Applying for a business license can be a complex and time-consuming process due to varying federal, state, and local requirements. Small business owners have limited resources, which can make the process even more complicated. However, a business license is still required.
Below are four steps to obtaining a business license in New Jersey.
Step 1. Create a business entity
Decide on a legal structure that makes sense for your business. You can create a sole proprietorship, partnership, LLC, or corporation. Each is unique and has different strengths and weaknesses.
Select the original business name to be registered with the New Jersey Department of Revenue and Business Services. You also have the option of registering a different name if you plan to operate under a different name than yourself or your business.
You must register an Employer Identification Number (EIN) with the IRS. Obtaining it is relatively easy. You can apply online and be approved in seconds. Used in business applications.
Step 2. Obtain a business registration certificate
To receive your business registration certificate, you must complete the NJ-REG with the New Jersey Department of Revenue and Corporate Services. This registration is essential for tax purposes and allows states to identify and track businesses within their jurisdiction. NJ-REG also helps businesses identify the licenses and permits they need to do business in New Jersey.
The NJ-REG is often required when starting a new business in New Jersey. However, it can also be used in the event of changes such as a change of address or organizational reorganization. Typically, the fastest way for businesses to submit this form is electronically. Once completed, you will receive your New Jersey Tax Identification Number and Business Registration Certificate.
Step 3. Apply for a business license
New Jersey does not require a general business license, but has over 693 industry-specific licenses and permits. Some of the licenses issued by New Jersey are:
- Sales and use tax certificate: The Department of Taxation allows businesses to collect and remit sales tax on transactions. This license allows businesses to legally sell goods that are subject to sales tax or provide certain services.
- Professional license: These typically permit an individual to legally engage in a particular occupation or trade across many jobs and occupations. Common areas covered include plumbing, electrical, cosmetics, and general contracting. These licenses require companies to meet competency and safety standards.
- Professional license: These apply only to occupations that require specific knowledge and expertise. They are typically in the fields of medicine, law, engineering, architecture, and accounting. These are occupations that impact public safety, health, and welfare. The requirements for obtaining these professional licenses are typically more stringent than vocational requirements in terms of required education level, training requirements, and passing professional exams.
Knowing which license you need can be the difficult part. New Jersey seeks to simplify this task by providing a personalized portal, the Navigator, to help individuals identify potential licenses. If you have any questions, you can also contact us by phone or live chat.
In addition to state licenses, each county and city may have additional licenses. A list of all county and city websites can be found here. Again, the city and county are trying to make the process seamless. For example, Jersey City has a business licensing portal to guide you through the licensing process.
Be sure to check with the federal government for any additional licenses required.
Step 4. Maintain compliance
Be sure to check license renewal dates and compliance requirements. Understanding the license renewal process is essential. Some licenses must be renewed annually, while others are valid for several years.
Failure to meet deadlines may result in penalties or suspension of operations. Once you have your license, make sure your business complies with all applicable laws and regulations. It should also be reviewed regularly to ensure compliance.
