You are advising a client regarding the organization of a new business venture to be based in New Jersey. You have determined to recommend a limited liability company as the form of business entity. Another decision remains: New Jersey LLC or Delaware LLC?
In many cases the decision will be easy because no compelling business reason will justify the additional annual costs, even though not material, of maintaining an out-of-state business entity qualified to transact business in New Jersey. However, if the agreement among the owners will be complex; if you anticipate partnering with a venture capital fund, private equity fund or other institutional investor; or if you anticipate accessing the capital markets for financial support, the balance ought to tip toward Delaware.
