New Hampshire LLC Formation
LLC is an acronym for limited liability company. An LLC is a type of business entity that allows you, as a business owner, to lower your level of legal liability. With a sole proprietorship, you can be held personally accountable for any debts and lawsuits your company incurs. A New Hampshire LLC is different. With an LLC in Hampshire, your personal finances and business finances are separate. Creditors and anyone suing your LLC can only go after the LLC, not you for money.
You may not want to start a business. Instead, you may want to hold assets such as an aircraft, real estate or vehicles in an LLC rather than in your name. New Hampshire allows you to form an LLC for this purpose.
New Hampshire LLC formation is a smart choice for anyone wanting to start a business in the state. An LLC provides you with personal liability protection and ways to save money on business taxes. New Hampshire LLC formation has eight steps:
1. Complete an LLC Name Search
2. Select a Registered Agent
3. Obtain a Certificate of Formation
4. Create an Operating Agreement
5. Get an EIN Number
6. Complete an Annual Report
7. Obtain a Business License
8. File Your LLC Taxes
Complete an LLC Name Search
Before completing any New Hampshire LLC forms, you must think of a business name. New Hampshire is very strict in what you can choose as an LLC. When thinking of a name for your LLC, you’re required to follow a few requirements:
1. You must use LLC somewhere in your business name. You can use “LLC” or “L.L.C.” Most people use LLC at the end of the business title.
2. You can’t use the words “Incorporated”, “Corporation”, “Inc.” or Corp.” in your business name. An LLC in New Hampshire isn’t a corporation or incorporated. Thus, the state won’t allow you to mislead anyone.
3. Create a distinguishable name for your business. This means the name must be distinct and different from anyone else’s business name in the state. Changing the grammar or using an identifier at the end of your business name won’t make it different and unique from other businesses with a similar name. For example, if you use “&” instead of “and” in a business name that is similar to another business, then the state will reject it.
Once you have a list of potential business names, you can complete the first step. This step requires you to search the New Hampshire name database. The state requires you to do this to ensure no one is using your potential business name. The quickest way you do this is by visiting the database called the “Business Name Search” page on the state’s website.
The second thing you’re required to do is input your potential name into the database. Make sure “Starts with” is selected. Input your business name into the “Business Name” field. The last step is to hit the “Search” button. It doesn’t matter if you use lowercase or uppercase when you’re entering your business name. Avoid using “LLC” or “LLC” and any punctuation out of the search.
For a successful search, you must be thorough. This means just entering the first couple words of your business name will be enough to determine if another business has the name you want to use. After you hit the “Search” button, browse the list of businesses with the same and/or similar names as your potential business name. You may find the following:
- The results show the names aren’t too similar to yours. This means you can use the business name.
- If the “No data found with your search criteria” message pops up, then you can use the potential name for your business.
- If your potential business name appears on the results list exactly as you entered it, the business name isn’t available for you to use.
- If your results show a business name considered “deceptively similar” to the name you want to use, it’s not available. You’ll either need to think of another name or think of a more creative name not too similar.
The reason this is an important step is that your LLC request may be rejected if you submit your New Hampshire LLC forms with a similar and/or identical business name.
Never apply for your Federal Tax ID Number (EIN), domain name, marketing materials or business cards until your LLC is approved. If it is rejected, you’ve just wasted a lot of money, and you must choose a different name.
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Select a Registered Agent
Before sending any documents to the Secretary of State to form your LLC, you’re required to pick a registered agent. A registered agent is a company or individual who accepts legal mail on your LLC’s behalf. The legal mail includes anything sent from the Secretary of State, lawsuits and tax notices. New Hampshire considers your registered agent as a point of contact for your LLC.
When selecting a registered agent, follow the state’s rules. These rules are specific. For instance, your registered agent must have a physical address in New Hampshire. A postal box isn’t accepted as an address for your registered agent.
Another rule is your agent registered with the company must be available during normal business hours. These hours are typically 9 a.m. to 5 p.m. during the weekdays. Your agent must be available for any service of process such as summons, complaints and/or subpoenas.
You have three options when selecting your registered agent:
1. Select yourself as your LLC’s registered agent. Remember, you must meet the state’s criteria registered agents.
2. Nominate your family member or friend as your LCC’s registered agent. They must also follow state guidelines regarding registered agents.
3. Hire a commercial registered agent. A commercial registered agent specializes in receiving any legal mail on behalf of your LLC. They charge an annual fee to do so. This service is highly recommended if you’re starting your LLC at home or you don’t want the LLC’s address on public record.
Obtain a Certificate of Formation
The only way you can have an active LLC in New Hampshire obtaining a Certificate of Formation. The certificate, called a Certificate of Formation of a New Hampshire Limited Liability Company, is filed with the secretary of state. Consider the certificate your LLC’s birth certificate.
Your certificate must contain the correct information to be approved by the state. The certificate must include:
- LLC’s name
- LLC’s address
- Registered agent’s name and address
- LLC’s dissolution date
- LLC’s nature of business
- Whether your LLC is run by managers
- Form SRA. This form contains a statement that you have complied with the state’s securities laws.
New Hampshire requires you pay a filing fee.
You can send the filing fee and form to the secretary of state in one of three ways:
1. By mail. You’ll receive a decision on your LLC in one to three weeks.
2. Online. You’ll receive a decision on your LLC in three to seven business days
3. In person. You’ll receive a decision in 15 minutes to two hours.
Create an Operating Agreement
The next step is creating an operating agreement for your LLC. Creating an operating agreement isn’t required in New Hampshire. However, it is important to create one for legal reasons. An operating agreement is a legal agreement between co-owners, also called members, of an LLC. The purpose of this document is to explain how the LLC will be operated and financed. This means you set the rules and policies of how you’ll run the LLC. If you are the sole owner of an LLC, it is still a great idea to have one. An operating agreement maintains a legal separation between your personal finances and LLC.
The type of information you’ll include in your operating agreement is:
- Who are the members, or owners of the LLC
- What percentage does each member owns
- How the LLC is managed
- How taxes are paid
- How profits and losses are distributed to each LLC member
- The rules a member must follow to sell percentage
- What happens to a member’s percentage when they die or are incapacitated
- The rules for new members wanting to buy into the LLC
Remember, an operating agreement is fluid. This means that changes to the way the LLC operates or is financed can change at any time. Thus, it’s important to create an operating agreement with the help of a professional LLC service instead of using a boilerplate operating agreement.
A boilerplate operating agreement is a one-size-fits-all document. It has all the terms needed for an agreement and allows you to fill-in-the-blanks with your LLC’s personal information. However, not all LLCs are the same. You need a customized operating agreement. This will allow you to include specific information and make changes as needed.
If you do create an agreement for the operations of the company, file it with your formation certificate.
Get an EIN Number
An EIN, or Employer Identification Number, is your LLC’s social security number. The number identifies your LLC for filing and tax reasons. With an EIN, you can open a business bank account. In addition, you can apply for specific licenses, hire employees and obtain permits.
To apply for an EIN, go to the Internal Revenue Service (IRS) website or complete the required form and mail it to the agency. Applying online is the easiest way to get this number. You fill out a couple of questions about your LLC, then hit submit button.
The IRS doesn’t charge you a fee to get an EIN. You do need a Social Security Number (SSN) or ITIN to apply for an EIN online. If you don’t have either an SSN or ITIN, complete the paper form and mail it into the IRS. It’s the only way to obtain an EIN without the required ITIN or SSN.
Complete an Annual Report
Once your LLC New Hampshire is approved by the state, you must file an annual report. This yearly report is required to keep your LLC in good standing and in compliance with the secretary of state. Complete your annual report online via the state’s QuickStart filing system. Although you can complete the report online, you have the option of submitting it electronically or sending a printed copy by mail.
New Hampshire includes a filing fee for your annual report. The processing time for all annual reports is approximately one to three weeks when you submit the report via mail. It is immediate if you submit the document online.
The first annual report isn’t due the year following the LLC’s formation. For example, if your LLC was formed May 2019, your report would be due between January 1st and April 1st of 2020. You can file the report during January 1st and April 1st of each year.
If you miss your annual reporting date, your LLC is assessed a penalty. In addition, New Hampshire will set the status of your LLC to “Not in Good Standing.” If you don’t file an annual report for two consecutive years, then the state will dissolve your LLC.
Sometimes a registered agent will receive a notice from the state regarding your annual report after it’s been submitted. This will happen when there’s one or more errors on the report. New Hampshire will give you 30 days to correct any errors in your annual report. You are responsible for re-filing the report within that time period.
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Obtain a Business License
Whether you complete this step depends on the nature of your business such as whether you sell goods and/or services. You must company with all city and county permit and license requirements depending on where your business is located and your industry. If you don’t comply with New Hampshire’s permit and license requirements, the state may penalize you. For example, you may be fined or unable to do business in the state.
File Your LLC Taxes
If your LLC has employees, it is liable to pay certain New Hampshire taxes. Check with the state’s department of revenue administration for assistance with knowing which taxes you’re legally responsible to pay. In addition to state taxes, your LLC is responsible for paying federal taxes.
The taxes collected by the IRS depend on your LLC’s status. For example, the IRS taxes a single-member as a sole proprietorship. Multi-member LLCs are taxed as a partnership. A multi-member LLC is a type of company owned by several co-owners.
Forming a Foreign LLC New Hampshire
If you are an existing LLC, you can do business in New Hampshire. An existing LLC just means that your LLC was formed in another state or territory. However, to do business in the state, all LLCs must register with the secretary of state. Also, your LLC must select a registered agent who is physically located in the state so that they can receive legal documents and notices.
To register as a foreign LLC, complete the Application for Registration as a Foreign Limited Liability Company. You must pay the filing fee and send it via mail. Included with your application and fee must be a good standing or certificate of legal existence from your LLC’s home state.
You should still complete the necessary steps to forming an LLC such as a business name search. If the name of your existing LLC isn’t available, create a new business name to use in New Hampshire. You’ll need to file the fee and Trade Name Registration application with the secretary of state.
Use a Professional Service to Make Forming an LLC in New Hampshire Easier
An LLC New Hampshire is a great way to protect your personal finances from your company’s debts and liabilities. This means creditors can’t use your personal money to pay off your LLC debts. However, forming an LLC in the state is a complicated matter. One misstep in the formation process and your LLC may not get approved. This means you’ll constantly re-start the process until it’s done correctly.
You don’t have that type of time. You’re building a business. Take an easier and stress-free approach to forming an LLC. Seek the help of a professional LLC formation service in New Hampshire. A professional LLC formation service will complete the required steps in the formation process for your LLC. When you’re forming a New Hampshire LLC, get a professional service to do the hard work for you. This way you can focus on starting, financing and growing your LLC. New Jersey LLC formation is the next topic.