Long hours in the office can become boring, hard and often not as fulfilling as you’d want, even if you get a good paycheck and bonuses. It is usually the lack of time that saps the joy out of the work we do, and it becomes even harder if you don’t really like the job you are doing, but you don’t have any better options. If only you could come in for work when you want, go on holidays when you want and spend time with your friends and family when you please. Well, there is a way to achieving all that. You should consider starting your own business.
Take the years you have spent as an employee and let them work for you. Use all your experience, the connections you made at work and outside your office. You know the supply channels, you have seen how a company is run. Put that all to good use.
While running your own business can be a burden, it also brings all the benefits you wish for. But the initial steps in the process are crucial. You have to make sure you have the knowledge and the skill set to be your own boss. But often this is a question of guts, and sheer willpower. Taking that step is a significant milestone. Once that is done, you will certainly have to put in more long hours, but this time you are doing it for yourself. You are doing it to build a company the way you want to build it. You are finding the people who fit the job and who fit the team that you want to work with.
Once everything is working as a well-oiled machine, you start to see the benefits. You become free to come to work when you want to. You choose the clients you want to work with, and you can go on holidays and spend time with your friends and family whenever you want to. In addition, the job you start does not have to be something you did previously and didn’t really find much joy in it. You can find the things you like and make them your job. This way you will not only just enjoy but you will also be passionate about achieving goals and watching the company you created grow.
In this guide you will find certain pointers to what is needed to start a company in the state of New Jersey. You will be given advice on the preparatory work needed before legally registering the company as well as on the legal registration process and your tax obligations. However, if by the end of the article you have any doubts, it is advisable to consult an attorney or a professional business advisor to help you in the process.
There is a lot more that goes into establishing a business besides the legal registration with the relevant authorities in the state of New Jersey. As mentioned above, in order to enjoy all the benefits of being your own boss, first you have to put in some long hours for the preparation of the business. This includes a lot of research, establishing of a checklist or a business plan that will not only guide you through the process of setting up your company but will also show you the market conditions, the supply-demand relation as well as other market factors, all of which are very important.
One of the first steps is to determine what you like doing, what your dreams are and where your passions lie. It is good to create a list of your services and products you enjoy doing or working with. Once you have the list, it is the time to sit down and start looking into all the aspect of each of the markets connected to your services and products from the list you created.
Essentially, you are looking at the market conditions and whether any of the services or products from your list fall into a niche market, an underserved niche market that you could tap into. If the task seems overwhelming, you might consider hiring professional assistance. In any case, these specialist or undersupplied markets provide the best opportunities for success due to an already healthy demand for a service or a product, and less intense supplier competition. This allows you to settle into your business, build a name for yourself within a smaller customer base and secure a steady income stream before branching out and entering new markets and eventually growing your business.
Once you have pinpointed the desired market, it is time to check whether your business model is viable and sustainable in the given environment. You also have to make predictions such as the expected costs of running your business, expected revenue and net profit among other things. All this helps create a well-rounded business plan. A good business plan is essential if you are looking for additional funding for your business. Any financial institution, such as banks, investment organizations or any other similar entities, will first request to look into your business plan in order to determine whether your business idea is worth investing in. Without a business plan, you are highly unlikely to attract investors.
Once the preparations are complete, once you have your target market, your product, your plan of action and your funding, it is time to turn your attention to registering the business with the relevant authorities in the state of New Jersey.
While the state of New Jersey offers an online solution to the registration process, this guide will go through the major individual steps. According to the New Jersey’s Division of Taxation, the best place to start your registration process is the New Jersey Business Portal’s One-Stop Shop for Business. The service will allow you to complete the process online, and here are the steps you will have to go through.
First, you have to choose the business structure for your business. You have the option of choosing a sole proprietorship, the simplest and easiest type of business structure to set up. It is also easy to maintain and is usually established by single business owners. The potential downside of a sole proprietorship is the fact that there is no legal distinction between the owner and the business, making the owner liable for all business debts. The next options would be partnerships. These share the ease of formation with the sole proprietorships as well as low start-up costs. However, partnerships also share the personal liability with the sole proprietorships with the addition of divided authority and the struggle to find adequate partners.
You might also look into the option of establishing a limited liability company, which provides the owners with limited liability as well as a flexible management and ownership structure. However, setting up a limited liability company has its costs and falls under stricter regulations compared to sole proprietorships or partnerships.
There is also the option of setting up a corporation, which is basically an entity for itself, separate from the ownership. It provides limited liability to its owners and makes it easier to raise capital through share sales and equity funding. However, corporations are under close scrutiny and require extensive record-keeping and often require double taxation.
Whatever your choice is, you will also have to select a trade name. Sole proprietors are able to operate under their own name, which means that no trade name registration is required. However, in case you are a sole proprietorship or a general partnership and plan on using a business name, you should contact your County Clerk’s office. Other business entities such as limited liability companies, or limited liability partnerships have to register with the Division of Commercial Recording of the New Jersey Department of Treasury.
It is also advisable to contact the municipality and county in which the business is located in order to determine whether there are any special requirements and permits you need to abide by or apply for. You can check whether your business requires a specific license and apply for it at the State of New Jersey’s business portal, under the NJ License & Certification Guide.
If you find the process complicated and need clarification or assistance, we again urge you to seek professional assistance. You can always contact the New Jersey Small Business Development Center for either free or affordable advice.
There is one more step you have to go through before your business registration is complete: taxes.
When registering a business, you are required to provide your Federal Employer Identification Number (FEIN) or a Social Security Number (SSN) if you are registering as a sole proprietor. However, you are advised to obtain an FEIN even if you plan on operating as a sole proprietor. This process is completed through the Internal Revenue Service (IRS) and can be completed online. During the business registration process, you will be assigned a 12-digit New Jersey Taxpayer Identification Number that corresponds to your FEIN/SSN with a suffix of 000.
But before looking further into the registration, let’s see who needs to register for a sales tax permit in the state of New Jersey. This process includes determining whether you have a sales tax nexus in the state. This means having a place of business, an employee or merchandise in a storage space or a warehouse. You also have a sales tax nexus if you own a real or personal property, deliver products in the state, have contractors or representatives or provide maintenance in the state.
Your next step is to check whether the services you provide or the products you are dealing with (selling) are taxable. In general, services are not taxable by the state of New Jersey but there are exceptions. Dealing with tangible products is taxable by the state of New Jersey; however, there are also exceptions here, such as dealing with clothing, groceries or prescription drugs.
If you have determined that you have a sales tax nexus and that what you provide and deal with is taxable, you have to file for a sales tax permit. The registration process can be completed online through the State of New Jersey’s Division of Revenue and Enterprise Services or by downloading the Business Registration Application (Form NJ-REG) filling it out and mailing it to the address provided in the Contact Details Section below. You are required to provide your FEIN/SSN, name, business name, the legal structure, New Jersey Business Code as well as information about the owners, partners or corporate offices and other information about the business.
There is no fee charged for the registration and, once you complete the process, you will not have to renew the permit. However, you are required to register at least 15 business days prior to opening in order to give time to the authorities to provide you with all the necessary information enabling you to comply with all the New Jersey tax regulations.
Depending on the line of business, there are situations in which you might be able to purchase products without having to pay the sales or use tax in the state of New Jersey. For example, if you engage in the business of buying cheap wholesale merchandise to resell online, you could avoid paying sales tax. To do this you have to provide a New Jersey Resale Certificate (Form ST-3).
This certificate is used by registered sellers to purchase tangible personal property for resale. You have to understand that while you might use the resale certificate yourself, you might also be at the receiving end of a resale certificate. In both cases, it is necessary to make sure that the document is filled properly. It must include buyer’s name and address, type of business, reasons for exemption, New Jersey Tax ID, and it has to be signed by the buyer. The seller is required to keep the resale certificate on file for at least four years following the transaction.
PO Box 252
Trenton, NJ 08625-0252
1 Washington Park
Newark, New Jersey, 07102
Online Contact and Regional Offices
Business Action Center
P.O. Box 820
Trenton, NJ 08625-0820
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