Starting a small business in New Jersey often means registering with several federal, state, and local agencies. Let’s review common New Jersey business license registrations so your business starts off right.
Related: Guide to starting a business in New Jersey
Setting Up the Business
Before you can apply for business licenses in New Jersey, you should first establish the business structure. This decision impacts your legal responsibilities, taxes, and how much personal liability you might face. Here’s a brief explanation of each type of structure recognized in New Jersey:
Sole proprietorship: This is the simplest form of business structure, where one person owns and runs the business. There’s no separation between the owner and the business, meaning the owner is personally responsible for all debts and legal actions against the business. Taxes are straightforward as the owner reports business income on their personal tax return.
General partnership: Similar to a sole proprietorship, but with two or more people running the business. Partners share profits and losses, and like sole proprietors, they are personally responsible for the business’s debts and legal issues. Partnerships also don’t pay taxes as a separate entity; instead, each partner includes their share of profits or losses in their personal tax filings.
Corporation: A corporation is a more complex entity that is separate from its owners, providing personal liability protection. Owners, known as shareholders, are not typically personally responsible for the corporation’s debts or legal problems. This entity requires more administrative requirements, like board meetings and record-keeping.
Limited Liability Company (LLC): An LLC blends elements of sole proprietorships, partnerships, and corporations. Owners (members) have limited personal liability for business debts and actions. This structure offers greater flexibility in management and less strict requirements than a corporation. In New Jersey, LLCs are popular among small businesses due to their simplicity and liability protection.
Related: Comparison of Business Structures
What Licenses Do New Jersey Businesses Need?
With the business structure out of the way, we can begin looking at the different types of registrations businesses in New Jersey may need. There isn’t a standard business license, as requirements vary depending on where the business is located and what it does. Here is a general overview of the different registrations your business may need.
State Business Registration
All businesses must register with the New Jersey Division of Revenue and Enterprise Services at least 15 days before beginning operations. To register, file Form NJ-REG. This registration provides for a state tax identification number and signing up for other relevant taxes.
Business License
In addition to the state business license, many businesses need to be licensed at the local level in order to operate. Rules for business registration vary depending on location and what the business does. Below are a few cities that have licensing requirements.
- Newark: Several types of businesses are required to register for a business license in Newark. A few include tire shops, restaurants, pet shops, florists, and several others.
- Jersey City: A few types of businesses operating within city limits will need to obtain a business license. Auto repair shops, tow trucks, and food establishments are a few of the businesses that need to get a license.
- Patterson: All businesses will need to get a city business license. In addition, several types of businesses will also need to obtain a special license in order to operate.
The cost of business licenses varies on location and the type of business.
For as little as $99, you can save a lot of time and know your business is in compliance with local, state, and federal requirements.
Trade Name Registration
While not a business license, it’s common for Sole Proprietorships and Partnerships operating under a company name that is different from the full name of the owner(s) to register for a Trade Name Certificate (also known as a Doing Business As or DBA) with the County Clerk’s Office in the county where the business is located.
Building & Zoning Permits
- Zoning: Check zoning requirements to be sure your intended business activities comply with local zoning ordinances. Zoning laws vary by municipality, so businesses should consult their local planning and zoning department
- Building Permit: Building permits in New Jersey are required for construction, modifications, or renovations, ensuring adherence to safety and building codes. These are issued by the local building department, which reviews and approves construction plans.
- Signage Permit: Signage permits in New Jersey regulate the size, placement, and type of business signs to conform to local ordinances and aesthetic guidelines obtained from the municipal or county planning or zoning office.
Sales Tax Certificate of Authority
Businesses selling products at retail (both physical and digital products) and certain services are required to collect sales tax. In order to collect sales tax, businesses need to register for a Sales Tax Certificate of Authority from the New Jersey Department of the Treasury.
Resale Certificate
Businesses purchasing merchandise to resell will usually want to obtain a New Jersey Resale Certificate in order to not pay sales tax for merchandise that is being resold to customers.
Professional License
A variety of professions in the state are regulated and need to be registered before offering certain services. A few common professions that require licensing in the state of New Jersey including; contractors, landscapers, child care centers, barbers, and many more. Additional information, fees, and licensing requirements for professions are available from the New Jersey Division of Consumer Affairs.
General Contractor License
Any business that provides home improvement services in New Jersey will need to register with the New Jersey Division Of Consumer Affairs. Electrical contractors and plumbers are licensed differently.
Employer Identification Number (EIN)
Many businesses will register with the Internal Revenue Service (IRS) for an EIN (also referred to as a FEIN, Federal Employer Identification Number, or Federal Tax ID Number). The EIN is the business equivalent of a Social Security Number for an individual.
Next Steps
These are some of the most common business licenses a new business in New Jersey will need to register for. Be advised that while it’s a good start, there are so many different licenses that may be needed, be sure to double-check with the City Clerk’s Office, Chamber of Commerce, and/or Economic Development office in your area before opening your doors.
