Making a new corporation is one of the most common reasons for using incorporating a business in New Jersey. A small business may prefer to file the documentation needed to incorporate a business directly with the state. There are also many companies that provide business formation services for a fee.

The most important factor in incorporating in NJ is choosing a specific business structure. New Jersey partnership law makes some important distinctions between a corporation and a partnership. A partnership generally does not pay a business tax although the partners are liable for business debts.

Corporate law defines the way in which the following entities interact:

1. Shareholders that collectively invest in an NJ incorporation. Shareholders may hold special privileges such electing a board of directors, proposing resolutions and sharing in the company’s income.

2. Directors that oversee the company’s activities. The activities of the board of directors are typically determined by the company’s bylaws. The board of directors and the shareholders are typically the same group of people in a small business.

3. Employees that provide expertise and perform labor for the company. Employees are also shareholders in many cases.

Action Steps
The best contacts and resources to help you get it done

Select the best structure for your business when you incorporate in New Jersey

Your choice of business types can include corporations, full partnerships and limited liabiliy partnerships (LLCs). There are many sites that summarize business laws in New Jersey and you may also need an attorney to explain the laws regarding an LLC in NJ to you.

I recommend: Ronald J. Cappuccio allows you to answer a series of questions to help you decide which business type is best for you. Meyner and Landis in Newark offer specific expertise in helping clients choose the right structure when forming a new business.

Create a business with a New Jersey incorporation service

There are many online services that can submit the required forms on your behalf in exchange for a fee. However, you will still need to comply with the disclosure, operating and reporting requirements.

I recommend: The Division of Corporations offers a range of packages that allow you to incorporate your New Jersey online. BusinessNameUSA.com provides a business corporation service and provides a range of related resources specific to New Jersey.

Incorporate in NJ by yourself with free resources

Each state has a department that is responsible for the formation of new businesses. You can complete these forms yourself and submit them directly to the correct government department.

I recommend: The State of New Jersey website offers a checklist for starting a new business and also has all the forms you will need. Gaebler.com provides useful links to help you incorporate New Jersey businesses.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  You will need to select a name before you form a corporation in New Jersey. Many online services provide a name search function to determine if a particular name has been used before. The required forms will also provide spaces for more than one business name in many cases. This increases the chances that an unused name can be found.

If you are looking to start or expand a business in New Jersey or just need help solving a problem specific to this state or region, there's a wide range of resources — both government and private — available to help.

While many nationally focused resources offer helpful solutions, some issues are better addressed at the state or local level. Answers to licensing, zoning, sales tax, incorporation, economic development issues and a mountain of other matters often reside at the state level. Ironically, however, finding the right resources closer to home can often be even more difficult, as local solutions often live in many different places.

Cover your bases by seeking solutions in these locations:

1. State government agencies, such as the commerce department, economic development office, secretary of state's office or other business-related state agencies.
2. Small business assistance programs offered through local universities and community colleges that are backed by state and federal resources. These include Small Business Development Centers (SBDCs) and SCORE offices.
3. Private, non-profit and special-interest industry and business organizations that provide a range of services, networking opportunities and even funding options for small businesses.
4. State and local offices of federal agency programs, such as the U.S. Small Business Administration (SBA) office in your area.

Action Steps
The best contacts and resources to help you get it done

Access official state programs for starting and growing a business in New Jersey

The central resource is New Jersey's 'Taking Care of Business' Web site.

I recommend: At NJ's Taking Care of Business, you can dive into immediate help to start a business, operate or expand an existing business, grow a minority or woman-owned business, locate financing and licensing information, and more.

Get free help at the New Jersey Small Business Development Centers (SBDC)

Need help to start or grow a business in New Jersey? The New Jersey Small Business Development Centers network (NJSBDC) provides free statewide counseling, training and assistance programs for the aspiring and existing small business owner.

I recommend: The NJSBDC network helps small businesses expand operations, manage growth or launch new ventures. With offices in every county of the state, NJSBDC consultants help small business owners finance, market and manage their ventures.

SCORE more free help for your biz

SCORE, 'Counselors to America's small business' is a terrific national organization that provides free mentoring for small business owners.

I recommend: These are SCORE New Jersey offices: Dover - North West SCORE; Lincroft - Monmouth SCORE; Monmouth Junction - Princeton SCORE; Newark - Metro New Jersey; North Branch - Central Jersey SCORE; Paramus - Bergen Cty SCORE; Pennsauken - Southern New Jersey SCORE; Pleasantville - Tri-County SCORE; Toms River - Ocean County SCORE.

Connect to a New Jersey small business resource portal

Discover hundreds of local programs offering free and low-cost help for starting and growing your business.

I recommend: The Business Utility Zone Gateway for New Jersey can connect you with a wide range of people, tools and resources.

Snag state-level help from the SBA

District, state and regional offices of the U.S. Small Business Administration can put a more focused face on federal programs and resources, and plug you into local training and assistance solutions.

I recommend: Just plug in a Zip Code, select a specific city from the pull-down menu or check your state on the U.S. map in the middle of the SBA home page.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Many types of businesses require state, city or county licenses and permits. State offices listed above will spell out any specific requirements for your industry.
• •  Small Business Development Centers (SBDCs) are an often-overlooked but terrific place to obtain free or low-cost advice and information, including training seminars and technology resources that are nearby.
• •  Locally-based SBDC consultants can advise you individually on how to write a business plan, market your products and services, find financial resources and other valuable information.
• •  The regional SBA office can plug you into loan and assistance programs, seminars and other initiatives to aid small businesses.
• •  Linking up with a local SCORE counselor is a great way to learn from an experienced individual about state-specific solutions.

The key to making the most of incorporating a business in New Jersey is the decision to incorporate your business. A corporation affects your ability to gain capital, controls the amount of debt you assume and determines your tax obligations. However, these advantages must be balanced against the additional taxes your business will incur.

You should also consider other types of business entities when you form a corporation in new jersey. For example, a New Jersey partnership is subject only to personal income tax, unlike a corporation.

There are several options for forming a company under New Jersey corporate law. These include:

1. A New Jersey incorporation as a profit or non-profit corporation. An S corporation (S-corp) is taxed under Subchapter S of the Internal Revenue Code which generally does not include income taxes.

2. A New Jersey limited liability company. This is a hybrid business entity that shares the characteristics of both a corporation and partnership. It pays incomes taxes and is more suitable for a small business with one owner.

3. A New Jersey limited partnership. This type of partnership has limited partners in addition to general partners.

Action Steps
The best contacts and resources to help you get it done

Determine the type of corporation that best suits your business when incorporating in NJ

The most important factors to consider are the personal liability obligations and tax implications. You should also familiarize yourself with the operating requirements and reporting regulations.

I recommend: The NJ Business Portal has detailed descriptions of the different business types in New Jersey including a comparison chart. LearnAboutLaw.com provides a summary of the steps needed for forming each type of business and includes links to the required resources.

Find a New Jersey incorporation lawyer

Incorporating in New Jersey must comply with the disclosure, operating and reporting requirements. New Jersey corporation law specifies these requirements in detail.

I recommend: The Corporate Department of Archer & Greiner provides a range of services including the formation and structuring of business entities. Sills Cummis & Gross has a location Newark and has one of the largest corporate departments in New Jersey.

Register your business through a New Jersey incorporation service

You must file the registration forms and pay the associated fees as required by New Jersey corporation law in order to form an NJ corporation or LLC in NJ. You may also need to file Articles of Incorporation, depending on the type of corporation you decide to register.

I recommend: Incorporate Fast provides corporation filing services in New Jersey and summarizes the required steps. InfotaxSquare.com can help you create a variety of business entities in New Jersey and also provides many related resources.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Pay any annual fees and filings needed when you incorporate New Jersey businesses. Corporations are automatically C-corps unless they specifically register as S-corps with the primary difference being the way they are taxed. One person may frequently hold more than one position in these corporations and many if not all shareholders are also directors in a small corporation.

When you are looking to start a business in New Jersey, you have to decide whether it will be a limited liability corporation or a sole proprietorship, and whether you have to submit the official paperwork with the state. It is important that you are well versed in the steps you have to take in order to be able to run a business legally in New Jersey. Here are some key terms to help you out.

Action Steps
The best contacts and resources to help you get it done

Business incorporation

Business incorporation is the act of making the existence of your business 'official' in the state of New Jersey through deciding on the name and type or 'formation' of the company, then registering with the proper authorities.

I recommend: Company Express has an expansive article about business incorporation. Check out Fasteasyincorporationkits.com for a New Jersey version.

Business plan

A business plan is a document that illustrates things regarding your New Jersey business such as the nature of your business, its internal governing structure and its future intentions. This is a 'must have' for New Jersey businesses when applying for any type of financing.

I recommend: This article from the New Jersey Small Business Development Center provides more information about making a business plan.

Business registration

Business registration is the process of making your business official. It involves getting a tax ID number or an Employer Identification Number, choosing the name of the business and putting it in writing. Many states have different requirements based on factors such as tax laws, and it is important to have the correct documentation and information that pertains to New Jersey.

I recommend: Read this information from the New Jersey Business & Industry Association to learn more about the registration process.

Formation

The business formation refers to the type of business, whether it is a limited liability corporation (LLC), a limited partnership, a sole proprietorship or a corporation. There are many advantages and disadvantages to each of these New Jersey business types and each follow different tax formulas.

I recommend: Check out this comprehensive list of business formation possibilities on the Alco Corporate Services website.

S Corporation

One type of business formation that you may consider when you are incorporating a business in New Jersey is the S Corporation. An S corporation means that the owner of the business pays pays taxes on business income as if it were personal income. Only small businesses are eligible for this standing.

I recommend: Nolo describes what an S corporation is and why it’s a good idea to choose this type of business. The New Jersey Department of the Treasury gives specific information about how S corporations work in New Jersey.

Corporation business tax

The corporation business tax is paid on profits generated by incorporated companies in New Jersey. Calculations on how much money a business pays starts on the day of incorporation, or the first of the month following its incorporation.

I recommend: NJ Business Portal describes which businesses have to pay tax and has links to the applicable tax forms.