1. Local Zoning Laws and Regulations in New Jersey
New Jersey consists of 21 counties and various municipalities, each with its own set of zoning ordinances. It is crucial to familiarize yourself with the local zoning regulations in New Jersey before finalizing a location for your therapy practice, even if you plan to operate from your residence. This step is necessary to ensure that your business activities align with the permitted land use in the chosen area.
If you intend to establish your therapy practice in a location where commercial operations are typically prohibited, such as a residential neighborhood, you may have the option to seek a zoning variance. A zoning variance provides an exception to the established zoning laws, allowing you to operate your business in an area that deviates from the usual requirements.
To determine whether you need to apply for a variance, it is important to understand the specific zoning requirements for your desired location and identify the types of business activities that are allowed. It is recommended to contact the local municipality where you plan to operate your therapy practice. They can provide accurate information and guidance regarding zoning regulations in New Jersey, ensuring that you comply with the necessary guidelines when establishing your therapy practice.
2. Business Name Search in New Jersey
To register a business name in New Jersey, you must complete the registration process with the state. You have the option to form a Limited Liability Company (LLC) or a corporation, or you can file for a “Doing Business As” (DBA) name through the state’s business division.
When registering your business name, it is essential to ensure its uniqueness and confirm that no one else in the state has already formed a company with the same name or has control of it as an online domain name.
- Domain Name Search:
We highly recommend conducting a search to check if your desired business name is available as a web domain (URL). Even if you don’t plan to create a business website immediately, securing the web address can prevent others from acquiring it. If the web domain is available, it is likely that the business name is also available for registration.
- New Jersey Business Name Search:
Next, utilize the New Jersey business entity name search tool. This step is crucial as your filing will be rejected if you attempt to register a name that is already in use.
The search requirements may vary based on your specific business needs. For instance, a unique and available name is required when:
- Filing for formal business structures like LLCs and corporations.
- Filing a DBA name for any business structure.
It is not mandatory to conduct a state-level name search for informal business structures such as sole proprietorships or general partnerships in New Jersey. However, if you choose to register an alternative name or DBA name, you must search the database to ensure that your desired name is both unique and available.
3. Business Structure in New Jersey
Next, it is important to determine the most suitable legal structure for your business in New Jersey.
The most common options are Sole Proprietorship, Partnership, Corporation, or Limited Liability Company (LLC).
- In New Jersey, a Sole Proprietorship involves operating your business as an individual, and you may not even need to register. There is no separate legal entity, and the law considers you and your business as one entity. You bear full responsibility and personal liability for any business activities or wrongdoing.
- A Partnership in New Jersey is similar to a Sole Proprietorship but involves two or more individuals. Like a Sole Proprietorship, it does not create a separate legal entity, and partners are jointly responsible and personally liable for business activities.
- A New Jersey Corporation is a more complex legal structure that requires a board of directors, corporate officers, and shareholders. However, corporations may not be suitable for most small business owners due to potential double taxation. Corporations can be advantageous for businesses seeking capital investment, going public, or having significant healthcare expenses. Technology and startup companies are common examples of corporations.
Unlike a Sole Proprietorship or Partnership, a Corporation is a distinct legal entity that provides personal liability protection for its owners (shareholders).
- A New Jersey LLC combines the benefits of a Corporation and a Sole Proprietorship or Partnership. It is a separate legal entity that offers personal liability protection for owners. In case of a lawsuit against the LLC, the owner’s personal assets such as homes, cars, and bank accounts are safeguarded. Additionally, an LLC enjoys pass-through taxation, avoiding double taxation.
An LLC is a popular choice for many business owners in New Jersey due to two key reasons:
- Personal liability protection: The assets of the LLC are separate from personal assets, protecting them in case of legal issues.
- No double taxation: Profits generated by the LLC are reported on the owner’s personal tax return, avoiding the burden of double taxation.
Unlike a Sole Proprietorship or Partnership, the assets of your New Jersey LLC are distinct from your personal assets, ensuring their protection in legal matters.
Furthermore, unlike a Corporation, an LLC is not subject to double taxation. Instead, the LLC’s profits are directly reported on the owner’s personal tax return.
4. Register Your Business in New Jersey
To officially establish your business in New Jersey, you will need to file the necessary formation documents with the New Jersey Division of Revenue.
- If you are forming a New Jersey LLC:
You have the option to file online or by mail, but we recommend the online filing method. The cost to form an LLC in New Jersey is a one-time fee of $125.
For the formation of an LLC, you will need to complete the “Public Records Filing for New Business Entity” form. Once approved, it will be referred to as your Certificate of Formation.
- If you are forming a New Jersey Corporation:
The filing fee for a New Jersey Corporation is also $125, and the document you need to submit is the “Public Records Filing for New Business Entity.”
- If you are operating as a Sole Proprietorship or Partnership in New Jersey:
Registration with the New Jersey Division of Revenue is not required since you are not establishing a separate legal structure. However, you will need to register with the New Jersey Division of Taxation.
If you wish to conduct business under a name different from your personal name or the names of you and your partner, you will need to file for an Alternate Name, also known as a Fictitious Name.
The appropriate form for registering an Alternate Name is the “Registration of Alternate Name” (Form C-150G). The filing fee for this form is $50.
Note: If you choose to form an LLC in New Jersey and operate under the legal name of the LLC, you are not required to file for an Alternate Name.
5. Business Licenses & Permits in New Jersey
To obtain a business license in New Jersey, you can apply online through the relevant licensing or regulatory agency based on your business type.
The licensing requirements for your business will depend on its activity and location, including zoning requirements. There are three main jurisdictions for licensing:
- State of New Jersey Business Licensing:
All businesses, including limited liability companies (LLCs) and corporations, must register to receive a New Jersey Business Registration Certificate. During the registration process, businesses indicate if they are subject to paying state sales tax. If sales tax is applicable, a Certificate of Authority, also known as a seller’s permit, is required.You need to obtain a Certificate of Authority if you:
- Are engaged in business in New Jersey.
- Intend to sell or lease taxable goods or services.
You can obtain a Business Registration Certificate and a Certificate of Authority from the Department of Treasury New Jersey Division of Revenue and Enterprise Services. Additionally, certain professions may require separate licenses, and you can find more information in the state’s Licensing and Certification Guide.
Steps for Obtaining a Business License in New Jersey:
- Register for a New Jersey Business Registration Certificate and Certificate of Authority online through the Division of Revenue and Enterprise Services website. You will need your state business ID number obtained during company formation and your federal Employer Identification Number (EIN). For assistance, contact the New Jersey State Board of Licensing.
Other New Jersey Business Licenses:The processes for obtaining other business licenses in New Jersey may vary. Refer to the state’s Licensing and Certification Guide and contact your local county or municipal government office for more information.
The New Jersey Business Registration Certificate and Certificate of Authority do not require renewal. However, for other licenses you may hold, review the state’s Licensing and Certification Guide and contact your local county or municipal government office for renewal requirements.
- Local New Jersey Business Licensing:
Depending on your business activity and location, you may need additional licenses or permits from your local government or county clerk’s office in New Jersey.
For example, the City of Newark does not have a general business license but requires specific licenses for various types of businesses at the local level.Contact your local county or municipal government office in New Jersey for more information. It is advisable to consult with a lawyer or accountant for legal or tax advice.
- Federal Business Licenses and Permits:
If your business conducts activities regulated by the federal government, you will need to apply for the appropriate business license or permit. The specific requirements will depend on your business’s activity and location, including zoning requirements.
Ensure you apply with the correct licensing and regulatory agency relevant to your business.
Please note that the information provided is a general overview, and it’s important to conduct further research and consult with the appropriate authorities to ensure compliance with all licensing requirements for your specific business in New Jersey.
6. Business Insurance in New Jersey
In New Jersey, there are various types of business liability insurance available to meet your specific needs. Here are some common options:
- General Liability Insurance (GLI): This coverage protects your business from claims related to bodily injury, property damage (including rented property), reputational harm, and advertising errors like copyright infringement.
- Commercial Auto Insurance: If your business owns vehicles, this insurance helps cover the costs of auto accidents. It is required for all business vehicles in New Jersey.
- Professional Liability Insurance: Also known as errors and omissions (E&O) insurance, this protects your business against claims of negligence, misrepresentation, professional service errors, inaccurate advice, libel, or slander.
- Workers’ Compensation Insurance: If an employee suffers a work-related injury or illness, workers’ compensation insurance helps cover medical treatment, lost wages, rehabilitation, and disability benefits. It also provides legal protection for your business in case of lawsuits.
- Business Owners Policy (BOP): A BOP combines commercial property and business liability insurance into a single policy. It offers protection against claims arising from fire, theft, bodily injury, property damage, and other risks associated with day-to-day business operations.
- Data Breach Insurance: This type of cyber insurance safeguards your business in the event of a data breach, covering costs such as notifying affected individuals, hiring a public relations firm, and providing credit monitoring services.
Remember, the specific coverage you need will depend on your business type, industry, and risk factors. It’s advisable to consult with an insurance professional or broker who can assess your business’s needs and recommend appropriate coverage.
7. Business Taxes in Alaska
Filing small business taxes in New Jersey involves several steps to ensure compliance with federal, state, and local tax obligations. Here is a guide to help you navigate the process:
Step 1: Establish your New Jersey business’s corporate income tax obligations:
- Determine if your business falls under the Corporation Business Tax Act, which imposes a franchise tax on various types of entities registered in the state.
- The tax rates range from 6.5% to 9% based on the net income of the corporation.
Step 2: Determine your New Jersey business’s employment taxes:
- If your business has employees, you need to withhold and remit New Jersey income tax from their salaries, wages, tips, commissions, bonuses, etc.
- The withholding amount and frequency depend on factors such as income, filing status, and exemptions.
- Payments made to unregistered contractors for services performed within the state may also be subject to withholding at a rate of 6.625%.
Step 3: Establish your New Jersey business’s additional state tax obligations:
- Sales and use tax: Determine if your business needs to collect and remit sales tax on certain goods and services sold within the state. The current rate is 6.625%.
- Unemployment contributions: Employers are required to make periodic contributions to the state’s Unemployment Trust Fund.
- Other potential taxes may apply depending on the nature of your business, such as cosmetic medical procedures gross receipts tax, cigarette tax, hotel/motel occupancy tax, etc. Check with local municipalities for any local tax requirements.
Step 4: Prepare to file and pay your New Jersey small business taxes:
- Compile necessary information and documents, including your business’s Employer Identification Number (EIN), accounting records, receipts, invoices, and legal documents.
- Organize these materials in advance to simplify the filing process.
- File your taxes online through the State of New Jersey Department of the Treasury Division of Taxation.
It’s important to note that tax requirements may vary based on your business structure and specific circumstances. Consulting with a tax professional or accountant experienced in New Jersey tax laws is recommended to ensure accurate compliance and minimize potential issues.