A huge benefit of starting a corporation is its limited liability, meaning that if the corporation files for bankruptcy or is sued, then the personal assets of the shareholders are still protected.
The following step-by-step guide will show you how to start a corporation in New Hampshire.
1. Select a name for your corporation
Starting a corporation begins with conducting a name search to ensure the name you’re contemplating is still available. Additionally, each state has naming requirements that you must adhere to.
General corporate name guidelines
Consider the following New Hampshire naming requirements when deciding on your New Hampshire corporation name:
- Corporations in New Hampshire must select business names that are distinguishable from names of other business entities already on file with the New Hampshire Secretary of State
- Your New Hampshire business name should not imply that it is formed for any other purpose other than what the Articles of Incorporation outline.
- Your New Hampshire corporation name should not imply that it’s formed for any unlawful or illegal purposes
- Your New Hampshire corporation name must include the word corporation, Inc., limited, or company
For additional guidance and direction on deciding on a New Hampshire corporation name refer to the New Hampshire state statute.
Trademarking your New Hampshire corporation name is a good way to protect it from intellectual property theft. It also ensures that no other business entity in the state of New Hampshire can conduct business under your business name. In order to trademark your New Hampshire corporation name, you need to first check that it is indeed available. Thereafter, submit an application to the US Patent and Trade Office.
Your New Hampshire entity name is its legal name. This is the name that the state uses to identify your business, and it’s also the name that you should use on all formation documents.
DBA (Doing-business-as) name
A DBA name is also known as a fictitious or assumed name. In the state of New Hampshire, you need to file for a DBA if you plan on conducting business under any other name aside from your entity name.
The first step is to visit the New Hampshire Business Name Lookup website and ensure that your DBA name is still available. Once you’ve confirmed DBA name availability, head over to the NH QuickStart website to complete the Application for Registration of Trade Name.
2. Nominate a registered agent
Registered agents are often referred to as service of process or statutory agents. In the state of New Hampshire, it’s a legal requirement for every business entity to have a statutory agent.
The main goal of the statutory agent is to receive legal documents and lawsuits on the corporation’s behalf. A statutory agent will need to meet the following requirements:
- The New Hampshire statutory agent must be at least 18 years of age
- The New Hampshire statutory agent must have a physical address in the state of New Hampshire. This excludes P.O. box addresses.
- The New Hampshire statutory agent must maintain availability in order to be able to receive correspondence during normal business hours
- The statutory agent must consent to the appointment
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3. Appoint initial directors at the organizational meeting
Prior to the formation of the New Hampshire Corporation, you’ll need to appoint initial directors. Every corporation in the state will need need to appoint at least one director known as the corporate director. The role of the corporate director is to adopt amend, and repeal bylaws as well as elect, supervise and remove corporate officers.
The election of the initial director must be done during the first organizational meeting, and the director will serve a term until the first shareholders’ meeting.
4. File Articles of Incorporation
Filing the New Hampshire Articles of incorporation, also referred to as a Certificate of Incorporation legally forms your business. The articles must be filed with the New Hampshire Secretary of State along with the necessary filing fees.
Your corporation will legally exist at the close of business on the day you submit to the Articles of Incorporation. Some of the necessary information that must be included in your corporation’s articles are:
- Your corporation’s name
- The addresses and names of the organization’s incorporators
- A statement regarding the securities act compliance
- The statutory agent and registered office
- An additional document that states that the company will comply with New Hampshire laws
- The corporations stock structure
The articles must be filed online with the New Hampshire QuickStart website. You may also opt to download the Articles of Incorporation Form and then have it mailed to the following address:
NH Dept. of State
107 N. Main St., Rm. 204
Concord, NH 03301-4989
5. Create and approve bylaws
Bylaws are not a New Hampshire state requirement; however, they are the rules that determine how your corporation is going to be operated. Essentially, it’s a constitution for your corporation and clarifies the rules for all members of the corporation.
New Hampshire corporation bylaws will need to supplement the existing rules of the federal government or the state.
Include the following information in your corporate bylaws:
- The rules for governing the operations of the corporation
- The rules for holding meetings, voting procedures, and electing directors and officers
- The process of storing and managing corporate records
- The rules for handling company disputes
- The rules for adding or amending bylaws in future
- The date of the annual meetings and the annual shareholder meeting
- The rules for negotiating contracts
6. Select a share structure
A share of stock resembles the unit of ownership of a corporation. Therefore, each share of stock represents a percentage of ownership of the corporation.
So if your corporation issues one share of stock to a stock owner or shareholder, then that individual then owns the corporation 100%. Shares are often structured into classes, and each class is known as a share class holding a different set of rights and privileges.
Corporations are allowed to have multiple classes, and each class is allowed to hold any number of shares.
7. Obtain an EIN
Obtaining an EIN or Employer Identification Number is necessary to complete a number of tasks, such as opening up a business bank account, submitting paperwork for tax purposes, and hiring employees.
Any EIN is issued by the federal government or Internal Revenue Service and is used as a way to identify business entities in every state. Essentially, it’s a social security number, not for individuals but instead for businesses.
Obtaining an EIN is 100% free of charge when you apply via the IRS website. The quickest way to get your EIN is to complete the online application; however, you are also free to download the EIN application Form and submit it to the following address:
Internal Revenue Service
Cincinnati, OH 45999
8. File New Hampshire state taxes
Based on your business type, or business structure, you may be liable for one or more corporate taxes in the state of New Hampshire:
- New Hampshire employer taxes: Any business entity that hires staff must register for the New Hampshire employer taxes. The application must be put through the New Hampshire Employer Security website.
- New Hampshire sales tax: New Hampshire is one of the five states in the US that doesn’t have a sales tax on goods and services.
- New Hampshire corporate taxes: New Hampshire has two corporate tax forms, which is the business profits tax [BPT] and the business enterprise tax [BET]. For more information on corporate income tax refer to the New Hampshire Department of Revenue website.
9. New Hampshire business licenses and permits
New Hampshire is one of the five US states that does not have a statewide general business license. Additionally, there is no seller’s permit or state sales tax. But, corporations in particular professions or professional corporations must have specific permits or licenses in order to offer their services legally in the state.
Refer to the NHOPLC or New Hampshire Office of Professional Licensure and Certification for more information on whether your corporation needs a professional license.
10. Annual report requirements in New Hampshire
Your Corporation must file the New Hampshire annual report between the 1st of January and the 1st of April of the year following incorporation. Thereafter, the annual report is due every other year following the 1st of April. The quickest way to fire the annual report is to do it via the New Hampshire QuickStart website.
11. Costs of starting a corporation in New Hampshire
The filing fees below apply to all New Hampshire corporations:
- Name reservation: $29
- DBA name: $50
- Articles of Incorporation: $100
- Annual report: $100
- New Hampshire Certificate of Good Standing: $5
Next steps after forming a corporation
By following the above step-by-step guide, you’ll be able to start your New Hampshire corporation in no time at all. However, forming your corporation is just the beginning, and you have to maintain your corporate status and remain in good standing.
Here are some steps to follow after the formation of your New Hampshire corporation:
Hire a business consultant
Hiring a business consultant for your New Hampshire corporation comes with various benefits, such as:
- Helping to effectively manage your corporation’s funding and also discover and explore unforeseen areas of loss or extra profit
- A business consultant makes payroll and bookkeeping much easier, leaving you with more time to focus on your growing corporation
- A business consultant helps your business from overpaying on taxes while also helping you to avoid penalties, costly tax errors, and fines
Obtain a New Hampshire certificate of good standing
A New Hampshire certificate of good standing confirms that your corporation was formed legally and has been appropriately maintained. There are several instances where a certificate of good standing will work to your advantage, including:
- Obtaining what in your specific business permits or licenses
- Forming your business as a foreign corporation in any other state
- Seeking funding from lenders and banks
A certificate of good standing may be obtained online, in person, or via mail via New Hampshire QuickStart. While there is no specific form to complete, New Hampshire does provide instructions on how to make requests.
Double taxation basically refers to income taxes that are paid twice on the same income source. Double taxation occurs when income is taxed at the corporate and personal levels. The only business structure that is liable for double taxation is a C corporation.
A sole proprietorship has a single owner and no employees. Additionally, sole proprietorships are formed to generate a profit. Nonprofit corporations, on the other hand, are created to raise money for the greater good of the public.
An LLC or limited liability company is easy to start up and maintain, offers management flexibility, and is also sought after for the fact that members are not held personally liable for the actions of the company. So members’ personal assets are protected by personal liability protection.
A C corporation or a C Corp. is often the best option for startups looking to attract investors. Sole proprietorships are the easiest business structures to start, and limited liability corporations or structures protect members’ personal assets.
While several states have advantages for incorporating, often the best state to form a corporation in is where you’re located and intend on doing the majority of your business. Certain states offer specific corporate tax benefits, while others have more flexible business laws.