How to Transfer LLC Ownership in New Hampshire: 2024 Updates

If you have an LLC in New Hampshire and you wish to discontinue it, you don’t always have to dissolve it. You can transfer the ownership, and it will keep running the way it was. Transferring ownership of a Limited Liability Company (LLC) in New Hampshire is a relatively simple and straightforward process involving minimal paperwork. It can be partially or fully transferred to another owner.

LLCBuddy editors shared a step-by-step guide on how to transfer ownership of an LLC in New Hampshire. The steps might seem easy and doable. However, these are general steps and might need special attention for specific cities or regions in New Hampshire. Hence, it is recommended to consult an attorney or legal expert before taking the steps.

How an LLC Ownership Structure Works in New Hampshire

By now, you must know that a limited liability company is one of the simplest forms of business structure. The ownership and transferring it to others is even simpler. For an LLC in New Hampshire or any other state in the United States, the company is considered an independent entity that is separated from its owners, which means the owners are not personally liable for the company’s debts or legal obligations.

The ownership structure of an LLC in New Hampshire is determined by the percentage of ownership interests held by each member. These ownership interests can be distributed however the members see fit and are typically outlined in the Operating Agreement drafted in New Hampshire.

There is no maximum limit on the number of members an LLC in New Hampshire can have, and the members can be individuals, other LLCs, corporations, or even foreign entities. This flexibility allows for a wide range of business structures, from single-member LLCs in New Hampshire to large, multi-member LLCs with complex ownership arrangements.

What is New Hampshire LLC Buy-Sell Agreement in Ownership Transfer?

In New Hampshire, the buy-sell agreement is a part of your operating agreement. It explains the instructions for buying and selling the LLC ownership. For example, who can be the member of New Hampshire LLC, how will buy out and sell of the LLC be determined, whether the members of the LLC in New Hampshire will buy the shares of the leaving owner, and how – these are the points you have in the buy-sell agreement.

Buy Out New Hampshire LLC or Partial Transfer: In this case, the members of the LLC generally buy the shares of the owner who is leaving. As the LLC buys the owner’s interests, the shares get divided equally among the remaining New Hampshire LLC members. LLC members must approve the transfer, and then the Operating Agreement (OA) will be updated to exclude the departed owner.

If your LLC operating agreement does not specify these terms beforehand, you must follow New Hampshire state LLC law. In some states, ownership transfer does not simply take place. Instead, they have to dissolve the LLC to continue with the process. So, while you’re forming an New Hampshire LLC, make sure to create a buy-sell agreement beforehand.

Sell a New Hampshire LLC Or Fully Transfer: Selling an LLC or Fully Transferring the ownership is a bit more complicated than the buy-out process. In this condition, owners have the independent legal right to sell the interest to any third party. They do not need other members’ approval for this. The negotiation between the buyer and the seller involves complexities if there is no operating agreement in the first place. As an owner, you must find a buyer, write the change of ownership letter, set out other formalities, and voila! Your ownership transfer is done. The parties will settle the sale contract, including the LLC price, following New Hampshire state laws.

How to Transfer New Hampshire LLC Ownership

When an LLC member decides to step down from the owner’s position, they must transfer the ownership to someone else. It can be other existing members of the LLC or a third party. Transferring LLC ownership in New Hampshire is a common yet complex deed. LLC owners who want to transfer their ownership must follow some steps to do the task. Here are the following steps-

Step 1: Review Your New Hampshire LLC Operating Agreement

An operating agreement is a kind of non-mandatory document in many states. In New Hampshire, it is not mandatory to draft one. If you have one at the time of LLC formation in New Hampshire, then it would be easier for the owners to transfer the name. If not, then it should be filed at the time of transferring ownership. The operating agreement for the LLC in New Hampshire must be reviewed for the ownership transfer conditions and other legal requirements regarding the buy-out and sale of the LLC.

Step 2: Amend the New Hampshire Certificate of Formation

Changing/transferring ownership might lead to structural change at the managerial level. In that case, the LLCs must comply with the New Hampshire Secretary of State. To do so, one must file the New Hampshire Certificate of Formation amendment. Specifically in Texas, LLCs must submit a Public Information Report annually to the Texas Comptroller of Public Accounts. The managerial changes will be explained there.

As soon as the ownership transfer negotiation is done and the agreement is made with the updated change of ownership, file it with the Secretary of State. For that, you must amend the Certificate of Formation and get the Certificate of Amendment. Make the changes to the existing Certificate of Formation, get the amendment form, and submit it to the New Hampshire SOS along with other documents and the filing fee. Read how to amend New Hampshire Certificate of Formation in a simple way.

Step 3: Spread the News

Once the legal formalities are done, and the ownership of your LLC is transferred officially in New Hampshire, you must spread the word to the clients, partners, and other concerned people. Also, banks and other financial institutions should be notified about the ownership change. Business entities, vendors, and other officials you work with should also be notified.

Step 4: Obtain a New EIN (optional)

You might need to apply for a new EIN based on the LLC ownership transfer. After officially transferring ownership, you must check with the IRS whether you need a new EIN. There is a formal form to notify the IRS about the LLC ownership transfer. Get the form from their website, enter the details, and submit it. You will get notified whether you need to apply for a new EIN.

Why Transfer LLC Ownership in New Hampshire

There can be several reasons why the transfer of LLC ownership in New Hampshire takes place in any organization. Some of the most common reasons include the following-

Death of the LLC owner
Separation or Divorce of the LLC Owners
LLC owners do not wish to continue their association with the organization
LLC owners want to appoint a new member (owner)
LLC owners want to sell the business off to someone else

These are some of the common reasons why an LLC ownership gets transferred in New Hampshire. Transferring LLC ownership requires a comprehensive LLC operating agreement in New Hampshire. This is an internal document every LLC should have at the time of formation.

The Role of New Hampshire Operating Agreement in LLC Ownership Transfer

Creating an Operating Agreement in New Hampshire is one of the major steps in forming a limited liability company (LLC). However, many states do not require an Operating Agreement. California, New York, Delaware, Maine, Nebraska, and Missouri are the states where an LLC operating agreement is mandatory.

Even when your state does not necessarily need you to file the operating agreement, it is recommended that you should have it to avoid any internal disagreements or issues in the future.
LLCBuddy Editorial Team

An operating agreement is an internal document explaining all the procedures, including ownership transfer, dissolution, LLC operation, members, and other LLC-related processes. Operations, such as dissolution and ownership transfer, occur based on those written regulations.

If there is no New Hampshire Operating Agreement or it does not have clear ownership transfer or buy-sell agreement provisions, the transfer takes place based on New Hampshire state law.

What to Include in New Hampshire Operating Agreement

This official document outlines the company’s structure, the members’ details, the dissolution process, and a lot more. Hence, it is always wise to have one to avoid any confusion in the future, whether your state needs it or not. The LLC operating agreement should have the following points-

Whether LLC members are related to each other and what type of relationships they share
Managers’ rights and responsibilities
Operating Agreement Amendment conditions
Members’ profit and loss shares
New Hampshire LLC Tax structures
Transfer of ownership rules and procedure
Dissolution of New Hampshire LLC

If your operating agreement explains all the above points, you must follow it for the ownership transfer.

Reasons to Transfer New Hampshire LLC Ownership

There can be many issues that lead to ownership transfer. One of the most common issues is the death of the owner. There can be other issues where transfer of ownership occurs. Here are some issues to consider,

Divorce Or End of Marriage: In some cases, according to the divorce decree, the ownership transfers to the spouse. If the LLC in New Hampshire has an operating agreement and the ownership transfer condition is specified, then the LLC must follow the New Hampshire operating agreement to proceed.

Death of a Member: This is the most common issue in LLCs. In New Hampshire, if a member dies, the ownership, by default, transfers to the legal heirs of the deceased person. However, in this case, the legal heirs (wife/husband/kids) do not get any managerial power or authority. They continue enjoying the benefits, such as a share of the profit and others. But they won’t get any other power in the company. In such situations, other members of the New Hampshire LLC often buy out the deceased’s interests.

Dissolution of New Hampshire LLC: If any member/owner plans to leave the company, the LLC gets dissolved and reformed with the new policy and operating agreement. The members and managers make this sort of decision at the time of the creation of the operating agreement.

FAQs

How do I transfer ownership of my New Hampshire LLC?

Ownership of a New Hampshire LLC can be transferred by typically selling or gifting membership interests to another person or entity.

Do I need to update any documents with the state when transferring ownership of a New Hampshire LLC?

Yes, you need to update the Operating Agreement of the LLC to reflect the change in ownership and file the necessary forms with the New Hampshire Secretary of State.

Can a New Hampshire LLC ownership transfer affect the tax status of the business?

Yes, transferring ownership of a New Hampshire LLC can potentially impact the tax status of the business. It’s recommended to consult with a tax professional for advice.

What is the process for transferring ownership of a New Hampshire LLC to a family member?

The process for transferring ownership of a New Hampshire LLC to a family member is similar to any other ownership transfer, but depending on the relationship, special considerations may need to be taken into account.

Are there any restrictions on transferring ownership of a New Hampshire LLC in the Operating Agreement?

The Operating Agreement of a New Hampshire LLC may contain specific restrictions or guidelines on transferring ownership, so it’s essential to review this document before proceeding with the transfer.

Do I need to notify the state of New Hampshire of an ownership transfer in my LLC?

Yes, any changes in ownership of a New Hampshire LLC must be reported to the New Hampshire Secretary of State by filing the necessary forms and updating the LLC’s information.

Can I transfer partial ownership of my New Hampshire LLC?

Yes, it is possible to transfer partial ownership of a New Hampshire LLC by selling or gifting a portion of the membership interests to another person or entity.

What are the potential consequences of not properly transferring ownership of a New Hampshire LLC?

Failing to properly transfer ownership of a New Hampshire LLC can lead to confusion among members, legal disputes, tax issues, and other complications down the line.

How long does it typically take to complete a transfer of ownership for a New Hampshire LLC?

The timeline for transferring ownership of a New Hampshire LLC can vary depending on the complexity of the transaction and the responsiveness of all parties involved. It’s best to plan ahead and allow for ample time to complete the transfer.

Is it necessary to involve an attorney in the ownership transfer of a New Hampshire LLC?

While it’s not always required to involve an attorney in the ownership transfer of a New Hampshire LLC, consulting with one can ensure that the process is done correctly and help prevent any potential legal issues.

Do I need to notify the state of New Hampshire when transferring ownership of my LLC?

Yes, you will need to update the ownership information with the New Hampshire Secretary of State’s office by filing an amendment to your LLC’s articles of organization.

Can I transfer ownership of my New Hampshire LLC without the consent of other members?

It depends on the operating agreement of your LLC. In most cases, the consent of all members is required to transfer ownership.

How can I find a buyer for my New Hampshire LLC?

You can advertise your LLC for sale on business-for-sale websites, through a business broker, or by networking with potential buyers.

Are there any restrictions on who can own a New Hampshire LLC?

There are no restrictions on who can own a New Hampshire LLC. Ownership is open to individuals, other businesses, or entities.

Do I need to update my operating agreement when transferring ownership of my New Hampshire LLC?

It’s a good idea to update your operating agreement when transferring ownership to reflect the new ownership structure and the rights and responsibilities of the new owner.

How long does it take to transfer ownership of a New Hampshire LLC?

The length of time it takes to transfer ownership of a New Hampshire LLC will depend on the complexity of the transfer and how quickly the necessary documents are prepared and filed with the state.

Can I transfer ownership of my New Hampshire LLC to a family member?

Yes, you can transfer ownership of your New Hampshire LLC to a family member. However, you should still follow the proper legal procedures to ensure the transfer is valid.

Are there any tax implications when transferring ownership of a New Hampshire LLC?

There may be tax implications when transferring ownership of a New Hampshire LLC, particularly if the LLC has significant assets. It’s a good idea to consult with a tax advisor before making any transfers.

What happens if I don’t properly transfer ownership of my New Hampshire LLC?

If you don’t properly transfer ownership of your New Hampshire LLC, the original owner may still be held liable for the company’s obligations and debts.

How do I obtain a new EIN for my New Hampshire LLC after transferring ownership?

If you need to obtain a new EIN for your New Hampshire LLC after transferring ownership, you can do so by applying online with the IRS.

Can I transfer ownership of my New Hampshire LLC to a non-US citizen?

Yes, you can transfer ownership of your New Hampshire LLC to a non-US citizen. However, the new owner may need to comply with certain visa and immigration requirements.

What documents are needed to transfer ownership of a New Hampshire LLC?

To transfer ownership of a New Hampshire LLC, you will need a written transfer agreement, an updated operating agreement, and any other required filings with the state.

Can I transfer ownership of my New Hampshire LLC to a trust?

Yes, you can transfer ownership of your New Hampshire LLC to a trust. However, you will need to follow the proper legal procedures to ensure the transfer is valid.

How do I determine the value of my New Hampshire LLC when transferring ownership?

You can determine the value of your New Hampshire LLC by considering factors such as the company’s assets, liabilities, revenue, and potential for future growth.

Are there any transfer fees associated with transferring ownership of a New Hampshire LLC?

There may be transfer fees associated with transferring ownership of a New Hampshire LLC, such as filing fees with the state and legal fees for drafting transfer documents.

Can I transfer ownership of my New Hampshire LLC to multiple new owners?

Yes, you can transfer ownership of your New Hampshire LLC to multiple new owners by dividing ownership interests among them.

Can I transfer ownership of my New Hampshire LLC to an employee?

Yes, you can transfer ownership of your New Hampshire LLC to an employee. This can be done by selling a percentage of ownership interest to the employee.

How do I officially record the transfer of ownership of my New Hampshire LLC?

You can officially record the transfer of ownership of your New Hampshire LLC by updating the ownership information with the New Hampshire Secretary of State’s office.

Can I transfer ownership of my New Hampshire LLC to a corporation?

Yes, you can transfer ownership of your New Hampshire LLC to a corporation by selling ownership interest to the corporation or merging the two entities.

Do I need to notify creditors when transferring ownership of my New Hampshire LLC?

It’s a good idea to notify creditors when transferring ownership of your New Hampshire LLC, especially if the new owner will be assuming any outstanding debts or obligations.

In Conclusion

As you all know, forming a limited liability company is much easier than forming a corporation, a partnership, or any other type of business. The ease of transferring ownership from one to another is one of the many reasons for entrepreneurs to start an LLC. In New Hampshire, transferring LLC ownership does not need a lot of paperwork or steps. You must update the formation papers with the new ownership information, file the amendment to the formation document, tell people about it, and comply with the state.

Though it seems easy to file documents while transferring ownership, it could be more complex than just these steps. Based on the local regulations, nature of business, or some other administrative rules, transferring ownership in New Hampshire might take more than what it looks like. It is recommended to consult a professional or attorney before you take such an important business decision.