Incorporating a Business in New Jersey Key Terms

Get your business off to a good start with these business incorporation terms

By M. Krasniak, Freelance Writer/Editor

When you are looking to start a business in New Jersey, you have to decide whether it will be a limited liability corporation or a sole proprietorship, and whether you have to submit the official paperwork with the state. It is important that you are well versed in the steps you have to take in order to be able to run a business legally in New Jersey. Here are some key terms to help you out.

Business incorporation

Business incorporation is the act of making the existence of your business "official" in the state of New Jersey through deciding on the name and type or "formation" of the company, then registering with the proper authorities.
Try: Company Express has an expansive article about business incorporation. Check out Fasteasyincorporationkits.com for a New Jersey version.

Business plan

A business plan is a document that illustrates things regarding your New Jersey business such as the nature of your business, its internal governing structure and its future intentions. This is a "must have" for New Jersey businesses when applying for any type of financing.
Try: This article from the New Jersey Small Business Development Center provides more information about making a business plan.

Business registration

Business registration is the process of making your business official. It involves getting a tax ID number or an Employer Identification Number, choosing the name of the business and putting it in writing. Many states have different requirements based on factors such as tax laws, and it is important to have the correct documentation and information that pertains to New Jersey.
Try: Read this information from the New Jersey Business & Industry Association to learn more about the registration process.

Formation

The business formation refers to the type of business, whether it is a limited liability corporation (LLC), a limited partnership, a sole proprietorship or a corporation. There are many advantages and disadvantages to each of these New Jersey business types and each follow different tax formulas.
Try: Check out this comprehensive list of business formation possibilities on the Alco Corporate Services website.

S Corporation

One type of business formation that you may consider when you are incorporating a business in New Jersey is the S Corporation. An S corporation means that the owner of the business pays pays taxes on business income as if it were personal income. Only small businesses are eligible for this standing.
Try: Nolo describes what an S corporation is and why it’s a good idea to choose this type of business. The New Jersey Department of the Treasury gives specific information about how S corporations work in New Jersey.

Corporation business tax

The corporation business tax is paid on profits generated by incorporated companies in New Jersey. Calculations on how much money a business pays starts on the day of incorporation, or the first of the month following its incorporation.
Try: NJ Business Portal describes which businesses have to pay tax and has links to the applicable tax forms.