Starting a New Business is a big step, one which requires careful consideration of several legal matter to address.
First, you need to consider the legal form your business will take. Specifically, will you operate the business in your own name or under a separate legal entity such as an LLC.
While not required, it is highly advisable to setup a separate legal entity from the start, mostly commonly a Limited Liability Corporation (LLC). Unless you plan on never having employees, freelance workers, or sub-contractors, and never expect to be responsible for state sales taxes, an LLC is really required.
It’s easy to form an LLC, which comes with a separate federal tax ID, thus all you business transactions will fall under this separate tax ID and not your personal SSN.
Another large advantage of doing business under an LLC, this separate legal entity provides you a certain level of legal protection against any 3rd party coming after your personal assets such as your home and savings.
Getting Your Own LLC
Getting your own LLC is not a big legal process, something you can do yourself if you wish. You do not need a lawyer. To get your own LLC in New Jersey, go to New Jersey’s Online Business Formation. There are plenty of online 3rd party services which can set-up your LLC. Alternatively, we can handle this process for you.
When getting your LLC, you will need to decide on a name. We recommend not using your personal name. Any name will work, as long as it is not already registered with the state. For example, our own LLC is Oak Hill Enterprises LLC, as we reside on Oak Hill Drive. An option for your LLC, you can also register a separate business name, known as a “Doing Business As” name, or “dba”. For example, while our LLC is Oak Hill Enterprises LLC, we are “dba” Oak Hill Bookkeeping & Tax Services. In 2012 when we started a retail business wine-making business, Your Own Winery was also “dba” under Oak Hill Enterprises LLC.
Registered Agent
Your LLC must have a Registered Agent, which is a person or business registered under your LLC to receive all government correspondence, almost always received by regular USPS mail. You can be your own Registered Agent in New Jersey, provided you are a New Jersey resident, have a physical address in the state, and are available during business hours to receive legal and government mail. If you prefer not to handle all the legal and government matters of the Register Agent, we can be your Registered Agent.
LLC Employer Identification Number (EIN)
Once your LLC has been created, the next step is to apply for a federal tax ID for your LLC, also know as your LLC’s Employer Identification Number (EIN). Even if you never plan to have employees, it is essential for your LLC to have an EIN as it will be required for many business transactions, such as billings to customers, payments to vendors, obtaining insurance policies. and many more. To obtain an EIN, you would file Form SS-4, Application for Employer Identification Number. You can go to the IRS website to get your EIN, or we can handle this for you.
Other Business Set-up Items
- Business License. Depending on your business, it is quite likely you will need a License from the State specific for your business and/or the products you sell or services you provided.
- State Registrations. Getting your LLC will result in your business being registered with the Secretary of State (i.e. of New Jersey), but you will also need the register with the State for sales taxes and having employees, if applicable. See NJ page Register Your Business, or we can handle this for you.
- Insurance. One of the advantages of your LLC as a separate legal entity for your business, it provides a level of protection from someone going after your personal assets (home and savings) – BUT ONLY if you have proper and adequate insurance in the LLC name to cover unseen bad events, such as a personal injury resulting from product you sold or work you performed, a loss of property resulting from work you performed, or just an unhappy customer who wants to sue you without a very good reason.
We have extensive experience in all these aspects of starting a new business – see About Us. As a NJ Certified Public Accountant (CPA) and a Certified QuickBooks Bookkeeper, we can assist you with all your business set-up, admin, bookkeeping and tax needs.
Best way to Contact Us – send an email to [email protected] or text to 973-640-0812 – to schedule a mutually convenient time for a Free Consultation by Phone or In-Person.