New Hampshire is one of the most business-friendly states given it does not levy a state income tax on net business profits. For entrepreneurs throughout the country, New Hampshire emerges as a top contender to do business, as it has no income tax on wages, no sales tax, and a lenient economic framework.
Establishing a Limited Liability Company (LLC) in New Hampshire can be beneficial for both small and large businesses as it allows for tax efficiency, limited liability, and flexibility in management structure.
In this comprehensive guide, we will walk you through the necessary steps, costs and ongoing compliance of maintaining an LLC in New Hampshire to help the reader understand its various benefits.
Step 1: Name your LLC in New Hampshire
Choosing a name is imperative as it depicts what the business will be known for and where it will position itself in the minds of the consumers. Furthermore, the name must be in accordance with New Hampshire state regulations.
New Hampshire LLC naming requirements:
- The name of the entity must contain the words “Limited Liability Company” and can be abbreviated as “LLC” or “L.L.C.”.
- The name should not be similar or identical to any entity name on record in New Hampshire. For instance, if “Granite Builders LLC” exists, “Granite Builderz LLC” will be refused because it is too similar.
- Restricted words, including “Bank,” “University,” or “Insurance,” may not be included in names unless permission from the appropriate state department is granted.
Inaccurate representations of the business are not permitted.
👉 To check if the name is free, you may check the New Hampshire Secretary of State’s QuickStart Business Name Search tool.
Name Reservation (Optional):
If you are not ready to file the LLC paperwork but are ready to set the business name, you may reserve it for 120 days with an Application for Reservation of Name. The fee is $15.
Pro Tip: Consistency is key in branding, so it’s best to check if the website URL, domain, and social media handles are free too.
Step 2: Designate a Registered Agent
In New Hampshire, all LLCs are required to get a Registered Agent for the business, whose responsibilities will include receiving legal and government documents on behalf of the business. These documents include but are not limited to service of process (lawsuit documents), tax documents, compliance notices, and other official mail.
Who can be a Registered Agent?
- Any person residing in New Hampshire with a verifiable physical street address.
- An entity such as a professional registered agent service is permitted to conduct business in New Hampshire.
Requirements:
- Must have a physical address in New Hampshire (cannot be a PO Box).
- Must be reachable for document service during standard business hours.
For international entrepreneurs, or those without a local presence, this hiring a professional registered agent service is optimal, as it guarantees compliance with local regulations while ensuring all critical communications are received.
Step 3: Submit the Certificate of Formation
Your LLC is legally formed in New Hampshire once you file the Certificate of Formation and is granted a Certificate of Formation, which is the official document that establishes your LLC. You’ll file this with the Secretary of State and it contains details of your company.
Information required in the Certificate of Formation:
- Name of LLC and the principal business address.
- Name and address of registered agent.
- Management structure of the business (whether member-managed or manager-managed).
- Purpose of the business (typically, a broad description suffices).
- Duration of the LLC (whether perpetual or for a limited timeframe).
Filing Methods & Fees:
- Filing Online via NH QuickStart Portal: $100 filing fee, and faster approval (3-7 business days).
- Mail: $100 filing fee, may take slightly longer to process.
After your filing is approved, you will receive a Certificate of Formation that confirms your LLC is registered with the state.
Step 4: Draft an Operating Agreement
While an Operating Agreement may not be a legal requirement in New Hampshire, it is suggested for every LLC, particularly for those with multiple members.
An Operating Agreement serves as an internal document detailing entitlement, duties, and ownership of the LLC. In absence of an Operating Agreement, the business is subject to governing state default laws, which may not align with the desired operational framework.
Operating Agreement Key Sections:
- Ownership structure: percentage of ownership for every member.
- Profit and loss distribution: allocation of finances among members.
- Management: members run the business or it is run by managers whom they appoint.
- Decision making: the voting system for major issues.
- Member changes: adding or removing members procedures.
- Dissolution: closing a business and the procedures to be followed, if need be.
Well-drafted Operating Agreements enhance business reputation while opening bank accounts and dealing with potential investors. In addition to reputation, the Operating Agreements increases protection against other members while disputes reduce.
Step 5: Apply for an EIN (Employer Identification Number)
The IRS issues an Employer Identification Number (EIN). The EIN serves as a tax identification number for the business and is crucial in managing the business’s finances and filing taxes on federal level.
Reasons your LLC requires an EIN:
- For filing federal tax returns for your business
- For recruiting employees
- For establishing a business bank account in the United States
- For dealing with American payment processors including Stripe, PayPal, and Amazon
- For establishing business credit
Where to get an EIN:
For Americans, applications can be made through the IRS website and will be generated instantly.
For Non-U.S. residents without a Social Security Number, application can be made using Form SS-4. This form needs to be sent to IRS via mail or fax. This step is important for obtaining a US bank account and can take a few weeks.
Step 06: Annual Report Submission
To maintain your LLC in compliance and good standing with the law, New Hampshire mandates the filing of Annual Report on the regular basis not less than annually.
Details:
- Deadline for submission: every 1st april
- Cost for submission: One hundred dollars
- Method for submission: Through Secretary of State QuickStart Portal, filing is conducted electronically.
Through the Annual Report, the LLC is able to update the State of New Hampshire on the contact details, ownership, and Registered Agent of the LLC.
Inability to file Annual Report in a timely manner has consequences that include but are not limited to penalties, and loss of good standing and possible administrative dissolution of your LLC.
Step 7: Managing Licenses, Permits, Taxes, and Compliance
Even though there is no sales tax and no state income tax on wages in New Hampshire, there may be additional tax and compliance obligations related to your LLC.
These may include:
- Business Profits Tax (BPT): This tax is incurred by LLCs exceeding a specified gross income threshold.
- Business Enterprise Tax (BET): This tax applies to businesses with an enterprise value of a specified threshold.
- Specific licenses or permits related to certain businesses: If your business deals with health, construction, food, or financial services, additional state or federal licenses may be acquired.
- Local business licenses: These licenses may be required on a city or county level, depending on where your business is located.
For businesses operating in New Hampshire, consulting with a tax expert and maintaining accurate financial records, in addition to proper bookkeeping, is essential to remain compliant with IRS and state regulations.
Benefits of Forming an LLC in New Hampshire
New Hampshire has certain key benefits for people intending to form an LLC.
No state income tax on wages and salaries: Retains a larger portion of their personal income for entrepreneurs.
No general sales tax: Particularly advantageous for eCommerce and retail enterprises selling goods in New Hampshire.
Cost-effective filing fees: In comparison to most other jurisdictions, LLCs have a lower formation fee, as well as lower annual maintenance fees.
Maintaining a competitive advantage: Illinois encourages entrepreneurial growth which benefits the state’s economy, therefore LLCs are not subjected to excessive restrictions.
Flexible management: The owners of the business have the option of appointing managers to handle day to day operations or they can choose to manage it themselves, allowing owners greater flexibility.
How Bizstartz Can Help You Form an LLC in New Hampshire
Starting a business in a new country or a new state can be overwhelming. This is where Bizstartz comes in. We assist both U.S. and foreign entrepreneurs in setting up their businesses in New Hampshire and throughout the United States.
Here at Bizstartz, we have New Hampshire LLC formation services which entail:
- Searching and reserving business name
- Filling your Certificate of formation with the Secretary of state
- Professional registered agent services in New Hampshire
- EIN application services, including support for foreign residents without SSN or ITIN
- Custom drafted operating agreements
- Annual report filing and compliance monitoring
- Sustained good standing bookkeeping and tax filing
With us at Bizstartz, you will notice that the pain points of the process are simplified and expedited, giving you your time and peace of mind.
Concluding Your Thoughts
New Hampshire is among the very best state LLC, with powerful buisness legal protections, low taxes, and ease of filing. As an LLC, you will enjoy limited liability, and heightened business trust, whilst laying the groundwork for expansion.
Should you wish to establish your New Hampshire LLC today, allow us to manage the entire process, from filing the necessary documents to maintaining regulatory compliance.
