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Last Updated on September 26, 2024 by Dr. Gabriel O’Neill, Esq.
Starting your own LLC in New Jersey comes with more expenses than just filing the initial paperwork. However, it doesn’t have to be as costly as it might seem. In this article, we’ll break down the various costs involved in forming an LLC in New Jersey and introduce you to useful services like ZenBusiness, which can simplify the process and help you save money.
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What Is the Cost of Forming an LLC in New Jersey?
Forming an LLC in New Jersey primarily incurs a cost of $125, which covers the online filing fee for submitting your LLC’s Certificate of Formation through the New Jersey Division of Revenue and Enterprise Services.
Here’s the LLC Cost Guide for all US States:
New Jersey Foreign LLC Formation Costs
In case you possess an existing LLC registered in a different state and wish to extend your business operations to New Jersey, it’s essential to enroll your LLC as a foreign entity within the state.
The fee for enlisting a foreign LLC from another state in New Jersey amounts to $125. The process involves submitting a Certificate of Authorization to complete the registration of the foreign LLC in New Jersey.
Annual Cost for LLCs in New Jersey
Maintaining a Limited Liability Company (LLC) in New Jersey involves various annual costs, including essential elements such as filing an annual report to remain in good standing, which incurs a fee of $75. Additionally, depending on the industry, there might be specific license expenses and permit fees.
A registered agent responsible for receiving legal documents on behalf of the LLC is also required, with fees determined by the chosen agent or service. It’s important to note that these are general estimates, and the actual fees can differ.
Consulting the Division of Revenue and Enterprise Services or a legal expert is advised to gain a comprehensive understanding of all expenses linked to your New Jersey LLC.
How Much Does It Cost to Start an LLC in New Jersey With the Best LLC Service?
ZenBusiness LLC Formation Cost
The initial basic expense for initiating an LLC application in New Jersey amounts to $125, which serves as a foundation and may increase as additional services are availed. Regarding processing timelines, the standard completion period spans 2 to 3 weeks.
Nevertheless, options for expediting the processing duration exist, offering an accelerated track of 4 to 6 days at a supplementary cost of $50 or an even swifter pace of 1 to 2 days for $100.
ZenBusiness presents a selection of three pricing tiers for their business formation services: Starter, Pro, and Premium.
- Starter plan: The ideal for fundamental business formation requirements comes for $0 in addition to state fees.
- Pro plan: This encompasses supplementary features such as expedited filing and registered agent service, with a price of $199 plus state fees.
- Premium plan: As the most extensive offering, the incorporates all aspects of the Pro plan and unlimited Worry-Free Compliance, a service aiding businesses in maintaining adherence to state and federal regulations. The Premium plan is priced at $349 plus state fees.
Additionally, any plan purchase includes a complimentary year of Worry-Free Compliance.
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Additional Costs When Starting an LLC in New Jersey
New Jersey LLC Name Costs
Assigning a name to your New Jersey LLC comes at no expense, denoted as $0. There exists no obligatory mandate for a Name Reservation submission or any similar procedure. The process entails entering your chosen LLC name within the Public Record Filings/Certificate of Formation document. Upon the state’s endorsement of your submission, your designated LLC name becomes officially established.
In the event you wish to secure your chosen name in advance of the LLC’s formation, you have the option to reserve it for a span of up to 120 days. This involves submitting Form UNRR-1 and remitting a filing fee of $50.
New Jersey Registered Agent Costs
In New Jersey, you’re required to have a registered agent when submitting your LLC’s Certificate of Formation, but it’s not obligatory to hire one. You can fulfill this role yourself or designate a friend/family member.
If you or someone you know takes on this responsibility, there are no expenses involved, and no fees are incurred for listing a registered agent on your LLC formation papers. Opting for a Commercial registered agent comes at a cost of around $125 annually, which is advantageous if you wish to maintain your address’s privacy in public records.
New Jersey Operating Agreement Costs
Operating Agreements for New Jersey LLCs are essential and should be created and executed by all such businesses. This agreement outlines the operational procedures and the ownership distribution among the Members of the company.
On many other platforms, similar Operating Agreements are offered for sale at prices ranging from $50 to $200, but here it’s available at no cost.
New Jersey EIN Cost
Obtain your New Jersey LLC’s EIN Number at no cost. This identification, an Employer Identification Number or Federal Tax ID Number, can be acquired for free ($0) directly through the IRS website.
While some websites may charge for this service, it’s important to note that obtaining an EIN for your LLC doesn’t incur any expenses.
New Jersey LLC Taxes
Taxes specific to New Jersey LLCs include:
Federal Income Taxes
The IRS offers various options for determining how your LLC is taxed. If you have a Single-Member LLC, the IRS treats it as a Disregarded Entity, meaning the LLC doesn’t file its federal income tax return. Instead, the LLC owner files the return and pays the taxes.
Tax treatment depends on the owner’s type: individual ownership leads to taxation similar to a Sole Proprietorship, while ownership by another company results in taxation as a branch/division of the parent company.
Multi-Member LLC Taxes
When an LLC has multiple owners, it’s taxed as a Partnership. The LLC needs to submit a 1065 Partnership Return and provide Schedule K-1s to the owners, detailing their share of profits. The owners report this income on their personal tax return (Form 1040) and pay taxes accordingly.
Husband and Wife LLC Taxes
In certain states like Texas, a husband and wife LLC can file taxes as a Single-Member LLC (Qualified Joint Venture) rather than a Multi-Member LLC. However, this option isn’t available in non-community property states like New Jersey.
Electing Corporate Taxation
An LLC can opt for corporate taxation instead of default classifications. This involves two types of corporate elections: S-Corporation and C-Corporation.
By filing the relevant forms with the IRS, an LLC can be taxed as either type of corporation. This decision should be made in consultation with an accountant, and it’s beneficial for established businesses.
New Jersey State Income Tax
Single-member LLCs in New Jersey have the owner file a personal state-level return that incorporates the LLC’s profits or losses. Multi-member LLCs might need to file a Partnership return at the state level, with owners reporting profits or losses on their personal returns.
Local Income Tax in New Jersey
For both individuals and LLCs in New Jersey, local municipalities might require filing and payment of local income taxes. Professional assistance is advised due to the complexity of these obligations.
New Jersey Sales Tax
If your LLC sells products in New Jersey, you could need a Seller’s Permit to collect sales tax. This permit, also known as a Sales Tax Certificate of Authority, is obtained from the New Jersey Division of Taxation. Registering for business taxes can be done online through the New Jersey Online Business Registration.
New Jersey LLC Payroll Taxes
When your New Jersey LLC has employees, payroll taxes are mandatory. These encompass various taxes and deductions, including federal and state income tax withholding, Social Security tax, Medicare tax, and more. Managing these taxes can be intricate, often necessitating professional assistance to ensure accurate calculations and submissions.
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New Jersey LLC Cost FAQs
How Much Does It Cost to Open an LLC in New Jersey?
The cost to open an LLC in New Jersey typically includes a filing fee with the New Jersey Division of Revenue and Enterprise Services, which is around $125. Fees may vary, so it’s advisable to check the latest information on the official website or consult a legal professional for the most accurate and up-to-date information.
How Much Does an LLC in New Jersey Cost Per Year?
In New Jersey, the cost considerations for an LLC differ slightly. The Annual Report for your New Jersey LLC will incur a yearly fee of $75 as an ongoing obligation. In the case of a Multi-Member LLC with 2 or more Members, there’s an additional requirement of the New Jersey Minimum Partner Tax, which amounts to $150 per Member per year.
Moreover, if you’ve opted for a registered agent service, there’s an associated annual fee of approximately $125.
Specific industries or localities within New Jersey might impose additional requirements, potentially including business licenses with varying renewal fees based on local regulations.
Should I Hire an LLC Formation Service?
Although it’s optional to engage a professional service to set up your New Jersey LLC, you can handle the formation process on your own. However, for those aiming for efficiency and accurate filing, it’s recommended to consider partnering with ZenBusiness.
Renowned for their outstanding customer support, ZenBusiness even offers free registered agent services for the first year, along with additional benefits such as creating an Operating Agreement and managing the submission of Annual Reports.
Conclusion
In summary, setting up an LLC in New Jersey requires more than just paying the initial filing fee. You’ll need to consider key factors such as necessary documents, working with a registered agent, drafting an operating agreement, and securing an EIN.
Managing these financial details effectively is crucial, and this is where LLC services like ZenBusiness can be incredibly helpful.
Armed with this knowledge and the support of ZenBusiness, aspiring entrepreneurs can approach the process of forming a New Jersey LLC with confidence and peace of mind.
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About the author
Dr. Gabriel O'Neill, Esq., a distinguished legal scholar with a business law degree and a Doctor of Juridical Science, is a leading expert in business registration and diverse business departments. Renowned for his academic excellence and practical insights, Dr. O'Neill guides businesses through legal complexities, offering invaluable expertise in compliance, corporate governance, and registration processes.
As an accomplished author, his forthcoming book is anticipated to be a comprehensive guide for navigating the dynamic intersection of law and business, providing clarity and practical wisdom for entrepreneurs and legal professionals alike. With a commitment to legal excellence, Dr. Gabriel O'Neill, Esq., is a trusted authority dedicated to empowering businesses within the ever-evolving legal landscape.