Last Updated on June 13, 2022 by Fair Punishment Team
Are you wondering how you can start an LLC in New Hampshire? It’s a great state to form one as it has some key benefits for small business owners such as limited personal income tax. However, there are a few key things you’re going to need to know to get started.
LLC’s require you to choose a registered agent, file articles of incorporation, create a unique operating agreement, get an EIN number, and decide if you will need a BIN.
As you can see, that’s a lot to get started with! But that’s not to say that it needs to be confusing. In this article we’re going to be taking you through each of these steps, helping you along the way to smooth the process.
What Is An LLC?
Let’s start at the very beginning. What exactly is an LLC? An LLC is an abbreviation for what we call a ‘limited liability company.’ These will offer you protection from lawsuits and can be used for a whole host of different business purposes such as partnerships, proprietorship, and corporations.
LLC’s are a common form of business that allows you to curb your own risks by putting caps on your own liability.
LLC’s are US-specific forms of private limited companies. There are similar forms within other countries, but for the purpose of this article, we’re only going to be looking at how an LLC works within New Hampshire.
It’s worth noting that an LLC does not classify as a corporation, but instead it is a legal form of a company that means individual members will have limited liability within many different jurisdictions.
Why Should You Form An LLC?
In an LLC, only the assets owned in the name of itself are subject to the claims of creditors – and this includes specific lawsuits that might be brought against your business. More than this, the personal assets of a member of an LLC cannot be taken to satisfy debts.
This means that the only thing that will be on the line – in, for example, a lawsuit – will be the business’ own assets. Because of this, you can probably see why LLC’s are a popular choice when forming a company.
In short LLC’s protect your own assets, and without one, you could be liable for others to claim your own personal assets. There is more than one way to get around this, but an LLC is one of the simplest ways.
New Hampshire Requirements
Before you form an LLC, you’re going to need to be aware of the various requirements that you will have to meet. We’ve listed these below in a simple, step-by-step guide. Make sure you check all of these closely, as almost all of these are a legal requirement.
Step 1. Naming Your LLC
Trying to pick a company name is the first step, and one of the most exciting things you can start out with. But we begin here with a roadblock! You’ll have to make sure you choose a business name that aligns with the New Hampshire naming laws and requirements.
The second thing you need to keep in mind with this step is to choose a name that can be easily searched. Potential clients or customers are going to want something simple so that they can find you!
Here are some common things you’ll have to abide by:
- You won’t be able to include words that could get your company confused with a government agency. This one is self-explanatory – so make sure it doesn’t overlap with anything such as the Treasury, the State Department, or the FBI.
- You need to make sure that you include either the abbreviations L.L.C,’ ‘LLC,’ or the unabbreviated version ‘limited liability company.’ this is important because it identifies your company in the form that it is.
- Consider restricted words. There are additional restricted words that you might need additional legal paperwork in order for you to use them. For example, if you want the word ‘University’ within your company name, you might require a licensed individual to do so.
You can check if your name is available by using the New Hampshire QuickStart Website here.
Step 2 – Choose A Registered Agent
Next up you’re going to need an SSA or a specific statutory agent. In short, these are representatives of your company who will respond to any official legal papers that you might receive.
here are a few specific parameters that this agent must fulfill in order to become attached to your LLC, and you’ll need to keep them in mind.
So who can be a registered agent? A registered agent must be:
- A Resident of New Hampshire,
- or else a corporation that is authorized to conduct business in New Hampshire.
- Somebody that you can elect – this can even be yourself!
So what if you want to be your LLC’s own registered agent? Well, you can, but it means that you’ll have to have your name and address added to the public record. You will need to be onsite and make sure that you keep regular business hours.
This isn’t so much of a problem if you’re the head of a new startup, but it is something to keep in mind.
Step 3 – Filing Articles Of Corporation
The first step of creating an LLC is to create a company in a regular way. This then gives you the opportunity to clarify that your company is an LLC, which will mean that individuals can legally act as separate to your company.
After creating your company, you’ll be able to specify the kind of company that you’re going to make – be it regular or professional.
Next up, you’ll need to fill out what is known as ‘articles of corporation.’ These are documents that will outline the finer details of how your company will operate, and it is here you can specify that you will be an LLC.
In short, you’re going to need to register your New Hampshire LLC by filing a Certificate of Formation. You can do this through the New Hampshire Department of State, contacting them either through the NH Quickstart Website or with physical documents via the mail.
It’s worth noting here that there is a specific way that you need to arrange your form, but it’s all fairly straight forward and you should be able to just follow the direction given to you within the document.
The processing time for these documents can vary, but will usually come back to you from 7 to 10 business days. If you’re doing it online, it may well be much quicker. There is a human component to checking your documents, so make sure you allow some time for this to happen!
The last thing we want to outline in this section is some of the costs associated with this process. As you’ve probably noticed by this point, creating any kind of business comes with a lot of individual costs that you might not have been expecting.
To cut these down, we would like to highlight that the general cost to start an LLC in New Hampshire comes in at $100. There are different ways in which you can make this payment – but make sure you expect it and put some funds aside for it!
Step 4 – Creating An LLC Operating Agreement
Alright, so we need to explain to you first off that creating an LLC Operating Agreement is not a legal requirement, but it’s very important that you do one! In short, an operating agreement is an official, legal document that will outline the operating procedures and ownership of your LLC.
It’s an important document that can save you some real legal hassle or problems in the future.
Operating agreements are especially important if there are multiple owners in your company, as they will ensure that everyone is on the same track when it comes to how your business operates.
So what does a good agreement look like? You’re going to want a professional to write this document, but in short, it will heavily outline and define some of the most common practices, ethos, and procedures within your company.
A well-written agreement is going to be comprehensive and easy to understand, ensuring that all owners understand the finer details.
If you have legal definitions for all of these processes, it means it will be much harder for legal disputes to occur in the future, and also means that everyone knows where they are within the business.
A good agreement will also outline what happens if things go wrong in the company, and how ownership can be transferred in a variety of different scenarios.
Step 5 – Obtaining An EIN Number
What is an EIN Number, you ask? It’s a simple 9-digit number that will be used to identify your business. It’s an abbreviation for Employer Identification Number and is usually assigned to you by the Internal Revenue Service. This number is used for anything relating to business or tax.
One of the best ways to think of this number is that it is your social security number, only for your business instead of yourself. LLC’s must get an EIN number as it is required for you to: open a business account, hire any employees, or file Federal and State income tax.
The good news is that you can get an EIN for no charge! It’s a simple process, one that – like the steps above – you can do either by mail or online. Once you receive your EIN, you can go about deciding what tax structure best fits your company.
There are multiple tax classification options out there, but it’s most common for an LLC to use the default tax status, as this is most simple.
It’s worth noting that once you get an EIN number, there may be a fee in order to renew it. This usually happens annually, so it’s something you should keep in mind after you receive the initial number the first time.
Step 6 – Deciding If You Need A BIN?
You might be wondering what a BIN is? A BIN is a Business Identification number, and it’s only relevant if you’re planning on hiring employees. If your company is small, let’s say just you and one other owner, and you have no plans to expand – then this won’t matter all that much to you.
Still, in the early stages of a business, it can be important to get one so that you can hire as and when you need to. A BIN is a requirement in order for you to meet payroll tax obligations.
Creating an LLC is a long process, but it’s only a few additional steps that separate it from forming a regular company.
In this guide, we have covered the basics, but within each step there are sure to be some extra hurdles that you will need to pass through in order to get what you want. We suggest that you research closer if there’s anything that you’re confused about.
Hopefully, this article has given you some insight into how to form an LLC in the state of New Hampshire.
Be aware that there are many different versions of this process depending on what state you’re in, and small differences may occur depending on where you are starting your company. If you still have some questions left over, keep reading for our short FAQ for some possible answers!
Frequently Asked Questions
How Are LLC’s Taxed Within New Hampshire?
Some good news here! New Hampshire is one of only five states within the USA that does not make you pay sales tax. This means that you won’t have additional charges for sales. However, you will still have to pay general tax rates.
What Is Better – LLC Or Sole Proprietorship?
Sole proprietorship is better for small businesses with low risks and low profits. LLC’s are better if you’re looking to expand your business, and expect that there might be legal problems in the future.
Sole proprietorships mean that you are much more liable, but this isn’t such a big deal if your company doesn’t have much turnover.
How Long Does It Take For A New Hampshire LLC To Be Approved?
Generally, this process can take from 3 to 5 weeks. This might seem like a long time, but makes more sense when you break the process down. There is a general 1-3 week processing time, and if you’re going by mail, there is an additional period in which your documents will be in the mail.
The online version of this process takes a lot less time, and can be done within a business week!
Do I Need To Create Separate Bank Accounts For Different LLCs?
Because an LLC means that company assets will be separate to your own, you will need to create a separate bank account if you’re making multiple LLC’s. You’ll need to do this in order to make sure that your company is legally distinct from individuals, or other companies!