Let’s be honest, there are a lot of hoops to jump and red tap to cut through to get a Limited Liability Company. There are tons of forms, licenses and registrations you’ll need to fill out and obtain. But once you’ve filled out all of the paperwork and the dust from your fervent formation activities, how long does it actually take to get an LLC in New Hampshire? We’ll discuss all things about New Hampshire LLC formation, doing business in the state, and formation time frames in this full guide.
Discovering New Hampshire
New Hampshire is rich in history, being the first of America’s colonies to draft its own constitution and declare independence from Britain. It’s called the Granite State because there’s a long history of granite mining in the state. It borders Maine, Massachusetts, Vermont and Canada. New Hampshire is home to lots of mountains. It’s even home to Mount Monadnock, which is among the most-climbed mountains in the world. It also has forests, the Hills and Lakes Region, which is unsurprisingly full of hills and lakes, and beaches along the Atlantic Ocean.
New Hampshire still mines granite and there are still quarries in the state, however it now predominantly mines gravel and sand, as well as precious stones. It produces a lot of beryl and garnet, for instance.
Economic Overview of New Hampshire
New Hampshire has a GSP (Gross State Product) of $83.7 billion, with a growth rate of 15.2k% from 2018-2023. The top-performing industries in the state according to revenue are Colleges & Universities, Hospitals, Property, Casualty & Direct Insurance, New Car Dealers, and Public Schools. The companies in the state that hire the most people are Dartmouth Hitchcock Medical Center and Clinics, DeMoulas Supermarkets Inc., Walmart Inc., Bae Systems Plc, and Fidelity Investments, Inc. And the sectors that have contributed the most to the state’s Gross Domestic Product or GDP in 2023 are Real Estate & Rental & Leasing, Manufacturing, Professional, Scientific & Technical Services, Healthcare & Social Assistance, and Wholesale Trade.
Business Environment in New Hampshire
According to usnews.com, New Hampshire ranks #11 in the U.S. for business environment, #11 for employment and #3 for growth. It’s #36 in affordability and #1 in economic opportunity.
Its cost of living index is 102.5, while the national number is 100.0, but the median household income is $88, 465, 18,748 more than the national average, and the poverty rate is only 7.2% (the national average is 12.8%).
State-Specific Regulations and Incentives for Forming an LLC in New Hampshire
Here’s a look at the incentives that the state of New Jersey provides to help businesses succeed.
- Regenerative Manufacturing Tax Exemption: If your business is somehow involved with regenerative manufacturing, it could qualify for an exemption from the Business Profits Tax (BPT) as well as the Business Enterprise Tax (BET) for as long as 10 years. Employees of the regenerative manufacturing business can have their student loans forgiven for 5 years or more, too.
- Economic Revitalization Zone Tax Credits (ERZ Tax Credit) Program: If your business creates at least one new full time job and makes qualifying capital improvements, it could be eligible for a tax credit of as much as $240,000 over five years. Credits are awarded depending on the amount of the capital investment, the total new jobs that are created and their salary level. The Economic Revitalization Zones are in 211 areas in the state, and your business must be located in one of them to qualify. The credits must first be applied against Business Profits Tax (BPT), and then anything leftover can be applied to the Business Enterprise Tax (BET). You can carry forward unused credits for up to 5 years. The state has set aside $825,000 for these ERZ tax credits.
- Research and Development Tax Credit: If a business is engaged in certain manufacturing research and development, then it could qualify to receive a credit that equals 10% of eligible R&D expenses, or $50,000, depending on which is less. Credits are required to first be applied to Business Profits Tax (BPT), with leftovers being applied to the Business Enterprise Tax (BET). Credits that are unused can be carried forward up to 5 years.
- Coos County Job Creation Tax Credit: Any business that chooses to locate or expand into Coos County can claim a tax credit for $750 per job per year up to 5 years on new jobs that pay an hourly wage that’s a minimum of 150% of the state’s average hourly wage. A credit of $1,000 per job per year up to five years is available for new jobs that pay an hourly wage that’s a minimum of 200% of the state’s average hourly wage. You’re required to use the credits first against Business Profits Tax (BPT) and the remainder can then be applied against Business Enterprise Tax (BET). And any unused credits can be carried forward up to 5 years.
- WorkInvestNH: These are reimbursable training grants for businesses with physical locations in New Hampshire, or who have the intention of moving to the state. To be eligible, you have to make a 1:1 cash match to match the grant funds. And the minimum grant allowance is $750.
Pros and Cons of Establishing an LLC in New Hampshire
Operating a Limited Liability Company in New Hampshire has both perks and downsides.
People are moving to New Hampshire. According to United Van Lines’ National Movers study, 54% of the moves in New Jersey in 2023 were people moving to the state, not away from it. And of all of the people who answered the survey, ⅓ of them said they were moving to the state so they could be closer to their families.
New Hampshire doesn’t charge state income taxes.
The state had the highest GDP growth rate in 2022, and the economy is rapidly growing and getting stronger.
There are also negative aspects of running an LLC in New Hampshire.
New Hampshire is unique in that it taxes LLCs. Single member LLCs in the state are taxed as sole proprietorships, and multi-member LLCs are taxed as general partnerships. That’s a pain because the main benefit of LLC ownership for many business owners is that LLCs are taxed as pass-through entities in most states, and by the IRS. That means that the fact that New Hampshire doesn’t charge state income taxes would ordinarily be great news for LLC owners, until you find out about these extra taxation rules for LLCs in the state. Basically, that benefit isn’t enjoyed by LLC owners in New Hampshire, and you may want to look into taxing your business as a corporation.
The majority of people living in New Hampshire weren’t born in New Hampshire, and because of this, the state’s population and economic future rely on migration to the state- and the state’s population growth has been slowing down for the past 24 years. More than half of New Hampshire’s new residents from 2010-2022 were migrants from other countries. And from 2017-2022, the number of deaths in the state outnumbered the number of births. This means that the future of New Hampshire primarily depends on its ability to lure in new residents from other states. The economy, real estate market, government funding to the state, and more are dependent on the state’s population, and if that’s only going up because people are migrating to the state, that’s risky because, well, what happens if people stop relocating to New Hampshire?
There are a little more than two times more job openings in New Hampshire than there are unemployed workers in the state. This means if you have job openings, it will be difficult to fill them. It’s not that the workers aren’t qualified to fill your opening, but that there simply aren’t enough workers available to fill empty positions. And your company’s position will be forced to compete with other positions, which may have higher pay or better incentives than yours.
Procedure of Establishing an LLC in New Hampshire
Before you rush off to quickly get your LLC, you need to learn how to form a Limited Liability Company in New Hampshire. Our guide will help you understand each step.
- Get a Certificate of Formation Form: This is the first step on your LLC journey is to get a Certificate of Formation form. (It’s also referred to as an “Articles of Organization” form.) Luckily, it’s not a hard form to obtain. It’s available from the Secretary of State, either on their website or by going to the Department of State’s office in person.
- Choose a Business Name: Believe it or not, business names have a lot of technicalities. First, you have to think of one that matches your company brand and is catchy. But the Secretary of State also requires businesses to use a name that’s unique to them. In other words, your business isn’t permitted to use a name if it’s currently registered to another business in the state. Since you’re probably not a wizard that can just instantaneously pull information from the ether about whether your business name is reserved by other establishments in the state, it’s a good thing that there’s a handy search feature of the business name database on the Secretary of State’s website. Once you find a business name that’s available, you need to file an Application for Reservation of Name to lock it in before another company takes it.
- Get a Registered Agent: Another legal requirement for your LLC is that it must have a “registered agent”, which is someone who receives mail from government agencies (like the Secretary of State) and legal notices at their address for your business. You’re free to choose a trustworthy and reliable individual, such as a friend or relative. Alternatively, for even more peace of mind, you could choose an experienced professional registered agent service.
- Choose Your Business Address: Your LLC’s business address is another important consideration. Your business address will be put on the public record, and the fact that everyone has access to it makes using your home or personal address a less-than-ideal option because of the security and privacy risks it poses. Some of the options available to you to protect your privacy include using your registered agent’s address, or getting a virtual address or virtual office.
- Sign and File Your Certificate of Formation: Make sure that all of the information is correct on your form, and then the last step is to sign and file your Certificate of Formation.
Necessary Documentation for Filing an LLC in New Hampshire
Here’s a look at several documents you need to have onhand when filing for an LLC.
- Certificate of Formation: Your Certificate of Formation form is like an application to get an LLC, so it’s your primary formation document. It’s your business’s introduction to the state government, and its registration, so it contains a lot of vital business information. Some of the information requested on the form is your business’s name, purpose, duration, address and registered agent’s information. You’ll also need to include names and contact information for each LLC member, and information about managers, as well.
- Operating Agreement: An operating agreement isn’t a legal requirement for LLCs, it’s more of a business essential, and both the Secretary of State and consultants recommend that you create one. A good operating agreement should include all of the basic information about your business that’s listed on your Certificate of Formation (name, duration, address, registered agent information), plus instructions for your LLC members to follow. This includes not only contact information for each LLC member, but a statement of their roles and contributions to the company, a detailed description of their shares of profits and losses, who they answer to, etc. And when it comes to managers, their information should be listed, as well as information about their voting rights and meeting schedules. And instructions for how to add or remove an LLC member, as well as what to do if a member dies, should also be included.
- Initial Report: LLCs in New Hampshire must file an Annual Report, which updates their information with the Secretary of State. The first one you file is called an “Initial Report”, and it should be filed along with your Certificate of Formation.
- Name Reservation Application: We’ve briefly discussed this form when discussing how to choose a business name. To reserve a business name so that other companies can’t use it, you must file an Application for Reservation of Name form with the Secretary of State.
- Employer Identification Number (EIN): You’ll need an Employer Identification Number, or EIN, to complete lots of important business activities, like opening a business bank account, filling out tax forms, or hiring employees. To get an EIN for free, just head over to the IRS website.
- Business Licenses: Your business will need a number of licenses and permits, depending on the types of goods and services you provide, and where you conduct business. You’ll need to check in with the county clerk in your area to find out about local licenses and permits you may need, as well as with the New Hampshire Economic and Labor Market Bureau.
- Tax Registrations: You’ll need to register your business with the New Hampshire Department of Revenue Administration (DORA) to set things up like sales tax collection.
Legal Requirements for Starting an LLC in New Hampshire
Your LLC is legally required to have a registered agent. Some of the requirements of a registered agent are that they have a physical address in the state of New Hampshire, and be over the age of 18. You’re allowed to designate an individual, or a professional registered agent service.
Your LLC will be required to file an annual report with the Secretary of State each year before April 1st. Failure to file could mean that your Limited Liability Company will lose its good standing status with the Secretary of State.
Time Frame for Establishing an LLC in New Hampshire
To fully understand formation times, you must understand the different designations of processing times. Processing times are the amount of time it takes for workers to process your documents once they’re received. Approval times are how long it takes from the time you submit your documents to the time your LLC is approved, and processing times are included in this.
How Long Does the Initial Paperwork Take in the State of New Hampshire?
Approval times if you file by mail are around 3-5 weeks, while online filings take 7-10 business days.
Processing Times in the State of New Hampshire
Processing time for both online and mail filing takes 7-10 business days.
Common Delays in the LLC Formation Process in New Hampshire
Here are some of the factors that could slow your formation process.
- Timing: Government offices don’t work on weekends or government holidays, so you’ll want to avoid filing on or around them because weekends and holidays can cause delays. Also, there’s a high filing volume at the first of the year and the end of the year, which will cause delays, too.
- Errors with Documents: Have you ever taken a standardized test where if you fill in the wrong circle it can mess up the whole thing? Your Certificate of Formation is quite similar to that. You need to make sure you fill in all of the information it requests, it must be accurate information, and you need to make sure you have the right number of copies (typically two). If you get any of these tasks wrong, your form will be rejected and you’ll have to re-submit everything, which obviously slows the process down.
- Your Filing Method: Generally speaking, if you file by mail then you can expect slower processing times. To avoid slow processing times due to the slow speeds of the postal system, you should choose another filing method.
Expedited Processing for LLC Formation in New Hampshire
Expedited processing is unquestionably the best method to choose for fast processing times. But does New Hampshire offer it?
What Are the Expedited Options Available?
New Hampshire doesn’t provide expedited processing if you file by mail or online. They do have an expedited processing option if you file in-person.
Additional Costs for Expedited Services in New Hampshire
Because of the added effort involved with expedited processing, you’re required to pay an extra fee on top of the obligatory formation filing fees. However, since expedited processing for walk-in filings isn’t exactly common, they don’t really advertise it. If you want to know more about this option then you should contact the New Hampshire Secretary of State.
Comparing LLC Formation Time Frame in New Hampshire with Other states
To understand New Hampshire’s formation times, we’ll give you an overview of the time frames of other states. This is especially helpful when determining whether to create a domestic or a foreign LLC.
Brief Comparison with Key States
New Hampshire’s processing times for both mail and online filings take between 7-10 business days. Their only expedited processing option is for in-person filing.
We’re not really sure how fast New Hampshire’s expedited processing is, but we know that Delaware, Michigan, Montana, Nevada and West Virginia all have the fastest expedited processing at just one hour. Wyoming, Wisconsin, Tennessee, South Dakota, New York, Missouri, Minnesota, Kentucky, Kansas, Colorado, Alaska, and Alabama have immediate online processing. And Alabama, Massachusetts and South Dakota all have 1-2 day mail processing, and Ohio and Kentucky have 1 day mail processing.
Several states don’t provide expedited processing, and Arizona’s takes 5 days, while Maryland takes 7 days. Online processing in Washington takes 12-14 days, and Arizona has 14-16 day processing times if you file online. And processing time if you file by mail in New York takes 8 months.
Why is New Hampshire a Favorable Place for Forming an LLC?
New Hampshire is a favorable place to form an LLC because loads of people are moving to the state, it doesn’t charge personal income taxes, and the economy is rapidly growing and getting stronger, which is great news for new businesses.
