Starting a business in Bergen County can open up endless opportunities. The county has a friendly business environment that supports new and existing businesses, from startups to global multinational companies. Besides vision, business formation requires an understanding of the market, careful planning, and hiring a legal professional to help navigate the legal processes for forming a new business.
A Bergen County business formation lawyer can provide informed advice, draft essential documents, help you choose an appropriate business structure, mitigate risks, and help you establish a strong legal foundation for future growth.
The Significance of Choosing The Right Business Structure
The legal structure you choose has a significant impact on your legal liability and state and federal taxes. A business attorney will take the time to understand your vision and expectations and assess the financial capabilities of your business to provide practical advice. It may help you choose the business structure that fits your aspirations, facilitates compliance with relevant tax authorities, and limits your liability. In Bergen County, business owners and entrepreneurs have multiple business structures to choose from.
The most common types of business structure include:
Sole Proprietorships
A sole proprietorship is the preferred business structure option for freelancers and small businesses. A significant benefit of choosing this option is the ease of formation. Forming a sole proprietorship doesn't require completion of extensive paperwork or filing of documents.
However, the sole proprietorship does not enjoy a separate legal existence distinct from its owner (the sole proprietor or sole trader). Choosing to be a sole proprietorship doesn't provide personal liability protection to the owner. The sole proprietor's assets are at risk when the business faces lawsuits or is debt-ridden.
Partnerships
In a partnership, two or more individuals come together to run a business and agree to share profits and losses. Partnerships in New Jersey can be general or limited. In a general partnership, all partners share the day-to-day running of business operations, managerial responsibilities, and are personally liable for the obligations and debts of the business organization. In a limited partnership, there are two types of partners - general partners and limited partners. General partners run and manage the business and are liable for its debts.
Limited partners contribute capital but do not take any part in the day-to-day management of the business. Limited partners, as the name suggests, have limited liability. A partnership formation lawyer can help protect your best interests and investment, reduce the risks of penalties and legal disputes, and make informed decisions regarding your partnership.
Limited Liability Company (LLC)
An LLC is an immensely popular business entity choice for small businesses in New Jersey. Owners can enjoy key benefits of both a corporation and a sole proprietorship or partnership. Members can enjoy the limited liability protection that a corporation offers. The personal assets of the LLC members will not be at risk if the business is sued. Choosing an LLC structure allows members to avoid complex tax return filing requirements that are associated with a corporation.
Filing of taxes is relatively simple for LLC members. A single-member LLC files taxes as a sole proprietorship, while an LLC with multiple members files taxes as a partnership. Alternatively, some LLCs can elect to be treated as an S Corporation for tax purposes subject to certain requirements. An LLC formation lawyer can help perform due diligence, draft essential commercial contracts, and protect your brand and intellectual property
.Corporation
A corporation has a distinct legal existence. Shareholders own corporations and elect a board of directors to oversee operations. Shareholders are not personally liable for the debts and obligations of the corporation. S-corporations and C-corporations are the most common types of corporations in New Jersey.
An S corporation can only have up to 100 shareholders and functions similarly to a partnership. Income and losses of an S corporation are included on the shareholders’ income tax returns. A C-corp can have any number of shareholders. C-corporations face double taxation. The law requires corporations to pay both federal and state taxes. Shareholders must report dividend earnings on their income tax returns.
A corporation formation lawyer can help you by handling legal complexities such as drafting and filing Articles of Incorporation, designing tailored legal strategies and solutions to fit the corporation’s business needs, and facilitating compliance with strict New Jersey laws for corporations.
The Business Formation Process In Bergen County, New Jersey
The business formation process can be a time-consuming and challenging proposition for business owners. A seasoned business lawyer can help businesses streamline the entire process by handling extensive legal and regulatory requirements.
The Articles of Organization must specify the business and mailing address, the registered agent’s name and address, the purpose of the LLC, and the name of the manager or authorized representative.
To form a Corporation in New Jersey:- Choose a name that is unique and accurately depicts the essence or purpose of your business
- Designate a registered agent to act as an intermediary between the corporation and the regulatory authorities. The registered agent is responsible for receiving official and legal documents and communications related to the company
- File Articles of Incorporation that include the corporation name, business address, mailing address, corporation purpose, name and address of registered agent, effective date of the corporation, and signature of at least one authorized representative
- Create bylaws that are a detailed set of rules to outline the internal management structure of the corporation
- Appoint directors and hold the first meeting of the Board of Directors
- Issue shares and stocks
- Obtain local business licenses and permits
- Acquire an EIN issued by the IRS to identify your corporation for taxation purposes.
Contact A Bergen County Business Formation Lawyer
Bergen County offers businesses of all sizes and business structures innumerable advantages like access to a large and vibrant market, a favorable tax regime, attractive incentives, and robust asset protection laws.
An experienced business formation lawyer can help you choose the appropriate business structure, comply with New Jersey business naming requirements, obtain necessary business licenses and permits, file Articles of Organization or Incorporation, and navigate potential legal complications and minimize delays.
Contact a Bergen County business formation lawyer to schedule a consultation or to find out how they can simplify the process of forming your business.
Alex Davis
Alex Davis is the founding member of Omni Law P.C. His practice focuses on providing high level strategic advice and guidance on deal structures, negotiating complex transactions, and offering personalized legal services.
Kathy Fox
Maclean Bowers
Contact Omni Law P.C. for Transactional, Business, and Corporate Legal Services.
Seeking knowledgeable guidance for your business? Omni Law P.C. focuses on providing flexible and affordable legal services to businesses, executives, and founders across various industries. Our experienced attorneys have a deep understanding of corporate transactions, intellectual property, commercial agreements, and emerging technologies We offer businesses the outside counsel they need to succeed. Whether you require assistance with contract negotiation, trademark registration, or mergers and acquisitions, we provide strategic legal advice tailored to your unique needs. Contact us today at (323) 300-4184 to see how we can provide the legal support to help you achieve your business objectives.
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