New Jersey LLC Owner Information

By Michele Vrouvas

Although the LLC business structure in New Jersey limits an owner’s personal liability, the LLC’s owners, also called members, must still comply with a multitude of state guidelines. As in many states, these include tax reporting, licensing and permits. In addition, while not required by law, there are agreements among the owners that can streamline the company’s day-to-day operations.

Although the LLC business structure in New Jersey limits an owner’s personal liability, the LLC’s owners, also called members, must still comply with a multitude of state guidelines. As in many states, these include tax reporting, licensing and permits. In addition, while not required by law, there are agreements among the owners that can streamline the company’s day-to-day operations.

Operating Agreements

Written operating agreements among an LLC’s owners establish procedures for governing the company and explain each owner’s rights, responsibilities and duties. They also describe how decisions are made, who has management authority and how owners will allocate profits and losses. Some agreements specify how new owners are admitted and if penalties are imposed on owners who don’t comply with the agreement. Although not required by state law, operating agreements provide the benefit of allowing owners, rather than the state, to make decisions for the company. According to attorney Rachael Lilienthal Stark, posting on the New Jersey Law Blog, “most provisions of the LLC Act can be pre-empted by the operating agreement.”

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Reporting Requirements

New Jersey LLCs must file an annual report with the Department of Revenue informing it of whether the LLC has changed its registered agent or membership. The information becomes a matter of public record and can be used by commercial, financial and legal organizations. Not filing the report places an LLC at risk of losing its active business status or even having its license revoked. The reports are signed by the LLC’s authorized representative. As of 2010, state law requires that the reports be filed online.

Employer Responsibilities

If the LLC has hired even one worker, it is considered an employer and needs to comply with employer responsibilities. New Jersey employers must withhold income from employee wages, file periodic reports on wages and withholding and purchase workers’ compensation, unemployment and disability insurance policies. They must also provide a safe working environment by adhering to federal and state Occupational Safety & Health Administration (OSHA) mandates.

Licenses and Permits

LLCs that perform special services must obtain licenses, certifications or permits. Examples of special services include providing child care, building and improving homes, transporting solid waste and operating restaurants, employment agencies and taxi companies. Owners should contact their municipal and county governments to find out if other local regulations apply. They can also contact the Division of Consumer Affairs for a list of services that require licensing.

Taxes

Once they are formed, LLCs must register with the New Jersey Department of the Treasury, Division of Revenue. LLC owners will then receive forms and information allowing them to comply with New Jersey tax laws. In particular, LLCs that sell taxable goods and services must report state sales and use taxes. Owners can contact the Division of Taxation for a guide that lists specific taxes. LLCs must also obtain a permit to collect these taxes and display the permit at their business location. Also, since the IRS classifies LLCs as partnerships for federal income tax purposes, LLC owners must follow the same guidelines for filing federal income taxes as partnerships do.

Owner Rights and Responsibilities

Sources of an owner’s rights and responsibilities are state law and the LLC’s own operating agreement, if any. The statutes give owners the right to demand information regarding business status, financial condition, company tax returns, lists of current owners and copies of executed operating agreements. The statutes also limit each owner’s personal liability for debts and obligations incurred by the company and by each owner acting individually. That means one owner is not liable if the company defaults on a commercial loan or if another owner does not pay his home mortgage. While the statutes provide certain rights and liabilities, an operating agreement can override those provisions as long as it does not conflict with state law. Operating agreements can go so far as to shield owners from bad agreements entered into by a non-owner who is permitted to manage the LLC’s finances.

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New Jersey LLC Information

A limited liability company (LLC) is a type of business structure in which the owners (called members in an LLC) are not generally held personally liable for any debts owed by the company. Each state has its own laws and regulations for forming and maintaining an LLC. In New Jersey, formation and operation of LLCs is governed by the New Jersey Limited Liability Company Act and the Division of Revenue.

How to Form an LLC in New Hampshire

If you properly form a limited liability company according to the laws in New Hampshire, you will have a business that provides limited liability to the owners and a flexible management structure. An LLC is formed by filing a certificate of formation with the state. You may fill out and file your own paperwork, or you may use an online legal document service to complete and submit the forms for you.

Who Has the Authority to Bind an LLC to a Contract?

A limited liability company is a type of unincorporated business. It is a relatively new business form and is a hybrid of other business forms. It offers limited personal liability for its members, who are the owners of the LLC, which means the members cannot be sued for a monetary amount greater than their investment in the company. On the other hand, the business is taxed like a partnership, which means the taxes flow down to the owners’ personal income taxes. The business itself does not pay taxes. LLCs are governed by state law; while state law permits LLCs to determine how they will be managed, there are sometimes questions concerning who has the authority to bind the business organization to a contract.

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