New businesses are the lifeblood of New Jersey’s economy, fueling technological and social advancements, job creation, and economic expansion across the state. Recognizing this profound impact, the State of New Jersey has, in recent years, taken proactive measures to cultivate a business-friendly climate that encourages business creation and growth. According to the Census Bureau, new business applications in New Jersey increased by 21% in 2021. As of 2022, the state received 154,032 new business applications.
New Jersey Economy Trends
- New Jersey has over 900,000 enterprises across various industries and counting.
- Small businesses constitute 99.6% of New Jersey’s businesses and hire almost half of the state’s workforce. The U.S. Small Business Administration (SBA) put the number of small businesses in New Jersey at 953,416 in 2022 and their employees at 1.9 million persons.
- New Jersey ranks 11th in the number of small businesses in the country.
- In 2020, businesses in New Jersey accounted for $35.2 billion in exports. Of the 19,430 identified firms responsible for the state’s exports, 17,778 (91.5%) were small firms.
- Small firms in New Jersey exported $13.1 billion in 2020, making up 37.2% of exports by identified firms that year.
Entrepreneurs starting their own business in New Jersey may do so following these steps:
- Step 1: Conducting Market Research
- Step 2: Writing a Business Plan
- Step 3: Obtaining a Business License or Permit
- Step 4: Funding the Business
- Step 5: Choosing a Business Structure
- Step 6: Picking a Business Location
- Step 7: Registering the Business with the Relevant Government Body
Step 1: What Kind of Business Should I Start in New Jersey?
Determining what business to start in New Jersey is the foremost question any entrepreneur should address when seeking to establish a successful business. Various factors influence a new business owner’s service or product, including the founder’s skills and interests, financial resources, market demand, and regulatory requirements. It is equally important to consider the kinds of businesses that thrive in New Jersey.
New Jersey is strategically positioned within the Northeast Corridor (NEC), a 457-mile (735.5 km) railroad connecting several major metropolitan areas in the United States, including Boston, Philadelphia, New York, and Washington, DC. The state’s proximity to these prominent markets makes it an ideal spot for new businesses. Business owners can connect to a large consumer base, attract skilled labor, ensure efficient delivery of goods and services, explore various collaborative opportunities, and more.
Specifically, New Jersey is renowned for awarding the second-highest percentage of STEM (Science, Technology, Engineering, and Mathematics) degrees within the NEC. According to the New Jersey Economic Development Authority (NJEDA), the state has the highest concentration of scientists (especially biochemists and biophysicists) and engineers than any other US state. Consequently, New Jersey is considered a world leader in the pharmaceutical and biotechnology industries, making it an excellent location to begin a business in the life sciences industry.
Other popular business sectors in New Jersey include:
- Food and Agriculture
- Financial Services
- Information Technology
- Retail Trade
- Leisure and Hospitality
- Construction and Utilities
Notably, the state is home to 21 Fortune 500 companies, 16 of the fastest-growing tech companies in the United States, over 400 biotechnology companies, and the operations of 13 out of the top 20 pharmaceutical companies in the world.
How to Do Market Research
Situating a business in New Jersey because of the state’s economic advantages is only one part of the equation. Also important is conducting market research to validate one’s business idea.
Market research exposes consumer needs, preferences, and behaviors, which are all essential to the longevity and success of any business venture. The investigation also helps a business owner identify the opportunities and threats in the market, allowing them to develop smart strategies to beat the competition and expand into new markets.
Below are some questions that market research can answer:
- How many people would be interested in a particular product or service
- If a demand exists for a product or service
- Where the target consumers reside and the extent of the company’s reach
- Whether similar offerings exist and the cost of those substitutes
- The demographics (age, employment rate, income, marital status, etc.) of the target market
Overall, there are two ways to conduct market research. The first method pulls from existing sources to provide the business owner with the needed data. (For instance, see research references from the SBA and NJ Department of Labor.) The second goes directly to the customers to find those answers through tools like questionnaires, surveys, and interviews. Business owners tend to prioritize the latter method, as it guarantees access to real-time data.
Beyond doing market research, a business owner must also determine their motivations for starting the business, the best business structure and model for their idea, available funding options, the time they can dedicate to developing the business venture, and their competitive advantages.
Individuals requiring assistance with market research in New Jersey can contact a local Small Business Development Center (NJSBDC) to receive free or low-cost guidance from business experts.
Step 2: How to Write a Business Plan
The extent of a business plan – and sometimes, its necessity – is frequently debated among starting entrepreneurs. Nonetheless, a business plan remains essential to any business venture. A well-crafted business plan clarifies and communicates a business idea and is often a critical component when applying for business funding.
When writing a business plan, business owners can choose among different templates, depending on their business type and needs. However, the traditional and lean startup business plans are the most popular templates.
The traditional, or old-fashioned, business plan is more common and elaborate than the lean startup business plan. Typically, it contains the following sections:
- Executive Summary: The executive summary marks the beginning of any traditional business plan. It briefly highlights other key sections that will comprise the plan, such as the company’s goals, target market, location, product/service, management team, and financial projections (if seeking funding).
As a crisp business overview, the executive summary is the section that receives the most attention. It describes the business to a reader and tells the person why it will succeed. Therefore, it should be well-written (written last, preferably) to give the reader a positive impression of the business.
- Business Description: Goes into detail to persuade the reader that a business idea is practicable. It provides more information about a company’s product or service line, competitive advantages, target market, and strengths (for example, if an expert is part of the team or the company has notable past accomplishments that position it for potential success).
- Market Analysis: Delves into a company’s industry and target market (the consumer base). It examines industry trends and customer demographics, needs, and preferences. It also surveys the competitor terrain, i.e., who the firm’s competitors are, their strengths, what they are doing well, and why it works. This detailed analysis can reveal opportunities to penetrate one’s target market. It can also uncover threats to the company’s operations.
- Organization and Management: Outlines how the business will be structured (as a corporation, partnership, or otherwise) and who will be part of the management team. It details the team’s skills, expertise, qualifications, or affiliations, emphasizing their contribution/relevance to the company’s mission or overall success. It is recommended to use an organizational chart to visually convey team attributes. Company owners can also include the resumes or CVs of key team members.
- Product or Service Line: Describes the products or services the company will sell. It includes a product/service’s life cycle, cost, manufacturers, suppliers, and comparison to existing offerings.
This part of the business plan should also discuss any plans for intellectual property (patents, copyrights) and other legal/technical considerations.
- Marketing and Sales: In this section, the company outlines its promotional, product, and pricing strategies, including how the company will advertise or sell, how the company will engage and retain consumers, how much money will be spent on promotions, and future product/service strategies.
- Financial Plan: Contains the company’s proposed budget and financial projections. Ideally, it should forecast five years into the company’s future and include forecasted income statements, balance sheets, capital expenditure budgets, and cash flow statements.
If seeking external funding, a person should include a funding request and three-to-five years of past financial history (if the business is already established). The historical data helps investors understand the feasibility of one’s business funding application.
- Appendix: Includes all supporting documentation or materials for the business plan. For example, resumes, licenses/permits, patents, relevant market research reports, credit histories, and key supplier or buyer contracts.
New Jersey has several resources to help with business plan development.
Step 3: Do I Need a Business License in New Jersey
Yes. Nearly all businesses starting in New Jersey will engage in one or two activities regulated by a federal or regional (state or local) body. As a result, New Jersey businesses often need to secure a business license from a government agency to operate legally within the state.
The type of license a business owner needs varies by their business activities and business location. For example, a firm selling alcoholic beverages in New Jersey will require a license from the Division of Alcoholic Beverage Control, and a car wash business will need a license from the municipal clerk in their city of operation. Further, a new business may need to get a business license from the city or county where they are located.
Fortunately, the state has a Licensing & Certification Guide that business owners can consult to determine applicable licenses. If a federal agency regulates one’s business, it is worth reviewing the SBA’s guide to find relevant federal licenses and permits.
How Much Does a Business License Cost in New Jersey?
The cost of a business license is not fixed in New Jersey, given that various government agencies issue business licenses and businesses operate in different industries. A business license may cost anywhere from around $25 to several hundred dollars, although some cost nothing to obtain. Moreover, government agencies use varying criteria to determine validity/renewal periods and fee waivers (if any).
The best way to determine the cost of a business license (and applicable waivers) is to contact the agency that issues the license. The New Jersey Licensing & Certification Guide is a handy tool for discovering regulatory bodies within the state.
How to Register for a Seller’s Permit in New Jersey
A seller’s permit is known as a “Certificate of Authority” or “Sales Tax License” in New Jersey. It authorizes businesses engaged in retail sales of goods or services (“vendors“) to collect sales tax on all taxable sales made within the state and remit those amounts to the state regularly (usually quarterly).
To register for a seller’s permit in New Jersey, a vendor must file Form NJ-REG (Business Registration Application) online with the Department of Treasury’s Division of Revenue and Enterprise Services (DORES). On the form, the applicant must indicate that they intend to collect sales tax. An application must be made at least 15 business days before commencing business operations in the state.
Alternatively, an individual can mail a paper application to DORES using the form on pages 17-19 of the Business Registration Forms and Information packet.
New Jersey Division of Revenue & Enterprise Services
Po Box 252
Trenton, NJ 08646-0252
New Jersey Division of Revenue & Enterprise Services
33 West State Street, 3rd Floor
Trenton, NJ 08608
There is no fee to submit the application or obtain the permit. However, note that any legal entity must get an EIN from the IRS and have their entity ID (obtained by submitting formation paperwork to DORES) to submit the Business Registration Application.
After DORES registers the applicant, the individual will obtain a Certificate of Authority for Sales Tax (Form CA-1) issued by the Division of Taxation, along with their New Jersey Business Registration Certificate (BRC). The Certificate of Authority must be displayed at all times at the person’s business location or at any event where one sells goods or services.
Individuals can review the state government’s website for more details about sales tax licenses in New Jersey. Alternatively, one can contact DORES at (609) 292-9292.
Step 4: How Much Does it Cost to Start a Business in New Jersey
Every new business in New Jersey will require some capital to get off the ground. The exact amount is case-specific, however. It varies by the business type/industry, the related compliance requirements, the company’s location, the products/services offered, and the founder’s pocket or financial resources. Common expenses that a business owner may incur include:
- Business formation costs
- Business licenses and permits
- Physical space (rent, renovations, maintenance)
- Utilities and equipment
- Professional services (e.g., legal and accounting)
- Marketing & advertising costs
- Miscellaneous (insurance, website development, software, etc.)
That said, some businesses will require little capital to start, while others will need a large investment. The US Small Business Administration provides a guide and spreadsheet to help calculate the startup costs for a business. When calculating business startup costs, it is important to aim for specificity in estimates, research similar business cases, and get multiple quotes for potential purchases or expenses.
How to Get Business Funding in New Jersey
A new business owner will often need funding to start up or expand in New Jersey. Fortunately, a variety of funding options are available to entrepreneurs, including:
- Personal Savings
- Business Credit and Loans
- Crowdfunding/Peer-to-Peer Lending
- Venture Capital Investments
How to Self Fund a Business in New Jersey
Self-funding, or “bootstrapping,” is a business funding model where an entrepreneur utilizes personal savings, assets, and other internal resources to finance a business venture. Many business owners in New Jersey explore the self-funding option before delving into others. One key advantage is that a business owner can retain complete control over their company’s finances and management.
However, an entrepreneur who self-funds also bears all associated risks. For this reason, one must carefully assess their finances to determine how much can be used to self-fund their business. A business owner should also strategize (advisably, in writing) how the money will be spent to minimize waste and consider other streams of capital generation, like a pre-order sale or a side hustle.
Looking into support from friends and family members or additional funding sources, such as a traditional loan or government grant, may be worthwhile.
How to Find Investors in New Jersey
Investors are people or organizations that can provide funding and other resources to a business. There are different kinds of investors, including angel investors, crowdfunders, and venture capital firms, and the type of investor one pursues depends on their business needs and goals. Since investors release funding in exchange for equity, financial returns, voting rights, a board seat, etc., a business owner must also determine the terms and conditions they can offer. Some investors will ask for an active role in the company’s management and may provide mentorship, guidance, or industry connections. Others may prefer a more passive role.
A business owner can attend networking events to find investors in New Jersey. They can also seek referrals from online or local business groups, seek out startup incubators and accelerators, and leverage relationships within their community.
Before approaching any investor, it is important to prepare a pitch deck that communicates the company’s business model, value proposition, competitive advantages, and growth strategy.
How to Get a Loan to Start a Business in New Jersey
Several entities offer business loans to business owners in New Jersey, including commercial banks, credit unions, saving institutions, commercial finance and non-financial companies, government agencies, and friends or family members. The method used to obtain a loan, as well as the loan terms, will depend on the organization or entity that provides it.
Friends and Family Loans
A loan from friends or relatives can benefit a new firm because it often bears little to no interest. However, personal relationships or ties may be affected if a business owner cannot repay the loan as agreed. It is advisable to draft and document an agreement that clarifies the repayment terms and conditions to avoid such risks.
Bank or Credit Union Loans
Banks and credit unions are the conventional sources of business funding. Although loan requirements and approval processes differ, a bank or credit union will usually provide a loan if one has a good credit score and a sound business model.
To increase the chances of being approved for a loan, a business owner should have all necessary financial information and documents ready. Lenders will ask for different details, but these are frequently requested:
- Cash flow projections (usually for the forthcoming five years)
- A business plan and expense sheet
- Documents showing how long a business has been active (e.g., copies of a business license or registration certificate)
Essentially, a business owner will require documents demonstrating why funding is necessary, how much money is needed, and how the loan will be repaid. One can review the New Jersey Business Action Center’s Guide to Doing Business to learn how to write a loan proposal and how loan requests are reviewed, among other details.
Note that while comparing offers and interest rates from lenders is prudent, a business owner should only apply where necessary to avoid affecting their credit score.
Business owners who cannot access traditional funding sources can look into SBA-guaranteed loans. These are loans endorsed by the US Small Business Administration to assist small businesses in getting loans from banks.
That said, the above are only some loans that new business owners in New Jersey can obtain. Besides speaking to a business consultant or accessing free business-help resources, business owners in New Jersey can also search the state’s Funding website to find loans in their industries.
How to Find New Jersey Business Grants
A business grant is a financial award that a government, private, or non-profit organization provides to a business. The award supports business initiatives such as economic growth, job creation, innovation, research and development, or public aid. Unlike a loan, business grants do not have to be repaid.
Entrepreneurs can find New Jersey business grants by searching the state’s Funding website. For assistance, one may also contact the New Jersey Business Action Center (NJBAC) or a local Small Business Development Center. Several state government agencies and municipalities also provide online resources to find grant opportunities in the state.
Can I Start a Business with No Money in New Jersey?
No. It costs money to start any business in New Jersey, even if that business is a sole proprietorship. Besides the ordinary startup costs that are applicable to new businesses, a budding entrepreneur must also contend with compliance requirements, such as obtaining a business license/permit, getting business insurance, and filing formation documents, which all carry associated expenses.
However, there are ways to reduce the cost implications of opening a new firm, including seeking external funding and asking for loans from relatives or friends. Business owners can also handle tasks that might be outsourced to a third party in-house to save costs.
Step 5: Choosing a Business Structure in New Jersey
A company’s legal structure determines how it will be run and the legal protections or benefits the owners or members will receive. For example, the taxes the business will pay, the extent of personal liability protection the owners have, and the firm’s registration and compliance requirements. As such, choosing a business structure that aligns with one’s business needs is necessary.
Of the different business structures an entrepreneur can establish in New Jersey, these are the most common:
- Sole Proprietorship
- Limited Liability Company
Sole proprietorships are ideal for individuals who want to test a business idea or want total control over their business operations. Partnerships are a good option for individuals who wish to do business with others. For example, professional groups (attorneys, accountants, doctors, engineers, creatives) may benefit from forming a partnership.
Corporations are great for businesses seeking to raise capital, go public (sell shares of stock), or expand significantly. Meanwhile, firms that organize under the LLC structure often have owners with significant personal assets they want secured, owners seeking more flexibility in management, or owners seeking certain tax advantages (for example, pass-through taxation).
How to Start a Sole Proprietorship in New Jersey
A sole proprietorship is an unincorporated business managed and owned by one person. The sole proprietor assumes complete responsibility for the company’s assets and liabilities. Consequently, the business is not considered separate from its owner for tax or other legal purposes.
Compared to other legal structures, a sole proprietorship is the least expensive to form and simplest to maintain in New Jersey. The owner does not need to register their business with the state to be formed. However, the business must register for state taxes by filing Form NJ-REG (Business Registration Application) with the Division of Revenue and Enterprise Services. Filing must be done at least 15 business days prior to opening.
Sole proprietors who do not intend to do business under their legal name must register their business (trade) name in the county where they will conduct business affairs. Although registration is not required when using one’s name for business, it is still recommended because it protects the trade name from being used by other businesses in one’s county of operation.
How to Start a Corporation in New Jersey
A corporation is a legal entity that exists apart from its owners (called “shareholders”). As a result, owners are not liable for the debts or obligations of the business, except if they become guarantors or a court determines them liable. Corporations are typically run by a board of directors who oversee the business’s day-to-day operations.
There are different types of corporations, including benefit corporations (B corporations), non-profit corporations, S corporations, close corporations, C (general) corporations, and professional corporations. However, New Jersey has only three types: C, S, and non-profit corporations.
To form any corporation in New Jersey, a person must submit the following documents to the Division of Revenue and Enterprise Services (DORES):
- A Business Formation Application (also called a Public Records Filing)
- A Business Registration Application. This application is filed after completing the formation process and requires a company’s EIN.
It costs $125 to form any foreign or domestic for-profit corporation in New Jersey, excluding the costs of expedited services and business name reservations ($50). There is no fee charged for filing a Business Registration Application. These filings allow a firm to obtain a Business Registration Certificate (BRC) that permits them to conduct business affairs in the state.
Note: Additional paperwork is required to form an S corporation (S corp) in New Jersey. An eligible entity must file Form 2553 with the IRS and Form CBT-2553 with DORES to elect for S-corporation status.
How to Start an LLC in New Jersey
An LLC (limited liability company) is a business entity with partnership and corporation characteristics. Like a corporation, an LLC is a separate legal entity from its owners (called “members”). This separation removes the owners’ personal liability for the business’s debts or liabilities. Meanwhile, like a partnership, owners of an LLC have management flexibility and tax benefits. One or more persons can own an LLC.
To form an LLC in New Jersey, a business owner must fully register the business with the state. This means submitting the Business Formation and Business Registration (NJ-REG) applications to the Division of Revenue and Enterprise Services.
It costs $125 to file LLC formation paperwork in New Jersey, but LLC owners submit the Business Registration application for free. Both applications can be completed online or submitted by mail/fax. Paper forms can be retrieved from the Business Registration Forms And Information packet. Note that additional costs may apply, such as the cost to request expedited processing or reserve an LLC name before filing for formation.
How to Start a Business Partnership in New Jersey
A partnership features two or more persons who combine skills, expertise, and resources to a business venture. Partners can avoid paying corporate taxes on profits and easily form their business without too much paperwork. However, owners are not always protected from the business’s debts or liabilities.
New Jersey has three types of partnerships: general, limited, and limited liability.
How to Start a Limited Partnership in New Jersey
A limited partnership features limited partners and at least one general partner (who can be a corporation). The general partners own and operate the firm, and they assume unlimited liability as regards the company’s debts and obligations. Meanwhile, the limited partners invest in the business and have limited liability in the company’s debts. As such, limited partners have little input or control over the partnership’s management.
On the other hand, a limited liability partnership offers limited liability protection to all partners. Partners are not responsible for the company’s debts or other partners’ or employees’ actions.
New Jersey does not recommend a separate process to start a limited or limited liability partnership. Owners must complete and file a Business Formation Application with the Revenue and Enterprise Services Division. They must also file a Business Registration Application (Form NJ-REG) after the formation process is completed, but the form must be submitted at least 15 business days before the opening day.
There is no fee to file Form NJ-REG, but partners must pay $125 to submit the formation application to DORES.
How to Start a General Partnership in New Jersey
In a general partnership, two or more persons own the business. The partners take on responsibility for the business’s management and the partnership’s debts and obligations. The partners are also personally liable for the actions of their employees or fellow partners.
General partnerships are not subject to Public Records Filing (i.e., filing a Business Formation Application) in New Jersey. However, such entities must file a Business Registration Application (Form NJ-REG) with the Division of Revenue and Enterprise Services to register for state taxes.
There is no fee to file Form NJ-REG. The form can be submitted online or via paper application (pages 17-19 of the Business Registration Forms and Information packet).
General partnerships register trade (business) names with the county clerk’s office in each county where they will operate.
How to Start a Non-Profit in New Jersey
A non-profit is a type of C corporation (regular corporation) formed for a purpose other than generating profit, such as for charity, education, or social welfare. It is necessary to file several forms to start a non-profit in New Jersey.
Like other corporations, a non-profit must complete New Jersey’s formation/authorization and tax/employer registration processes with the Division of Revenue and Enterprise Services. The fee for filing a Business Formation application for a domestic non-profit corporation is $75. The fee is $125 for a foreign (out-of-state) non-profit corporation. There is no fee charge to file the state’s Business Registration application (Form NJ-REG).
Note that there are other steps a New Jersey non-profit corporation must complete. The company will require an EIN and may qualify for a federal tax-exempt status per Section 501(c)(3) of the Internal Revenue Code, in which case the company must apply to the IRS. Also, the organization may be eligible to file Form REG-1E with the Division of Taxation to obtain sales tax exemption. More details about forming a non-profit in New Jersey, including helpful resources, are offered on the Division of Taxation’s website.
Step 6: Choosing a Business Location in New Jersey
A business’s location impacts how much it will pay in taxes, the state and local regulations it must comply with, and the zoning/land use restrictions that will apply. A firm’s location also affects its success in the long run. Thus, when choosing a business location in New Jersey, an entrepreneur should research factors such as:
- The proximity of the business to its target consumer profile
- Ease of access to customers
- Positive environmental factors (such as the existence of nearby businesses, schools, and the cultural ambiance) and environmental concerns
- Related expenses of doing business in one area versus another. For example, the cost to rent or lease a premise, purchase business equipment or inventory, get legal assistance, or obtain insurance
- Region-specific incentive programs and benefits. For instance, financial aid provided to business owners
- Whether a brick-and-mortar, mobile, online, or home location will serve one’s business interests
Historically, Essex and Bergen counties are known for receiving a high number of business applications (over 10,000 each year) compared to other New Jersey regions. However, the counties saw a modest decline in business formation requests between 2021 and 2022, with applications in Essex County dropping as low as 15.1%. In recent times, business applications in Ocean County have risen by 7.4%.
What Kind of Business Can I Run From Home in New Jersey?
Municipal ordinances regulate the kind of business a person can operate from home within New Jersey. Thus, an individual should refer to local ordinances, ask their local homeowners association (HOA) or another neighborhood group, or contact their zoning department to determine if the municipality permits their home business. It is also prudent to check one’s lease, if applicable, to see if home business operations are allowed.
Home businesses approved to operate within a city or township in New Jersey are typically those compatible with the surrounding community and that will not violate any land use/zoning restrictions. Essentially, a business that will not threaten public health, welfare, safety, or morals.
How Do I Start A Small Business From Home in New Jersey?
Establishing a home business in New Jersey follows a similar pattern to any other new business. Depending on the business structure chosen, the business owner may have to register with the Division of Revenue and Enterprise Services. The entrepreneur must also file for state taxes and obtain relevant licenses from federal or state government institutions.
Because a home business will likely operate from a residential area, the owner must also pay close attention to the ordinances covering their city of operation. These local rules ensure a business is suitable for its surroundings and will not disrupt the tranquility or character of the neighborhood. For instance, many ordinances restrict the number of on-site employees a home business can have.
Typically, a home business owner will need to seek approval from their municipality. This involves submitting a Home Office or Home Occupation Permit application to their city or township’s zoning officer. Some municipalities provide a blank form for such requests on their websites (for example, the Township of Bridgewater and the City of Bayonne), while others require the applicant to draft a letter (for example, the Township of Plainsboro). One’s zoning officer should be contacted for inquiries about the application and relevant zoning regulations.
Starting a Business Online in New Jersey
Online businesses are not subject to special legal requirements to operate in New Jersey. As with any new business, the owner of an online business must register with the state’s Division of Revenue (if eligible) and complete other standard steps for New Jersey business entities, including obtaining the necessary permits and certifications if selling a regulated product or service.
It is also crucial to confirm relevant restrictions or regulations from one’s municipality. New Jersey’s Online Business Starter Kit is a good resource for people looking to kick-start an online business.
Step 7: Legal Requirements for Starting a Business in New Jersey
Anyone can start a business in New Jersey, regardless of age, residency, or citizenship. However, all aspiring entrepreneurs must familiarize themselves with the laws or regulations that affect their business operations. This allows them to set up their business properly, maintain a good standing status with the state, and avoid fines or penalties that may result from noncompliance.
The legal requirements for opening a business in New Jersey are specific to a firm’s structure, activities, and location. Nonetheless, certain prerequisites are common to business owners, such as selecting a unique business name, choosing a legal structure, requesting a business license/permit, registering for state and local taxes, and obtaining a federal EIN. An EIN is typically required to open a business bank account in compliance with the state’s business laws.
How to Get an EIN Number in New Jersey
An EIN (short for “Employer Identification Number”) is assigned by the Internal Revenue Service to distinguish the tax accounts of employer businesses and certain non-employer businesses (firms with no employees).
Business entities in New Jersey can obtain an EIN within 15 minutes using the online EIN Assistant. An entity can also request an EIN by mailing or faxing Form SS-4 to the IRS. Below are the addresses for submission:
Business Entities within the United States
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
Foreign Business Entities (no local principal place of business, office/agency, or legal residence)
Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999
Fax: (855) 215-1627 (within the US)
Fax: (304) 707-9471 (outside the US)
Ideally, all businesses in New Jersey, regardless of whether having employees or not, should obtain an EIN. The number will be needed for most official business transactions, including filing tax returns, obtaining a loan, opening business accounts, registering a company vehicle, and applying for business licenses. However, the IRS will permit non-employer sole proprietorships and single-member LLCs to use the owner’s social security number (SSN) for federal tax purposes.
How to Get a New Jersey Registered Agent
New Jersey does not require every new business to get a registered agent to accept service of process and other legal mail on their behalf. The prerequisite applies only to businesses that must register with the state to be formed, such as limited liability companies (LLCs), corporations, limited partnerships (LPs), and limited liability partnerships (LLPs). Sole proprietorships and general partnerships—businesses formed without state registration—are exempt from the requirement to maintain a registered agent.
For businesses that must get a registered agent in New Jersey, the state approves two categories of agents: individual or corporate. An individual registered agent is a natural person who resides in New Jersey and is 18 years or older. A corporate registered agent is another business that offers registered agent services and is authorized to transact business in the state. In both cases, the agent must have a physical New Jersey street address.
If electing an individual to be the registered agent, a company owner can choose themselves, a member/director, an employee, or a family member to perform the role. Appointing an agent in-house may be less costly than paying for a registered agent service. Registered agent services in New Jersey typically cost around $100 to $300 per year.
Patents, Trademarks, and Copyrights in New Jersey
Patents, trademarks, and copyrights are all methods used to protect intellectual property in New Jersey.
A patent safeguards inventions, for example, a technology or manufacturing process. It grants exclusive property rights to an inventor, enabling them to prevent others from selling, making, or using their invention within the United States, territories, and possessions for a limited period. The United States Patent and Trademark Office (USPTO) administers patents for New Jersey businesses.
The validity of a new patent is up to 20 years from the filing date, or in special cases, from the date an earlier application was submitted. Interested persons can search for existing patents and find details about the US patent registration process on the USPTO’s website.
A trademark protects elements of a brand’s identity, such as a logo, business name, symbol, slogan, or any other sign differentiating one company’s goods and services from another. Trademarks can be registered with the state or federal government in New Jersey.
The New Jersey Division of Revenue handles the state trademark registration process. Applications can be made with Form TMSM-01 and cost $50 to file (expedited processing is available for an additional fee). Below is the address for submissions via regular mail:
New Jersey Division of Revenue
Trade/Service Mark Unit
PO Box 453
Trenton, NJ 08646-0453
The term of a New Jersey trademark is five years, subject to renewal.
Business owners that prefer a broader trademark coverage can file with the Patent and Trademark Office, the US agency responsible for federal trademark registration. Federal trademarks are more expensive to file but have a longer term for holders—10 years. A federal trademark can also be renewed periodically for an indefinite term.
Copyrights shield original works of authorship fixed in a “tangible form of expression,” such as musical compositions, books, films, illustrations, photographs, artwork, blog posts, movies, plays, poems, architectural works, computer programs, and more.
The United States Copyright Office, a subdivision of the Library of Congress, administers copyright protection for New Jerseyans. Interested persons can file a copyright online. Generally, a copyright lasts throughout an author’s lifetime and continues 70 years after their demise.
Detailed information (including FAQs) about the registration process is available on the Copyright Office’s website. However, the office can be reached at (202) 707–3000 or (877) 476–0778 (toll-free), as well as through the mailing address below, for general inquiries:
US Copyright Office
101 Independence Avenue, South East
Washington, DC 20559-6000
New Jersey Business Tax
One unavoidable aspect of doing business in New Jersey is paying the associated state taxes. New Jersey requires companies to register for tax purposes by submitting Form NJ-REG to the Division of Revenue, which subjects them to several state taxes administered by the Division of Taxation. Examples include:
- Sales and Use Tax: The sales tax applies to any business selling taxable goods and services in New Jersey. The current sales tax rate in New Jersey is 6.625%.
- Employer Withholding (Payroll) Taxes: These are taxes held on wages paid to all employees (residents and non-residents) in New Jersey, except non-resident employees from Pennsylvania.
- Income Taxes: Business income taxes are levied on a company’s net income and profits. New Jersey corporations file Form CBT-100 or CBT-100S returns yearly. Meanwhile, partnerships or limited liability companies with income or losses from New Jersey sources or a New Jersey resident partner file Form NJ-1065 returns annually. A partnership that withholds tax on behalf of non-resident partners must file Form NJ-CBT-1065 together with NJ-1065. (See applicable partnership forms).
Sole proprietorships and single-member LLCs, on the other hand, are not subject to business income taxes in New Jersey. Such businesses are treated as individuals and file Form NJ-1040 or NJ-1040NR returns instead.
- Specialty Taxes: These are taxes applicable to certain industries or services. Examples include cigarette tax, admissions surcharge, tobacco and vapor products tax, recycling tax, occupancy tax (for motels and hotels), and motor fuels tax.
One can review the Division of Taxation’s website for an extensive list of business taxes and fees collected in New Jersey, as well as the Division’s Tax Guide. A person can also call the Division of Taxation’s hotline at (609) 292-6400 or New Jersey’s Automated Tax Information System at (800) 323-4400.
Are Business Records Public in New Jersey?
Yes. Business records are disclosed to the public under the New Jersey Open Public Records Act (OPRA). As such, anyone can request information on businesses operating in New Jersey from the Department of Treasury’s Division of Revenue and Enterprise Services. Requests can be made online, via mail, or by any other means the Division provides. A fee applies to obtain copies of documents from DORES.
However, certain information in a business record may receive confidential treatment under New Jersey’s OPRA and privacy laws. Examples include social security numbers, proprietary commercial or financial information, and trade secrets. Individuals can review the OPRA’s 27 exemptions for more details.