Form An LLC In New Hampshire: The Basics

When you start a business, you have to constantly make the right choice. One of the biggest decisions you need to make is choosing the appropriate structure.

For many startups, the most popular choice is a limited liability company (LLC). That is because of its hybrid nature. It protects the assets of the owners, also known as members, against the debts and obligations of the company. At the same time, it also prevents double taxation.

How to Form an LLC in New Hampshire

Like other states, it also has its own requirements, process, and fees. You will have to register with the Secretary of State by filing the necessary forms.

Fees and Other Requirements

Forming a New Hampshire LLC comes with a filing fee. You have to pay $100 to the Secretary of State. 

You also need to file annual reports which are due by April 1 every year. It costs $100. Additionally, you also have to check if you have to secure business licenses and permits.

Steps to Form an LLC in New Hampshire

  • Follow the naming requirements. One of the most important things that you need to take care of is choosing the name of your company. Make sure that no other business entity is already using the name that you want. You can conduct a free name search on the website of the Secretary of State. If you already have a company name in mind but are not ready to form an LLC yet, you can reserve it for 120 days by filing an Application for Reservation of Name form and pay $15.

The state also has naming guidelines that every business entity needs to follow. An LLC has to have the words Limited Liability Company or the abbreviation (LLC). You cannot use a name that can confuse it with a government agency.

  • Appoint a company registered agent. The state requires you to have a central point of contact. It can either be an individual or another business entity. The registered agent will be in charge of receiving legal documents, tax notices, and other communications on behalf of your LLC.Your registered agent needs to be available during normal working hours and has a physical address in New Hampshire. The address cannot be a P.O. box.

If you choose an individual, it has to be a New Hampshire resident. If it is a company, it has to be authorized to transact in the state.

  • File paperwork. The state requires you to submit a completed Certificate of Formation. It normally takes the Secretary of State around 5 to 7 business days to finish processing the documents.
  • Create an Operating Agreement. While the state does not require LLCs to submit operating agreements, it may be best to have one. This is especially true if your LLC has multiple members. The main purpose of the operating agreement is to list the important information regarding running the company. You can include details about how members join and their contributions, the capital accounts, how you will distribute the profits and losses. You can also indicate the management style, whether it will be member-managed or manager-managed. You can also put details on the process to amend the agreement.
  • Getting an Employer Identification Number (EIN). It will be something that can identify your business entity. It is like a social security number but for businesses. Aside from this, the EIN can also help in the following:
      1.  Opening a bank account under the name of the company
      2. For Federal and/or State Tax Purposes
      3. For your business account that you will use for payroll taxes

You can file for an EIN by submitting a completed SS-4 form. You can get it in minutes and is free of charge. You should do this process after your LLC is approved because you will need to use your registered LLC name for the EIN.

  • Selecting Your Tax Status. One of the attractive features of an LLC is that it provides flexibility when it comes to taxation. There are four ways you can choose from:
      1. Single-member – If your LLC only has one member, the IRS automatically treats it as a single-member LLC. You will have to file a Schedule C with your 1040 at the end of every year. You do not have to pay sales taxes and you get pass-through taxation. You pay self-employment taxes on the LLC’s net profit.
      2. Partnership – If you have two or more members, the IRS will tax you as a partnership. You will file Form 1065. Like a sole proprietorship, you will be a pass-through entity. You do not have to pay income taxes. Meanwhile, the profits and losses will flow to every member’s Form 1040 through Schedule K-1 of Form 1065.
      3. C Corporation – If you want, you can elect your company as a C Corporation. You can do this by filing IRS Form 8832. If you choose this, your LLC will be taxed as a C corporation. So, you will have to pay taxes on profits and losses. These will also not be directly passed down to the LLC members. In short, there will be double taxation.
      4. S Corporation – You need to elect S corporation status by filing Form 2553 with the IRS. Unlike a sole proprietorship or partnership, you can potentially protect some profits from being subject to self-employment taxes. The dividends are not usually subjected to these taxes.

Getting Help

Starting a business comes with a lot of responsibilities. Knowing how to form an LLC in New Hampshire can help you handle the requirements properly. However, if you find the whole ordeal a bit overwhelming, you can always ask for help.

You can turn to a reliable third-party organization such as DoMyLLC. Our team can provide personalized solutions to ensure that you will be getting the service that your company needs. We also offer live support. You can reach out to us if you have any queries.

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