
New Jersey LLC Operating Agreement Template
Use this template for your New Jersey LLC operating agreement to avoid having to create one from scratch:
LLC Operating Agreeement