Step 1) Verify & Secure Brand Name
The first step is ensuring the brand name you want is unique, not misleading, doesn’t contain any restricted wording and isn’t too similar to any other name registered with the Division of Commercial Recording, NJ Dept. of the Treasury. To check, conduct a Business Entity Search through the Division of Revenue & Enterprise Services as well as a quick trademark search using the TESS System through the U.S. Patent Office.
Keep in mind your corporation’s name should contain words like “Corporation,” “Company,” “Incorporated,” or an abbreviation of one of those words. The abbreviation ‘Ltd.” and certain foreign language words also may be permitted. Information about an optional reservation of name on paper Form UNNR-1 that’s good for 120 days and fees for the service can be found here: Application for Reservation of Name.
Quick Note: Before you commit 100% to a name, you may also want to check that there’s a decent URL available for your business. Use WEEBLY to search your options. If there’s a quality domain name for purchase, we advise buying it right away. Even if launching a business website isn’t on your radar right now, it’s going to be soon, and you might as well nail down a domain name that’ll make it easy for customers to find you!
Step 2) Appoint A Registered Agent
The next step is appointing a New Jersey Registered Agent to receive and help handle/process all official documents like state filings, tax forms, legal notices, etc. To be considered, the agent must be a state resident or registered business entity with a physical NJ street address, not a P.O. Box.
So, you can name yourself as agent for service of process, hire a professional that charges as much as $160/year, or get a qualified/certified Registered Agent for free by registering your corporation through a filing service like IncFile.
Step 3) File Certificate Of Formation
In order to legally conduct business through your corporation, you must file a Certificate of Incorporation with the NJ Division of Commercial Recording. The essential information is:
- Name and address of the business,
- Corporation’s business purpose,
- Registered agent’s name and street address,
- Number of shares that the corporation is authorized to issue,
- Number of directors constituting the first board,
- Names and addresses of the initial directors, and
- Name(s) and address(es) of the incorporator(s).
Also, note that the Online Services Certificate of Incorporation template on the Business Formation webpage maintained by the NJ Division of Revenue & Enterprise Services allows additional info such as limitation of liability for officers and directors, and corporate duration.
Filing Fee: $125
Step 4) Get A Corporate Records Book
Think of this as the hard copy record book where all critical corporate documents are kept like the Certificate of Incorporation, Bylaws, meeting minutes, stock certificate ledger, stock certificates, stock certificate stubs, stock transfer documents, etc. It’s the ultimate company binder! They’re very common and while not necessary, having one is highly-recommended for all serious business entities.
Step 5) Have Directors Meet, Discuss Bylaws & Issue Stock
At least one Director named in the Certificate of Incorporation, among other things, will oversee the corporation until the first shareholder meeting where new Directors are voted in. The initial Director(s) hold an initial meeting (or sign a unanimous consent) to:
- Appoint officers,
- Discuss/create Corporate Bylaws,
- Authorized signers for bank account(s),
- Agree on corporate seal and adopt official stock certificate form,
- Approve the issuance of stock, sign certificate(s) and record stock issuance,
- (OPTIONAL) Approve S-Corp status,
- Sign Minutes of Meeting/Consent, and
- Add signed Minutes/Consent, Bylaws and Certificate of Incorporation to Corporate Records Book.
Note: To form an S-Corp, submit Form 2553 with the IRS and be sure all shareholders have signed it.
Step 6) Get an EIN for Your Corporation
An EIN, Employer Identification Number, is required if you want a smooth tax season, to be able to set up a business bank account, legally hire employees, and so forth.
Most business activity is tracked using this number, so it’s not optional by any means. Thankfully, you can easily get an EIN free of charge through the IRS website. It’s quick and easy. Make sure to save the PDF document and/or number once the IRS website gives you that option! Once you click “submit” you can’t go back and must wait 2-3 weeks for the paper copy.
Step 7) Open A Business Bank Account
There are two primary reasons to open unique business bank accounts:
- The many perks banks and lending institutions are offering these days. There are a fair number of perks, so be sure and check around.
- Making your finances easier by syncing the single account with accounting software and adding a HUGE layer of protection by being separated from any other business/personal accounts. To get your research going, check out this short free quasi-guide to Business Checking Accounts.
Call ahead at your chosen bank. Most banks require the EIN document from the IRS and the Certificate of Incorporation. Some require additional documents such as a business license from the local city/county or the corporation’s Bylaws.
Step 8) Handle Taxation & Licensing/Permits
Obviously, getting situated with state and federal taxes isn’t optional. These days it can be much simpler, though, with help. How many licenses you’ll need and how many fees will be determined by a number of variables including your type of business, whether you work with the public, location, etc.
Step 8 is where it really helps to work with a professional or buckle down and do the research yourself. Licenses, permits and business taxes need to be taken care of. To get started:
Note that this guide on how to incorporate in New Jersey isn’t a legal document or legal advice. It’s for informational purposes and the information above is subject to change. For specific legal questions regarding how to form a corporation in New Jersey or business in general, please consult with an accredited professional. We recommend JGW INcounsel/John G. Webb, III, Esq.