The New Jersey limited liability company (LLC) operating agreement is a legal document that outlines the company's day-to-day operation and provides the rights and obligations of each member of the LLC.
The LLC operating agreement, or business operating agreement, has a relatively free form. That means that the members of the LLC are free to determine the operating structure of the company according to their business model, as long as the provisions of the operating agreement are not in conflict with federal and state laws.
Is an Operating Agreement Required in New Jersey?
No, an operating agreement is not a required document in New Jersey. Regardless, individuals forming an LLC in New Jersey still choose to make the operating agreement and optimize their business operations.
4 Main Types of Operating Agreements
Here, you can find the four main types of operating agreements used in New Jersey:
Types of Operating Agreements
Single-member LLC operating agreement: This type of operating agreement is used for LLCs with only one member since it only provides the operating rules for the company without regulating the mutual relationship between the multiple members.
Multi-member LLC operating agreement: Here, two or more members form the company, and the operating agreement must regulate both the operation of the company and the mutual relationships of the members.
Member-managed LLC operating agreement: Here, the members have decided to manage the company personally, and the document determines each member’s managing authority inside the company.
Manager-managed LLC operating agreement: This option enables the members of the LLC to delegate their managing authority to professional managers. In that case, the operating agreement regulates how the manager will run the company on a daily basis.
Laws and Legal Requirements for LLC Operating Agreements in New Jersey
Chapter 42:2C of the New Jersey Statutes, also called the Revised Uniform Limited Liability Company Act, is the act that regulates the status of LLCs in New Jersey.
Moreover, there are a few sections of this act that regulate the status of operating agreements in New Jersey, in particular:
Laws and Legal Requirements
§ 42-2C-11: Scope, function, and limitations of the operating agreement.
§ 42-2C-12: Regulates effect on limited liability company and persons becoming members, as well as preformation agreement.
§ 42-2C-13: Regulates effect on third parties and relationship to records effective on behalf of limited liability company.
How to Form a Limited Liability Company (LLC) in New Jersey
The easiest way to form a limited liability company in New Jersey is to follow the steps outlined below:
How to Form a LLC in New Jersey
#1. Choose a Business Name For Your LLC
First, you should choose a business name that is distinguishable from other registered business names in New Jersey. If you choose a business name too similar to other business names registered in New Jersey, your application might be rejected.
To check if your business name is distinguishable, go to the Department of Treasury website and do a business name search.
#2. Choose the Type of LLC
Here, you have two options:
Domestic LLC: Used for new LLCs that are established and registered in New Jersey.
Foreign LLC: Used for existing LLCs that are established elsewhere but are also registered in New Jersey.
#3. Nominate an Agent
Every LLC in New Jersey should appoint a registered agent. This is the person in charge of receiving official notifications and documents on behalf of the LLC. It can be an individual with a registered address in New Jersey or an entity with the authority to operate in New Jersey.
#4. File the Formation Documents
The documents are filed with the New Jersey Division of Revenue. It can be done online or by sending an application via mail.
Moreover, to register the foreign LLC, you should also submit the Certificate of Existence from the state where the company was initially established.
#5. Pay the Required Fee
The application fee is $125. If you submit your application online, the platform will guide you to the page where you can pay the fee with your credit card.
If you apply via mail, you should write a check, attach it to your documents, and send it to the following address:
New Jersey Department of the Treasury, Division of Revenue & Enterprise, Services/Corporate Filing Unit, P.O. Box 308, Trenton, NJ 08646-0308
#6. Create your LLC Operating Agreement
After registering your company, you should create an operating agreement and optimize your business operations.