1. What type of business entity will you form?
To start a small business in New Jersey, first consider the type of entity that will best suit your needs. Depending on whether you will be the sole owner or partner with others, you may choose to operate as an LLC, partnership, or corporation. Each entity offers its own advantages and disadvantages and you will need to consider the legal and tax consequences to find the best fit for your business.
2. How will you form the business?
After selecting the business entity, the next step is to complete the process of legally forming your small business in New Jersey. The formation process involves steps such as choosing a distinct name for your business and completing documentation to register your business with the state. You can do this on your own or hire an attorney to complete the process for you. The benefit of using an attorney ensures that you will register the business properly and have your questions answered during the process.
Next, execute a governing agreement that will provide the terms that manage the business. For instance, if you form an LLC, an operating agreement will govern how the LLC is managed (member-managed, manager-managed), how profits and losses are allocated, ownership percentages, disputes and more. Whether you are a sole owner or have multiple owners, a governing agreement will help you control how your business is run.
3. Will you need Licenses & Permits?
Highly likely. Depending on which county in New Jersey you are located in and the type of business you have, you may be required to apply for certain permits. You may also need state licenses to operate your business, particularly any necessary occupational licenses for the services you will provide.
4. What about taxes?
Consulting with an accountant is always advisable when starting up as your business will be required to register with the state for tax purposes. You will also want to obtain any financial benefits to be had from owning a small business and a qualified tax advisor can assist you with maximizing potential gains.
5. How can I benefit from the use of Contracts & Policies?
You will be transacting business regularly so protect yourself with contracts that stipulate the who, what and where of it all. Have your customized agreement on hand to represent what you are selling, the price, how it will be delivered, warranties, and more. This way your deals will be expressed clearly and to your satisfaction.
Those are 5 beginner steps for starting your business. Feel free to contact this office for more information regarding how to start a small business in New Jersey.
What formation steps are you focusing on as you begin your business?