If I Move From New York to New Jersey: What Do I Need to Do to Keep My Business Running Legally?

Moving out of New York City comes with some immediate perks, like more space, a lawn/backyard, a bigger home and lower taxes. So for most people thinking about moving to New Jersey, the benefits most often outweigh the costs and crossing the bridge becomes a simple choice. However, for business owners who formed their companies in New York, there is one extra item that you need to address during your move in order to continue legally operating your business in your new home state.

Whether you continue to operate your business in New York City and New Jersey, or just in New Jersey, you may need to register your LLC or corporation with the New Jersey State Division of Revenue and Enterprise Services. According to New Jersey law, if you are "transacting business" or "doing business" in the State of New Jersey, you must register as a "foreign" business entity. The term foreign used here just means that your business was not originally filed in New Jersey.

ACTIVITIES THAT DO NOT QUALIFY AS TRANSACTING BUSINESS:

The following is a list of activities that you may engage in that would not qualify as "transacting business" in New Jersey and therefore could save you the requirement of filing as a foreign business entity:

Maintaining, defending or settling a lawsuit or proceeding;
Carrying on activity concerning the internal affairs of your business, including holding member or shareholder meetings;
Maintaining bank accounts at financial institutions;
Maintaining offices or agencies for the transfer, exchange and registration of your company's own securities or maintaining trustees or depositories with respect to those securities;
Selling through independent contractors;
Soliciting or obtaining orders, whether by mail or electronic means or through employees or agents or otherwise, if the orders require acceptance outside New Jersey before they become contracts;
Creating or acquiring indebtedness, mortgages or security interests in real or personal property;
Securing or collecting debts or enforcing mortgages or other security interests in property securing the debts and holding, protecting or maintaining property so acquired;
Conducting an isolated transaction that is completed within 30 days and is not in the course of similar transactions; and
Transacting business in interstate commerce. (This would be similar to selling products over the internet to people in NJ, but you do not have any offices, employees, etc. in New Jersey).

ACTIVITIES THAT QUALIFY AS DOING BUSINESS OR TRANSACTING BUSINESS:

While the New Jersey statutes are not explicit in what doing business or transacting business actually looks like, there are some easy indicators that would suggest that you might be classified as operating your business in New Jersey. If you have a physical office and/or employees working in New Jersey, then you're doing business there. Likewise, if you solicit customers and provide services to those customers in New Jersey, you would be considered as transacting business there.

IF I AM TRANSACTING BUSINESS, WHAT DO I NEED TO DO:

If you've come to the conclusion that you are "doing business" in New Jersey, then you must file a Certificate of Authority with the State of New Jersey. Using the online portal, there are some basic steps that you need to complete. However, if you’re registering a corporation with NJ, before doing so, you must first obtain a Certificate of Good Standing from the New York State Department of State, Division of Corporations. In order to complete the online process with New Jersey, you must upload a copy of the Certificate of Good Standing (which is only good for 30 days from the issue date).

Finally, if your business requires any permits or licenses in order to operate, you will need to contact the relevant New Jersey authorities to secure that documentation within New Jersey State.

WHAT HAPPENS IF I DON'T FILE A CERTIFICATE OF AUTHORITY WITH NEW JERSEY:

According to New Jersey law, failure to file the Certificate of Authority, will prevent you from filing or maintaining any legal action or proceeding in New Jersey. This means that if you needed to file a lawsuit to protect your business, without the certificate, your case would be dismissed. In addition, the New Jersey Attorney General may file a legal action preventing you from operating your business in the State. In addition, you can face a fine of $200 for each year that you do not have the Certificate of Authority.

Despite these penalties, failure to secure the Certificate of Authority does not impair the validity of a contract or act of your company or prevent you from defending against any lawsuit in New Jersey. Likewise, failure to obtain the certificate will not affect the limited liability status of your business.

If you are unsure whether you are "transacting business" or "doing business" in New Jersey, please do not hesitate to give us a call at (212) 547-8857 or schedule a consultation online and we'd be happy to discuss these issues further and help you reach a resolution.

Disclaimer: This blog post and similar posts are not to be considered as providing legal advice. The discussion here is meant for educational and informational purposes only and shall not create an attorney-client relationship with the readers of this content.