How To Start an LLC In New Hampshire? (2024 Business Guide)

Jon Morgan
Published by Jon Morgan | Co-Founder & Chief Editor
Last updated: February 16, 2024
FACT CHECKED by Lou Viveros, Growth & Transition Advisor
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Embarking on the journey of starting an LLC in New Hampshire opens a gateway to unique opportunities for entrepreneurs. This state, known for its business-friendly environment, offers a structured yet flexible process for LLC formation.

Drawing from my extensive background in LLC formation, which spans over a decade, I have had the privilege of guiding numerous clients through the intricate process of initiating and sustaining their businesses in New Hampshire.

This guide, enriched with insights from seasoned business professionals, is crafted to provide you with essential knowledge, ensuring a confident start to your LLC in New Hampshire.

We also recommend finding an LLC service provider in New Hampshire for your startup needs, especially since some offer this service for free.

Quick Summary:

  • To start an LLC in New Hampshire, you are required to comply with statutory requirements and file the necessary legal documents.
  • Entrepreneurs in New Hampshire have options like Single-Member, Multi-Member, or Manager-Managed LLCs, each with its own pros and cons in management, credibility, capital, and control.
  • With 137,811 small businesses making up 99% of the state's business entities, New Hampshire is highlighted as a supportive environment for entrepreneurs.
  • Personally, the flexibility and support offered by New Hampshire for LLC formation make it an attractive option for business owners looking to minimize bureaucratic hurdles.


How To Form an LLC in New Hampshire

To form an LLC in New Hampshire, there is a state business protocol that has to be followed.

1. Choose the Type of Your LLC (Mandatory)

Drawing from my experience guiding entrepreneurs in New Hampshire, I've observed the impacts of choosing the right LLC structure.

  • Single-Member LLC: Ideal for solo entrepreneurs, this structure offers simplicity in management and tax filing. However, it may face limitations in raising capital and can be seen as less credible by some institutions.
  • Multi-Member LLC: Suitable for businesses with multiple owners, this structure facilitates collaboration and potentially easier capital raising. The downsides include more complex management and the need for a detailed operating agreement to manage relationships among members.
  • Manager-Managed LLC: Beneficial for owners who prefer not to be involved in daily operations, as it delegates management to designated managers. This can be advantageous for attracting professional managers, but it may lead to less control for members over business decisions.

I have seen how aligning the LLC structure with the business's specific needs and owner's involvement level is key to long-term success and operational harmony.

2. Choose a Name for Your New Hampshire LLC (Mandatory)

A man naming a New Hampshire LLC

When you are choosing an LLC name, a New Hampshire Limited Liability Company needs to have a name that distinguishes it from all the other businesses in its field.

Here are a few points you must consider when choosing a name:

  • They also must end with one of the following designations: "limited liability company," "limited company," or "ltd."
  • The business name can't include words that might confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
  • In addition, some restricted words (e.g., bank, attorney, university) necessitate further legal documentation and a certified individual, such as a doctor or lawyer, to be a member of your LLC.
  • The availability of the name in New Hampshire.

Read More: Look Up An LLC in New Hampshire

3. Select a Registered Agent (Mandatory)

An LLC's registered agent is the person who receives mail and official Hampshire state documents on behalf of the business.

The only requirement for a registered agent is that it be someone living or working in New Hampshire, and they must be available during normal business hours.

There is no filing fee to choose a registered agent in New Hampshire; however, you should make sure they are available seven days a week, 24 hours per day, for legal documents.

If you are having problems finding one, you can use a registered agent service to help.

4. File New Hampshire Articles of Organization (Mandatory)

As a business consultant, I've assisted numerous clients in filing their LLC's Articles of Organization with the New Hampshire Secretary of State. This critical document sets the foundation for your LLC and requires careful consideration of several key elements.

They include the LLC's name, registered agent, business purpose, and where it will be located in Hampshire.

This is the time to settle if your LLC will be member-managed or manager-managed in your operating agreement.

The filing fee in New Hampshire is $100, a relatively small but crucial investment in your business's legal foundation. I always remind clients to budget for this and other initial costs, as outlined in our comprehensive article on LLC startup expenses in New Hampshire [1].

Make sure you have a Certificate of Formation when you form an LLC because the business won't be officially formed until you fill it out with New Hampshire's Secretary of State.

Steps to Take After Forming an LLC in New Hampshire

After successfully forming your LLC in New Hampshire, there are several important steps to take to ensure your business operates smoothly and remains in compliance with state regulations.

The New Hampshire LLC operating agreement sets the members' rights and responsibilities, as well as the business' ongoing duties.

Members may agree on different LLC rules, such as choosing managers for day-to-day operations, drafting member buyout terms, and deciding how much a member must pay to withdraw from the LLC after they've given notice.

Having a detailed New Hampshire LLC operating agreement ensures that all business owners are in alignment and minimizes the chance of future conflict.

The following are examples of some of the provisions that may be found in an operating agreement:

  • Your business name and business address
  • Duration of the LLC
  • The registered agent's name and address
  • Forms and documents on the Certificate of Formation
  • Purpose of the business
  • Members and their contributions
  • How profits and losses will be shared
  • The steps for accepting new members and outgoing ones are outlined.
  • The management structure of the LLC
  • Indemnity and liability provisions
A small white card with EIN written

You'll need to get a New Hampshire federal employer identification number (EIN) if you plan on hiring employees and need to withhold Hampshire state income taxes.

This is the LLC equivalent of a personal tax identification number (PTIN).

You can apply for your EIN online or by mail through the IRS (Internal Revenue Service).

Make sure to complete the LLC's federal tax identification information on your EIN application.

The three main purposes of requiring an EIN are to:

  • Open a business bank account
  • File and manage all your Federal and State Taxes
  • Hire employees to conduct business

Opening a dedicated bank account for your LLC, while optional, is a step I recommend for its practical benefits. Here's a brief overview focusing on the requirements:

To open an LLC bank account, you'll typically need your Articles of Organization, the LLC's Employer Identification Number (EIN), and your operating agreement. These documents prove your business's legal status and structure.

Choose a bank that aligns with your LLC's needs. Each bank has different requirements, fees, and services, so it's important to compare options. Consider factors like monthly fees, minimum balance requirements, and the availability of additional services such as online banking and credit lines.

Look into what each bank offers. Some might provide specialized services beneficial for your LLC, like merchant services or tailored business credit options.

Consider both the physical location of the bank and its digital banking capabilities. Easy access to banking services can streamline your financial management.

From my experience, while setting up an LLC bank account involves some research and paperwork, the clarity it brings to your business finances is well worth the effort.

Related Articles:

8. File Your LLC Annual Report (Mandatory)

Happy working man receiving document

This Report is an annual requirement and plays a vital role in keeping your LLC's information current with the state authorities.

The deadline for filing the Annual Report is April 1st of each year. It's important to adhere to this deadline, as missing it can result in penalties and may even lead to the administrative dissolution of your LLC.

The Report generally includes essential details about your LLC, such as the names and addresses of members or managers, the principal office address, and any changes to the registered agent or office.

The filing process is streamlined and can be completed online through the New Hampshire Secretary of State's website.

This method is recommended for its efficiency and ensures timely submission. There is also a filing fee, which needs to be paid at the time of submission.

Remember, the Annual Report is more than just a regulatory requirement; it's a critical update of your LLC's status and a compliance measure that should not be overlooked.

9. Obtain Business Licenses and Permits

Pointing at a document

Businesses that make a certain amount of money must obtain a New Hampshire state business license.

The New Hampshire Department of Revenue Administration requires you to pay a business license fee before they issue the LLC a business identification number.

You must also apply for the following Hampshire business licenses or permits:

  • A Hampshire sales tax permit if you're planning on selling goods in Hampshire.
  • A Hampshire withholding tax permit for employees who will be paying Hampshire state withholding tax.
  • A Hampshire unemployment insurance permit if you are planning on having employees in Hampshire.
  • Hampshire buyer's permit for purchasing goods in Hampshire.
  • If your LLC is doing business out of state, then you'll have to apply for a Hampshire non-resident seller's permit. Other examples would be the Hampshire non-resident buyer's permit and the Hampshire non-resident use tax permit.

10. Choose Your Tax Structure

When choosing a tax structure in New Hampshire, there are several options to consider, each with its own pros and cons.

  • Sole Proprietorship: Simple to set up and requires less paperwork. However, it offers no personal liability protection and limited tax benefits.
  • Partnership: Ideal for businesses with multiple owners. It allows for shared decision-making and profits, but partners are personally liable for business debts.
  • Limited Liability Company (LLC): Provides liability protection and tax flexibility. It's more complex to establish than a sole proprietorship or partnership but offers significant advantages in terms of personal asset protection.
  • Corporation (C-Corp or S-Corp): Offers the strongest protection against personal liability and has potential tax benefits. However, it's the most complex and costly structure to set up and maintain.

As a business consultant, I lean towards the LLC. This structure strikes a balance between liability protection, tax flexibility, and administrative simplicity. It's suitable for a wide range of businesses, offering the benefits of a corporation without its complexities.

Setting up a new structure like an LLC or corporation can take a few weeks to a few months, depending on the complexity and state-specific procedures. It's important to adhere to annual filing deadlines, which can vary by state and structure.

Benefits and Drawbacks of an LLC in New Hampshire

Benefits

  • No Individual Income Tax: LLC members in New Hampshire can retain more of their earnings due to the absence of individual income tax​​.
  • No Sales Tax: This creates a favorable environment for retail and service-oriented businesses, reducing cost burdens on consumers​​.
  • Member Privacy: New Hampshire prioritizes member privacy by not requiring public disclosure of member names in formation documents, enhancing confidentiality​​.
  • Business-Friendly Environment: The state offers a straightforward LLC formation process and low regulatory hurdles, making it accessible for startups and small businesses. Moreover, the landscape for entrepreneurs is particularly promising, with small businesses—numbering 137,811 and representing 99% of the state's total business entities, according to the 2023 U.S. Small Business Administration report—forming the backbone of its economy [2].
  • Tax Credits and Incentives: New Hampshire offers a range of business tax credits, including startup grants and exemptions, to lighten the tax load on small businesses. This supportive environment is complemented by incentives like lower sales taxes and medical insurance deductions. Notably, 304,765 small business employees, making up 49.8% of the state's workforce, underscore the dominance of small enterprises, which constitute 99.0% of its business landscape, as per Statistics of U.S. Businesses [3].

"In New Hampshire, start-up companies that meet the criteria can access various business loans offered by the Capital Regional Development Council. These loans are aimed at supporting new and expanding businesses in New Hampshire, with the maximum loan amount available being $200,000."

-Jon Morgan, Co-Founder & Chief-Editor of Venture Smarter

Drawbacks

  • Corporate Income Tax: Although there is no individual income tax, New Hampshire imposes a corporate income tax at a rate of 7.50%, which affects LLCs that choose corporate taxation​​.
  • Limited Asset Protection: The liability protection offered by LLCs in New Hampshire may not be as comprehensive as in some other states, potentially exposing personal assets to legal risks​​.
  • Interest and Dividends Tax: The state imposes a 5% tax on interest and dividends income, affecting individuals receiving such income​

DIY vs. Professional LLC Formation

DIY LLC Formation

Pros:

  • Cost-Effective: Generally cheaper than hiring a professional.
  • Control: Complete control over the formation process and decisions.

Cons:

  • Time-Consuming: Requires significant personal time and effort.
  • Legal Knowledge: Requires a good understanding of state laws and regulations.

Professional LLC Formation

Pros:

  • Expertise: Professionals are knowledgeable about legal requirements and can ensure compliance.
  • Time-Saving: Saves personal time as the service handles most of the process.
  • Peace of Mind: Reduced risk of errors in documentation and filing.

Cons:

  • Cost: Generally more expensive than the DIY approach.
  • Less Control: You rely on others to manage the formation process.

Individual requirements and circumstances should guide your choice. If the process seems overwhelming or if your business has complex legal needs, professional services might be more appropriate.

Conversely, if you're comfortable with legal documentation and have a straightforward business model, DIY could be a viable and cost-effective option.

FAQs

Can a Foreign LLC Do Business in New Hampshire?

A Foreign LLC can do business in New Hampshire by filing the required legal papers and obtaining the necessary licenses and permits.

What Is the Difference between a New Hampshire Domestic LLC and a Foreign Limited Liability Company?

The difference between a New Hampshire Domestic LLC and a foreign limited liability company is that a domestic LLC is locally formed, while a foreign company originates from another state.


References:

  1. https://sos.nh.gov/corporation-ucc-securities/corporation/forms-and-fees/domestic-and-foreign-limited-liability-company/domestic-forms/
  2. https://advocacy.sba.gov/wp-content/uploads/2021/08/Small-Business-Economic-Profile-NH.pdf
  3. https://www.census.gov/programs-surveys/susb.html

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