If you’ve always wanted to be your own boss, you aren’t alone. According to a survey, nearly two-thirds of Americans dream of opening their own business. Establishing a New Hampshire limited liability company (LLC) is a great way to attain this goal.
New Hampshire offers unique benefits for small business owners. For instance, there’s only a limited personal income tax in the state. To take advantage of such benefits, however, you have to carefully create your LLC to meet local, state, and federal requirements, covering everything from business permits to taxes.
Luckily, the process is relatively straightforward. It’s all about breaking it down into digestible steps, following a particular order. This guide gives you the tools you need to do just that. Below, get a comprehensive, step-by-step overview of what it takes to start a New Hampshire business — and find out how the right LLC service can make the process even easier.
Creating Your New Hampshire LLC requires you to take the following steps:
Forming an LLC in Nebraska requires you to file a Certificate of Organization with the Secretary of State. This might sound simple at first, but important decisions need to be made before doing so. After that part is done, you will need to look at creating an Operating Agreement, obtaining any necessary professional licenses, and setting your business up to file taxes at the federal, state, and local levels.
To simplify the process of forming an LLC in Nebraska, we’ve put together a step-by-step guide detailing each step and answering any questions you may have.
Step 1: Name Your New Hampshire LLC
Your business is like a baby — you want to give it the perfect name. Strive for something that isn’t too complex so that people can recall it easily. A great business name should also provide some idea of what products or services you offer.
According to state law, your LLC’s name must:
- Include the words “limited liability company.” An abbreviation of “LLC” or “L.L.C.” is acceptable.
- Steer clear of prohibited words. Specific terms like “corporation” can’t be used, as they might confuse people regarding the type of business you own. You also can’t use restricted words, such as phrases associated with a government agency.
- Be distinguishable. This means the name is one-of-a-kind so that it can be easily identified in records. To ensure no other business is already using your desired name, check the New Hampshire Department of State Quickstart’s database of business names.
When selecting a name, also do your research regarding domain names. Your business website is a great marketing tool. Securing a domain that mirrors your business name makes it easy for customers to find you online. Check to see if your desired domain is available.
Once you have the perfect name, reserve it to make sure it doesn’t get taken by someone else. Complete the Application for Reservation of Name and send a copy to Corporation Division, NH Dept. of State, 107 N Main St, Rm 204, Concord, NH 03301-4989. You must pay a $15 filing fee.
Lastly, one thing you want to check before deciding on a name is whether it’s trademarked. Visit the United States Patent and Trademark Office website to see if your business name or logo is federally trademarked. If it’s not, you can take steps to trademark your name, if you wish. An easier route to go maybe to get a state trademark, one that applies only within New Hampshire.
Step 2: Appoint a Registered Agent in New Hampshire
A New Hampshire registered agent accepts legal mail on your LLC’s behalf. This must be a person or business with a physical address in New Hampshire, not just a P.O. box, because certain documents — like lawsuits — are legally required to be delivered in person. New Hampshire requires you to appoint a registered agent for your LLC.
While you are allowed to appoint yourself as the registered agent, this presents drawbacks. For one thing, the registered agent’s address is a matter of public record, and you probably don’t want your home address easily accessible. For another thing, likely, you won’t always be at your business during regular business hours. Hiring a third-party agent gives you privacy and flexibility.
Some additional benefits of using a registered agent service include:
- Easily operate as a foreign LLC: If you plan on doing business outside the state where your LLC is registered, a registered agent service can easily hold a small registered office in those states for you.
- Avoid the risk of noncompliance: With someone designated to receive all of your legal paperwork, you can rest easy knowing they’ll make sure you meet deadlines so that you remain in good standing.
New Hampshire does allow you to hire an external registered agent, provided they are a legal person or business with an in-state address.
Step 3: File New Hampshire Certificate of Formation
With your LLC name and registered agent, you can go ahead and file your New Hampshire Certificate of Formation. Commonly referred to as “Articles of Organization” in other states, this paperwork is submitted to the New Hampshire Secretary of State’s Corporation Division. If approved, it formally establishes your LLC as a legal business entity.
You can file the paperwork by mail, online, or in person. The filing fee for mail is $100, and processing usually takes one to three weeks. The filing fee for online is $102, and processing usually takes three to seven business days. For a walk-in filing, you’ll have to pay $125, but your paperwork can be approved in just a couple of hours.
To complete the Certificate of Formation paperwork, you need to provide the following details:
- The LLC’s name
- The LLC’s physical business address and (if different) mailing address
- The resident agent’s name and address
- A description of the nature of the business and/or the six-digit North American Industry Classification System (NAICS) code. You can look up the code applicable to your business here.
- The names of the LLC’s managers (owners)
You must also specify whether the management of the LLC is “vested in a manager(s).” This means choosing between a “member-managed” and “manager-managed” model of business. If you’re a smaller operation, and all managers are involved in day-to-day business decisions, member-managed is suitable. Larger LLCs with multiple members may do better with a manager-managed structure.
Step 4: Create an Operating Agreement
Creating an LLC Operating Agreement is best practice in the business world. This valuable document defines who owns your business and how it will be run. Points to cover include who owns the LLC, how much of the LLC they own, how profits are to be divided, and how important decisions — like a potential sale of the company — might be made.
New Hampshire doesn’t require an Operating Agreement with your Certificate of Formation, but you should create one anyway. By providing clarity on business operations, this document prevents disputes between LLC members. It also makes your business more credible. For example, any reputable potential investor will ask to see an Operating Agreement to ensure your business is run well.
Step 5: Apply for an EIN
With the above steps complete, you can request an Employer Identification Number (EIN). This unique tax ID is what you will need for your tax paperwork if you have more than one member or plan to have employees. However, even if you’re the only owner, it’s still a good idea to apply for an EIN. Having an EIN also simplifies bureaucratic steps like opening a business bank account.
Apply for your EIN on the Internal Revenue Service (IRS) website. It doesn’t cost a thing. If you want help with the process, ZenBusiness can take care of your EIN application. While we handle the tax details, you can focus on the more exciting aspects of starting your business.
How much does it cost to start an LLC in New Hampshire?
When you file your Certificate of Formation, you must pay a $100 filing fee. There is an added $2 processing fee for online filing. If you choose to file in person, expect to pay $125.
New Hampshire also requires LLCs to file an annual report by April 1 of every year. The fee is $100 to file, plus $50 if filed late. You may also need to pay for business permits and licenses. Check with the U.S. Small Business Administration (SBA) for federal licensing requirements. New Hampshire has a list of business areas requiring licensure. It’s up to you to ensure your LLC has all the federal, state, local, and industry-specific licensing it needs.
What are the benefits of an LLC in New Hampshire?
The benefits of forming a New Hampshire LLC include:
- Unique tax requirements: Personal income taxes are limited, and New Hampshire is also one of the few states that don’t impose a sales tax.
- Well-protected Operating Agreements: The New Hampshire LLC Act aims to give “maximum effect to the principle of freedom of contract and to the enforceability of operating agreements.” Basically, this means Operating Agreements are strongly upheld, which prioritizes the interests of LLCs.
- Different member classes: The New Hampshire LLC Act also allows for the contractual freedom to establish different “classes” of membership. For instance, you can have voting and nonvoting members when it comes to important decisions.
Learn more about the benefits of the general LLC business structure.
How is a New Hampshire LLC taxed?
Most LLC owners decide to have their business taxed the default way, which is as a sole proprietorship (for single-member LLCs) or a partnership (for multi-member LLCs). This method only requires partners to pay taxes on their percentage of their profits on their personal tax returns. The LLC itself is not taxed. Another option is to choose to be taxed as a corporation. If you have formed a large LLC or bring in high earnings, this option might make more sense. Note that New Hampshire does not impose a sales tax. Personal income tax is also limited, taxing investment profits like dividends at just 5%.
However, New Hampshire imposes a business enterprise tax, ranging from 0.5% to 0.75%, which usually impacts businesses with an enterprise value of over $104,000. There is also a business profits tax, which varies annually but is generally around 8.5%. Only LLCs with more than $50,000 in gross receipts must file the business profits tax.
New Hampshire offers a unique situation in terms of taxes, which can be advantageous — but also confusing. A professional accountant can help guide you.
New Hampshire LLC FAQs
- What is the processing time to form my New Hampshire LLC?
This depends on how you file your Certificate of Formation. If you file by mail, expect to wait for one to three weeks for processing. An online filing is usually processed within three to seven business days. An in-person filing can be completed on the same day.
- Do I need to file my Operating Agreement with the state of New Hampshire?
While it’s not mandatory to file it with the state, creating an Operating Agreement helps to prevent conflicts between members and clarifies general operations.
- What tax structure should I choose for my New Hampshire LLC?
Every business has different needs. The answer depends on your LLC’s unique characteristics, like annual profit and the number of employees. Consult a tax professional for personalized advice.
- Does New Hampshire allow a Series LLC?
You may not establish a Series LLC in New Hampshire.
- Which licenses and insurance are required for an LLC in New Hampshire?
This is determined by the type of produce or service you provide. Depending on your business, you may need licenses, permits, and/or insurance coverage in everything from health and safety to building and construction.