Here is an outline of the steps you need to follow in order to form a corporation (specifically, a "C corporation") in New Jersey. You should also read the general section on forming a corporation for information that is applicable in any state. Additionally, you should familiarize yourself with the New Jersey Division of Revenue website, which has useful information and resources.
1. Choose a business name for the corporation and check for availability.
- Please see our section on choosing and checking the availability of a name for your small business, as well as our section on the trademark law aspects of choosing a name.
- New Jersey law requires that a corporation name contain the word "corporation," "company," "incorporated," or an abbreviation of one of those words, or abbreviations of like import in other languages. Additionally, your corporation name must be distinguishable from other names on file with the state.
- For information about checking the availability of your desired business name in New Jersey, see the Check Business Name Availability page on the Division of Revenue's website.
- Although you are not required to do so, consider registering your business name as a federal and/or state trademark.
2. Recruit and/or appoint a director or directors for the corporation.
- Under New Jersey law, a corporation must have at least one director.
- Directors must be at least eighteen years of age.
- Directors need not be residents of New Jersey or shareholders of the corporation, unless the certificate of incorporation or the bylaws so require.
- The certificate of incorporation must set forth the number of directors constituting the first board and the names and addresses of the persons who are to serve as directors.
3. Prepare and file a certificate of incorporation with the Division of Revenue.
- The filing fee is $125. The Division of Revenue website has a simple, fill-in-the-blank form for all new business filings, which you can print out and mail to the Division of Revenue. Instructions are included with the form. Alternatively, you can use the New Jersey Division of Revenue On-line Business Filing and Registration Service. For general information on the certificate of incorporation (usually called "articles of incorporation"), please see the Articles of Incorporation page.
4. Create the corporation's bylaws.
- There is no set criteria for the content of bylaws, but they typically set forth internal rules and procedures for the corporation, touching on issues like the existence and responsibilities of corporate offices, the size of the board of directors and the manner and term of their election, how and when board and shareholder meetings will be held, who may call meetings, and how the board of directors will function. You are not required to file bylaws with the state, but the corporation must keep a copy at its principal place a business. For general information on corporate bylaws, please see the Corporate Bylaws page.
5. Hold an organizational meeting.
- See the general section on forming a corporation for details. You can find the New Jersey statute relating to the organizational meeting at N.J. Stat § 14A:2-8 (link is to the entire code, you need to click through to Title 14A, Article 2, and then locate the specific provision).
6. Issue stock certificates to the initial owners of the corporation.
- See the general section on forming a corporation for details. The New Jersey statutes relating to issuance of stock certificates are located in N.J. Stat § 14A:7-11 (link is to the entire code, you need to click through to Title 14A, Article 7, and then locate the specific provision). Unless the articles of incorporation state otherwise, the board of directors has the authority to set the "consideration" (i.e., the amount to be received) for each share of stock.
7. Obtain any required local licenses.
- See the general section on orming a corporation section for details.
8. Determine what tax and other regulatory obligations the corporation has, and take care of any necessary registrations.
- Request an Employer Identification Number (EIN) from the IRS. This can be done via its online application. There is no filing fee.
- All new businesses must register with the Division of Revenue using the Business Registration Application. Upon registering, you will receive the forms, returns, instructions, and other information needed to comply with New Jersey law.
- Whenever you hire an employee in New Jersey, you must inform both the IRS and the State of New Jersey. You can find details of all the necessary steps, including verifying work eligibility and withholding allowances, on the Hiring Employees section of the IRS website. You can find state-level information on reporting new hires at the New Jersey New Hire Reporting Directory.
- As a corporation, you must carry workers' compensation insurance. More information is available in An Employer's Guide to Workers' Compensation in New Jersey. You may choose to obtain insurance for yourself, but are not required to do so.
- As a small business owner or employer, there may be other informational returns that you have to file annually or semi-annually with the IRS. For more information, take a look at the IRS Guide To Information Returns.
- New Jersey's current corporate income tax rate for entities with net income greater than $100,000 is 9.0%. If net income was between $50,001 and $100,000, the rate is 7.5%. For businesses with $50,000 or less, the rate is 6.5%. The minimum tax for businesses with New Jersey gross receipts under $100,000 is $500.
9. Open a bank account for your business.
- It is a good idea to keep your business's finances separate from your personal accounts. A good way to do this early on is by opening a bank account for your corporation. You will probably need a Tax ID number (EIN) and a copy of the certificate of incorporation. Here is one example of the documentation that banks ask for.
Note: New Jersey law requires incorporators to be at least eighteen years old.Other Notable Requirements for Maintaining a Corporation in New Jersey
- New Jersey corporations must file an Annual Report using the New Jersey Division of Revenue On-line Business Filing and Registration Service every year after the company's date of formation. The filing fee is $50. Corporations are not required to file this report in the year in which they are formed.
- New Jersey requires certain documents to be kept at a corporation's principal place of business. The required documents are described in N.J. Stat § 14A:5-28 (link is to the entire code, you need to click through to Title 14A, Article 5, and then locate the specific provision).
- An S corporation has the same basic organizational structure as a regular corporation, but some of the tax advantages of a partnership or LLC. An S corporation pays no federal income tax, except for tax on certain capital gains and passive income. Instead, the corporation's profits and losses "pass through" to shareholders, and profits are taxed at individual rates on each shareholder's Form 1040. Certain requirements and additional obligations apply -- please see the S Corporation page for details.
- To form an S corporation, designate "S" status with IRS via Form 2553 within 2 months and 15 days of filing your articles of incorporation with New Jersey.
- To have the "S" election recognized by New Jersey, you must file Form CBT-2553, which is included in the Business Registration Packet. You can file it online using the New Jersey Division of Revenue Online Business Filing and Registration Service