Business Formation

Starting and running a business in the United States takes a lot more than managing daily operations. You need a credible Princeton business formation attorney on your side to help figure out the financing, legal structure, and location of your business. The business entity you choose to form has the potential to affect every aspect of your business operations.

At Inderjit K. Sidhu Esq. LLC, we are ready to guide you through business matters and help you reach your potential as the owner of a business. Contact our law office now and schedule a free 15-minute consultation with our experienced New Jersey business law attorneys.

Why Do I Need a Business Formation Attorney in New Jersey?

Opening a new business in New Jersey is not as easy as it may seem. There are many things to consider including financing, markets, and customers. In addition, you need to deal with issues such as regulatory compliance, personal liability, tax filings, and insurance. Our skilled Princeton business formation attorneys at Inderjit K. Sidhu Esq. LLC is ready to assist you with everything you need to get your business started.

Help People Start New Ventures

We represent clients planning to start their own companies in Princeton, NJ as well as business owners looking to expand their operations and protect their interests.

Provide Sound Legal Advice

Our legal team advises investors and business owners on how to structure a new venture and on agreements governing relations between the owners.

Ensure Compliance with the State Laws

Our top-ranking New Jersey business law attorneys can guide you through the various aspects of a business formation. We can work as a team to ensure that your business transactions are completed properly and comply with state and federal laws.

Our business law firm is here to help put your business on the path to success. Contact us now and schedule a free 15-minute consultation with our experienced Princeton, NJ business law attorneys.

What is Business Formation?

Business formation is a fundamental aspect of starting a new company. How your business is formed will determine the personal liability of the owners, how taxes are paid, and other important details. If you have chosen the wrong business structure, or incorrectly filed the paperwork for the structure you preferred, you could be unintentionally open to personal liability for your business’s debts.

Fortunately, you don’t have to navigate the business formation process alone. A knowledgeable Princeton business formation attorney can help you know and understand your options and obligations throughout the business formation process.

What is the Business Formation Process in New Jersey?

If you’re a new business owner, you need proper guidance to ensure that you follow legal protocols and state laws. A top-ranking business formation lawyer in Princeton, NJ can help you understand the process of business formation.

When forming a business in New Jersey, it is crucial to remember that several steps may need to be taken depending on the business you are starting. The two main steps that you must take to ensure that your business is properly registered are as follows:

Choosing Your Business Entity Type

The first step in forming a business is determining the type of legal entity that your business will be. This is crucial when starting a business because it has significant legal and tax consequences.

There are several types of business formation, each with its advantages and disadvantages. A qualified Princeton business formation attorney will analyze your present situation and make sure you choose the appropriate business structure that will limit your liabilities and safeguard your assets.

Sole Proprietorship

A sole proprietorship has only one owner. It is the simplest and least expensive type of business to form. However, in this type of business, you have no protection from lawsuits or creditor claims. Your personal assets can be used to satisfy a business debt or legal judgment.

Partnership

A partnership is a formal arrangement by two or more parties to manage and operate a business and share its profits. This form is flexible and avoids income tax at the business level, but the partners are personally liable for the partnership’s debts.

Corporation

A corporation is a legal entity that is separate and distinct from its owners. The corporation files income tax forms and is responsible for its debts.

Limited Liability Company (LLC)

An LLC is set up to protect the owners of a company from the businesses’ liabilities. An LLC has both characteristics of a corporation and a partnership.

Creating Agreements Between the Owners

In any form of business entity, an agreement between the owners is one of the most important elements of a business. The agreement will determine how the business is managed, what the owners’ functions will be, how the owners are paid, and how ownership interests can be transferred or purchased. 

Most importantly, the agreement will govern what will happen should there be a dispute between the owners. Partnership agreements, operating agreements for limited liability companies, and shareholder agreements for corporations set the rules governing the relations among the owners.

Registering Your Business for Tax and Employer Purposes

Regardless of your type of business entity, you are required to register your business for tax purposes. To properly file your federal taxes, you must apply for an Employer Identification Number (EIN), also known as a Federal Tax Identification Number. A competent Princeton business formation lawyer can guide you through this process.

The purpose of the registration is to provide information that will let the state determine the taxes and employer contributions for which you may be responsible. Failure to register your business will result in penalties and fees on taxes owed to the State of New Jersey. Furthermore, if you’re planning on contracting any public agency in New Jersey, you will be required to obtain a Business Registration Certificate as proof that you are legally registered with the state.