New Jersey Just Cut the Cost to Start a Business — Here's How Much You'll Save

New Jersey Just Made It Cheaper to Open Your Doors

Starting a business in New Jersey got a little less expensive on July 1, 2026. Governor Phil Murphy signed a new law, P.L.2026, c.24, that cuts the state filing fees business owners pay when they form an LLC, incorporate, or launch a nonprofit. It's a small number on paper, but for the tens of thousands of New Jerseyans who form a new business entity every year, it's one less cost standing between an idea and an official launch.

What actually changed

The new law, formerly Assembly Bill A5325, dropped the fee to file a Certificate of Formation for an LLC from $125 to $100. Corporations get the same break: the fee to file a Certificate of Incorporation also fell from $125 to $100. Nonprofit organizations see an even bigger percentage cut, with the fee for an original certificate of incorporation dropping from $75 to $50.

The bill passed both chambers of the New Jersey Legislature unanimously on June 30, 2026, a rare show of bipartisan agreement in Trenton. It was sponsored by Assemblyman Roy Freiman (D-16), Senator John Burzichelli (D-3), and Senator Carmen Amato (R-9). Amato, a Republican, called it "a step toward creating a more welcoming environment for employers and job creators," while framing the fee as "an unnecessary cost" that the state no longer needed to collect at the old rate.

Why a $25 cut actually matters

On its own, $25 isn't going to make or break a startup budget. But formation fees are just the first of many small charges that stack up when someone launches a business: a registered agent fee, a business license, an EIN application (free from the IRS, but often bundled into paid filing services), and the cost of opening a business bank account. Lawmakers pitched the fee cut as a signal, not just a savings — a message to entrepreneurs that New Jersey wants to make the earliest, most fragile stage of business ownership less expensive to navigate.

New Jersey has historically sat in the middle of the pack for state LLC filing costs, more expensive than states like Kentucky or Arkansas but cheaper than Massachusetts, where LLC formation runs $500. The state also still charges a $75 annual report fee for LLCs and corporations, which was not touched by this legislation — so the upfront savings apply to the moment of formation, not the ongoing cost of staying registered.

How New Jersey now compares to its neighbors

Formation costs vary widely by state, and New Jersey's new $100 fee puts it in a more competitive spot regionally. Pennsylvania charges a flat $125 to form an LLC. New York's base filing fee runs $205 — and New York adds a separate publication requirement that forces new LLCs to run notices in two newspapers for six consecutive weeks, a step that commonly adds another $500 to $1,500 depending on the county. Against that backdrop, New Jersey's $100 fee, with no publication mandate, is now one of the more affordable options in the tri-state area, a detail state officials have leaned on in pitching the change as a way to keep entity formation from drifting to competitor states.

Who benefits most

The fee reduction applies to anyone filing a new Certificate of Formation or Incorporation on or after July 1, 2026. That includes:

• First-time founders forming a single-member LLC to formalize a side hustle or freelance business
• Small business owners opening a second entity, such as a holding company or a separate LLC for a new product line
• Nonprofit founders launching community organizations, who see their filing fee cut by a third
• Out-of-state entrepreneurs choosing to register a New Jersey entity because of its access to the New York and Philadelphia metro markets

The cut does not apply retroactively. If you already paid $125 to form your LLC or corporation earlier in 2026, there is no refund process — the new rate only applies to filings submitted on or after the effective date.

How this fits into New Jersey's broader small business push

The fee reduction follows a string of other New Jersey moves this year aimed at business owners, including expanded family leave protections and a stricter worker classification test. Unlike those changes, which add compliance obligations, the formation fee cut is one of the few recent New Jersey business policies that reduces cost rather than adding it. State officials have framed it as part of a broader effort to keep New Jersey competitive with neighboring states for new business formation, at a time when Delaware and other low-fee states continue to attract entity filings.

For owners weighing where and how to structure a new venture, the fee change is also a good moment to revisit bigger-picture questions: whether an LLC or a different structure makes more sense for tax purposes, and what licensing or insurance requirements apply once the entity is formed. Comparing LLC versus S corp tax treatment before you file can save far more than $25 down the line, and confirming what local business license you'll need keeps you from getting caught off guard by county or municipal requirements that formation alone doesn't cover.

What to do if you're forming a business in New Jersey now

If you're planning to file, submitting after July 1, 2026 means you'll automatically pay the lower fee — the state's online filing portal through the Division of Revenue and Enterprise Services reflects the new rate. There's no special code or waiver to request. Owners who used a formation service or attorney should confirm the service is charging the updated state fee rather than the old $125 figure, since third-party filing companies sometimes lag on passing through state fee changes to clients.

For owners still deciding whether to form an LLC, a corporation, or stay a sole proprietor, the lower fee removes one small piece of friction from that decision, but it shouldn't be the deciding factor. Liability protection, tax treatment, and how you plan to raise money or bring on partners matter far more than a $25 difference in filing costs.

It's also worth budgeting for what comes after formation. Most New Jersey municipalities require a separate local business license or permit before you can legally operate, on top of the state-level filing, and many industries — food service, childcare, construction, and personal care among them — layer on additional licensing requirements specific to that trade. New businesses that only budget for the state filing fee are sometimes surprised by these downstream costs, so it's worth mapping out the full list of required registrations before you commit to a launch date.

A word on timing if you're mid-formation

If you started the paperwork for your LLC or corporation before July 1 but hadn't yet submitted it, waiting a few days to file after the effective date would have meant paying the lower rate. That window has now passed, but the same logic applies to any future New Jersey fee changes: filing dates, not the date you drafted your formation documents, determine which fee schedule applies. If you're using an attorney or a formation service, ask directly which state fee they're billing you for and confirm it matches the current published rate on the Division of Revenue and Enterprise Services website, since some flat-fee packages advertised before July 1 may not have been updated to reflect the savings.

The bottom line

New Jersey's fee cut is modest, but it's a real, if small, cost reduction for anyone forming a new business entity in the state starting July 1, 2026. LLC and corporation filers save $25; nonprofit founders save $25 as well, a bigger percentage cut on a smaller base fee. It won't transform the economics of starting a business, but for owners already budgeting every dollar during launch, it's one less line item to plan around.

Photo by Adeolu Eletu on Unsplash