New Jersey LLC
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Advantages and Disadvantages New Jersey LLC
An advantage of a New Jersey LLC is that you can gain the protection of law in terms of separating out your personal assets from the future liabilities of your New Jersey LLC as it conducts business, and where its creditors could look into litigation in order to satisfy the LLC's financial obligations. A tax benefit of an LLC is that your New Jersey LLC qualifies as a "pass through" vehicle, accordingly is not taxed at either the state of federal level, so long as your New Jersey LLC remains in good corporate standing. Indeed, failure to maintain good standing in terms of corporate formalitiees and related filings could mean that your New Jersey LLC could be re-classified as a corporation by the Federal Government, thus establishing an immediate corporate tax liability and possible fines and penalties.Simplicity and flexibility are characteristics of an New Jersey LLC. Unlike the C Corporation or the Subchapter S Corporation which require annual meetings and written minutes along with other corporate procedures, your New Jersey LLC does not requires such meetings and records. Like the C corporation, your llc can bring in unlimited numbers of investor or members through private placement contracting, which allows you to capitalize your New Jersey LLC at whatever level meets your needs, inclusive of debt financing as arranged with lenders. However, unlike the C corporation which must distribute earnings on a dollar-per-share basis, your New Jersey LLC can develop much more flexible distributions policies, as will be noted in your llc operating agreement.
By New Jersey and other state law in order to proceed with forming a llc, you need to prepare a written abstract detailing your llc purpose, the names of your initial New Jersey LLC members, the name and address of your New Jersey registered agent, the details of which will be introduced into the body of your LLC operating agreement and related New Jersey LLC formation documents assembled for application to the state of New Jersey.
New Jersey's 2008 Business Tax Climate Ranks 49th
New Jersey ranks 49th in the nation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: New York (48th), Pennsylvania (27th) and Delaware (9th).New Jersey's Individual Income Tax System
New Jersey's personal income tax system consists of six brackets and a top rate of 8.97% kicking in at an income level of $500,000. Among states levying personal income taxes, New Jersey's top rate ranks 6th highest nationally. New Jersey's 2005 individual income tax collections were $945 per person, which ranked 15th highest nationally.New Jersey's Corporate Income Tax System
New Jersey's corporate tax structure consists of a flat 9% on corporate income. However, corporations with total net income of $100,000 or less pay 7.5% and corporations with total net income of $50,000 or under pay 6.5%. Among states levying corporate income taxes, New Jersey's top tax rate ranks 7th highest nationally. In 2006, state-level corporate tax collections (excluding local taxes) were $287.51 per capita, ranking the state 6th highest nationally.New Jersey's State/Local Tax Burden Highest in Nation
Estimated at 11.8% of income, New Jersey's state/local tax burden percentage is the highest in the country, well above the national average of 9.7%. New Jersey taxpayers pay $6,610 per capita in state and local taxes.Home | New Jersey LLC Advantages and Disadvantages | Site-Map