Fact checked for accuracy by Billie Anne Grigg, a bookkeeper and Mastery Level Certified Profit First Professional.
If you’re starting a business in New Hampshire, you may be wondering which legal entity is right for you. One option you may be considering is a limited liability company (LLC). An LLC can offer personal asset protection and flexibility regarding taxation and management. It is a business structure that combines the features of a corporation and a partnership.
LLCs are popular among small businesses because they offer personal asset protection and flexible taxation and management options. This article will provide a step-by-step guide on how to form an LLC in New Hampshire.
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Step 1: Choose a Name for Your LLC
The first step in forming an LLC is to shortlist a name for your LLC. Your LLC must have a unique name that is not already being used by another business in New Hampshire. The name must include the phrase “Limited Liability Company” or the abbreviation “LLC.”
You must also adhere to the following guidelines while choosing a name for your LLC:
- The name cannot be the same as the name of a federal or state agency
- The name must not include words that could confuse your LLC with a government agency
- The name must not imply that your LLC is organized for a purpose that it is not
Once you have a few names in mind, it will also be worth checking if the domain name is available. If you would like, you can also reserve your name by filing an Application for Reservation of Name form with the Secretary of State of New Hampshire. The filing fee to mail the form is $15.
Step 2: Appoint a Registered Agent
Every LLC must have a registered agent in New Hampshire. A registered agent is an individual or business that agrees to receive legal papers on behalf of your LLC.
Following are the key requirements that a registered agent must meet:
- The registered agent must be a resident of New Hampshire or a business entity authorized to do business in New Hampshire
- The registered agent must have a physical street address in New Hampshire
- The registered agent must be available during business hours
Step 3: File the Certificate of Formation
To form an LLC in New Hampshire, you must file the Certificate of Formation with the New Hampshire Secretary of State. The Certificate of Formation is a short document that includes the following information:
- The name and address of the LLC
- The name and address of the registered agent
- The LLC purpose
- The name, address, and signature of the organizer
Once filled out, the certificate can either be filed online or by mail. The filing fee is $100.
Step 4: Create an Operating Agreement
After your LLC is formed, you will need to create an operating agreement. In this document, you will find information about the ownership structure and management structure of your LLC. The operating agreement also outlines the rights and responsibilities of the members. Having an operating agreement in place isn’t required by New Hampshire, but it’s a smart move to keep disputes from arising in the future.
Step 5: Obtain an EIN
The final step in forming your LLC is to obtain an employer identification number (EIN) from the IRS. An EIN is a nine-digit number used to identify your business for tax purposes. You will need an EIN if you have employees or if you plan to open a business bank account.
As you can see, forming an LLC in New Hampshire is a simple process that you can complete in just a few steps.
Cost to Start an LLC in New Hampshire
It is easy and inexpensive to form an LLC in New Hampshire. The state filing fee for the Certificate of Formation is $100. You can file online or by mail. New Hampshire also requires LLCs to file an annual report, which costs $100.
If you decide to reserve your LLC’s name prior to filing the certificate there is an extra cost of $15. Another optional cost you may need to consider is a registered agent service. The costs for this service will vary, but will generally be around $50 for one year depending on the company you go with.
Forming your LLC on your own will be the cheapest option, but there is also the option to hire an LLC formation service. If you do not have the time to fill out forms and would prefer to focus on other aspects of the business, there are many LLC formation services available online to match a variety of budgets.
What to Do After Forming Your LLC in New Hampshire
Congratulations on taking the first step towards starting your business by forming an LLC! Now that you have completed this initial task, it is important to understand what comes next and how to keep your LLC in good standing. This guide will provide you with all the information you need about what to do after forming your LLC in New Hampshire.
Check For Any Licenses and Permits
You may need to obtain specific licenses and permits to operate your business. The type of business you run will determine what licenses and permits you need. For example, if you are selling food products, you will need to obtain a food license from the state. Check out the Online Licensing page of the New Hampshire website to check what state licenses and permits you should apply for.
File Annual Reports
All LLCs in New Hampshire are mandated to file an annual report with the Secretary of State. The report is due on April 1 every year and must be filed online. Failure to file on time is a $50 late filing penalty and may result in the dissolution of your LLC, so take care in making sure you file these annual reports on time! The filing fee is $100.
Obtain Business Insurance
It is a good idea to obtain business insurance for your LLC. This will protect your business from liability in the event that someone is injured or property is damaged or even if your business is sued.
Open a Business Bank Account
You will need to open a business bank account for your LLC. This will allow you to keep your personal and business finances separate, which will make things easier for you, in the long run, come tax season. You will need an employer identification number (EIN) to open an account.
Hire a Professional Accountant
While you are not required to hire a professional accountant, it is a good idea to have one. An accountant can help you with bookkeeping, tax preparation, and financial planning. By hiring an accountant, you can leave all the nitty-gritty details of everything regarding payroll and taxes and instead focus on growing your business.
Many resources are available to help you form and operate your LLC in New Hampshire. The New Hampshire Secretary of State has a helpful website that provides information about starting and operating a business in the state. The Small Business Administration also has a website with plentiful resources for small businesses.
How to Keep Your LLC Compliant in New Hampshire
Once you have formed your LLC and registered it with the state, you need to take steps to keep it in compliance. This includes filing annual reports and paying taxes.
Following are some of the key things you need to do to keep your LLC compliant in New Hampshire:
- File annual reports
- Pay taxes
- Maintain a registered agent
- Abide by state regulations
- Stay up to date on changes in the law
- Renew any licenses and permits, if required
Tax Filing Requirements for LLCs in New Hampshire
All LLCs are required to file an annual report and pay state taxes. At the federal level, LLCs are typically pass-through entities, meaning that the LLC itself does not pay taxes on its income. So, the members of the LLC will pay the federal self-employment tax rate of 15.3%. You can also elect to be taxed as an S corp or C corp.
In New Hampshire, there is a Business Profits Tax imposed on all LLCs with gross business income of more than $50,000 that do business in the state. The tax percentage is around 8% but varies by year. You may also be required to pay the New Hampshire State Interest and Dividends Tax at 5%. Check the New Hampshire Department of Revenue Administration‘s website to get more information.
You can seek the services of an accountant to help you with your taxes. However, it is ultimately the responsibility of the LLC’s members to ensure that their taxes are paid and that their annual report is filed.
Frequently Asked Questions
How long does it take to register an LLC in New Hampshire?
Forming an LLC in New Hampshire is simple and can be completed in a few steps. If you file online, it will take the Secretary of State about 3 to 7 business days to process your LLC. However, filing by mail will take the Secretary of State between 1 to 3 weeks to process your LLC.
Unfortunately, New Hampshire does not have an expedited filing option for LLCs.
What tax structure should I choose for an LLC in New Hampshire?
The tax structure you choose for your LLC in New Hampshire will depend highly on how you want to be taxed at the federal level. The default tax structure for LLCs in the United States is as a pass-through entity, which means the tax responsibilities fall to the individual members of the LLC instead of the LLC itself.
If you would prefer to pay less self-employment tax, it may be advisable to elect to be taxed as a corporation instead. This can provide tax benefits for the LLC and its members, but it depends on the individual business. To properly understand what would be the best tax structure for you, consult a business attorney or accountant.
It is important to note that LLCs in New Hampshire are subject to the business profits tax, regardless of their tax structure.
Should you hire an LLC formation service in New Hampshire?
While there are many LLC formation services available, you are not required to hire one to form your LLC. It is quite easy to form an LLC in New Hampshire and you can do it on your own. However, if you want to spend more time on the more important aspects of starting a business instead of focusing on paperwork, hiring an LLC formation service may be worth the extra bucks.
Filed under: New Hampshire Business Guides