How to Start an LLC in New Hampshire
Those who want to start an LLC in New Hampshire must follow the rules and file the correct paperwork. We’ve prepared a step-by-step guide to help you. It includes a look at some of the unique features of doing business in New Hampshire with some tips and tricks for forming an LLC.
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The place to start with establishing an LLC in New Hampshire is to pick a name to call your company. New Hampshire requires your name to be distinguishable from all other businesses registered in the state.
New Hampshire is unique in that it also includes businesses dissolved within the past 120 days as part of the list of names that can’t be used or be similar to when choosing a business name.
Additionally, New Hampshire has its own rules about what names are considered to be similar to other business names. Articles like “the” and “an” don’t make it unique. Plurals, abbreviations, and similar-sounding names that are spelled differently are also not allowed.
Other things that don’t make a business name distinguishable are extensions like LLC, numbers, and punctuation. Those that are limited liability companies must have “LLC” in their name.
Name your LLC
Think you have the perfect name for your LLC? Check to see if it’s listed in the state’s business directory. Names that don’t come up in a search are free to claim.
You should see how other businesses are named by using a free name search tool on the New Hampshire Secretary of State’s web page. All you have to do is plug in the proposed name of your business and see what comes up. While you may find a business that already has your desired name, looking at all the similar names may help you churn out a creative one that no one else has.
Researching name availability is your first step. LLC owners must use all due diligence to make sure the business name they want isn’t being used somewhere else in the state.
Another place to check to see if your desired name is being used is on social media. Sometimes, people start a side business or a sole proprietorship and don’t register the name with the state. However, they will use it to promote their business on social media.
You should also check for a matching domain name. If someone else is using the business name as a domain, it could be confusing to your customers.
Select a registered agent
The State of New Hampshire requires all business entities to have a registered agent according to state law Section 293-A: 15.07.
A registered agent will receive legal documents, including service of process.
Those who don’t select a registered agent can’t legally do business within the state.
New Hampshire has rules about who can be a registered agent. They include:
- The person must be at least 18 years old
- The registered agent must live in the State of New Hampshire
- The person selected must have a street address (not a P.O. box)
Anyone that fits those rules can be your registered agent. It can be yourself, an employee, another member of your LLC, a family member, and even a friend.
Many businesses opt to hire a registered agent service. Most also offer other types of business services like incorporation and entity setup services, tax setup services, and even business name selection services.
Make sure any professional business you want to help with your registered agent needs is approved to do business in the state. Expect to pay an annual fee for this service.
File Certificate of Formation
The next form to file is a Certificate of Formation with the state, which is form PLLC-1. This is an important piece of paperwork that makes your business a legal entity in New Hampshire.
New Hampshire asks that you create a free account with NH QuickStart on the Secretary of State’s website.
NH QuickStart is the Secretary of State’s online platform for business registration. You can use the platform to easily get forms and information. It also allows you to use one-click form filing.
You can avoid setting up an account by clicking through the business name search and forms. However, it is worthwhile to go ahead and register if you plan to start a business. That way you will be informed of any changes the state has regarding businesses, registration deadlines, and other important information. Plus, it will be easier to find forms and other necessary materials.
A Certificate of Formation provides certain basic information to the state about your business. In New Hampshire, this includes:
- The business name
- The business address
- The management structure (manager-managed, member-managed, single-member LLC)
- A description of the activity the business will be doing
- The registered agent’s name and street address
- Whether the LLC is vested in a manager
- The printed name and signature of someone who will be signing documents
- Names, business mailing addresses, and titles of all LLC managers or LLC members
You can fill out and submit your LLC formation documents here.
New Hampshire charges entrepreneurs a $100 fee for filing Certificates of Formation, which is referred to as Articles of Organization in other states. There is an additional $2 convenience filing fee for filing online. You can also mail your documents to the Corporation Division, NH Dept. of State, 107 N Main St, Rm 204, Concord, NH 03301-4989.
However, the State of New Hampshire is particular about mailed forms. They must be printed on 8-inch by 11-inch standard paper in black ink. Checks paying for the $100 fee must accompany them. Checks should be made out to The State of New Hampshire.
New Hampshire processing time
How quickly the state processes your Certificate of Formation depends on the way you send it to the corporate division. Online is fastest with your LLC approved in under seven days. Those who mail in their forms will save the $2 but will wait between one and three weeks to get it approved.
Create an LLC operating agreement
New Hampshire doesn’t require a business to have an operating agreement to gain approval from the state. However, business experts say it is always a good idea for an LLC to have an operating agreement for many reasons.
An operating agreement keeps the state out of the business. How? States have laws about business operations, but an operating agreement takes priority. Those who don’t have an agreement or who don’t detail how certain elements are handled fall by default under state law.
An operating agreement also spells everything out for all the LLC members so there are no assumptions or miscommunications. It also outlines processes in specific situations, such as the death of a member.
An operating agreement should include:
- Expected LLC activities
- Who makes major decisions
- Voter rights
- How member interest transfers happen
- Initial contributions
- How profits, losses, and distributions are managed
- Management methods, structure
- Compensation to LLC members
- Bookkeeping methods
- Dissolution procedures
It takes a lot of attention to detail to run a business in New Hampshire. Setting up an LLC can be time-consuming. From dealing with tax structures and opening checking accounts to setting up daily business operations and understanding insurance policies, running a business can be tough.
Get your EIN
A federal employer identification number (EIN) is a number assigned by the Internal Revenue Service to your business. It’s like a Social Security number for a person as it’s a way the IRS can track your business for tax purposes. Getting an EIN is highly important for this type of business structure as you will use it to file taxes, hire employees, and get loans.
An EIN is obtained by applying online with the IRS. Not all businesses need an EIN. However, you do need an EIN, if your business:
- Plans on having employees
- Files business taxes
- Is an LLC with multiple members
- Is bought by you from someone else or you inherited it
- Offers a Keogh plan or solo 401(k) retirement plan
- If it ever files for bankruptcy
You can get your EIN by visiting the IRS website.
Open business bank accounts
An LLC in New Hampshire needs bank accounts to pay bills, deposit checks, and buy inventory. One of the first things that need to be done before you open your doors is opening a checking account in the business name.
Having a separate checking account makes good business sense as it keeps company money separated from personal finances. It also helps in record-keeping.
A business credit card could be helpful too.
It’s a smart move to do business with a bank that is also a Small Business Administration (SBA) lender. The SBA is a federal program for small businesses. Every bank isn’t a lender. Those banks in New Hampshire that are SBA lenders include TD Bank, Merrimack County Savings Bank, Eastern Bank, and People’s United Bank among others.
All have different interest rates on loans, even though all are SBA lenders. Rates range from 4.9% to 6.7%.
Review LLC tax rules in New Hampshire
LLC owners will pay federal taxes and state taxes on the company’s profits on their own personal income tax returns.
New Hampshire does charge a franchise tax, which the state calls a corporate LLC tax. The state will drop its corporate tax rate in 2023. It was 7.7% for tax periods ending on or after Dec. 31, 2019. Those with tax periods ending on or after Dec. 31, 2022, will get a 7.5% rate.
It also has a self-employment tax, which is 15.3%. Startup owners can include expenses as deductions.
New Hampshire is one of five states that doesn’t charge any sales tax.
File an annual report
New Hampshire requires all businesses to file an annual report by April 1 annually. The report is to update any changes to the business, such as a change of address or in a registered agent.
The fee for filing an annual report is $100. As in the Certificate of Formation, those filing online will pay an extra $2 while those mailing in paperwork will need to include a $100 check with no additional fee.
The state charges an additional $50 if you file your annual report late.
You can file a New Hampshire annual report with the New Hampshire Secretary of State’s office.
Get insurance for your LLC
It’s important to protect yourself and your business with insurance. That includes liability insurance, worker’s compensation insurance, property, and equipment insurance and if you can, health insurance for yourself, other LLC members, employees, and their families.
New Hampshire doesn’t require liability insurance under its state laws. Your LLC does give business owners personal liability protection. Personal assets like your home or personal savings account cannot be used to cover any business debts. However, liability insurance can provide additional support. It protects your company if a customer seeks legal damages for a product or service.
The state requires worker’s compensation insurance under state law RSA 281-A:5. Under the law, every employer who has full-time or part-time employees is required to have worker’s compensation insurance written by a carrier. It doesn’t exclude relatives either so every family-run business must also have the insurance even if all their employees are children, parents, a spouse, aunts, uncles, or other relatives.
Property and equipment insurance also isn’t required by the state but it’s a good way to protect your assets in case of fire, storm, flood, or theft.
Additional resources to help you set up a business in New Hampshire
New Hampshire has several agencies and resources to help you create your LLC. Here is a list of those who can offer great information and guide you.
What’s the difference between a business license and a state registration in New Hampshire?
All businesses are required to file a Certificate of Formation to tell the state they are doing business and show up on tax rolls. The state doesn’t give business licenses. A business license is a separate document given by a local city or county to allow you to do business.
Do I need to get a New Hampshire tax number?
Yes, you will need a state tax number to pay state taxes. Business file for the NHES Employer Account Number on the New Hampshire Employment Security (NHES) website. The state will send your nine-digit employer account number after the paperwork is submitted. The Determination of Liability notice that comes with your account number will also have your state tax rate.
How long does it take to form an LLC in New Hampshire?
Once you’re done your research and are ready to file paperwork, you can have your LLC approved by the state in three to five days if you file online.
What is a trade name in New Hampshire?
A trade name or a DBA in New Hampshire is when a business does business in any name other than the name registered with the state on its Certificate of Formation. The state considers a trade name the same as a “doing business as” name. Businesses are required to register trade names as well as their registered company name.
How do I get a certificate of good standing in New Hampshire?
You have to request a certificate of good standing by mail in New Hampshire. Write a request to the New Hampshire Secretary of State, Corporation Division. You must include the business entity’s name, where you want the certificate mailed, and a check or money order for $5.
Can I reserve a business name in New Hampshire?
Yes, you can go through the Secretary of State to reserve a business name. The process begins when you apply for a name reservation. Business names can be reserved for up to 120 days.
How do I register a farm name in New Hampshire?
A farm name is considered the same as a trade name and can be filed with the Secretary of State’s office online or by mail.
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