Forming an LLC in New Hampshire
Limited liability companies (LLCs) are a popular business structure among small businesses. Business owners want the personal liability protection and the "pass-through" taxation of a New Hampshire LLC. Follow our step-by-step guide to setting up a New Hampshire LLC.
Steps to Form an LLC in New Hampshire
Name Your LLC
You'll need to pick a name for your business that attracts potential customers to your products and services and meets state law requirements. Keep both considerations in mind as you begin brainstorming and making a list of possible names. Have a list of several potential names because a name you like may not be available.
Search your name. Because your New Hampshire LLC name must be distinguishable from all other names on file with the Secretary of State, you must conduct a name search to determine name availability. If a name on your list is unavailable, choose a different name. You risk rejection if you attempt to register an LLC name used by another business.
Also, your LLC name must include "limited liability company" or an abbreviation. Don't include any entity designator that would mislead the public about the type of entity you have. Also, don't use words or phrases that suggest that your business is a governmental agency. Don't use restricted words, such as "bank" or "attorney," unless you have the appropriate licenses or approvals.
Reserve your name. If you are not ready to file your Certificate of Formation but want to protect your name, file Form-1 Application for Reservation of Name with the State of New Hampshire. The name reservation fee is $15, and the reservation holds the name for 120 days.
Protect your name. Your name is your brand. As such, you will want to protect it. You can do that in two ways by registering the domain name and trademarking the name. Search the domain name online and purchase it through various vendors. You can apply for trademark registration of your business name at the USPTO website.
Get a Registered Agent
New Hampshire requires a registered agent for your LLC. A registered agent is the point of contact between the state and your LLC. A New Hampshire registered agent must:
- Handle service of process for your company
- Reside in New Hampshire (with a physical street address) or be a corporation having a New Hampshire address
- Be available during regular business hours (Monday – Friday, 9 a.m. to 5 p.m)
Due to these requirements, some business owners opt to use a professional registered agent service company.
File Your Certificate of Formation
The certificate of formation, commonly referred to as "articles of organization" in other states, is the document that creates your LLC. File the certificate of formation with the New Hampshire Secretary of State online, by mail, or in person.
Be prepared to provide the following information when you file your certificate of formation:
- LLC name
- LLC address
- Registered agent name and address
- Nature of the business
- If management is vested with a manager
- Names of managers and/or members
The filing fee for a New Hampshire Certificate of Formation is $100 (with an additional $2 processing charge for online filings).
Draft an Operating Agreement
LLC operating agreements are important internal documents for LLCs. Although they're not filed with or required by the state, they can be helpful during disputes in your organization.
Generally, operating agreements address the following:
- The management structure of your business
- Ownership percentages
- Members' rights and responsibilities
- How to allocate profits and liabilities
- Voting procedures
- Dissolution procedures
An important consideration is if your LLC is member-managed, meaning the members run the company and make decisions or if it is manager-managed, meaning the LLC appoints managers (who may or may not be members) to run the company. Without these provisions in your operating agreement, state law rules will apply if a conflict arises.
Get an EIN
Most new businesses need an EIN (Employer Identification Number), especially if you have employees. This number is for identification purposes. It's like a Social Security Number but for your business. Getting an EIN is easy and free. You can apply online on the IRS (Internal Revenue Service) website.
Set Up Business and Tax Accounts
After the Secretary of State accepts your LLC formation documents, investigate the federal, state, and local tax and license obligations. You must register for new business accounts necessary for your operations.
Generally, if your LLC is a pass-through tax entity, the profits and losses of the LLC are reported on the LLC member's personal state and federal tax returns. If so, there is no state income tax on the LLC itself. However, if the LLC elects C corp status with the IRS, the LLC pays a state tax.
However, New Hampshire operates differently. The state taxes LLCs on interest and dividends (I&D) and gross business income, the business profits tax (BPT). Contact the New Hampshire Department of Revenue Administration to determine your LLC's tax liability.
State Business Tax
New Hampshire does not have a state business tax but two other taxes for LLCs: interest and dividends tax and business profits tax.
Interest and Dividends Tax (I&D)
New Hampshire has a 5% interest and dividends tax. If the LLC's gross dividends and interest income exceed $2,400, it must file and pay the I&D tax. However, this tax is being reduced and phased out according to the following schedule:
- 4% for taxable periods ending on or after December 31, 2023
- 3% for taxable periods ending on or after December 31, 2024
- 2% for taxable periods ending on or after December 31, 2025
- 1% for taxable periods ending on or after December 31, 2026
- For taxable periods after December 31, 2026, the tax is repealed
Business Profits Tax (BPT)
You must file a business profits tax if your LLC's gross business income exceeds $50,000. If your taxable period is on or after December 31, 2022, you do not have to file if your gross business income is $92,000 or higher. The BPT tax rate is 7.6% for the taxable period on or after December 31, 2022. The BPT tax rate is 7.5% for the taxable period on or after December 31, 2023.
State Employer Tax
If your LLC has employees, you set up an employer tax account with the New Hampshire Employment Security (NHES) and an employer user account with the unemployment insurance system (NHUIS). As an employer, you may also have to provide worker's compensation, withhold employee taxes, and post workplace compliance posters.
Sales and Use Taxes
There is no sales tax in New Hampshire. Instead, New Hampshire charges a business profits tax and interest and dividend tax.
Business Licenses and Permits
You'll need to contact local and state licensing agencies to find out what licenses or permits you might need for your type of business. Some licenses or permits are industry-specific, so it's vital to get information about your specific type of business requirements. Check out the license and permit section on the New Hampshire Business Information webpage.
Registration in Other States
If you want to do business in another state, you must register your LLC as a foreign LLC. Contact the state's secretary of state office for application requirements. You may need proof of your LLC's good standing, which you can request from the New Hampshire Secretary of State. You must also follow that state's rules for setting business tax accounts and business licenses. And if you plan to hire employees in that state, you must comply with state tax laws and withholding.
To keep your LLC compliant with state law, you must file an annual report and pay an annual report fee of $100. You can file the annual report online with the New Hampshire Department of State. The annual reports are due by April 1st of each year.
FAQs About New Hampshire LLC Formation
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