Articles of Organization

Forming your New Jersey LLC requires filing the LLC's certificate of formation (the equivalent of articles of organization in other states)-but unlike other states, this gets filed with the New Jersey Division of Revenue under the Department of the Treasury (usually it's the state secretary of state). There is a $125 filing fee.

The certificate of formation must be signed by at least two organizers and must include the LLC's name, business purpose, registered office address, and the name of the LLC's registered agent there. The certificate must state whether the LLC will be "perpetual" or if a specific time period has been set for the "life" of the LLC. It may also list other provisions that the members want to specify.

Your LLC is considered officially "organized" once the original signed certificate of formation is delivered to the New Jersey Division of Revenue (with the filing fee, of course) by the LLC's agent or attorney-in-fact. A certificate of formation will be issued and delivered along with a conformed copy to the LLC's representative. The original certificate will in turn be filed with the Division of Revenue.

Registered Agent and Office

New Jersey LLC's must have a registered in-state agent designated to receive official state administrative and legal correspondence. The registered agent may be an individual resident of New Jersey whose business office is the same as the LLC's registered office; it may also be a domestic corporation, an out-of-state corporation authorized to do business in New Jersey with the same business office as the registered office, or the LLC itself.

The registered office may be but does not need to be the New Jersey LLC's place of business.

Operating Agreement

Next to its certificate of formation, the most important document for an LLC is its operating agreement, which can be amended or repealed as allowed by the certificate of formation or by state statute. Just like a corporation's bylaws, this isn't absolutely required as such by the state, but it's a key internal document that lays out how the LLC will operate. It should list the members, how much each member has invested, how any profits will be divided, and how much weight each member has when matters come to a vote.

It may also specify meeting requirements (notice, quorum, voting rules, etc.) and so on, but it doesn't have to. Normally, however, the operating agreement does include requirements from state law. It can also include limits or constraints on the power of the members to adopt, amend, or repeal the agreement. If there is more than one member, the operating agreement has to initially be approved by all the members in writing.

Membership in the LLC

An LLC must have one or more members. The member may acquire an interest in the LLC at its formation, in a way specified in the operating agreement, or when the person's admission is documented in the LLC's records. To become a member, an individual normally must make some kind of contribution by paying cash, transferring property to the LLC, or assuming an obligation to do so. However, a person may be admitted as an LLC member without acquiring a membership interest if there is such a provision in the certificate of formation or the operating agreement, or if all members agree and the new member's admission is entered in the LLC's records.

A member can only withdraw from the LLC in a manner specified in the certificate of formation or operating agreement. The applicable document also usually specifies a minimum period of time a member can be a member before being allowed to resign. If the minimum period of time is not specified, the member must provide at least six months' written notice before he or she can resign.

Ongoing Requirements

LLCs must file an annual report to the New Jersey Secretary of State listing:

• The LLC's name and address
• The name and address of the LLC's registered agent
• The name(s) of the LLC's managing member or members

Additionally, LLCs in New Jersey must maintain the following types of records open to inspection at their office:

• A copy of the LLC's federal, state and local income tax returns for each year
• A current list of the name and address of each member and manager
• A copy of the written operating agreement, certificate of formation with amendments, and executed copies of any written powers of attorney
• Complete information about the state of the LLC's financial condition
• The amount of cash and a description of the agreed-upon value of any other property or services contributed by each member
• Cash, property, or services that each member has agreed to contribute in the future
• The date on which each became a member

In addition, it's a good idea for your LLC to keep minutes of the proceedings and committees of the owners or members.

Dissolution

An LLC is dissolved when any of the following occurs:

• After 30 years from the date of formation, if no time for dissolution is specified in the operating agreement
• At a time specified in the operating agreement
• Upon the occurrence of an event that requires dissolution as specified in the operating agreement
• Upon the written consent of all members, including the written consent of the sole member of a LLC with only one member
• When there is no longer at least one member, unless at least one new member is admitted within 90 days
• When decreed by a court order

Taxes

An LLC offers some tax advantages over a corporation, including the availability of more deductions. Additionally, an LLC is not required to be a separate tax entity like a corporation. Instead, it can be a "pass-through entity" when it comes to taxes, so that the LLC owners report business losses or profits on their personal tax returns, in the same manner as a partnership.

The tax rate for New Jersey LLCs varies, based on New Jersey taxable net income.

Articles of Incorporation

Before starting up operations in the Garden State, state law requires that a certificate of incorporation must be filed with the New Jersey Division of Revenue, accompanied by a $125 fee. The certificate must be signed by at least one incorporator, who can be either a natural person of at least 18 years of age. The incorporator signs and files the certificate of incorporation with state, and it must include:

• The name(s) and address(es) of the incorporator(s).
• The names and addresses of the initial directors of the corporation.
• The corporate purpose.
• The duration of the corporation (if not perpetual)
• The initial registered agent (typically an initial director or shareholder)
• The address of the corporation's initial registered office
• The aggregate number of shares the corporation is authorized to issue

New Jersey also permits additional provisions for managing the business and regulating the affairs of the corporation to be included in the certificate of incorporation.

Registered Agent and Office

New Jersey corporations must maintain a registered agent in the state-a person or office designated to receive official state administrative and legal correspondence. The agent must have a business office that is identical to the registered office and be either an individual over 18 residing in the state, or a corporation with the authority to conduct business in the state.

The registered office must be the same as any of the corporation's places of business; it may not be just a post office delivery box.

Bylaws

Bylaws lay out the corporation's basic operating principles from both the managerial and legal perspectives. Corporations should maintain their bylaws at their main executive office, but are not required to file them with the state. The incorporators or board of directors should adopt the corporation's bylaws at their initial meeting-making sure that they do not conflict with state law or provisions in the certificate of incorporation-and keep them updated.

Corporate bylaws should include at least the following:

• How, when, and where shareholders' and directors' meetings are held
• What authority directors have, how many there are, and how long they serve
• How consensus on major decisions is reached with and without meetings
• Duties and responsibilities of officers and how long they serve
• How stock is issued
• Requirements for providing annual financial information to shareholders

Directors and Officers

The board of directors makes major decisions for the corporation. There must be at least one director for the corporation. Prerequisites or qualifications may be specified in the bylaws, if desired.

Officers may be listed in the bylaws or elected by the board. Officers' positions should consist of a president, a secretary, a treasurer, and, if desired, a chairman of the board, one or more vice presidents, and any other officers as provided in the bylaws. An elected officer may appoint other officers in compliance with the bylaws.

An officer may hold more than one corporate office, but cannot execute, acknowledge, or verify any legal instrument acting in more than one capacity.

Required Reports

A New Jersey corporation must file an annual report with the New Jersey Department of Revenue each year outlining the corporation's overall status. The report must include:

• The name of the corporation
• The names and addresses of the corporation's directors and officers
• The name of its registered agent
• The complete address of its registered office
• The address of the corporation's main business or headquarters office

Taxes

The New Jersey corporate income tax rate varies based on the amount of corporate income and other factors. The minimum annual corporate income tax is $200.

If the corporation is to be taxed as an S corporation, the state requires a separate application to be recognized in that status.