If you wish to incorporate in New Jersey, you have to first decide which type of business entity best suits your requirements. There are several options including limited liability companies (LLCs), limited partnerships (LPOs) or corporation. Among these, the Limited Liability Company (LLC) has become the most popular option because of its relatively low cost and flexible features. The New Jersey Limited Liability Company also allows owners to shield themselves from personal bankruptcy should their business suffer a major setback. As an added benefit, new jersey llcs has very low public tax rate which further reduces the burden on the owners.
new jersey llcs has very few restrictions on the ownership structure and there is no requirement for shareholders' or partners' signatures. Unlike incorporation in New Jersey, you do not need to file personal documents as an individual. You can set up the LLC by yourself and later make an annual payment according to the terms agreed upon. In case you are incorporating as a company, there are several things you must consider in order to comply with the state laws regarding corporate filing and tax registration.
New Jersey LLCs is filed electronically. Therefore, it is important that before you file an application for LLC, you check whether the documents are already available on the internet. If not, you will have to contact the department of financial services to find out if you have to go through another filing process. However, most companies offering incorporation in New Jersey to allow you to choose online filing or choose one from among the list of filing options provided by the Jersey department of commerce.
Incorporating an LLC in New Jersey
New Jersey LLCs needs to file annual reports. This is required for all types of businesses in the state. If you are incorporating as a sole proprietorship or as a partnership, you will have to file an annual report with the state law enforcement agency. On the other hand, for any other type of business, you will be required to file an annual report with the office of the secretary of state.
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One very important issue that must be considered before incorporating a business in New Jersey is that the LLC must comply with the state taxes. The state tax agency has the power to fine and suspend an LLC that fails to file the right tax returns. However, if an LLC files for bankruptcy, it is not obliged to file state taxes in its name and it can still carry on business, provided that it contributes to the payment of its debts.
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The next thing you need to know is that the LLCs cannot be formed without the consent of the shareholders or members. This is required for two reasons. Firstly, it allows the state to keep track of the ownership of the LLCs and secondly, it helps the government and judges assess the efficiency of the business. There are some common mistakes that most people make when forming an LLC which result in the automatic disqualification of the LLCs from running as a full corporation.
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One of the biggest mistakes that people make when incorporating an LLC in New Jersey is that they fail to file the annual reports. Most of these overlook the importance of submitting the annual reports because of which the company fails to pay the corporate income taxes and pays nil state taxes. If you incorporate an LLC, you must pay the annual filing fee and file all the state taxes as well. This means paying the state taxes and also contributing to the payment of the federal taxes.
You must ensure that the LLC that you incorporate in New Jersey has all the documents that are needed in foreign corporations. It means that it must have the Articles of Organization as well as the Articles of Incorporation and the Operating Agreement. Once you incorporate an LLC in New Jersey, you are considered as a foreign corporation and therefore you must transact business under the rules of the foreign corporation laws. If you fail to comply with the tax laws in your state or you transact business through your LLC, then you can be subjected to a penalty fine.
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