The Limited Liability Company (LLC) is a popular entity structure for businesses starting in New Hampshire. The LLC provides personal liability protection and has the potential to save money on taxes. With our step-by-step guide, you can learn how to form an LLC in New Hampshire yourself without an attorney.
Unlike a sole proprietorship or partnership where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting the business owner’s personal assets.
Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.
Steps to Form a New Hampshire LLC
Let’s break down the steps to complete the New Hampshire LLC formation process.
Total Time: 10 minutes
Step 1: Choose an LLC Name
The first step in forming a New Hampshire Limited Liability Company is to make sure the name you want is available.
It’s critical to do a name search before registering an LLC name, as the name of each LLC must be distinguishable from other entity names registered in the state of New Hampshire. The New Hampshire Secretary of State makes it easy to search and verify if your LLC name is available. Here is more information on how to do a New Hampshire LLC name search.
In addition to the name being unique, the entity designator (identifier used at the end of the business name) must be either:
– Limited Liability Company
– or similar abbreviations
A comma may be used after the business name and before the designator. “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.
If there is a name you want but are not ready to register the LLC, you can file the Application for Reservation of Name with the New Hampshire Secretary of State. The name reservation will hold a name for up to 120 days, at the cost of $15.
If you plan to use a different name from the one that you register (perhaps you want to run multiple businesses under the LLC), you can use a Trade Name (sometimes referred to as a DBA, Doing Business As name, fictitious business name, or assumed name). To register a Trade Name, file the Application for Registration of Trade Name (Form TN-1), along with the $50 filing fee with the Secretary of State.
Before settling on a name, you may want to see if a domain name is available in order to have a matching website address.
Step 2: Appoint a New Hampshire Registered Agent
Every LLC in New Hampshire is required to have a Registered Agent. A Registered Agent will act as a central point of contact to receive legal documents, tax notices, summons, subpoenas, etc., on behalf of the LLC.
The basic requirements to be a Registered Agent in New Hampshire include:
– The agent must be a New Hampshire resident at least 18 years of age or a commercial Registered Agent service with a registered office in the state.
– The agent must have a physical address in the state (PO Boxes aren’t allowed).
– The agent must generally be available during normal business hours at the address provided to receive service of process.
Learn more about the requirements for a Registered Agent in New Hampshire
Any individual meeting the requirements can be the agent; however, the agent’s name and address become public record, and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when doing business from home or still employed. Hiring a company like Northwest Registered Agent to be the Registered Agent will reduce unwanted phone calls and mailings.
Step 3: File the New Hampshire Certificate of Formation
The paperwork to officially create an LLC in New Hampshire is called the Certificate of Formation (called the Articles of Organization in many states). The easiest option is to file on the Secretary of State’s website. Additionally, you can download the Certificate of Formation (Form LLC-1), and mail or hand-deliver the paperwork to the New Hampshire Secretary of State’s office.
If filing in person, take to the Secretary of State’s office at:
Corporation Division, New Hampshire Department of State
107 N Main St, Rm 204
Concord, NH 03301-498925
When filling out the Certificate of Formation, there are a few sections and terms that can be confusing. Let’s go over a few of these sections to help get your LLC started right.
Principal Purpose – This section asks for information regarding the activities of the business. To answer, you will need to look up a number called NAICS (North American Industrial Classification System). This code is a six-digit number that classifies and categorizes the different industries.
Related: What is a NAICS number?
Manager/Member Information – This section asks if the LLC is Member-Managed or Manager-Managed.
– Member-Managed LLCs have an active involvement in the management of the LLC.
– Manager-Managed LLCs are hired by the members to run the LLC, similar to a CEO of a corporation.
Most LLCs are member-managed.
Duration – In this section, you can indicate how long it will remain in existence. Most LLCs will choose a Perpetual duration; however, some businesses (usually investment-related) will have a specific closure date.
Business Address – In this section, enter the street address, city, state, and zip code of the initial principal office. This address can be the LLC’s physical address, or it can be the address where the business records are stored. This address does not have to be in New Hampshire, but you may not use a PO Box.
Mailing Address – If there is an address that is preferred for mail to be sent by the Secretary of State that is different from the Business Address, enter it here. Otherwise, click the box for “Same as Business Address.”
Turnaround Time: Submitting the paperwork in person at the Secretary of State’s office will provide the fastest turnaround at under 2 hours. Online filing typically takes 3-7 business days, and filing by mail can take up to three weeks.
You don't have to form your LLC by yourself or pay an attorney!Forming an LLC is a little intimidating, especially when it’s your first time. Professional entity formation services help guide you to make sure it’s done right. Check out our reviews of popular LLC formation services to learn more.
You have a New Hampshire LLC, now what???
Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.
Prepare a New Hampshire LLC Operating Agreement
The operating agreement is a document that governs the framework of an LLC. This document covers items like ownership rights, member responsibilities, how profits and losses are distributed, and more.
Most states do not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:
- The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit
- Member’s personal liability protection may be diminished.
- Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.
Obtain an EIN
The EIN or Employer Identification Number (also called a Federal Employer Identification Number, FEIN, or Federal Tax Identification Number) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to a social security number for an individual, the EIN identifies business entities for tax purposes. The EIN will be needed to hire employees, open a bank account, build business credit, register for business licenses and permits, file federal and state taxes, and more.
There is no cost for the EIN when registering through the IRS. The number is available immediately when applying through the IRS website; however, you can also register by phone, fax, or mailing IRS Form SS-4.
Related: How to Apply for an EIN
Elect the LLC’s Form of Federal Income Taxation
One of the significant benefits of the Limited Liability Company is the tax flexibility it provides. When applying for the Employer Identification Number, you will choose how the entity will be taxed for federal income tax purposes. While there are some limitations, an LLC may be classified for federal income tax purposes as a:
- Sole proprietorship
While this may sound confusing, this refers to how the LLC is taxed, not the legal structure.
Related: How can an LLC be taxed?
By default, the taxation of an LLC is called pass-through taxation, which means the profits or losses of the LLC flow through to the members.
Single-member LLCs will, by default, be taxed as a sole proprietorship. The members can also elect to change the taxation to a C-corporation or an S-corporation.
Multi-member LLCs will, by default, be taxed as a partnership. The members can also elect to change the taxation to a C-corporation or an S-corporation.
In general, the difference between being taxed as a corporation and being taxed as a sole proprietorship or partnership is that the profits and losses are passed to the member’s federal income tax returns based on their percentage of ownership. As a result, the owner will pay self-employment taxes on all business profits. As an alternative, electing to be taxed as a corporation allows the members to take a reasonable salary and then pay payroll taxes. Any remaining profits are distributed and aren’t subject to payroll taxes, resulting in potential tax savings.
Before electing how your LLC will be taxed, consider talking with an accountant to assess which one will be best for you. Some tax elections, such as the C corporation, may be detrimental for some people due to double taxation.
Open an LLC Bank Account
Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.
Several documents will be needed to open a business bank account, such as:
- A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
- Copies of the original formation paperwork from the state showing the creation of the LLC.
- Driver’s licenses of the members.
- Occasionally the bank may request a New Hampshire Certificate of Good Standing to prove the LLC is active and in good standing with the state.
Apply for Business Licenses and Permits
Depending on what your business does and where it is located, there will likely be various business licenses and permits needed before starting your business. Some common registrations include:
- Business License – All businesses operating in the State of New Hampshire are required to register with the New Hampshire Secretary of State’s Office. Additionally, some cities also require businesses to obtain licensing before they can start.
- Professional License – Certain services such as barbershops, accountants, hunting and fishing guides, and others must be licensed.
Get Business Insurance
Even with the liability protection of the LLC, business insurance is important to protect the business. The most common types of insurance include:
General Liability Insurance – covers damages owed and medical expenses for accidents that happen at your place of business.
Business Property Insurance – replaces damaged, stolen, or lost business property. This includes your physical business location, equipment, supplies, and anything else you used to run your business.
Business Vehicle Insurance – covers company vehicles and may also include coverage for personal vehicles used for business-related activities. Many personal policies won’t cover your vehicle if there is an accident while being used for business purposes.
Workers Compensation Insurance – mandatory in most states if you have employees, this insurance covers medical expenses that occur because of an accident or injury that happens to one of your employees while they’re at work.
File Annual Reports
LLCs are required to file an annual report with the New Hampshire Secretary of State. The annual report is due by April 1st of each year and there is a state fee of $100, or $102 if filing online.
Common Questions To Starting An LLC In New Hampshire
How much does it cost to start an LLC in New Hampshire?
The state filing fee to start an LLC in New Hampshire is $100 for filing by mail, $102 for online filing, and $125 for in-person filing.
Is there a yearly fee for an LLC in New Hampshire?
Each year, a New Hampshire LLC will need to file the Annual Report and pay the $100 annual fee.
How long does it take to start an LLC in New Hampshire?
Submitting the paperwork in person at the Secretary of State’s office will provide the fastest turnaround at under 2 hours. Online filing typically takes 3-7 business days and filing by mail can take up to three weeks.
Do I have to pay to hire a registered agent?
No. Anyone can act as a registered agent, provided they are at least 18 years old, reside in the state, and are generally available to receive documents during normal business hours.
If I have an LLC, is a business license required?
It’s sometimes thought that the LLC and business license are the same, but they aren’t. An LLC is referred to as the business entity, which is how the business is organized to conduct business. A business license is an approval from a government entity to legally operate.
What is a Foreign Limited Liability Company?
A foreign LLC refers to an LLC that is physically operating in states outside of the state where it was formed. Physically operating means having a presence, such as having an office or employee in the state. The LLC will need to register as a foreign LLC in each state the LLC plans to operate.
What is a Professional Limited Liability Company?
Businesses that require occupational licensing in New Hampshire, such as accountants, architects, veterinarians, etc., will want to file for a Professional Limited Liability Company (PLLC) instead of an LLC. Filing for a PLLC is very similar to that of the LLC.