If you’re here, then you’ve made the decision to form a New Hampshire LLC.
Congratulations! Starting a new business or moving your existing business to a new state is a big step.
I’ll walk you through the steps you need to take to start your LLC, but first, let’s go over some of the fundamentals to ensure that a New Hampshire Limited Liability business (LLC) is the right business structure for your business.
(If you want to skip to the ‘how to form an LLC’ section, click here)
Table of Contents
What Is A New Hampshire LLC?
A New Hampshire LLC is a Limited Liability Company formed in the state of New Hampshire that is governed by the laws, regulations, and statutes of the state of New Hampshire.
Why choose An LLC?
There are three major benefits to forming a New Hampshire LLC rather than other business forms, such as forming a partnership, being a sole trader, forming an S Corporation, or becoming a C corporation.
1. Limited Liability And Asset Protection
The first advantage of choosing to form an LLC in New Hampshire instead of choosing another business entity is the limited liability and asset protection that come from owning a New Hampshire LLC. As the owner of the LLC, you aren’t individually liable for the debts and legal obligations of your New Hampshire LLC.
This implies that if your New Hampshire LLC is sued or goes bankrupt, the creditors of your New Hampshire LLC won’t be able to seize your home, vehicle, or other personal property. Their financial remedy is limited to the assets of your LLC.
During the past few years, Americans have encountered more than their fair share of unexpected events and calamities, such as fires, floods, hurricanes, and voracious winter storms, as well as a worldwide viral pandemic. In our constantly fluctuating economy, no business is ever truly safe. So we’ve come to accept that all it takes is one bad day to financially cripple even the most prepared businesses.
But the limited liability and asset protection that come from owning a Limited Liability Company (LLC) guarantee that you won’t lose your home and all of your belongings if you lose or have to close your business. This sort of protection is priceless to many small business owners.
The second advantage to choosing to form a New Hampshire LLC is the privacy and protection of your personal details that come from forming an LLC if you choose to protect them.
When you start a business under other structures, such as a sole proprietorship, you’ll be required to register certain information (such as your name and address) with New Hampshire’s Secretary of State. The information is then uploaded onto the Secretary of State’s website as your business’s contact information, which is a matter of public record.
Hackers and fraudsters have gotten better at what they do over the last decade, which is unfortunate for everyone on the internet. They may now steal your identity and utilize apparently insignificant pieces of information (such as your name and address) to rack up thousands of dollars in your name so quickly you may not even realize it until it’s too late. Because of how much technology has dominated the corporate sector, this is particularly worrisome to business owners.
When forming an LLC in New Hampshire, however, you can choose to keep your personal information private and off the public record.
All you have to do is utilize an LLC formation service which will put their business information on the public register, keeping your personal information out of the hands of malicious people and securing your credit score and identity.
The third important advantage of a New Hampshire LLC versus a corporation is that it offers considerable tax benefits.
If you form a corporation as your business entity, you will be subject to what is known as “double taxation”.
The term “double taxation” refers to the fact that the profits earned by a corporation are first taxed at corporate rates and then the profits (which have already been taxed once) are further taxed when they are given to corporate shareholders in the form of dividends. So because the funds are taxed twice, it’s called “double taxation”.
You avoid double taxation entirely if you form a New Hampshire Limited Liability Company (LLC), however.
The earnings of an LLC in New Hampshire are taxed at company rates, rather than corporate rates and the profits that are transferred to LLC members are considered to be personal income, not dividends. Of course, personal income taxes are paid when the LLC members file their income taxes annually, but not immediately upon receiving the income. This means that the funds of a New Hampshire LLC are only taxed once.
But wait, there’s more! New Hampshire LLCs receive even more tax advantages.
The 2017 Tax Cuts and Jobs Act added something called the Qualified Business Income Deduction (QBID). This is a type of tax benefit specifically for LLCs. This means that on top of avoiding “double taxation”, New Hampshire LLC owners can save up to 20% on their taxes and that tax benefit won’t be available to you if you choose a different business type. A 20 percent tax discount is an excellent reason to choose to form a New Hampshire LLC.
How To Start An LLC In New Hampshire
Now that you know what a Limited Liability Company (LLC) is and the advantages of owning an LLC, if you’re convinced that a New Hampshire LLC is the best structure for your business in New Hampshire, here are the steps to start an LLC in New Hampshire.
*IMPORTANT* Some businesses will execute the LLC formation process for you if you feel you need assistance traversing the jungles of rigorous red tape required to start an LLC in New Hampshire, filing all of the necessary paperwork, forms, as well as preserving your privacy.
I’m referring to LLC formation services that can help you form an LLC in New Hampshire for as low as $0 plus the state filing fee (though ZenBusiness, at $49 plus the state filing fee, is my top-rated LLC formation service).
Click here to read my guide on the best LLC service if you want some help with the red tape and files and also want the privacy protection that comes from an LLC formation service.
1. Obtain Certificate of Formation Form
The first step you need to take to start your LLC in New Hampshire is to get your hands on a copy of the Certificate of Formation form from New Hampshire’s Secretary of State.
Get your New Hampshire Certificate of Formation form here. This is a PDF version of the form that you can print out and mail in.
Because the New Hampshire Certificate of Formation form is the primary formation document for LLCs in the state of New Hampshire, the following steps will refer back to this form.
2. Choose Your Business Name
Now that you have your Certificate of Formation, the first thing you need to do is to add the name of your New Hampshire LLC to the form. However, naming your LLC isn’t as straightforward as you would think.
Every business and LLC in New Hampshire must have a unique name registered with the New Hampshire Secretary of State Corporation Division. However, it’s quite simple to find out if another business is using a business name by performing a search on the New Hampshire Secretary of State business name database here.
Every New Hampshire LLC must contain the words “Limited Liability Company” in its name which can be abbreviated as “Ltd.”, “Co.”, “LLC” or “L.L.C.” Conveniently, if the LLC name you initially chose isn’t available, you can add “LLC” or “L.L.C.” as suffixes in the same way that you’d add numbers to the end of an online username, enabling you to still use some version of your preferred LLC name
Once you’ve found a version of your LLC name that is still available for your New Hampshire LLC, you must file an Application for Reservation of Name form with the New Hampshire Secretary of State. You can find the PDF form here to file by mail, or click here to file online. There’s a $15 filing fee.
3. Choose A New Hampshire Registered Agent
The next step to forming your New Hampshire LLC is to appoint a registered agent. Every Limited Liability Company in the state of New Hampshire must have what is known as a “registered agent”.
A registered agent is either an individual or a business that will become the point of contact for your LLC, accept mail and service of process during business hours, and keep your information secured by listing their name and address with the New Hampshire Secretary of State rather than your own.
There are two choices when you appoint a registered agent for your LLC. You can choose to take on the role of registered agent for your business yourself or you can choose to hire a professional registered agent service. I’ll go over the pros and cons of each so that you can make an educated decision when you appoint a registered agent.
If you choose to assume the role of registered agent, then it’s important to know that you will be legally expected to be available during normal business hours on business days to accept mail and service of process. The problem comes when you consider that most LLCs usually operate during normal business hours on business days and it’s not a good idea to stretch yourself too thin trying to both manage your business and also be your business’s registered agent.
If you happen to miss a service of process, your New Hampshire LLC could be sued and you would have no way to defend yourself from a default judgment. What’s worse is that missing a service of process could lose your LLC its “good standing” status with the New Hampshire Secretary of State which would result in you no longer being able to legally do business in the state of New Hampshire.
Hiring a registered agent service means that you significantly reduce your workload compared with taking on the registered agent role yourself. Furthermore, your information will be protected. Appointing professional registered agent service also guarantees you will receive and be notified about any mail or service of process that the registered agent service accepts on your behalf. The only downside of hiring a registered agent service is that they charge fees between $99-$299.
Considering the risks involved with being a registered agent yourself, it’s worth the cost to hire a registered agent service. I always recommend that new LLCs use a registered agent service rather than try to take on the role of registered agent themselves to save money.
If you’d like to know more about registered agent services, you can click here to read my article about the best New Hampshire registered agent.
4. Choose Your LLC Address
Another important piece of information you’ll be expected to list on your Certificate of Formation is the address of your LLC. Every LLC and business in the state of New Hampshire must register a principal business address with the New Hampshire Secretary of State which is listed on the Secretary of State’s website.
If you’ve decided not to use an LLC formation service or registered agent and your business has a physical address in New Hampshire, you’ll have to register that address. If your business doesn’t have a physical address then the only option you’re left with is to list your home or office address which isn’t ideal. The New Hampshire Secretary of State won’t accept a P.O. Box address on the Certificate of Formation form.
If you’ve appointed a registered agent service, you don’t have to worry about which address to list on the Certificate of Formation form. The registered agent service will add their own address to the form, which keeps your information private and protects you from identity theft.
5. Sign And File Your Certificate of Formation
After collecting all required information and completing your New Hampshire Certificate of Formation, it's time to sign and file your New Hampshire Certificate of Formation with the Secretary of State.
Prior to filing your Certificate, verify that it is accurate and includes the essential information:
- The name of the LLC,
- The office location, email address, and business phone number of the LLC,
- The nature of the LLC's business—be precise, for example, “software development”,
- The name and address of the LLC's registered agent,
- If the LLC will be managed by managers,
- A list of all managers and/or members, and
- The signature of the LLC's manager, if any, or a member.
After confirming that your Certificate has all of this information and is correct, you may file online with the New Hampshire Secretary of State, along with a $100 state filing fee. You may also file a Certificate by mail at the following address:
N.H. Department of State
State House, Room 204
107 North Main Street
Concord, NH 03301-4989
When your New Hampshire Certificate of Formation has completed processing, the Secretary of State will notify you by email. If you have chosen to file your Certificate by mail, then processing may take up to three weeks
Other LLC Activities
After you've filed your Certificate of Formation, there are a few additional procedures you'll need to do to ensure that your New Hampshire LLC gets off to a strong start in the business world.
Limited Liability Companies (LLCs) in New Hampshire are required to file an annual report with the Secretary of State. LLCs are required to file annual reports by April 1st of each calendar year, in almost the same way that state and federal tax filings are. Your LLC will be required to file an annual report online via the New Hampshire Annual Report Online Filing website. Failure to file your annual report by April 1st may result in an automatic “Bad Standing” status by the Secretary of State.
You’ll likely need to get additional business licenses and permits depending on where your LLC is located and the kind of business you will be doing. Check with the city or county clerk in the area where your LLC is located to see whether you need any local business licenses before starting up. Visit the New Hampshire Economic and Labor Market Information Bureau website here, for further information on state business license requirements for your limited liability company in New Hampshire.
If your LLC is going to offer professional services, such as legal or accounting services, then you must follow the process for establishing a Professional LLC or PLLC. Professional Limited Liability Companies (PLLCs) are limited to providing a single kind of professional service, and all members must possess the required business licenses and permits, or be registered with the state to offer the licensed professional service for which the LLC was established. You may be required to provide a copy of each LLC member’s appropriate business license or state registration as part of the LLC formation process.
If your LLC intends to sell products, collect sales tax, or hire employees, you must register with the New Hampshire Department of Revenue Administration (DORA). Even though your LLC will not be collecting sales tax or hiring employees, you may be required to register with the DORA due to other reasons. You may register online at the DORA's website by clicking here.
New Hampshire is also unique in that it imposes a number of taxes directly on LLCs with income or other values that exceed specified thresholds. More state tax information may be found on the New Hampshire Department of Revenue Administration (DORA) website.
If your LLC is located outside of New Hampshire and is expanding into the state, or if you are not a New Hampshire resident, you must follow the procedure for forming a foreign LLC. This procedure is almost identical to that of establishing a domestic LLC. The major distinction is that you must submit an Application for Registration as a Limited Liability Company. You must also include a Certificate of Good Standing from your home state that is dated no more than 60 days prior to the day you file your foreign LLC registration papers. You must also designate a registered agent with a physical address in New Hampshire. The filing fee for the application is $100 and you can file it online or by mail
To ensure that the foreign limited liability company's name is available in New Hampshire before filing, check the New Hampshire business name database. If the desired name is not available, the foreign LLC must register a trade name with the New Hampshire Secretary of State Corporation division to be used in the state. You must submit an Application for Reservation of Name along with a $50 filing fee. The application may be submitted either online or via the mail.
Expert services are available to assist you if you have never had to file an annual report or apply for a business license before. A New Hampshire PEO service may assist you with filing your annual report and other papers, and online legal services can also aid with additional paperwork.
New Hampshire LLC Fee Summary
How much does it cost to form an LLC in New Hampshire? Whether you use an LLC formation service to help form your LLC or not, you’re going to encounter some fees and taxes. Here’s a list of some of the charges you can expect to pay when forming an LLC in Nebraska:
Certificate of Formation filing fee: $100
Name Reservation filing fee: $15
Registered Agent Fee: $99-$299
Annual Report filing fee: $100
State Personal Income Tax: $0 on personal income, 5% tax interest on dividends
State Corporate Income Tax: 7.7%
After Starting Your New Hampshire LLC
Starting your LLC in New Hampshire is a significant step, so take a moment to relax and celebrate with a beer or glass of Chardonnay, take a long walk, or enjoy the beauties of a nearby beach while you revel in the work you’ve done, but don’t let yourself get too comfortable. You’re still not prepared to operate your New Hampshire LLC.
Before you have the essential foundations, you must complete three more steps to ensure your LLC remains in Good Standing.
Step 1. Create An Operating Agreement
While New Hampshire LLCs are not required by law to create or adopt an LLC Operating Agreement, it is nevertheless in your business's best interest to do so.
If your LLC does not have an operating agreement, it will be governed only by the business and LLC laws and regulations of the state of New Hampshire which may or may not be beneficial to your company's operations. Through the adoption of an Operating Agreement, you can establish operating procedures and standards that go above and beyond the needs of state legislation which frequently only cover the minimum requirements.
*IMPORTANT* Prior to writing the Operating Agreement, you must establish your LLC's management structure. An LLC with multiple members makes decisions via a voting mechanism. If you or any of your LLC members lack management expertise, you should rather choose a manager-managed model. In this model, your LLC delegates authority to make high-level decisions to managers rather than making them yourself. If you select this kind of management model, it is critical to guarantee that each manager is competent and trustworthy.
Operating Agreements provide rules and standards for how members, managers, and departments of your LLC communicate with one another, as well as their respective duties and obligations. LLCs that do not have Operating Agreements are severely restricted in their ability to operate.
Additionally, an Operating Agreement serves as a contract between members and should clearly define their respective duties and authority levels. Poorly drafted Operating Agreements often include ambiguous or misleading language, resulting in disputes between LLC members and departments. A badly drafted Operating Agreement may also exclude processes for onboarding new members and allocating shares and duties in the event of a member's departure, stifling your business's development.
To prevent these scenarios, ensure that your Operating Agreement's guidelines are as clear and comprehensive as possible. A well-written Operating Agreement should detail each LLC member, their profit and loss share, their duties and authority level, and how they should communicate with your LLC's various divisions. If your LLC has managers, your Operating Agreement should also contain standards and procedures outlining their power and duties. A well-written Operating Agreement with clear directions and comprehensive operating processes can simplify your business's everyday operations, allowing you to rest as your business grows.
If this is your first time writing an Operating Agreement, many LLC formation services include help in creating one as part of their service package. Consider subscribing to an online legal service if you just need assistance with the language. Additionally, Northwest Registered Agent provides a free Operating Agreement form on their website which you may get here.
Step 2. Apply For An Employer Identification Number
Certain business operations may require you to obtain an Employer Identification Number, or EIN, from the Internal Revenue Service (IRS). Some activities that may require you to obtain an EIN are the collection of sales tax and the hiring of employees. Of course, hiring employees is not necessary to acquire an Employer Identification Number (EIN). An EIN is a tax identification number that qualifies your business for additional licenses and permits. Your EIN also identifies your business in the same way that a Social Security Number identifies you as a person.
Additionally, obtaining an EIN enables you to use it more often than your Social Security Number which may aid you in avoiding identity theft in the future. You may get an Employer Identification Number (EIN) from the Internal Revenue Service, and the procedure is less complicated than you would think.
To apply for an Employer Identification Number (EIN), just visit the Internal Revenue Service's website (found here) and complete the application for an EIN between the hours of 7 a.m. and 10 p.m. Monday through Friday, followed by filing the application for your New Hampshire LLC's EIN.
Step 3. Open A Business Bank Account
To properly establish the foundations for your New Hampshire business, you must open a business bank account specifically for your LLC.
Many New Hampshire business owners neglect this stage due to forgetfulness or inexperience, but it is important enough that you will be glad you took the time to complete it.
Numerous LLC and small business owners do both commercial and personal financial activities via their personal bank accounts, assuming that having a single bank account for various purposes is convenient or time-saving. However, there are many reasons why this is a bad idea.
The first reason is that it significantly simplifies the process of filing both federal tax and state tax returns. Many business owners who use their personal accounts for both personal and business transactions believe they will be able to distinguish between the two kinds of transactions when tax season comes around. However, federal tax returns are frequently submitted several months after these transactions occur, and the passage of time only makes things more difficult to remember; therefore, unless you wish to maintain a detailed ledger documenting all of your business transactions for tax purposes, it is simpler to open a business bank account.
The second reason you should avoid doing business transactions for your LLC via your personal bank account is that doing so exposes your personal information and bank account money to liability in the case of a lawsuit. When you conduct the financial operations of your LLC via your personal bank account, you effectively nullify the restricted liability and personal asset protection provided by an LLC.
In summary, you should establish a commercial bank account for your LLC to simplify tax reporting and safeguard your personal information and assets.
To establish a business bank account for your LLC, you will need what is referred to as a “bank kit.” A bank kit contains many formation papers, including your Certificate of Formation, Operating Agreement, EIN, and a copy of your LLC's initial resolution. While you may compile all of these papers on your own, several LLC formation services include bank kits with their services.
Forming an LLC is a huge step for your business in New Hampshire, so congratulations!
If you’ve chosen to form your LLC without the assistance of an LLC formation service, here are the steps you’ll need to complete:
- Obtain the Certificate of Formation form,
- Name your LLC,
- Choose your Registered Agent,
- Choose your LLC address, and
- Sign and file your Certificate of Formation
Forming a New Hampshire LLC requires a tremendous amount of work, and it can be overwhelming at times. There are tons of forms to file, documents and applications to gather, create and submit, a never-ending list of filing fee charges to pay, and an treacherous ocean of red tape to navigate through. However, if you finish this activity on your own, you’ll be amazed at how rewarding the feeling of achievement is.
Again, congratulations on your decision to create an LLC in New Hampshire, and best wishes for your future business ventures!