How to Start a Business in New Hampshire

Choosing an entity type is the first step to starting a business in New Hampshire.

Sole proprietorships and general partnerships are business structures that do not require formation paperwork to be submitted to the Secretary of State. But without formal paperwork, these businesses are not considered legally separate entities from their owners. This means that sole proprietorships and general partnerships do not have liability protection. And, without liability protection, your personal assets—such as your house, car, and savings accounts—could be seized to satisfy any business-related debts.

Let’s go over the most common entity types that provide liability protection: LLCs and corporations.

New Hampshire Limited Liability Company (LLC)

A limited liability company (LLC) is a popular business choice because of how flexible an LLC is to run and manage. You can hire an outside manager, appoint someone within the business, or handle the day-to-day operations yourself. LLCs are taxed as pass-through entities by default and have liability protection, making them a competitive choice!

To form a New Hampshire LLC, you’ll need to file Articles of Formation with the New Hampshire Secretary of State.

New Hampshire Corporation

Corporations are less flexible than LLCs. Shareholders must appoint a board of directors, who then hire officers to run the business. In addition, corporations have stricter policies and are required to hold annual meetings. However, corporations can sell stock, which will help attract investors and make it easier for the business to grow at a faster rate than an LLC. And like LLCs, corporations have liability protection.

To start a New Hampshire corporation, you will need to file the Articles of Incorporation with the Secretary of State.

It’s time to name your business. If you’re a sole-proprietor, then your business name is automatically your legal first and last name unless you get a DBA.

To name your New Hampshire LLC or corporation, you will need to abide by the New Hampshire business naming requirements. This means that your name:

• Must include an identifier, such as “LLC” for limited liability companies and “INC” for corporations.
• Must be unique among existing New Hampshire businesses.
• Cannot contain language that makes it seem like your business is a different type of entity, such as “charity” or “gov”—unless your business is a nonprofit or government agency.
• Cannot use the name of a political party without written consent from a representative of that party.

Complete an advanced business name search to see if your business name is available in New Hampshire.

Sole proprietorships and general partnerships do not need to file formation paperwork with the state. It’s only when forming a separate legal entity, like an LLC or corporation, that you need to file with the Secretary of State.

• To form a New Hampshire LLC, file your New Hampshire Certificate of Formation for $100.
• To form a New Hampshire corporation, file your New Hampshire Articles of Incorporation for $100.

After filing, you will be assigned a charter number (also called a Business Identification Number) by the Corporation Division.

You’ll also need to appoint your registered agent before filing your formation documents. Keep in mind that the information listed on your business forms, including your registered agent’s name and address, will be publicly available.

So far in this guide, we’ve dealt with public forms that you’ve had to file with the New Hampshire Secretary of State. Now, it’s time to organize your internal records. These are the documents your business will keep on record within your company.

Though these documents are internal, you’ll likely need to show them to third parties like the bank or—if you start a nonprofit—the IRS.

Here are the major internal documents you need to organize for LLCs and corporations:

New Hampshire LLC Operating Agreement

This is your LLC’s rule book. It defines how your LLC will do things like make decisions, distribute money, manage operations, and appoint officers. Your operating agreement plans for every big picture scenario your LLC is likely (or unlikely) to face, including dissolution.

Drafting an operating agreement is hard, and the internet is full of shabby templates that have been copy and pasted from who knows where. So we had our attorneys draft a New Hampshire LLC Operating Agreement template that you can use as a solid foundation.

New Hampshire Corporate Bylaws

Bylaws are the rules your corporation will adopt and follow internally. Bylaws detail how your corporation will appoint directors and officers, hold shareholder and board meetings, and handle emergencies, among other things. Unlike operating agreements, corporate bylaws are required by law in New Hampshire.

As with operating agreements, you can find plenty of bylaws templates online. But bylaws are pretty serious, so you don’t want to just use the first template you come across. Our attorneys drafted a New Hampshire Corporate Bylaws template you can use to get started.

Starting a nonprofit? Learn about New Hampshire nonprofit bylaws.

Depending on what sort of business you are operating in New Hampshire, you may need to obtain a business license.

New Hampshire doesn’t have a general state-issued business license. However, certain professions require licensing, and most cities/counties require their own local licenses. Which license—and how many—will depend on where your business is located and your specific profession. Below, we break down the most common types of licenses you might need.

Professional Business Licenses

A professional business license is required for any business in a field that needs specialty training or education to provide services. A few of these common fields are law, medicine, and engineering. The New Hampshire Employment Security department’s online professional licensing portal lists the various fields that require professional licenses, as well as a way to apply for a new license and renew an old one.

Local Business Licenses

Once you figure out what your business needs federally and state-wide, you need to look into your local city and county licensing requirements. These licenses give your business permission to exist legally in a particular area. For example, in Manchester, coffee shops will all need a city business license to operate. Check with your local business department to see which licenses you’ll need.

Learn more about How to Get a Business License.

The liability protection you get from forming an LLC or corporation is only as strong as the separation between you and your business. At a minimum, you’ll need to open a bank account for your business. And if you’re going to hire employees, you’ll need to tackle payroll, too.

Open a Business Bank Account

To keep your business spending separate from your personal spending, you’ll need to open a business bank account. If you don’t, a court could find that your business is not actually separate from you, the owner, under the Alter Ego Doctrine. Also known as piercing the corporate veil, this is the outcome when a judge finds that a company is not a separate entity but rather an alter ego of the owner. If this ever happens, you could lose your limited liability status.

Opening a business bank account as a sole proprietor is important, too. Though sole proprietors and general partnerships have no limited liability status to protect, both will benefit from organizing their business finances come tax season.

Set up Payroll

Before you can hire employees, you’ll need to figure out how to pay them. This is done by setting up your payroll.

All you need to do is:

• get a FEIN
• register with the New Hampshire Department of Revenue
• decide if you’re hiring employees or independent contractors
• prepare the forms employees will fill out
• choose a payroll system or service

Technically, you do not need to hire a payroll service—you can do this all yourself. However, a payroll service or software can save you a ton of time and streamline the payroll process.

Forming an LLC or corporation protects your personal assets. But if anything disastrous befalls your business—like a lawsuit, burglary, flood, or fire—your business is on the hook to pay. Business insurance can help cover the costs.

While there is some flexibility in what insurances you will need depending on your specific business, there are a few insurances that are widely considered necessary to keep you and your business safe from unforeseen complications down the road.

Below are a few of the types of insurance that businesses in New Hampshire might need.

Workers’ Compensation Insurance

Workers’ compensation covers your employees in case of workplace injuries. Typically covering both lost wages and medical bills, workers’ compensation insurance offers both employers and employees peace of mind when faced with financial insecurity brought about by a work-related injury.

Under NH RSA 281-A:5, every employer who has employees must have workers’ compensation insurance. Sole proprietorships and general partnerships with no employees are not required to have it. LLCs and corporations with no employees and less than four members may elect to not purchase workers’ comp insurance as well.

Liability Insurance

This covers the costs of claims against your business for injuries or damages to the property of others, like clients or customers. This includes medical expenses, legal fees, settlements, and judgments. Whether or not you need it depends on whether your business is likely to be sued and how many assets your business needs to protect. If it’s just you and your computer in your basement, you might feel comfortable skipping liability insurance. Or maybe you won’t. Beyond general liability insurance, you can purchase or add on more specific types, like professional, cyber, commercial, home-based business, or product liability insurance.

Paying your taxes is a part of life that we all dutifully (but often anxiously) attempt to do correctly every April. It’s no different for your business. Business taxes need to be assessed on a federal, state, and local level. Let’s go over what that looks like in New Hampshire.

Federal Taxes

• LLCs. Single-member LLC? By default, you’re taxed similar to a sole proprietor. More than one LLC owner? You’re taxed as a general partnership. Either way, your default tax status is “pass-through,” which means you don’t pay corporate taxes. Instead, your LLC’s owners report profits and losses on their personal tax returns. An LLC can file paperwork with the IRS to be taxed as an S-Corp or C-Corp instead.
• Corporations. Corporations are taxed as C-Corps by default. This means that corporations pay the 21% federal corporate tax rate and the applicable New Hampshire corporate tax rate.

To pay your federal taxes (and take a good deal of other steps required to start a business), you’ll need to get an Employer Identification Number (EIN). You can apply for one with the IRS or hire us to get one for you.

New Hampshire State Business Taxes

Although New Hampshire has no sales tax, there are other state taxes you may have to file. For example, New Hampshire assesses a Business Profits Tax (BPT) for most companies conducting business within the state. All businesses in New Hampshire that earn over $50,000 per year are required to pay this tax, regardless of entity type. The current BPT rate is 7.6%; however, that will lower in 2023 to 7.5%. In addition, businesses that earn less than $50,000 in total revenue do not need to file. (After December 31, 2022, this threshold will be increased to $92,000.)

Local New Hampshire Business Taxes

After figuring out your federal and state taxes, it’s time to turn your attention to your local tax requirements. Importantly, New Hampshire has no local sales tax. You will, however, be subject to income tax and property tax. For example, in Concord, the 2021 corporate property tax is at $25.12 for each $1,000 of assessed value.

If you want the people of New Hampshire to find your business, they have to be able to find you online. This means you’ll need a website, a business email account, and social media accounts. Don’t worry if you’re not especially tech-savvy—you don’t have to be a web developer or an influencer to establish a robust online presence. You’ll just need the following:

• Domain name. Your domain is the address where your website will live. You’ll want a domain name that is short, unique, local, and—most importantly—available. If your domain is trademarked, you could face legal trouble.
• Domain registrar. Once you’ve decided on a domain name, you’ll want to register it with a domain registrar. Some domains are more expensive than others. Some domain registrars also offer hosting and most will provide you with a business email that includes your domain name (“[email protected]”).
• SSL certificate. An SSL certificate signals to your users that your website is secure. If your website will use forms—like a sign-up form or a “contact us” form—an SSL certificate is critical. But even if you don’t you use forms, you’ll still probably want one—it allows an encrypted connection, which means your users’ data is transported securely. There are several types of SSL certificates, and you can often get one through your domain registrar.
• Site design. The easiest option is to use a free website creation tool—there are a number of free options available. Most are easy even for a newcomer to use, with styles and built in templates. For a more custom design, you can hire a web designer to work on your website, but this will be much more expensive.

In New Hampshire, all LLCs and corporations are required to file an annual report. (Nonprofits file a nonprofit report every five years and trusts file an annual report every year with the Charitable Trusts Department.) The annual report due on April 1st and has a $100 filing fee.

Annual reports can be filed two ways—after you log into the NH Quickstart online portal, you can update your annual report manually or, if you do not need to report any changes to your business, choose the One Click Annual Report option that allows you to submit your annual report instantly.

A trademark is a design, symbol, word, phrase—or any combination thereof—that represents a brand’s goods or services exclusively. Only some businesses register trademarks.

You can apply to register your trademark with the State of New Hampshire or federally with the U.S. Patent and Trademark Office (USPTO). Registering your trademark in New Hampshire is cheaper and easier than registering with the USPTO, but doing so only protects your trademark in New Hampshire.

You can only register a trademark once you’ve started using it (so slap it on that website you just made), and not all applications are approved. Trademark law is complex, and the strength of a trademark application (and the trademark itself) depends on many factors.

Our attorneys can review your application, offer advice, and prepare and submit the application for you—Check out our Trademark Service.