How to Start a Business in New Hampshire
Starting a business in New Hampshire can be exciting and challenging—but it shouldn’t be overwhelming. We’re here to help. With no sales tax and no personal income tax, New Hampshire is an appealing place to start your new business. But what about state licensing requirements? Protecting your personal assets? Attracting investors? This comprehensive guide will answer all your questions about starting a business in New Hampshire.
Ready to Start a Business in New Hampshire?Let's Get You Started
Pick a Business Structure
Name Your Business
File Formation Paperwork
Draft Internal Records
Get New Hampshire Business Licenses
Organize Your Money
Get Business Insurance
Understand Your Tax Burden
Build Your Business Website
File New Hampshire Annual Report
Apply for Trademarks
1. Pick a Business Structure
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.
Can an LLC be just one person?
Yes! A one-person LLC is called a single-member LLC. Single-member LLCs are one of the most common kinds of businesses in the country. For the most part, single-member LLCs are just like multi-member LLCs, but there are some slight differences in how they file taxes and protect personal assets. SMLLCs need to apply for a Department Identification Number with the New Hampshire Revenue Department. (You simply fill out and mail in Form DP-200.)
Read all about Single-Member LLCs.
What about a New Hampshire nonprofit?
New Hampshire nonprofits are businesses that exist to benefit society or a particular group of people—such as religious, environmental, and scientific groups.
You can start your New Hampshire nonprofit by submitting your Articles of Agreement with the New Hampshire Secretary of State.
Want to learn more? Check out our Nonprofit Guide.
2. Name Your Business
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.
Can I reserve a business name in New Hampshire?
Yes! Reserving your business name is a great idea—especially if you’re waiting to officially form your business. To reserve a name, you’ll need to file an Application for Name Reservation ($15) with the Secretary of State. This will reserve your business name for 120 days.
What is a DBA?
A DBA (also called a trade name) is any name you use to do business other than your legal business name. For LLCs and corporations, your legal business name is the name listed on your business formation documents. For sole proprietors, it’s your first and last name.
Why would you want a DBA? Maybe you want to rebrand your business, launch a new line of products, or open a new location. If you need a DBA, you’ll need to file a Trade Name Reservation Application ($50).
What about trademarked names?
It’s a good idea to check with the US Patent and Trademark Office (USPTO) to make sure your business name hasn’t been trademarked by someone else. If it has, and you use it anyway, there’s a chance that the business could come after you for infringement.
3. File Formation Paperwork
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.
What is a registered agent?
A registered agent is a person or business that accepts legal mail on your business’s behalf. The registered agent must be available at a physical office in New Hampshire during normal business hours to receive mail. Because of this, the registered agent’s information must be made available to the public.
How can I keep my information off the public record?
The easiest way to keep your information private is to share it in as few places as possible. Hiring a registered agent company, like Northwest, can help with this. You can opt to put Northwest’s name and address on your formation documents, keeping your information private.
4. Draft Internal Records
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.
5. Get New Hampshire Business Licenses
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.
How do I get a New Hampshire business license?
There is no general New Hampshire business license. To get any business license in New Hampshire, you just submit the required paperwork and pay any necessary filing fees. Applications will vary, but you’ll likely need to include the name of your business, the type of entity you own, and the primary address.
How do I get a professional license in New Hampshire?
The process for getting a professional license in New Hampshire is determined by your profession’s licensing board. Each individual profession will have its own requirements, proof of experience, and fees. For example, Speech Pathologists must earn a Masters or higher, complete a practicum, and pass a state exams in addition to filing an application and paying a $110 initial license fee.
How do I get a local business license?
Getting a local business license depends on your location. Each county and city might have their own requirements for you to start and run your business. For example, the city of Derry does not require a business license, while the city of Concord does. Make sure to check with your local area to determine what your business needs.
6. Organize Your Money
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.
How do you set up a business bank account?
Do I need a business bank account to accept credit card payments?
Probably. Payment processors require you to provide them with a bank account. This is where they’ll deposit funds from transactions. Most of the time, this needs to be a business bank account.
Some payment processors may let you get away with listing a personal bank account, but it’s not a great idea. Mixing your business finances with your personal finances erodes the separation between you and your business, weakening your liability protection. It also turns tax season into a nightmare.
Learn more about Payment Processing.
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.
What forms do my employees need to fill out?
Your new employees will need to fill out a W-4 to determine how much you’ll withhold and an I-9 to verify that the employee is eligible to work in the US.
What’s the difference between an independent contractor and an employee?
It’s important to understand the difference between an independent contractor and an employee. That’s because for employees, you’ll need to withhold and pay income, social security, and Medicare taxes. Independent contractors pay these taxes on their own.
An independent contractor is self-employed—how they complete their work is not directly controlled by an employer. An independent contractor may perform the same kind of work for other businesses, and can do the work when and how they choose.
An employee, on the other hand, performs their work how and when their employer chooses.
If you’re unsure, you can file Form SS-8 with the IRS and let them decide.
Learn everything you need to know about hiring independent contractors.
How do I get a Business Identification Number?
Your BIN, also called your charter number, is assigned to you by the New Hampshire Department of State when you register your business. You will automatically receive this number when you register, so no need to fill out any extra forms.
7. Get Business Insurance
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.
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.
Do business owners need workers’ compensation insurance in New Hampshire?
Workers’ compensation insurance is only required for employees in New Hampshire. Owners are not required to be included themselves in the insurance policy.
However, many business owners choose to add themselves under their workers’ compensation policy because personal insurance could decline claims that would fall under workplace injury.
Do I need business insurance for my home-based business?
Probably. That’s because you can’t count on your homeowners’ or renters’ insurance policy to cover damages related to your business. Most insurance companies offer a home-based business insurance plan.
8. Understand Your Tax Burden
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.
- 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.
Do I need an EIN if I’m self-employed?
If you’re operating a sole proprietorship or single-member LLC that doesn’t employ anyone else and you don’t need to file excise or pension plan returns, you don’t legally need an EIN.
However, you can still get one—and you probably should. Otherwise, you’ll have to use your own social security number to do business. Plus, you’ll likely need an EIN to open a business bank account.
How do I get an EIN?
To get an EIN, you can either apply online or file form SS-4 by mail with the IRS. Getting an EIN is free.
Check out our guide to applying for an EIN.
What is an S-Corp?
An S-Corporation is a federal tax election. Registered business entities like LLCs and corporations start out with a default tax status, but can file paperwork with the IRS to be taxed as an S-Corp. Like LLCs, S-Corps are taxed as pass-through entities. Like corporations, S-Corps can make distributions that aren’t subject to the 15.3% self-employment tax.
Learn more about the S-Corp tax election.
What is a C-Corp?
A C-corporation is the default federal tax election assigned to corporations. Most corporations are taxed as C-Corps, but LLCs can also apply for C-Corp tax designation by filing paperwork with the IRS. C-corps file federal corporate income taxes and state corporate income taxes. C-corps can pay their shareholders in distributions, and the shareholders report those profits on their personal tax returns.
Learn more about the C-Corp tax election.
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.
9. Build Your Business Website
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.
10. File the New Hampshire Annual Report
In New Hampshire, all LLCs and corporations are required to file an annual report. (Nonprofits file every five years.) 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.
What if I don’t file an annual report in New Hampshire?
If you do not file your annual report in New Hampshire, LLCs and corporations will first be charged a $50 late fee and then potentially administratively dissolved. Nonprofits are not charged a late fee, but the state might still dissolve your business.
11. Apply for Trademarks
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.
How do I register for a trademark in New Hampshire?
To register for a trademark in New Hampshire, you just have to fill out the New Hampshire trademark application and pay the $50 filing fee. You will need to include a description of the trademark, the goods/services you’ll market with this trademark, and the date of its first use. This application is only good for the state of New Hampshire, and it lasts for ten years.
Can I register a trademark before I use it?
No. But you can file an application with the USPTO under Intent-to-Use status. This gets your application in line before you’ve actually used the mark, which could be helpful if you’re worried someone else might register your mark before you’ve had a chance to use it.
For your trademark to become official, you’ll eventually need to show proof that you’re using it. An Intent-to-Use application buys you some time to do that.
Learn more about filing an Intent-to-Use Trademark.