If you are starting a New Jersey business, one of the first things to figure out is the type of business you want it to be. There are various options, such as sole proprietorship, partnership, corporation, S corporation, and Limited Liability Corporation (LLC).
An LLC is a preferred choice by many because it means you are not responsible for business liabilities and have simpler record-keeping rules as compared to a corporation.
There are several steps needed before starting an LLC. One of the first things is an NJ LLC name search. This will tell you if your company name is available or if it’s already claimed by another business.
Read on to find out what’s involved in starting an LLC and why it may be the right option for you.
What is an LLC?
An LLC is unlike other types of corporations, in that you are not responsible for business liabilities. So, if something happens, such as an accident or a bankruptcy claim, debtors and plaintiffs can only go after your business, not your personal assets.
However, there are differences between LLCs and other types of corporations. LLC record-keeping rules are stricter, and you can decide if you want to be taxed as an LLC or a corporation. This decision could save you hard-earned money.
How Do You Open an LLC?
There are several steps you need to take when opening an LLC. These include:
Choosing a Business Name
The first step is choosing a business name. Most companies want a name that’s catchy and explains what their business does. Most importantly, it cannot be taken by another company in your state.
You will need to do an NJ LLC name search on a state agency website to find out if the name you’ve chosen has been used.
Once you find a name, you must include LLC or limited liability company after it. There may be other state rules that require compliance.
Name a Registered Agent
Your registered agent will be responsible for receiving official and legal documents on the company’s behalf and passing them on to the company. You can be your company’s registered agent, or you can name an employee as a registered agent. However, the agent must be present at your address during business hours.
Fill Out and Submit an LLC Articles of Organization Form
You will need to file a document to ensure the state sees your company as an LLC. In most states, this document is called an Articles of Organization form. The website that you used to do your NJ name search should have the form available.
You must include specific information on the form such as:
- Business name
- Address
- Type of business
- Business structure
- Contact information
- LLC duration
All business owners must sign the form.
Once the form is complete, you must submit it and pay a filing fee. Filing fees vary from state to state.
Create an Operating Agreement
The operating agreement states how the business will be run. It describes how the business will be handled in terms of financial, legal, and management matters. It sets guidelines for how profits are distributed and procedures to be followed if an owner leaves the company.
Operating agreements are not mandatory in every state, but it’s a great idea to create an outline that demonstrates how the business is run. It will cut down on confusion and possible legal issues later.
Final Thoughts
An LLC is a desirable business structure for many entrepreneurs. It protects you from liabilities, offers freedom at tax time, and it does not require strict record keeping. Launching an LLC is simple enough… it all starts with an NJ name search.
Will you be choosing this business structure for your company?
