Forming a professional corporation in New Jersey can be a complicated and confusing process. However, professional corporations offer many benefits, such as limited liability protection and a more professional image. In this article, we will guide you through the process of forming a professional corporation in New Jersey, step by step.
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Step 1: Choose a Name for Your Professional Corporation
The first step in forming a professional corporation in New Jersey is to choose a name for your company. The name should contain the words "professional corporation," "professional association," "service corporation" or "service association." Besides, the name must be distinguishable from other businesses already registered with the State of New Jersey.
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You can check the availability of your chosen name by searching the New Jersey Business Gateway website.
Step 2: Appoint a Registered Agent
Every professional corporation is required to have a registered agent in New Jersey. A registered agent is a person or company authorized to receive legal documents and other official correspondence on behalf of the corporation. As a registered agent, they must have a New Jersey street address.
You can hire a registered agent company or appoint an individual who is not affiliated with your company as the registered agent.
Step 3: File the Certificate of Incorporation
To properly form a professional corporation in New Jersey, you must file a Certificate of Incorporation with the State of New Jersey. The form is available on the New Jersey Business Gateway website.
The Certificate of Incorporation must include the following information:
- Name of the corporation
- Registered agent's name and address
- Corporate purpose
- Number of authorized shares
- Number of shares to be issued
- The name and address of each incorporator.
You will need to pay a filing fee for submitting the Certificate of Incorporation. You can pay the fee by credit card or check.
Step 4: Draft Professional By-laws
Professional by-laws are a set guidelines and rules. They define how the corporation will operate and what functions its Board of Directors and officers will have.
Every professional corporation is required to have a set of by-laws relevant to its profession. The by-laws should address the following issues:
- Professional services
- Memberships
- Dues and assessments
- The election and tenure of officers and Board members
- Voting rights
- Compensation and benefits.
It is recommended to consult an attorney experienced with multi-disciplinary practices, to draft appropriate by-laws.
Step 5: Get Employer Identification Number
After receiving the Certificate of Incorporation, you need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).
An EIN is required to open a bank account, apply for licenses, pay taxes, and make financial transactions. You can obtain an EIN by applying online at the IRS website.
Step 6: Obtain Licenses
A professional corporation operating in the State of New Jersey may require various state or local licenses. The required licenses vary depending on the profession.
You obtain a license from specialized boards which regulate disciplines such as law, engineering, medicine, etc. Make sure to check the appropriate board’s website or even consult with their customer relations phone number for clear guidance and/or obtain information packet! The customers representative shall provide information efficiently so that people who need everything do not mess up.
Step 7: Register for Taxes
If you have employees or sell goods or service, you must register with the New Jersey Department of Revenue. After registrating, you will receive a Business Registration Certificate and permits to collect sales tax.
Step 8: Setup your Corporate Records
Every professional corporation collecting compensations for providing services in New Jersey, is required to create and keep Company Records that will include its by-laws and council assistance together in a main location. These records must be kept for at least seven years after the insolvency process is created.
Conclusion
Forming a professional corporation in New Jersey seems like a daunting process. However, by following the steps listed above, the process is less confusing and more systematic. Obtaining an even-state license is significant perform obligation dedication to consistently implement top-quality services and jumpstart the company's future success, often capable of increasing revenue and achieving long-term sustainability.
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