Form an LLC in New Jersey.

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certificate of formation, the most important document for an LLC is its operating agreement, which can be amended or repealed as allowed by the certificate of formation or by state statute.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.