Operating Agreement for LLCs
-
Required Operating Agreement: Only five states legally require LLCs to have an operating agreement: California, Delaware, Maine, Missouri, and New York.
-
Importance of Operating Agreement: An operating agreement clarifies how LLC funds are distributed to the owner and protects personal assets from business assets.
Forming an LLC in New Jersey
- Choose a name
- Choose a registered agent
- Obtain a business license
- File your certificate
- Draft an operating agreement
- Comply with state and federal obligations
Single-Member LLC Establishment in New Jersey
- Naming Requirements: Name must include “Limited Liability Company” or “LLC.”
- Tax Election: IRS requires LLC members to make a tax election for federal tax purposes.
- Tax Obligations: Pay sales tax, payroll tax, and franchise tax as per government regulations.
- Employer Identification Number (EIN): Obtain an EIN for unique identification and banking purposes.
- Ownership Transfer: Rules for transferring LLC ownership outlined in the operating agreement.
- Amendments: Operating agreements become legally binding when signed, and notarization can increase credibility.