Side-by-side comparison of Limited Liability Company and Sole Proprietorship for New Jersey businesses. See costs, tax treatment, and which structure fits your situation.
| Feature | LLC | Sole Prop |
|---|---|---|
| Filing fee (New Jersey) | $125 | $0 |
| Annual fee | $0/yr | $0/yr |
| Liability protection | Yes | No |
| Self-employment tax | On all profit | On all profit |
| Formation complexity | low | none |
| Ongoing complexity | low | none |
| Can raise funding | Limited | Limited |
Pros
Cons
Pros
Cons
⚠High top marginal income tax rate of 10.75%
⚠Minimum corporate business tax of $500-$2000 based on gross receipts
Our free quiz calculates your actual tax burden under each entity type based on your income and New Jersey tax rates.
Take the QuizLimited Liability Company: Liability protection with pass-through taxation. The most popular choice for small businesses. Sole Proprietorship: The simplest structure. You and your business are the same legal entity. In New Jersey, LLC filing costs $125 and Sole Prop costs $0.
Both have similar tax treatment. The best choice depends on your specific income level and New Jersey tax situation. Use our free quiz for exact numbers.
LLC filing fee: $125, annual fee: $0/year. Sole Prop filing fee: $0, annual fee: $0/year.
Disclaimer
This comparison is for educational purposes only and does not constitute tax, legal, or financial advice. Filing fees, tax rates, and regulations may have changed since this data was compiled. Verify all information with the New Jersey Secretary of State and consult a qualified CPA or tax attorney before making entity selection or tax election decisions.
Affiliate disclosure: Formation service links on this page are affiliate links. We may earn a commission at no extra cost to you. This does not influence our comparisons or recommendations.