Elizabeth, NJ

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How to start your LLC in Elizabeth, NJ

STEP-BY-STEP GUIDE by Lee Payton Updated: November 21, 2022
STEP 1
Instant
Name your LLC
STEP 2
Instant
Appoint a Registered Agent
STEP 3
2 - 4 wks.
File Certificate of Formation
STEP 4
Varies
Draft an Operating Agreement
STEP 5
Instant
Get an EIN (Employer Identification Number)
STEP 6
Instant
Register your LLC for Tax & Employer Purposes

Why form an LLC in Elizabeth, NJ?

Elizabeth is located 15 miles from New York City and has a growing population of 137,298. It is the county seat of Union County and is the fourth-largest city in the state. Its prime location makes it a popular place for people who work and play in New York City.

As a business owner, Elizabeth offers many incentives for you to create commerce in the community. The sales tax is only 3.5 percent, half of the state average of 7 percent. With a strong economy and proximity to NYC, it is a great place to start your new small business.

We’ll cover: 

  • How to name your LLC and file the proper documents
  • How to stay compliant
  • Local Elizabeth business resources available to you

LLC Formation Process in a Nutshell

1. Name your LLC

How should you name your LLC? You might have your heart set on a name, but there are important things to consider first. You’ll want to ensure that it follows state rules and isn’t too close to an existing business’s name.

The rules for naming your company in Elizabeth, NJ are fairly simple according to New Jersey Revised Statutes section 42:2C-8.

Your New Jersey LLC name must end with one of the following:

  • Limited liability company
  • Limited company
  • An abbreviation of one of the two phrases above, like LLC, LC, or Ltd. Co.

Your LLC name must be unique and easily distinguishable from other New Jersey businesses. You will want to avoid confusing the public with a name similar to that of another New Jersey business.

Let’s say you have your heart set on the name “Elizabeth Air Conditioner Repair, LLC,” but after a search, you find another New Jersey corporation named “Elizabeth Air Conditioner Repair, Inc.” The names are too similar even though “Inc.” is a different kind of company.

If you make a simple change to your name such as “Elizabeth Air Conditioner Service, LLC,” you should be okay.

Whatever name you choose shouldn’t be misleading to the public. This includes using another company’s name or choosing a name that would cause people to confuse it with government entities.

If your business name implies that you carry any form of professional license, at least one of your members must have that valid license issued by an appropriate government agency.

For example, if your business is named “Elizabeth Private Investigations, LLC,” you’ll need to hold a valid New Jersey Private Investigator License.

New Jersey is a densely populated state with lots of businesses, so it may not be as easy as you think to pick a good, unique LLC name. Fortunately, the Division of Revenue has two business search engines available. The first will let you search for all existing businesses with a certain word or phrase in their name.

The second business search engine was designed specifically to find an available name for a new company. With this search engine, you can put in one of two words, and the website will show you the various businesses that might have names too similar to the one you are thinking of using.

After naming your company, it’s also legal in New Jersey to apply to do business under an assumed name or “DBA,” but more on that later in this article.

Instant
Free

2. Appoint a Registered Agent

What is a registered agent? A registered agent is an individual or company that receives service of process, legal documents, and official notices on your business’s behalf.

Service of process is a legal term for business letters or legal papers. Your agent is the gatekeeper between you, the state, and the public.

New Jersey state law requires that you appoint a registered agent and provide their details at the time of filing your Certificate of Formation. New Jersey’s rules for naming and changing registered agents are in New Jersey Revised Statutes section 42:2C-14.

Registered agents must meet the following requirements:

  • Be at least 18 years old
  • Have a physical address in the state of registration
  • Be available to receive mail and sign official documents during normal business hours, Monday to Friday, 9 a.m. to 5 p.m.

A registered agent must also respond quickly in the event of a lawsuit so that your business avoids missed deadlines, fines, or penalties for non-compliance.

Some business owners choose to designate themselves as registered agents because:

  • It’s cheap: You’re not paying someone for something you can do yourself.
  • It’s simple: The only address and contact information you have to keep current is your own.
  • It’s reliable: You will receive all important documents personally.

However, there are several downsides to this:

  • No privacy: You’ll have to make your address available to the public on the Secretary of State’s website.
  • Junk mail/spam: Public-facing addresses are swarmed by junk mail in addition to a small amount of legitimate mail.
  • No breaks: Registered agents must be open for service during all business hours. They don’t get time off.
  • Business interruptions: If your agency address is the same as your business address, your business and clients may be interrupted by your duties as an agent. If you are getting served with a lawsuit in front of customers, that could be embarrassing or even hurt your business.
  • It’s your fault if you miss something: You always have to make sure your agency address is correct and up to date. If you make a mistake or miss something, that’s on you.

For these reasons, most experienced business owners hire companies to act as their registered agents. These services cost between $100 and $150 per year. If you choose to use a law firm, you could spend up to $500 per year.

If you choose to start your LLC by using a business formation company, they often include a registered agent service in their packages. Feel free to take a look at our registered agent recommendations article for more information.

Instant
$0 - $100

3. File Certificate of Formation

What is a Certificate of Formation? This document turns your business from an idea into an actual legal entity, ready to sign contracts and do business. New Jersey law states that filing your Certificate of Formation makes it official.

To file, you’ll need the following basic information as listed in New Jersey Revised Statutes section 42:2C-18:

  • The name of your LLC
  • The registered street and mailing addresses of the LLC
  • The name and address of the LLC’s registered agent
  • The name and address of each person forming the LLC

You can also include any other matter in the certificate. The one exception is that you can’t limit the authority of an LLC member or manager in this document. (If you want to publicly limit someone’s authority, you will need to file a separate statement of authority.)

The filing fee for your Certificate of Formation is $125. You can file it with the state online using the Division of Revenue and Enterprise Services’ business formation website.

Processing time for a certificate of formation varies, but it’s normal for the process to take from two to four weeks. You might not have that kind of time, or you may just not want to wait.

In that case, the state does offer a few options for expedited service:

  • Within 8.5 business hours: $25
  • Same-day service: $50 (fax filing only)
  • Within 2 hours: $500
  • Within 1 hour: $1000

To save time and avoid the hassle of LLC filings, all seasoned entrepreneurs use LLC formation services. For recommendations, check out our article on the best LLC services.

2 - 4 wks.
$125

4. Draft an Operating Agreement

What is an operating agreement? An operating agreement is a contract between you and other members of your LLC. It outlines the rules by which your company does business, keeps you prepared for everyday situations, and protects against the unexpected.

Your operating agreement should list each member of the company and how they’re expected to work. It can be as simple or detailed as you’d like to make it.

Although not required by New Jersey LLC law, we strongly urge you to consider one. Without an operating agreement, state law acts as a fallback. Remember that state laws don’t always align with your intentions and expectations for your business.

The benefits of having an operating agreement include:

  • They determine the rights and duties of LLC members. If one LLC member is responsible for running the business or managing the books, the operating agreement should say so.
  • They say whether the LLC has a member or non-member manager and what the manager has the right to do. Managers also have special duties to the company and the members. The operating agreement should state these.
  • They outline what the LLC is legally able to do. The operating agreement should also set down how the company is allowed to conduct its business from day to day.
  • They say how new members can join the company. They also have rules about how exiting members can leave.
  • They set down how and when profits are paid to members. They can also create different types of membership and payment schemes.
  • They say whether members or managers are in charge. They also say how to hire and fire managers.
  • They say how and under what circumstances the LLC should end. You might not want to dissolve your business now, but you might in the future. It’s best to think about it and plan before it becomes an issue.
  • They say how to change the rules. You may need to amend your operating agreement in the future. The operating agreement should set down the rules for making changes.

When it comes to hiring, firing, and everything in between, an operating agreement allows you to customize the rules of the LLC according to your expectations. They should be signed by every member and kept somewhere safe.

The best LLC formation services provide operating agreement templates for as low as $50, and we highly recommend them.

Varies
Varies

5. Get an EIN (Employer Identification Number)

What is an EIN? EINs are tax identification numbers assigned to businesses by the Internal Revenue Service. They function much like social security numbers, but for businesses instead of individuals. They allow the IRS to keep track of companies and other business entities that pay taxes.

Here are the three most common cases in which your business will need to obtain an EIN:

  • Your LLC has more than one member
  • You have employees
  • Your business is taxed as a C or S corporation

Regardless, we highly recommend getting an EIN even if it’s not required for your business. Among other reasons, most banks and online payment services require them to open a business bank account.

Obtaining an EIN is easy and can be done in minutes on the IRS website. You can also file via mail or fax.

It’s free of charge and shouldn’t be paid for unless part of a larger LLC formation package.

Read More: How to get an Employer Identification Number in New Jersey

Instant
Free

6. Register your LLC for Tax & Employer Purposes

Your LLC is formed and you have your EIN, but you’re not quite ready yet to do business in New Jersey. Now, you have to register your business so that you can pay state payroll taxes, unemployment insurance, and other withholdings. 

Also, if your business plans include selling goods or services, you will have to collect sales tax. In that case, you need to get authorization to collect sales tax as part of your registration process.

Business registration is usually done through the NJ-REG form, but you can now go to the NJ Division of Revenue’s website to register online.

Instant
Free

Cheapest way to start your LLC

Do it Yourself
Gain personal knowledge
Lower upfront cost
You're losing money when you consider how much time it takes
There's the risk of making a mistake
It's a headache
Potential price
$0
Potential time
5+ days
Formation Service
Very easy to use
Affordable ($39 for an LLC)
Same-day filing
Highly reliable
Not ideal for complex LLCs
Potential price
$39
Potential time
30 min
Attorney
A lawyer can help you manage risk
Offers more customization when you need it
Costs more than any other method
Finding one takes time
Slower compared to formation services
Potential price
> $400
Potential time
5+ days

Licenses and Permits in Elizabeth, NJ

Certain types of businesses require professional licensing, such as doctors, lawyers, and private investigators, just to name a few.

Check the New Jersey Division of Consumer Affairs website if you have questions about any licensing requirements for your business.

State

In New Jersey, your Certificate of Formation serves as the license or permit at the state level. No other documentation is required.

Local

The City of Elizabeth requires permitting or licensing for a small portion of businesses. To apply for one of these permits or learn more, visit the City of Elizabeth Business License Page.

Remember that your business may need specific licenses or permits. Contact the City of Elizabeth if you have any questions.

Support for Small Businesses in Elizabeth, NJ

As the 4th largest city in the state, Elizabeth offers plenty of support for your small business.  Here are just a few local Elizabeth organizations that can help:

Next Steps After you Register your LLC

Now that you’ve made it official and formed your Elizabeth, NJ LLC, there are a few more easy steps to follow to complete the setup and protect your new business.

  • Register a Matching Domain

    There are several good reasons for buying a matching domain name for your LLC, even if you don’t plan on building a website just yet.

    Competitors can easily buy your domain and its variations to keep you from using them.

    There are also people who intentionally search public records to find newly registered LLCs to buy and resell them at a higher price.

    A domain name from a provider like GoDaddy.com will cost you around $20 to $50 per year.  These hosts offer regular specials and discounts that help you save money even if a website isn’t in your immediate future.

  • File for a DBA (Doing Business As)

    New Jersey allows you to do business under an alternate business name (also known as a DBA). This means you can operate under a name different from the business’s legal name.  It can also help distinguish your company from other similarly named businesses.

    You will need to obtain an Alternate Name name under New Jersey Revised statutes section 42:2C-9.

    For example, your LLC’s legal name is “John’s Air Conditioner Service, LLC” but you want customers to know you as “Elizabeth AC Service,” “Elizabeth 24/7 Air Conditioner Repair,” or anything other than “John’s Air Conditioner Service.”

    The certificate should contain:

    • The DBA you want to use
    • Your LLC’s legal name
    • Where your LLC was organized (New Jersey)
    • How long you intend to use the DBA (not longer than 10 years)
    • The street or mailing address of your LLC’s principal office, whether inside or outside of New Jersey
    • The counties in which your LLC is doing business using the DBA

    The Division of Revenue offers a form certificate that you can use here. Also, keep in mind that you must pay a $50 state fee at the time of filing. Once you have registered, you can use the New Jersey DBA/alternate name for five years.

  • Stay Compliant

    Keeping your business compliant is vital to avoid fines, penalties, or state sanctions. You’ve come too far to let compliance issues shut you down.

    New Jersey Revised Statutes section 42:2C-26 requires your LLC to file a report every year. It must have this information:

    • Your LLC’s name and address
    • Your registered agent’s name and address
    • The name and addresses of the managing members (or of the non-member managers, if your LLC has them instead)

    There is a $75 fee for filing your LLC’s annual report.

LLC Formation FAQs

What are the benefits of an LLC?

Most importantly, having an LLC will ensure your personal assets are protected if your business cannot pay its debts. Running your business through an LLC can also provide you with better tax treatment. In addition, LLCs have fewer and less complicated reporting requirements compared to other types of businesses, making them particularly suitable for smaller businesses.

Do I have to form an LLC to start a business?

It is not strictly necessary to form an LLC in order to start a business. You can engage in business as a sole proprietorship instead. However, in that case, your personal assets may be at risk if your business takes on too much debt or loses a lawsuit in court.

How much does it generally cost to form an LLC?

It doesn’t cost much to set up an LLC for your business. In most states, you will need to pay less than $150 to register your new LLC with the local state authorities. In some states, you may need to pay some additional costs later on, for example, when filing an annual report or filing for a DBA.

How long does it take to form an LLC?

The time it takes to have your LLC approved can vary wildly depending on the state, the filing method you used and if you opted for expedited filing. In some states, you can have your LLC approved in as little as one day, while in others, it may take weeks or even months.

If you want the fastest possible turnaround time, you should consider using online filing and pay for expedited service, if available.

How will my LLC be taxed?

The IRS and most state tax authorities treat LLCs as “pass-through” entities. This means that your LLC does not pay taxes directly (as corporations do). Instead, the tax burden is passed through to the members of your LLC. The members will then include profits and losses from the LLC’s business on their personal income tax returns.

In what state should I form my LLC?

It is generally best to form your LLC in your home state, where you will actually carry out your business. Some people believe that it is advantageous to form your LLC in Delaware or Nevada. In reality, you would then have to register with the authorities in your home state as a foreign LLC and pay additional fees – without much benefit in return.

Do I need to file for a DBA?

You are not generally required to file for a DBA (“Doing-Business-As”). However, most business owners choose to do so anyway. Getting a DBA will allow you to omit the letters LLC from your customer-facing business name. You can also have multiple names for your LLC if you want to run more than one business through your LLC.

Can I form an LLC if I am not a US citizen or US resident?

Yes, you can form an LLC for your business in any US state. There is no requirement for you to be a US citizen in order to form an LLC, nor do you need the right to reside in the US. If your business is going to own physical property in a given state, you may want to form your LLC in that state.

Do I need to hire an attorney to form an LLC for my business?

No, you don’t need to hire an attorney to form an LLC for you. It is generally much cheaper and straightforward to file the necessary paperwork yourself or to hire an affordable LLC formation service to handle the work on your behalf. However, you may want to consider hiring an attorney if your business is very complex.

Elizabeth, NJ Business Formation Quick Links