New Jersey Business License Basics

While registering your company in New Jersey might seem complex, it doesn’t have to be.

This guide breaks down the process into clear, manageable steps. We’ll walk you through each stage of registration, from selecting your business structure to applying for necessary licenses. By simplifying these steps, you’ll be ready to navigate the registration process efficiently, bringing you one step closer to launching your New Jersey business.

Related: Starting A Business In New Jersey Checklist

Step 1: Choose a Business Structure

The first step to registering a business in New Jersey is selecting a business structure. A business structure (also called a business entity) is how a business is legally formed to conduct business. New business owners need to consider their choices, as it will determine how the business is taxed and its owner’s personal liability.

In New Jersey, there are four common types of business entities: sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).

Related: Comparison of Business Structures

Sole proprietorship: A sole proprietorship is the simplest business structure in which the owner and the business are considered the same legal entity. This means the owner is personally responsible for all of the business’s debts and liabilities.

Pros

• Easy and inexpensive to set up.
• The owner has full control of the business.
• No separate business tax filings are required.

Cons

• The owner has unlimited personal liability for business debts and obligations.

Related: How to Start a Sole Proprietorship in New Jersey

General partnership: A general partnership is a business structure where two or more individuals jointly own and operate the business. Each partner is personally liable for the business’s debts and obligations.

Pros

• Simple and inexpensive to establish.
• Shared management and financial responsibility.
• No separate business tax filings are required.

Cons

• Each partner has unlimited personal liability for the business’s debts and obligations.
• Potential for conflicts among partners if not properly managed.

Corporation: A corporation is a separate legal entity owned by shareholders. It provides limited liability protection for its owners and is subject to specific regulations and tax requirements.

Pros

• Limited liability protection for shareholders.
• In addition to debt, a corporation can raise capital by selling shares of the company to investors.

Cons

• More complex and expensive to set up and maintain.
• Can be subject to double taxation, where profits are taxed at the corporate level and again when distributed as dividends to shareholders.
• Increased regulatory requirements and paperwork.
• Must appoint a New Jersey registered agent.

Related: How to Form a Corporation in New Jersey

Limited Liability Company (LLC): An LLC is a hybrid structure that combines a corporation’s limited liability protection with a sole proprietor or partnership’s operational flexibility.

Pros

• Limited liability protection for owners (members).
• Pass-through taxation, where profits and losses are reported on the owner’s personal tax return, avoids double taxation.
• Flexibility in management structure.

Cons

• More complex and expensive to establish compared to sole proprietorships and general partnerships but easier than a corporation.
• Must appoint a New Jersey registered agent.

Related: How to Form a New Jersey LLC

Step 2: Select a Business Name

After choosing your business structure, the next possible step is selecting a business name. Here’s an overview of the naming process for different business structures in New Jersey:

Sole Proprietors and General Partnerships:
If you’re operating under a name different from the name(s) of the owner, you’ll need to register a New Jersey Trade Name Certificate (also known as Doing Business As or DBA) with the County Clerk’s Office where your business is located. For example, if John Smith wants to open a bakery called “Garden State Pastries” as a sole proprietorship, he would need to file a DBA. This allows him to conduct business and receive payments under his business name.

Each Trade Name has to be unique from other business names in the county where it is being registered. Several counties offer name searches online, or you can review the Trade Name book at the Clerk’s office.

Corporations and LLCs:
These entities select their names during the formation process. The chosen name must be unique within New Jersey, making running a New Jersey business name search a good idea to avoid delays in processing the formation paperwork. Corporations and LLCs can register for an additional name, but it isn’t typical.

Step 3: Federal Employer Identification Number 

For many businesses, the next step is obtaining a Federal Employer Identification Number (FEIN), also known as an Employer Identification Number (EIN). This unique nine-digit number, issued by the Internal Revenue Service (IRS), serves as a federal tax ID for your business.

You need an EIN if:

• Your business has employees
• Your business is structured as a corporation, partnership, or multi-member LLC

While sole proprietorships and single-member LLCs with no employees can use the owner’s Social Security number for tax purposes, they may still opt to get an EIN for various reasons, such as not using their SSN on tax forms.

Obtaining an EIN is a straightforward process that comes at no cost. The most efficient method is to apply online through the IRS website, which typically takes just a few minutes. Alternatively, you can submit your application by mail or fax using Form SS-4 if you prefer these methods.

How to Apply for a FEIN

Step 4: Professional Licensing

Many professions in New Jersey require specific licenses before offering services. The New Jersey Division of Consumer Affairs oversees the majority of professional licensing boards in the state. Some common professions requiring licenses include:

• Contractors
• Landscapers
• Child care centers
• Barbers
• Accountants
• Real estate agents
• Nurses
• Doctors

For detailed information on licensing requirements, fees, and application processes for various professions, consult the New Jersey Division of Consumer Affairs website or contact the relevant licensing board directly.

Step 5: New Jersey Business Registration

New Jersey requires most businesses to register with the state. This process is handled through the Division of Revenue and Enterprise Services and often includes obtaining a Sales Tax Certificate of Authority if applicable.

Who Needs to Register

• Corporations
• Limited Liability Companies (LLCs)
• Limited Partnerships (LPs)
• Limited Liability Partnerships (LLPs)
• Sole Proprietorships and General Partnerships (only if collecting sales tax or have employees)

Businesses that sell taxable goods or services must obtain a New Jersey Sales Tax Certificate of Authority as part of this registration process, which allows businesses to collect sales tax on behalf of the state.

This applies to:

• Retail sellers of physical goods
• Sellers of digital products
• Providers of specific taxable services

The business registration process is handled through the New Jersey Division of Revenue and Enterprise Services.

Step 6: Resale Certificate

Businesses that purchase merchandise for resale often benefit from obtaining a New Jersey Resale Certificate. This certificate is particularly useful for:

• Retailers
• Wholesalers
• Manufacturers who resell finished products

With a valid resale certificate, these businesses can purchase inventory without paying sales tax at the time of purchase. Instead, they collect sales tax from the end customer when the product is sold at retail.

To obtain a resale certificate, businesses must first register for a New Jersey Sales Tax Certificate of Authority. Once registered, they can generate resale certificates through their online business account with the New Jersey Division of Taxation.

Step 7: Local Business Licenses

While there isn’t a general statewide business license in New Jersey, many municipalities require local business license registration. These licenses help ensure businesses comply with local regulations and safety standards. Here are some common types of local licenses:

• General Business License: This is often required for most businesses operating within city limits. It is typically issued by the city clerk’s office or business licensing department. For example, Jersey City requires a general business license for all businesses, which is obtained through the Division of Commerce.
• Food Service License: Restaurants, cafes, and food trucks usually need a food service license issued by the local health department. In Newark, food establishments must obtain a Food Handler’s License from the Department of Health and Community Wellness.
• Contractor’s License: Many municipalities require contractors to obtain local licenses. In Trenton, general contractors must secure a license from the Department of Inspections.
• Retail License: Retail stores often need a specific retail license from the local government. Atlantic City requires retail businesses to obtain a Mercantile License from the City Clerk’s office.

It’s important to check with your specific municipality for local licensing requirements, as they can vary significantly from one location to another.

Step 8: Local Building & Zoning Permits

Before committing to a property purchase or lease for your business, it’s important to understand local building and zoning regulations. These rules ensure that businesses operate in appropriate areas and meet safety standards. Here are the main types of requirements you may encounter:

Zoning Regulations: These determine where different types of businesses can operate within a municipality. Check with your local zoning office to confirm that your intended business use is permitted at your chosen location. This step is particularly important for home-based businesses, as some residential areas have restrictions on commercial activities.

Building Permits: If you plan to construct a new building or modify an existing structure, you’ll likely need building permits. These ensure that any construction or alterations meet local building codes and safety standards.

Certificate of Occupancy: Many municipalities require a certificate of occupancy before a business can operate in a building. This document certifies that the structure is safe and complies with all relevant codes.

Addressing these requirements early in your planning process can avoid delays and ensure your business location is fully compliant with local regulations.