Known as the “Crossroads of the East,”, New Jersey’s economy is driven by several different industries with the major league players being manufacturing and distribution. It is considered as the greatest chemical producing state and is home to over 15,000 factories. If you register a new company in New Jersey, you can be rest assured that it will be a key player in a growing economy.
Advantages of setting up an LLC or Corporation
As a business grows, the economy also grows and vice-versa. Ever wondered what factors drive business growth? Of course, infrastructure plays a key role for a start-up company in New Jersey but apart from that, it also depends on the type of business you form. For example, a limited liability company has several advantages over a general partnership. Let’s take a quick look at some of the advantages of forming an LLC or a Corporation in New Jersey.
Advantage#1: Salient benefits of Corporations or LLCs
- Grow New Jersey Assistance Program (Grow NJ): Grow NJ is a program targeted at start-up companies in New Jersey and you can benefit from tax credits on job creation and retention. This incentive program is aimed at strengthening the state’s competitive edge in the global marketplace. Businesses may be eligible for tax credits that range from $500 to $5,000 per job, per year; and then there is the bonus credit that ranges from $250 to $3,000 per job, per year. More Information
- Independent Life: One of the salient advantages of an S Corporation in New Jersey is that it enjoys an independent life. The death or incapacitation of a stockholder will not disturb operations of the business.
- Pass through taxation: If you register a new company in New Jersey as an S corporation then the corporation or firm will not pay any income tax. Instead, the income or loss of the corporation will be passed on to the stockholders.
- Sales and Use Tax Exemption (STX) Program: One of the advantages of a start-up company in New Jersey is the Sales and Use Tax Exemption (STX) Program. Businesses that make specific purchases for renovation and construction of a new business facility or location will be eligible for a sales tax exemption. The exemption is valid on purchase of equipment, machinery, fixtures, furniture and furnishings, and building materials used for the project.
- Limited Liability: If you register a new business in New Jersey as an LLC then you will be able to enjoy limited liability protection. This means claimants can sue the LLC and not the owner or investors.
- Flexible Profit Distribution: An LLC has the benefit of being able to select different ways of distribution of profits.
Advantage#2: Business Incentives
There is a variety of business incentive programs available for small and medium enterprises or start-up companies in New Jersey. Let’s look at some of the top programs in New Jersey.
- Premier Lender Program: Starting a new business can be such a tough task unless you have access to financing options and this is where the state of New Jersey can help. The “Premier Lender Program” is a low cost financing option through which a start-up company in New Jersey can receive a loan of up to $2 million or up to $1.5 million in loan guarantees on fixed assets.
- Garden State Growth Zone Business Lease Incentive: This is another good program for new as well as established businesses. The program known as the Garden State Growth Zone (GSGZ) Business Lease Incentive (BLI) offers reimbursements to both profit and nonprofit businesses. The reimbursement is a percentage of the annual lease payments and eligible areas need to be between 500 – 5,000 sq.ft. This program is available in five Garden State Growth Zones, which are Camden, Atlantic City, Passaic, Trenton, and Paterson. More Information
Are there any Disadvantages of Incorporating in New Jersey?
When you register a new business in New Jersey, you can be rest assured that there is a wide variety of business incentives to leverage but are there any disadvantages? The disadvantages are limited to the type of business entity you form. For instance, an LLC can get dissolved when a member dies or if it undergoes bankruptcy. Similarly, the process of incorporation may lead to higher overall taxes. The disadvantages will not affect business growth keeping in mind the incentives and infrastructure offered by the state.