5.6.2021

How to Start a Business in New Jersey

Written by Austin Chegini

christina wocintechchat com vLwH8bWoi 8 unsplash

If you’ve ever wondered what it would take to start a business in New Jersey, we’ve got you covered. We look at the legal and tax requirements in the state of New Jersey, types of insurance you may need, and what goes into crafting a great business plan.

Start with a Plan

In order to start a successful business, you need to know where you’re going and how you intend to get there. That begins with a good business plan, which includes all of the following:

  • What you want to sell (product or service, or both)
  • Where you want to sell (online-only, physical location, or both)
  • Your target market
  • How much money it will take to get your business off the ground
  • How to market yourself and your business
  • How to grow sustainably

By putting everything down in writing, you’ll have well-defined goals to aim toward instead of simply a vague feeling or sense of where you should be headed. You’ll be able to measure your progress in meeting those goals, and you’ll look much more serious to investors and potential business partners than someone without a plan.

New Jersey’s official state website also has clear guidelines for creating a business plan along with many other resources for new business owners, including links to business mentors, and support for female-owned and Latin-American owned businesses.

Once you’ve got your business plan down, you’re ready to choose a business structure that fits your business model.

Select Your Business Structure

As a new entrepreneur, it can be challenging to understand which business structure is right for you. In the state of New Jersey, you have several options to choose from, including:

  • Sole Proprietorships
  • General Partnerships
  • Limited Partnerships (LP or LLP)
  • Limited Liability Companies (LLC)
  • Corporations (B, C, or S types, Nonprofits)

If you’re not sure which business structure is right for you, you can always seek the advice of a licensed business attorney in New Jersey. This professional can help you weigh the pros and cons of each type so you can determine which most closely matches your existing business model.

Now that you’ve selected the best business structure for you, it’s time to select a business name.

Choose a Business Name

Depending on the business structure you choose, you may be required to register your business name with the state of New Jersey. If you find another business already operating in the state with your preferred name, you’ll need to select another one that’s not currently registered for use.

You can do this by searching for your business name and seeing what results (if any) come up.

Note that this only applies to the following business structures:

  • LP
  • LLC
  • Corporation (including nonprofits)
  • LLP

Once you’ve found a name that is not in use or registered it with the state, your next step is likely to be obtaining a federal tax ID number.

Obtain a Federal Tax ID Number

Almost every New Jersey business needs a Federal Tax ID number, also known as a Federal Employer Identification Number (or EIN) for short. This number makes it possible for your business to pay taxes at the state and federal level, as well as carry out some other tasks.

The IRS website makes online registration easy, and helps you understand which businesses don’t need an EIN. For example, sole proprietors are often allowed to use their social security number for tax purposes instead of registering for an EIN.

Once you have an EIN (if required), you’re ready to register your business with the state of New Jersey.

Get Registered in New Jersey

All New Jersey businesses, regardless of business structure, must register with the state. 

Sole proprietors must register for a business license online using this registration tool. All other business entities will first “form” their business with the state by going to the Business Formation tool. 

Registration fees cost:

  • $125 for LPs, LLPs, LLCs, and Corporations
  • $75 for Domestic Nonprofits
  • No fee for sole proprietorships

You may be required to register for a DBA (Doing Business As name) if this is different from the legal entity’s name.

LLCs, Limited Partnerships, and Corporations will also need to file additional documents with the New Jersey Division of Revenue and Enterprise Services (DORES).

Once you’ve registered your business with the state, you’re ready to register for your tax accounts and any additional licenses and permits you may need for your specialized business type or industry.

Obtain New Jersey Tax Account(s) and Permits/Licenses

All New Jersey tax accounts must be obtained through DORES, using the same portal that sole proprietors used to initially register their business.

Depending on the type of business you have, you may need to register for some or all of the following accounts:

  • Sales tax
  • Use tax
  • Corporation tax
  • Employer Payroll tax
  • Alcoholic Beverage tax
  • Motor Fuels tax
  • Litter Control fee
  • Cigarette tax
  • Motor Vehicle Tire fee

There are additional taxes your business may be required to pay, so be sure to check with your local county or municipality, as well.

You may also need to obtain additional licenses or permits to operate in the state, including the following areas or specializations:

  • Accounting
  • Acupuncture
  • Advertising
  • Counseling
  • Cemetery sales
  • Kickboxing
  • Landscaping
  • Pet Grooming
  • Talent Agency

This isn’t a complete list of every business activity or service that could require a specialized permit or license, and you may wish to consult with a business attorney licensed in New Jersey to determine which ones you need to obtain.

Some licenses must be renewed on a regular basis, so make sure you understand the renewal requirements for your business when you register.

Before you open your doors to the public, you’ll need to think about insuring your business against liability.

Liability Insurance

You’ll want to ensure you have some type of liability protection in the unforeseen event that someone is injured through a service you provide, by one of your products, or because of your physical location, website, advertising, etc.

Liability insurance may not be the only type of insurance you’ll need for your business. If you plan on hiring employees, then you’ll also need to think about workers’ compensation insurance before you hire anyone.

Workers’ Compensation

If you’re a business owner with employees, you’ll be required to carry workers’ compensation insurance.

Workers’ compensation covers an employee’s necessary medical expenses and lost wages should they be injured in the course of their job duties. Workers’ compensation claims may be denied by you, the employer, but the denial is typically appealable.

Now that you’ve got your employees covered, your business plan is in place, and your tax and registration requirements are taken care of, there may be something you’ve overlooked.

A Point of Sale That Works for You

Many business owners don’t give much thought to their point of sale systems until it’s too late. They buy the first POS they see and then end up disappointed when it does not perform as intended.

Epos Now provides business owners with robust and secure point of sale systems. Our software runs on computers, tablets, and even handheld devices. Not only that, but Epos Now payment processing partners allow you to accept major credit cards and contactless options like Apple Pay.

Speak with a consultant today to learn more about our award-winning systems.

Epos Now Call us now