New Hampshire offers several benefits to entrepreneurs looking to incorporate. One of the most important factors in choosing where to incorporate is finding a state that makes incorporating simple and affordable. In addition, there are tax advantages to doing business in New Hampshire.
There are three main types of incorporation: domestic, foreign, and limited liability companies. Each type has different requirements and paperwork. If you’re considering incorporating in New Hampshire, it’s best to start by determining what type of entity you want to form.
Domestic corporations are taxed like regular businesses. Foreign corporations must file annual reports with the Secretary of State and pay corporate income tax. Limited liability companies don’t have shareholders; each member owns a percentage of the LLC. This structure protects members from lawsuits.
Forming a corporation begins with filing Articles of Organization with the Secretary of State. You’ll need copies of your federal identification, such as a driver’s license or passport and proof of residency. Once incorporated, you’ll need to register your name with the Secretary of State, obtain a taxpayer ID number, and open a bank account.
You’ll also need to complete a Certificate of Good Standing, which includes information about your directors and officers. These documents must be filed within 30 days of being appointed.
Next, you’ll need to file articles of amendment with the Secretary of State to change the company’s registered agent. A registered agent is responsible for receiving legal notices, including court papers and government filings. Your registered agent will receive mail addressed to the company and forward it to you.
If you plan to hire employees, you’ll need to provide W-2 forms to your workers. Employers must withhold social security and Medicare taxes from employee wages.
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Choose a corporate structure for your business
Incorporating is one of the most important steps you take as a small business owner. Choosing the correct corporate structure depends on what you want out of your business. Do you want to limit personal liability? Are you looking to protect intellectual property? Or do you just want to keep things simple? There are many different types of companies, each serving a unique purpose. Let us help you choose the best option for your needs.
Check Name Availability
A name reservation is an optional procedure that allows you to reserve certain names for your company. When you reserve a name, it becomes unavailable to others. To make sure you don’t end up with a confusingly similar name, you’ll want to check the availability of the name you’re considering.
You can do this by entering the name into Google. If there are no matches, you know the name isn’t available. However, if you find multiple matches, it could mean that someone else already owns the name. In this case, you’ll want to contact the owner directly to see what he or she wants to do about it.
Register an agent for your business
A registered agent is someone whose name appears on the Articles of Incorporation. A registered agent is responsible for receiving legal notices, such as corporate filings, tax returns, and lawsuits. This person must be willing to accept service of process on behalf of the corporation.
File articles of incorporation for your new business in New Hampshire
A corporation must file an annual return to maintain its status as an incorporated business. This includes filing an article of incorporation, an annual report ,and paying fees. If you are starting a new business, it is important to know how to properly incorporate and register your business.
Establish bylaws & corporate records
A corporation must establish rules for how it operates. These are called “bylaws.” They govern everything from day-to-day operations to major decisions like mergers and acquisitions. Bylaws are usually written up by a board of directors. But sometimes, corporations don’t have boards. Or they’re too small to write up bylaws. In those cases, the founders write up the bylaws themselves.
Corporations need a secure, centralized tool that allows officers, directors, and shareholders to view records, keep track of meetings, and make changes. This tool is known as a “corporate recordkeeping system.” Corporations use this tool to meet legal requirements such as filing annual reports with state regulators and keeping records about shareholders and officers.
The best tools allow companies to customize the information displayed in the system. For example, some systems let companies add custom fields to help organize data. Some even allow companies to set up alerts so that they receive notifications whenever certain events happen.
Appoint Initial Directors
The initial directors must be named and sworn in the articles of organization. This is done to ensure that the board members have the authority to act on behalf of the company. If the articles do not list initial directors, the initial directors are appointed by the incorporators. In some cases, the initial directors are chosen because the company is small enough that it does not require additional directors.
Hold Organizational Meeting
The board of directors of a nonprofit organization must hold an organizational meeting once every calendar year. This includes meetings held during the fiscal year. A director cannot attend more than one such meeting unless he or she gives written consent to do so. If a director fails to give his or her consent within 30 days, the director shall forfeit his or her office.
Issue Stock Certificates
A certificate of stock represents an ownership interest in a corporation. This document is usually signed by the president or secretary of the corporation.
Holders of stock certificates are known as shareholders. They are entitled to certain rights and privileges such as voting rights, dividends, and liquidation proceeds.
The term “stock certificate” refers to a physical paper document containing information about the company’s ownership.
Obtain a federal employer identification number (EIN).
An employer identification number (EIN) is required for almost every type of business. If you are self-employed, you must obtain one. A federal tax ID number is necessary for many types of businesses, including sole proprietorships, partnerships, limited liability companies, corporations, trusts, estates, S corporations, and nonprofit organizations. You can apply for an EIN online.
The Internal Revenue Service requires that employers file Form SS-4, Application for Employer Identification Number, with each employee hired. This form asks basic questions about the applicant, such as name, address, Social Security number, and date of birth. After completing the form, applicants receive a confirmation email stating whether their application was successful. Applicants whose applications are approved receive an EIN within 10 days.
If you do not have employees, you do not need an EIN. However, it is still important to obtain one. Without an EIN, you cannot open a bank account, file taxes, or pay payroll taxes.
Get New Hampshire state tax identification numbers/accounts
To avoid penalties, you should always register with the department before you file any tax returns. If you are an individual or a corporation, you will need to obtain a New Hampshire Individual Income Tax ID Number (NH ITIN). A person must obtain a NH ITIN to file state personal income taxes. An ITIN is needed to file both federal and state tax forms.
If you are self-employed, own real estate, or work for wages, you will need to file a New Hampshire Business Enterprise Tax Return. If you are self-employed or working for wages, you will also need to obtain a New Jersey Sales and Use Tax Permit.
You will need to file a Federal Form 1040EZ if you earned $10,000 or less during the year. You will need to file either a Federal Form 1040A or a Federal Form 1040 if you earned more than $10,000.
The deadline to file your 2016 New Hampshire State tax return is April 15th.
Consider Electing S-Corp Taxation
Double taxation occurs when an individual pay income tax twice on the exact same amount of money. This happens because the government taxes individuals on their wages and salaries, while corporations are taxed on their net profit. If you want to save on double taxation, consider electing S-corp taxation.
A corporation is a legal entity that exists separate from its owners. A sole proprietorship is similar to a corporation except it doesn’t have shareholders. In both cases, the owner is responsible for the company’s finances.
The main difference between a sole proprietorship and a corporation is ownership. Corporations are owned by many people called shareholders. On the other hand, a sole proprietorship is owned by one person.
There are several benefits to choosing S-corp taxation over sole proprietorship taxation. One benefit is that you don’t have to file an IRS form called Schedule K-1. Another advantage is that you can deduct all of your expenses related to running your business.
If you’re considering electing S-corp, here are some things to keep in mind:
• You must use a professional accountant to help you set up your business.
• Your accounting software must support S-corp taxation, and you’ll probably need to upgrade your system.
New Hampshire Business License
A general business license is not needed for most businesses in New England. However, local licensing laws vary by county, and there is no blanket requirement for business licenses in NH. In fact, some counties do not require a business license at all. For example, Hillsborough County does not require a business license. Here are the requirements for each county in NH:
Berlin – Required
Belknap – Required
Burlington – Required
Carroll – Required
Cheshire – Required
Coos – Required
Ongoing filings to maintain your corporation
Filing taxes is mandatory if your corporation is incorporated in any state. Depending on the entity type, some states require filing an annual return or statement yearly. Failure to do so could lead to penalties and fines.
The IRS requires corporations to file Form 1120 annually, including information about shareholders, officers, directors, capital stock, assets, liabilities, income, deductions, credits and distributions. Corporations must also file Form 2553 if they changed their name during the tax year.
If you don’t know where to start, check out our guide to corporate filings. We’ll help you find the forms you need to complete your federal and state returns.
Frequently Asked Questions
How much does it cost to incorporate in New Hampshire?
The cost of incorporating varies depending on where you live in NH.
How do I get an NH tax ID number in NH?
The New Hampshire Department of Revenue Services (DRS) requires businesses to obtain an NH Tax Identification Number (NH TIN). A business may apply for an NH TIN online at www.nhrevenue.org/tin_applications.htm. If you have questions about obtaining an NH TIN, please contact DRS Customer Service at 1-800-842-9081.
James Rourke is a business and legal writer. He has written extensively on subjects such as contract law, company law, and intellectual property. His work has been featured in publications such as The Times, The Guardian, and Forbes. When he’s not writing, James enjoys spending time with his family and playing golf.