Starting a business in New Jersey can often feel like navigating a maze due to the lack of a universal New Jersey business license.

Instead, you’re left to figure out by yourself which of the many federal, state, and local permits your business needs to operate legally.

But, don’t worry; this article will guide you through the process. It’ll help you identify and learn how to secure the permits you need so you can step into the next phase of your business journey with confidence.

Do I Need a Business License in New Jersey

In New Jersey, businesses are required to obtain various licenses and permits at the local, state, and federal levels. Here’s a general breakdown:

Type of Business

Below, we’ve detailed common ways in which your business type can dictate the licenses you’ll be required to obtain, as well as specific examples of these:

• Sales and Use Tax Certificates: In order to legally sell certain products or services in New Jersey, your business must obtain a sales and use tax certificate from the New Jersey Treasury’s Division of Taxation. This is what enables you to collect sales tax
• Professional Licenses: Many trades or professions — like plumbing, electrical work, cosmetology, and general contracting — require specific licenses that qualify a business to offer these services. For example, any new accounting firms must register and obtain certification from the New Jersey Division of Consumer Affairs’ Board of Accountancy
• Environmental Permits: Certain industrial activities may require specific authorization via permits if they have the potential to impact the environment. For example, a crop protection or agricultural services company likely will need to obtain an agricultural chemicals permit from the New Jersey Department of Environmental Protection in order to apply pesticides or herbicides legally

However, this is not the only factor influencing the exact combination of licenses you’ll need — the location of your business within New Jersey plays an important role as well.

Location

In this section, we’ve provided a succinct overview of the potential licenses and permits that your business may need due to local, state, and federal requirements:

• Local: Beyond state-level permits, you’ll also need to look out for additional licensing requirements imposed by the city and county in which you’re based. Because determining which specific licenses you need is often the most difficult step, many cities and counties offer personalized guidance through their county clerk’s office
• State: Just like all other states, New Jersey sets its own licensing criteria. Because there’s no overarching state business license, the state has 15 distinct agencies that regulate different business sectors. New Jersey’s online portal, Navigator, is a straightforward way to find out which licenses you may need
• Federal: The federal government regulates a number of industries that require a federal license in addition to any local or state requirements. These sectors include agriculture, alcoholic beverage sales, firearms, and more. For a complete list, visit the US Small Business Administration website

Since the exact permits and licenses your business will need are entirely unique to your situation, you’ll have to conduct thorough research into your own local, state, and federal regulations to smoothly launch your business.

Alternatively, many entrepreneurs opt to leverage the expertise of third-party services to handle this on their behalf.

How to Get a Business License in New Jersey

In order to get your business license(s) in New Jersey, you will need to complete the following steps:

• Form Your Business
• Obtain an Employer Identification Number (EIN)
• Apply for the Required Licenses and Permits

Let’s take a look at each step in more detail below.

Step 1: Form Your Business

Before setting out to obtain a business license in New Jersey, it’s pivotal that you first choose an appropriate structure and obtain a Business Registration Certificate. Sole proprietorships, general partnerships, and corporations are all common choices, however it’s often seen as the most advantageous for small businesses in New Jersey to register as a Limited Liability Company (LLC). Here are a few reasons for why:

• Limited Liability: Members are protected from personal liability for business debts, safeguarding personal assets
• Tax Benefits: LLCs typically enjoy a pass-through tax treatment, avoiding the double taxation that corporations are subjected to
• Management Flexibility: LLCs allow for flexibility in management structure, either being member-managed or manager-managed based on the preferences outlined in the certificate of formation
• Ease of Formation: With the New Jersey Secretary of State providing forms that meet the minimum state law requirements and the option to file online, setting up an LLC is relatively straightforward

Many small business owners opt to avoid the tricky process of forming an LLC by instead leveraging the help of third-party LLC formation enterprise services.

Step 2: Obtain an EIN

The second step you’ll need to complete before applying for your business license is to obtain your EIN. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses in the United States so that their financial transactions can be identified and tracked.

An EIN is often necessitated when applying for various permits and licenses as it allows local and state governments to ensure your business is operating within the confines of the law. You can obtain it in a number of ways:

• Online: You can apply for your EIN on the IRS’s official website by using the EIN Assistant. You should be granted your EIN shortly after completing this application
• By Fax/Mail: After completing Form SS-4, you can apply for an EIN by submitting it to the IRS via mail or fax
• By Phone: International applicants and businesses located outside US Territories are required to call the IRS at (267) 941-1099 to obtain their EIN — which they should receive during this call

Note: If you are a sole proprietor, you will be able to use your Social Security Number (SSN) instead (as long as you do not have employees).

Step 3: Apply for Licenses and Permits

After settling on the appropriate structure for your business and initiating the application for your EIN, the next step is to focus on securing the necessary licenses and permits to operate legally within your locale and industry.

• Local Licenses: Cities and counties in New Jersey often have different licensing requirements. While some municipalities may require all businesses to have a license, others may only require them for certain industries. Newark has more than 40 different industry-specific business licenses, for example, with fees ranging from $25 to $1,500
• Statewide Licenses: New Jersey regulates a number of industries at the state level. Businesses in the home renovation and repair sector must obtain a home improvement contractor license, for example, which the New Jersey Division of Consumer Affairs oversees
• Federal Licenses: While the federal government doesn’t mandate licenses for general business operations, if your business falls under any government-regulated category, such as agriculture, fishing, firearms, and alcohol sales, it may be required to obtain additional federal licenses or permits

Note: For more detailed information on municipalities and their respective websites, check out the state of New Jersey website.

Step 4: Renewal of Licenses and Permits

Many New Jersey business licenses require periodic renewal every few years in order to keep them valid. If you’re uncertain whether you need to renew any of your business’s licenses, make sure to reach out to the agency that issued your business license for clarification.

Alternatively, due to how complicated each step of applying for and renewing business licenses is, you can use a business attorney or a third-party service instead.

How Much is a Business License in New Jersey

The cost of obtaining business licenses in New Jersey can vary widely, depending on the nature of your business, the industry in which it operates, and the specific licenses or permits you need. Some licenses might only cost a few dollars while others (e.g., a liquor license) can cost several thousand dollars.

Each industry-specific state agency — as well as local city and county governments — will have their own fee structures. For instance, obtaining a license from the New Jersey Department of Environmental Protection will have a different cost to obtaining a contractor’s license.

It’s essential to consult the relevant state and local agencies to get accurate pricing for the licenses or permits you’ll need for your specific business type. Alternatively, some third-party services can offer a much more straightforward way of calculating the total figure.