Are you about starting a business in New Hampshire and want to form an LLC? If YES, here is the requirement to start an LLC in New Hampshire and the cost. A Limited Liability Company (LLC) is a business structure that has a hybrid nature, which protects the personal liability (such as house, vehicles, and bank accounts) of the owner or owners in the event of bankruptcy or a lawsuit.
A limited liability company is usually owned by more than one person who are known as LLC members. However, it can still be owned by just one member, such an LLC is known as a single-member LLC, whereas an LLC with more than one member is known as a multi-member LLC.
Not only does a limited liability have the obvious advantage of protecting the owner’s asset from a lawsuit, it also drastically reduces the paperwork when compared to corporations and other legal entity types, it prevents your company from being taxed twice, and also increases the credibility of your business. In addition, limited liability companies offer the easiest way of choosing the S-Corp tax designation, because they are simpler to maintain than a standard C-Corporation.
Types Of LLCS
All the various types of LLC have the characteristic advantage of pass-through taxation and limited liability. However, there are still variation of the LLC Business model that may be best suited for different scenarios and individuals. Here are some of the most well-known types of LLCs:
- Domestic LLC: this is an LLC that intends to conduct business in the location where it was registered. Usually, when the term LLC is used, it is actually referring to a Domestic LLC.
- Foreign LLC: if an already existing LLC would like to have a subsidiary in another state, they will need to register in that state as a foreign LLC. For example, if an LLC “organized” in West Virginia opens a business establishment in New Hampshire, then the West Virginia LLC will need to also form in New Hampshire as a Foreign LLC.
- Professional LLC: this is for businesses that are formed with the intention of providing a professional service, such as medical or legal practice. In order to form a Professional LLC, a member of the LLC must have the necessary state licenses to demonstrate their professional qualifications.
It should however be noted that the limitation of liability does not extend to professional malpractice claims. As such, it is best to consult your lawyer before you go for this type of LLC.
- 4. Series LLC: A Series LLC is a unique type of LLC where a single “parent” LLC provides limited liability protection across a series of “child” businesses. Also, each “child” business is protected from the liabilities of the other businesses under the single Series LLC.
Here is a detailed guide on how you can form an LLC in New Hampshire.
A Detailed Guide to Starting an LLC in New Hampshire and the Cost
1. Naming your New Hampshire LLC: the very first step towards choosing a name for your New Hampshire LLC would be to first make sure that the name is available. You can do this by checking the states database to make sure your desired LLC name is available for use.
The name that your LLC can take must be unique and different from other registered names in the district.
LLC Designator: any name that you would choose for your LLC in New Hampshire must be with a proper designator (suffix). Here are the only suffixes that are allowed:
- Limited Co.
- Limited Company
- Limited Liability Company
If you are confused on the suffix to go for, you can stick with “LLC”, which is the most common. It is also the easiest to recognize.
The name you should chose for your LLC may not include a suffix that makes it sound like a different type of legal entity. For instance, Inc., Incorporated, Corp., Corporation, LP, LLP, Non Profit, Non Profit Corporation are not allowed if you intend to choose the Limited Liability structure.
You should also bear in mind that there are some certain names you cannot file online but must be filed through the mail.
If you file your LLC by email and the name is not accepted, the state will refund your filling fee, however, if your LLC was filed online and the name is rejected, you will have to forfeit your filling fee. Due to the fact that online filing is nonrefundable, there are certain names that must be filled by mail.
- Names that start with “A” and are followed by a space: if the name you want to choose for your LLC starts with an “A” and then a space, you will have to file it via email. This is not case sensitive (that is, it does not matter if the “A” is uppercase “A” or lowercase “a”)
- Names that include “The”, “An”, “and”, or “&”: if the name you want your LLC to bear include the following, you will have to file it via mail:
“The” or “the”, “An” or “an”, “And”, “and”, or “&”
- Names that include special characters: any name that has a special character, must be filled via mail. However, Periods, commas, and apostrophes are not considered special characters. They are considered punctuation. Special characters include, –, !, @, #, $, %, ^, *,|, /, () et al.
A lot of people rush the LLC formation process and may find out that after the whole process they are unsatisfied with the name they choose and would like to change it. Even though this is possible, (you can file and amendment), however, the process can be quite complicated. You’ll need to change your LLC name with the IRS, the bank, and the Office of Tax & Revenue. As such it is advisable to choose the best name you can.
2. Choose a registered agent: A registered agent is a person or business entity who will receive notices, legal mail and court documents on your behalf should your LLC be sued or involved in any court case. Your registered agent must have a physical address that is in New Hampshire where the service of process and other documents can be received.
You can be your own LLC’s registered agent, get a friend or family member to serve in this capacity or you can hire a commercial registered agent to fill the role. If you would like to keep your address off public records, then you should hire a Commercial Registered Agent.
3. File the New Hampshire certificate of formation: in order to register your LLC, you will need to file the certificate of formation with the state of New Hampshire. During the filing process, you will be mandated to state if your LLC is member managed or manager managed. If your LLC is manager managed, the manager will have to sign the certificate of formation. Filing for a certificate of formation costs $100.
4. Create an operating agreement: LLCs are not required by law to have an operating agreement in New Hampshire, however, it is always a good practice to have one. An operating agreement is a written contract among the members of an LLC which specifies the ownership of the LLC and what percentage is owned by whom.
The operating agreement also explicitly states how the LLC will be run, how profits will be shared and how the taxes will be paid among other things. An LLC operating agreement helps to reinforce the fact that the company is a separate legal entity from its owner or owners. This helps maintain the personal asset protection provided by your LLC and is very beneficial to have if you ever end up in court.
5. Apply for an EIN: An Employer Identification Number (EIN), also known as an EIN number, FEIN, Federal employer identification number or a deferral tax number can be gotten from the IRS after your New Hampshire LLC is approved by the DCRA.
You can see it as your LLC’s social security number. It helps identify your LLC to the IRS for tax and filing purposes. You will need your EIN if you want to open an LLC bank account, register your LLC with the Office of Tax & Revenue, and process employee payroll (if applicable). Getting an EIN is totally free of charge.