Now you are a small business owner in New Jersey! Congratulations and we are thrilled you are informing yourself about small business insurance. Great start and a move that is ultimately very beneficial to your financial assets and personal peace of mind. There is great information available for the small business owner today and if you haven’t found it yet, let us help lead the way.
Whether you’re operating your small business out of your home, in a rented space or maybe you have a kiosk, in all situations you have personal business property that you have invested in to run your New Jersey small business, whether it’s a laptop or a table top. Maybe you own your building and you want to protect it from the elements in the Garden State of New Jersey. Also a needed coverage regardless of the where you operate your small business is protection from lawsuits. At the very least; customers, vendors and property managers you work with will require proof of insurance because they understand the potential for the unexpected. The New Jersey AssureStart Business Owners policy (BOP) has you covered!
If you use vehicles for your small business in New Jersey, the law requires that you choose a car insurance policy that best suits your insurance and financial needs. A commercial auto policy can cover multiple drivers and business-use-only vehicles. Some other cases that might require commercial auto insurance; you are transporting products or people, or you want to insure workers that either use your business vehicles or drive their own cars for business purposes. Typically your business assets can be greater than your personal assets, a commercial auto insurance policy will allow for higher limit of liability protection than personal auto.
Speaking of employees, if your small business has employees, in the state of New Jersey Workers’ Compensation coverage is required unless you can obtain a Comprehensive Employers’ Liability Insurance policy, but as of 2013 Analysis of Workers’ Compensation Laws – no insurance carriers in the state offer this type of policy. Employers that secure Workers’ Compensation have some important legal protections including immunity from most lawsuits by injured employees. Workers’ Compensation insurance pays medical bills and some lost wages of employees who are injured at work, or who have work-related diseases or illnesses.
Have you grappled with what small business structure to use yet; Sole Proprietor, Corporation, LLC or Partnership? Here is a quick view of the Pros and Cons.
| BUSINESS STRUCTURE | PROS | CONS |
|---|---|---|
| Sole Proprietor | Easy and Inexpensive to Form Complete Control Easy Tax Preparation |
Unlimited Personal Liability Hard to Raise Money You and Your Business are ONE at Tax Time |
| Corporation | Limited Liability Ability to Generate Capital Corporate Tax Treatment Attractive to Potential Employees |
Time and Money Double Taxing if a Dividend is Paid to Shareholders Additional Paperwork |
| S Corporation | Tax Savings Business Expense Tax Credits Independent Life Separate from Shareholders |
Stricter Operational Process Shareholder Compensation Requirements |
| Limited Liability Company (LLC) | Limited Liability Less Recordkeeping Sharing of Profits |
Limited Life Self-Employment Taxes |
| Partnership | Easy and Inexpensive Shared Financial Commitment Complementary Skills Partnership Incentives for Employees |
Joint and Individual Liability Disagreements Among Partners Shared Profits |
In the state of Liberty and Prosperity, if the name you have chosen for your business is anything other than your own personal name, otherwise known as a DBA “Doing Business As” or a “Fictitious” name, then you’ll need to register it with the appropriate local government agency. The legal name of your business is generally required on all government forms and applications, including your application for tax ID’s, licenses and permits. The state of New Jersey has a section for Formation and Registration of your business. The state of New Jersey has a “one-stop shop for business” at the State of New Jersey Business Portal.
Some small businesses may need some form of license or permit to operate legally. The requirements vary by type of business, where it’s located and what rules apply. Find out if your New Jersey small business needs a license or permit the same Business Portal has a section on Licenses & Permits. One other site, if you haven’t found it yet is the U.S. Small Business Administration, which has tons of small business information.
Does your small business need an Employer Identification Number (EIN), otherwise known as a Federal Employer Identification Number (FEIN) – this is a federal requirement for tax filings? If you have employees, operate your business as a corporation or partnership, or file any tax returns for employment, excise, alcohol, tobacco or firearms than your business needs an EIN. Additionally, if you withhold taxes on income, other than wages, paid to a non-resident alien or if you have a Keogh plan your business needs an EIN. Here is how to Apply-for-an-EIN.
Small business owners especially new sole proprietors can find a wealth of information covering their federal tax responsibilities at the SB/SE Tax Center which is the IRS page for everything small business!
AssureStart’s products have been approved by the New Jersey Department of Banking & Insurance and are underwritten by Midvale Indemnity Company, NAIC 27138, an affiliate of American Family Mutual Insurance Company, 6000 American Parkway, Madison, WI 53783. 5166 08/14
