Legal Question in Business Law in New Jersey

Re: Delaware Corp operating in New Jersey

I totally agree with Ron. Having formed LLC's for myself and numerous clients, both within and outside NJ, he is correct that if you intend to operate in NJ, you would have to obtain authorization to do business in NJ, register with the tax department and file NJ returns. Since all busineses operating in NJ must be registered and pay taxes to NJ, it appears to accomplish nothing to form your LLC outside NJ. NJ allows one-person LLC's and separate tax reporting can be avoided, by simply filing the business operations (income and expenses) on a Schedule "C" as part of your personal tax return. By doing this, you will save accounting fees as well. Unless there is some special reason for doing this out-of-state that you have not mentioned in your question, there seems to be no reason to do it as you indicate. If you have further questions or need assistance, contact me directly.

Re: Delaware Corp operating in New Jersey

This is one of the biggest mistakes people make when trying to "do it yourself." If you form a Limited Liability Company in Delaware that is going to do business in New Jersey, the LLC must be authorized to do business in NJ. It is actually more expensive for a "foreign" (out-of-state) LLC to register than a domestic Limited Liability Company.

Secondly, unless your are a business law expert, you should get the advice of a tax and business lawyer prior to setting up a business. Your lawyer can help decide the correct legal form for the business entity as well as its location. Your lawyer will also form the LLC, draft a real Operating Agreement and help you start your business right.

I hope this helps!

Ron Cappuccio

http://www.taxesq.com