Starting LLC in New Hampshire: Peculiarities & Detailed Manual
Want to start an LLC in New Hampshire? It is a profitable decision for a business, as the state has waived corporate tax in favor of gross corporate income tax. So you’ve decided to start an LLC? Not sure how to initiate the process? To start an LLC in New Hampshire, you need to get ready for several stages.
We’ve prepared a guide for you with just six steps to form your LLC and to get success! You can also refer to the virtual LLC formation service.
Note: ZenBusiness is the best service to file the LLC. You’ll surely appreciate reasonable prices, company values, and other peculiarities.
An New Hampshire LLC: The Notion & Essence
Many New Hampshire business owners choose to start an LLC. So, unlike a corporation, they can take advantage of flexible management. We’re talking about the protection of personal assets that sole proprietorships and general partnerships lack.
The state of New Hampshire puts forward simplified requirements for registration and maintenance of LLC and invites business owners to choose the type of taxation. Do you still have doubts about the LLC?
6 Stages to Form an LLC Correctly
Stage №1: Choose Your LLC Name
The LLC name is a significant aspect, as it is the name of your company that makes the first and strongest impression on the audience of your potential customers! The name must be different from existing company names and must meet New Hampshire’s regulatory requirements. Now get started with the following aspects.
LLC name in terms of jurisdiction
The State of New Hampshire obliges business owners to include the abbreviation DDS or the phrase – limited liability company in the name. Please note that the terms corporation or registered are prohibited. In addition, you cannot use the designations of other forms of business: banks or law firms.
Take care of the explanations
You must include in the title an explanation of the nature of your business. For example, if you are engaged in the computers’ repairing, write in the LLC title – computer wizard. If you have any values or principles, also indicate this. For example, if you are farming, use the term natural, nitrate-free, etc.
So, you need to get a little creative and fully comply with New Hampshire’s legal requirements.
Stage №2: Hire a Registered Agent
A registered agent is called a statutory agent in New Hampshire and will help you to start an LLC. The agent can be an New Hampshire resident, natural or legal attorney responsible for sending and receiving legal documentation on behalf of the future company. A company representative can also be an employee of the company or its owner. The State of New Hampshire notifies:
An LLC’s registered agent is a company representative in court who has gained a lawful right to answer claims and demands on behalf of the LLC.
A registered agent guarantees an excellent reputation for your New Hampshire LLC. Also, if your business gets worse, New Hampshire can take legal action against it without notifying you. The registered agent will always receive appropriate notification and will be able to take timely measures to protect your interests as an attorney.
You should apply to the online service to get started a business in compliance with all regulations and requirements. So, you will have the opportunity to filter spam and protect your personal and contact information. If you use the ZenBusiness and Northwest Registered Agent to form an LLC, you will receive the free services of a registered agent.
Stage №3: Applying for Registration
To register a business in New Hampshire, you must file the Articles of Association with the New Hampshire State Secretariat. If you are anxious about your LLC formation, you can submit your documents for pre-processing, which will allow the Secretary of State’s office to advise you of the eligibility. It can be a good option if you get started for the first time in an LLC without consulting an attorney. Be sure to provide:
- The desired name of your business.
- Personal and contact details of the registered agent.
- Business management form.
- Personal and contact details of the manager of your company.
- Signature of the applicant and registered agent.
- Date of application submission.
The fee to ground an LLC: New Hampshire holds a $100 fee to ground an LLC.
Processing Time: The state may need up to three weeks to handle the mailed-in correspondence and return the finalized version. Naturally, online forms are handled faster. Generally, it takes two business days. Do not forget that processing won’t begin unless you’ve sent all the forms duly filled.
Stage №4: The Operating Agreement Background
While an operating agreement is not binding in New Hampshire, creating one could significantly improve the company’s climate. An operating agreement is a document that describes the structure of a project, the way it works, the rights and obligations of each partner.
This document reflects the consistency of partners and thereby reduces the chance of controversy and disputes. Therefore, it is significant that all members of the future LLC carefully read this document before joining the company.
An attorney can help draw up an operating agreement and determine the way income and liabilities will be distributed among the owners of your LLC. You will find more information about the operating agreement here. Prepare to enter the following information:
- Names of all participants.
- The rights and obligations of each of the listed participants.
- Description of procedures for voting or resolving differences between members.
- Regulations on the financial share of participation of LLC members.
- Description of the way you’re going to manage the LLC.
So, do not neglect this stage of LLC formation. It largely guarantees your safety and the observance of your rights by all members of the business project.
Stage №5: Tax Compliance
To conduct a business that you want to register as an LLC successfully, you need to comply with several tax requirements at various levels.
Requirements of Federal Significance
Does your LLC involve multiple owners? Then you need to take care of the EIN! The EIN, or Employer Identification Number, is a unique nine-digit number assigned by the IRS to US corporations. This number must be obtained by all business owners under whose leadership the hired employees work. A business owner can obtain an EIN from the IRS in person or by mail.
Your state’s cess requirements
On a state level, New Hampshire charges a business profits tax from LLCs. It currently amounts to 7.9%; however, the state means to lower the rate to 7.5% by December 2021. Every entity, which receipts value exceeds $50,000, is to cover the tax in question.
There is a high chance you won’t need to fill in this tax right after you’ve started your company, but you should keep it in mind. More detailed information on the matter is available here. In a similar manner, a business whose gross receipts value prevails $217,000 is obliged to cover the Business Enterprise Tax.
Contrary to most states, a sales tax isn’t charged in New Hampshire. Even LLCs operating in retail sales won’t have to cover them. Additionally, New Hampshire doesn’t impose an income tax. Usually, entrepreneurs are to cover withholding taxes to the state as well as the federal government. However, in New Hampshire, you’ll make payments by feeling only federal papers. More on the procedure you’ll access here.
LLC owners in New Hampshire must make payments dedicated to the labor force by funding the state’s unemployment insurance. The fee isn’t tax per se, yet it must be covered regularly. You’ll get all details at New Hampshire Employment Security.
Additionally, you’ll have to get a hold of industry-related taxes dedicated to specific business spheres. You’ll access an overview of the business taxes of New Hampshire here.
Local Tax Business Demands
Local fees depend on a county or a specific area your LLC operates in. You’ll have to cover property taxes on everything your entity owns. The Municipal Property Division assesses and levies the fees in question. We advise you to arrange a meeting with a county clerk, so you’ll get all local requirements in order.
Stage №6: Getting Business Licenses & Permits
A statewide general business license isn’t needed to operate in New Hampshire. But the state requires obtaining licensure, needed by the federal government. However, not all LLC acquire federal permits, only the ones operating in specific spheres like, for example, agriculture. All federally-regulated industries, which require additional licensure, are available in the listings provided by the Small Business Association.
New Hampshire has taxes relevant only to specific industries, so it doesn’t come off as a surprise that those industries uphold specific licenses. Luckily, the state offers forms to the business of any kind, so you’ll quickly access the license perfect for your LLC.
We advise all LLC proprietors to get acquainted with the list of permits provided by the state here. Please note that you may need local licenses. For that, we recommend consulting a local municipality.
Other Stages for Business Owners After LLC Registration
After completing the six mandatory steps towards starting an LLC, you need to take care of the following.
Opening a business bank account
Separate your personal and LLC accounts. Thus, you will be sure of the safety of your personal and financial data. Besides, you won’t have any hassle when filing your charge returns. Your EIN will help you open a business account quickly, no matter what you choose a bank or credit union.
All owners of companies/corporations, regardless of their form of management that attracts employees, must go through the compensation insurance procedure. All basic and detailed information is available with the New Hampshire Bureau of Workers’ Compensation.
This policy aims to protect the rights of workers who are injured at work and unable to work. It will not be superfluous to get a civil liability insurance policy, as well as pay attention to some other types of insurance.
New Hampshire expects all business proprietors to submit an annual report comprising information on the profits they’ve made. You report your LLC’s financial state over a fiscal year and submit the form regardless of whether you’ve gained profit, or your company bears losses.
New Hampshire offers an FAQ to guide you through income reporting regarding the type of business you own. You’ll access all necessary forms there as well.
Referring to the services of a qualified accountant
The annual report serves as a way to inform the state on any vital changes as well as overall progress your LLC has made in a year. New Hampshire levies a $100 fee for filing the report.