What Will Be the Principal Office Address of Your Business?
Previously in our business formation series, we covered the jurisdiction of operations for New Jersey business owners. You learned about key legal and compliance considerations when selecting the state where your venture will operate. Furthermore, it was made clear that there is a significant difference between the jurisdiction of operations and the jurisdiction of formation. Today's article will expand on this knowledge by introducing another key address that New Jersey business owners should be aware of—the principal office address. Specifically, you'll learn:
What the principal office address is and what it is used for
Legal considerations when selecting a location for your office address
The difference between the principal office address and the registered agent address
And much more. Read on!
Understanding the Principal Office Address
By now, you understand that you must make several decisions regarding the formation and operation of your business entity. First, you must choose a state to form your business, the specifics of which are covered in our second article. Second, you must choose a state to operate your business, which may or may not be the same as the state of formation. You also know that New Jersey mandates all businesses to have a registered agent address, which must be a physical location.
In addition to all this, you must choose a principal office address—the official physical location that will be designated as the headquarters of your company. This principal office address is essential during the business formation process because it acts as the main point of contact for the company. It is where key administrative and management activities are performed, and it is where the company conducts most of its core operations.
Legal Restrictions to Remember When Choosing a Principal Office Address
Choosing a principal office address for your business is not as simple as randomly picking a location or using one of your business's primary addresses. It is a bit more complicated than that, and here are the factors that you should keep in mind:
It must be a physical location: Your principal office address cannot be a P.O. Box. New Jersey law mandates that it must be a physical location where business operations are conducted.
No shared office for Corporate Transparency Act compliance: Under the Corporate Transparency Act (CTA), your principal office address cannot be a shared office space, virtual office, or co-working space. It must be a distinct, verifiable location that ensures transparency about where the business entity is located.
Zoning and permits compliance: The primary location chosen for the principal office must adhere to local zoning laws. If located in an area not zoned for commercial use, you may have to obtain special permits or find a different location that fits the intended use.
Address consistency across documentation: The address you provide during business formation should be consistent across all official documents, including tax filings, business licenses, and permits.
Reporting and disclosure requirements: You must accurately report the principal office address and ensure it is updated if your business moves. Failure to do so can result in penalties and legal issues.
Principal Office Address vs. Registered Agent Address
At this point, you may have thought that the principal office address sounds a lot like the registered agent address, which we covered in article six of our business formation series. While there are similarities, there are also important distinctions between these two addresses.
Purpose: The principal office location is where the business conducts its core operations and where the headquarters are based. On the other hand, the registered agent address is where the business's registered agent receives official legal documentation like lawsuits, subpoenas, and other notices from the state.
Usage: The principal office address is used for business licensing, tax filing, and official records. It is where the state and federal government expect to find the company's management. The registered agent address is where legal documents are delivered to the business. The registered agent must be available during regular business hours.
Restrictions: The principal office address must be a physical location and comply with zoning laws, whereas the registered agent address can be the physical address of an individual registered agent or a company that offers registered agent services.
Tips for Choosing a Principal Office Address for Your Business Entity
Here are some factors to keep in mind when selecting a principal office location for your business entity:
Select a physical location: Ensure that the chosen location is real and verifiable. It cannot be a P.O. Box or a shared office space.
Consider zoning laws: Verify that the chosen location complies with local zoning laws.
Accessibility: It should be easily accessible for clients, partners, and employees.
Room for growth: If you plan to expand, choose a location that can accommodate growth to avoid moving and updating the address frequently.
Consult a New Jersey business lawyer: An NJ business lawyer can help ensure that the chosen address complies with all local, state, and federal requirements. They will help you avoid pitfalls that can lead to legal issues, fines, or delays in the business formation process.
Conclusion
Congratulations, you're now well-versed in the important locations your chosen business entity will need in New Jersey. We invite you to join us for the next article in our series, which will discuss another critical aspect of business formation: taxation.
Are you wondering about any of the issues mentioned above? Please email us at Info@staturelegal.law or call (732) 320-9831 for assistance.
At Stature Legal, our New Jersey business lawyers give business owners the clarity they need to fund, grow, protect, and sell their businesses. We are trustworthy business advisors keeping your business on TRACK: Trustworthy. Reliable. Available. Caring. Knowledgeable.®