How to Form a Professional Corporation in New Hampshire


Steve Goldstein
Steve Goldstein
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Form a Professional Corporation in New Hampshire

Are you considering starting a professional corporation in New Hampshire? Congratulations! Establishing a professional corporation is an excellent choice for entrepreneurs and professionals alike who seek to benefit from a business structure that provides limited liability protection, tax advantages, and enhanced credibility. However, navigating the process of forming a professional corporation in New Hampshire can be daunting.

This article aims to provide a comprehensive guide on how to form a professional corporation in New Hampshire, covering everything from understanding the basics of this business entity to the essential steps and requirements you must comply with to launch your new venture successfully. Let’s dive in and explore the ins and outs of forming a professional corporation in New Hampshire!

What is a Professional Corporation in New Hampshire?

A professional service corporation (PSC), sometimes called a professional corporation (abbreviated as PC), is a type of organization authorized by state law to allow owners of particularly licensed professions in New Hampshire. The owner of a professional corporation is responsible for their own negligence or misconduct, but they are not held personally accountable for the actions of other owners. PC or P.C. is a regularly used abbreviation to identify professional corporations.

PCs and LLCs provide personal asset protection; that is, the personal assets are free from business debts. However, they do not have similar tax benefits. There is no secret formula as to which type of business structure is better than the other. It solely depends on the requirements of your business. However, forming an LLC is easier than setting up a PC in New Hampshire.

LLCBuddy Editorial Team

Unlike other types of corporations, owners of Professional Corporations get two types of citizenship. One is where they incorporated the corporation, and the other is where they conduct the business. This benefit is not available for other types of corporations. You can form a free LLC in New Hampshire if you hire a professional service that provides LLC formation at $0.

How to Form a Professional Corporation in New Hampshire

To form a Professional Corporation for the professional service you provide, you must follow a few steps that include verifying if you are qualified for a PC, naming your business, hiring a Registered Agent, filing the Articles of Incorporation, outlining an operating agreement, requesting for an EIN, opening a bank account, getting a business license, and filing for an annual report and taxes.

Step 1: Verify If You Are Qualified for a Professional Corporation

In forming a professional corporation in New Hampshire, you should know if you are qualified. There are specific professions that are allowed to form a professional service corporation, including-

  • Doctors
  • Architects
  • Engineers
  • Accountants
  • Lawyers and others

You should be qualified to have a license to provide your service. In most cases, once you have graduated with your studies, passed the exam, and got your license, you may now form a professional corporation. However, if you work in an industry that doesn’t offer a license or professional certification, you should consider forming a corporation or limited liability company.

Step 2: Name your Professional Corporation in New Hampshire

After you have decided on the idea to form a professional corporation in New Hampshire, deciding the name for your corporation is significant. There is a complete guide on New Hampshire LLC name guidelines for you to have a proper business name. Here are some regulations you must follow while naming your professional corporation.

  • The business name should have the word PC, frequently followed by the name of the principal owner in place of Inc or LLC. (Example. John Doe, MD, PC)
  • No confusion with a government entity name.
  • A unique name is needed with no match
  • Limit of restricted words that need a license.

In New Hampshire, if you do not wish to file your professional corporation right away but want to hold the name that you have decided on, then you can reserve your corporation name for 120 days. To keep the name, you must file a name reservation application with New Hampshire Secretary of State.

A professional corporation, professional association, service corporation, or professional service corporation must be present in the name if it doesn’t already. You might opt to register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for a DBA (doing business as). In this manner, you can choose any name you desire to run a clinic or law firm.

Step 3: Choose the New Hampshire Registered Agent

The next step in forming a professional corporation is hiring the New Hampshire Registered Agent, a person that accepts legal paperwork on behalf of your business. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in New Hampshire. Forming a professional corporation for your service will be easier if you have Registered Agent in New Hampshire.

Alternatively, you can serve as your own New Hampshire Registered Agent if you have the time. However, you must stay compliant to avoid missing any important documents from New Hampshire.

Step 4: File the Articles of Incorporation in New Hampshire

After you hire a New Hampshire Registered Agent to form a professional corporation, the next step is to file the New Hampshire Articles of Incorporation. In writing the Articles of Incorporation, the business name, owner’s contact information, corporation address, and Registered Agent contact information should be written. You should also include the names of all co-owners. All owners have to prove they have the proper license to practice the specific profession they intend to.

Filing the Articles of Incorporation in New Hampshire may be done with three methods that are online, by mail and in-person. The Articles of Incorporation fee may vary from different states. However, in New Hampshire, it costs $100 for filing online, by mail, or in person. Create an account/Log in to the SOS site, get the online form, fill it, and submit online. For offline filing, Send the form by mail or drop it off in person at Corporation Division, NH Dept. of State, 107 N Main St, Rm 204, Concord, NH 03301..

Step 5: Write an Operating Agreement in New Hampshire

An operating agreement is a document that contains all of your company’s organizational details. It is not required to draft an operating agreement in most states. Yet, having one as an internal document is strongly advised. The New Hampshire operating agreement includes information like-

  1. About Business
  2. Members and management
  3. Capital contribution
  4. Profit Distribution
  5. Change of membership
  6. Dissolution

Step 6: Designate the PC Board of Directors in New Hampshire

The next step is to appoint the initial board of directors in your PC in New Hampshire. All the initial directors must submit their details to the owner. The owner must keep the records and submit them in accordance with the New Hampshire SOS. When writing the By-laws, as a shareholder and owner, you must make sure there is a point mentioned about appointing a new director later.

Step 7: Write the Corporate Bylaws

Now that you are done forming the team of the board of directors, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

In creating corporate bylaws, you should include the following on how the decisions will be made.

  • The responsibilities are given to each officer.
  • How will judgments in business be made?
  • Where and when are the annual shareholder meetings?
  • The minimum number of shareholders required for decision-making.
  • Location and timing of dividend payments.

Step 8: Hold the First Board of Directors’ Meeting

After drafting the corporate bylaws, gather all the board of directors for the first meeting. This meeting will be finalized by appointing directors to manage the company’s daily operations, approve the bylaws, choose the corporation’s accounting year, and approve the stock issue. All board meetings should have minutes taken and stored with the company’s records.

Step 9: Request an EIN in New Hampshire

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in New Hampshire can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in a number of ways. It will give your professional corporation the final advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 10: Open a Bank Account and Prepare for Taxes

Once you have filed and received your Employer Identification Number, you should open a bank account since you will use this account for yourself, your clients, and your employees.

Your business dealings in New Hampshire might be simpler by having a US business bank account because it boosts your company’s legitimacy and liquidity. For firms other than sole proprietorships, most banks demand an EIN to create a business bank account. Also, keeping separate finances helps you avoid combining personal and professional finances. Also, having an EIN makes tax preparation easier. With a professional corporation, you can anticipate paying employment and corporate taxes.

Step 11: Get a Business License in New Hampshire

Before your professional corporation operates in New Hampshire, you need to have a business license first. A business license is a formal document issued by the state government agency that allows you to operate your business in the geographic region that that agency governs. In New Hampshire, business license and permit costs depend on the business’s nature and type. You must check with the local authorities if any special licenses or city-based permits are needed.

Step 12: File Your Taxes in New Hampshire

Finally, you are down to the last step. After getting a business license and being ready to operate, do not forget to file your taxes first. You should start paying taxes quarterly as soon as possible to avoid a large tax bill. Each state has different tax requirements. Go through the New Hampshire classification of taxes for the taxes an LLC in New Hampshire has to pay.

Important Information

Maintaining Professional and Business License in New Hampshire

Now that you have established your professional corporation, you must maintain or renew your professional license every now and then. Even if your business is established but you don’t have a valid license to operate, your business is irrelevant. And, even if your professional license is still valid for a year or two, but your business license is already expired, it is still irrelevant.

Make time to check the status of your licenses at least once per year. Then, you can keep from missing anything significant. If there are any issues, you can address them.

Filing an Annual Report in New Hampshire

In New Hampshire, you will be required to submit a report each year. The owners’ and Registered Agent’s names and contact details are listed in the annual report. Also, it should include all of your yearly financial activity. You must submit one yearly in New Hampshire, and you can do it yourself or hire someone else to handle it. Everything must be precise and up to date.

Advantages of Forming a Professional Corporation in New Hampshire

A professional corporation takes a lot of time to process and pursue. However, with the help of the New Hampshire Registered Agent, everything will become easier. In fact, there are advantages that will help you form a professional corporation in New Hampshire.

  1. Limited Liability: The biggest advantage of setting up a professional corporation is that the owners are not held personally responsible for the debts and obligations of the company. This indicates that only the company’s assets will be confiscated to settle claims and creditors if the business is sued or declares bankruptcy. Additionally, this protection exempts corporate owners from being held accountable for other owners’ reckless or criminally negligent acts.
  1. Tax Deductions: Similar company expenses, such as employee fringe benefits, startup and operating costs, and equipment purchases, can be written off by professional companies in the same ways they can be for other kinds of firms. However, there are several tax deductions professional corporations can take advantage of that other types of businesses can’t. For example, the salaries and bonuses paid to owners and employees are tax-deductible.
  1. Retained Earnings: Professional corporations can keep a portion of their profits under the corporate tax system to grow their companies.

FAQs

What is a Professional Corporation in New Hampshire?
A Professional Corporation in New Hampshire is a business entity that is created by licensed professionals, such as doctors, lawyers, and accountants, to provide services in their professional field.
What is the process to form a Professional Corporation in New Hampshire?
The process to form a Professional Corporation in New Hampshire includes selecting a corporate name, filing Articles of Incorporation with the New Hampshire Secretary of State, obtaining a federal employer identification number, filing for any necessary business licenses or permits, and establishing a registered agent for service of process.
What is the filing fee to form a Professional Corporation in New Hampshire?
The filing fee to form a Professional Corporation in New Hampshire is $100.
Is it necessary to obtain a Registered Agent in New Hampshire when forming a Professional Corporation?
Yes, it is necessary to obtain a Registered Agent in New Hampshire when forming a Professional Corporation. The Registered Agent must be a resident of New Hampshire or a business entity authorized to do business in the state.
What information is required to form a Professional Corporation in New Hampshire?
The information that is required to form a Professional Corporation in New Hampshire includes the company name, the business purpose, the number of authorized shares, the name and address of the Registered Agent, and the effective date of the Articles of Incorporation.
What are the benefits of forming a Professional Corporation in New Hampshire?
The benefits of forming a Professional Corporation in New Hampshire include personal liability protection for the shareholders, tax advantages, and the ability to raise capital.
Do I need to obtain a business license to form a Professional Corporation in New Hampshire?
Yes, you may need to obtain a business license to form a Professional Corporation in New Hampshire, depending on the nature of the business activity.
How long does it take to form a Professional Corporation in New Hampshire?
It typically takes 7-10 business days to form a Professional Corporation in New Hampshire, depending on the complexity of the filing.
Is there a time limit to file the Articles of Incorporation for a Professional Corporation in New Hampshire?
Yes, the Articles of Incorporation for a Professional Corporation in New Hampshire must be filed within 120 days of the date of the filing fee payment.
What is the annual report filing requirement for a Professional Corporation in New Hampshire?
The annual report filing requirement for a Professional Corporation in New Hampshire is that an annual report must be filed with the Secretary of State no later than April 1st of each year.
What is the annual fee for a Professional Corporation in New Hampshire?
The annual fee for a Professional Corporation in New Hampshire is $100.
Are there any additional fees to form a Professional Corporation in New Hampshire?
Yes, there may be additional fees to form a Professional Corporation in New Hampshire, such as franchise taxes and fees for obtaining business licenses or permits.
How is a Professional Corporation in New Hampshire taxed?
A Professional Corporation in New Hampshire is generally taxed as a C corporation, meaning that the profits are taxed at the corporate level and any profits distributed to the shareholders are subject to taxation at the individual level.
Is it necessary to hold annual meetings for a Professional Corporation in New Hampshire?
Yes, it is necessary to hold annual meetings for a Professional Corporation in New Hampshire in order to keep the business in compliance with the state’s laws.
Is a Professional Corporation in New Hampshire required to keep corporate records?
Yes, a Professional Corporation in New Hampshire is required to keep corporate records, such as minutes of meetings and resolutions, and make them available for inspection upon request.
Are there any restrictions on the name of a Professional Corporation in New Hampshire?
Yes, there are certain restrictions on the name of a Professional Corporation in New Hampshire, such as the name must not be the same as or deceptively similar to another existing business entity.
What type of capital is required to form a Professional Corporation in New Hampshire?
The capital required to form a Professional Corporation in New Hampshire is the minimum amount of capital that is necessary to form the entity and to cover the initial operating expenses.
Can a Professional Corporation in New Hampshire own real estate?
Yes, a Professional Corporation in New Hampshire can own real estate, as long as it is related to the business purpose of the corporation.
Is it necessary to obtain a surety bond for a Professional Corporation in New Hampshire?
It may be necessary to obtain a surety bond for a Professional Corporation in New Hampshire depending on the type of business activity and any applicable state or local laws.
Can a Professional Corporation in New Hampshire offer health insurance to its employees?
Yes, a Professional Corporation in New Hampshire can offer health insurance to its employees, as long as it is in compliance with applicable state and federal laws.
Is it necessary to register a Professional Corporation in New Hampshire with the IRS?
Yes, it is necessary to register a Professional Corporation in New Hampshire with the IRS in order to obtain a federal employer identification number.
Can a Professional Corporation in New Hampshire borrow money?
Yes, a Professional Corporation in New Hampshire can borrow money, as long as the loan is in compliance with applicable state and federal laws.
Is it necessary to have a board of directors for a Professional Corporation in New Hampshire?
Yes, it is necessary to have a board of directors for a Professional Corporation in New Hampshire in order to comply with the state’s corporate laws.
Is it necessary to submit the financial reports of a Professional Corporation in New Hampshire to the state?
No, it is not necessary to submit the financial reports of a Professional Corporation in New Hampshire to the state. However, the corporation may need to submit its financial information to the IRS or other agencies depending on its business activity.
Are there any restrictions on the sale of a Professional Corporation in New Hampshire?
Yes, there are certain restrictions on the sale of a Professional Corporation in New Hampshire, including the requirement to obtain approval from the shareholders and corporate board of directors.
Do I need to file a business plan for a Professional Corporation in New Hampshire?
No, you do not need to file a business plan for a Professional Corporation in New Hampshire, but you may want to create one to help you better manage the business.
What is the process for forming a Professional Corporation in New Hampshire?
The process for forming a Professional Corporation in New Hampshire begins with the filing of Articles of Incorporation with the Secretary of State of New Hampshire. After filing the Articles of Incorporation, a Certificate of Authority is needed to do business in New Hampshire. The Certificate of Authority can be obtained from the Secretary of State’s office.
What is required to form a Professional Corporation in New Hampshire?
To form a Professional Corporation in New Hampshire, the Articles of Incorporation must be filed with the Secretary of State, along with a Certificate of Authority. The Articles of Incorporation must include the corporation’s name, purpose, duration, agent of service, and number of shares of stock.
Is there a fee associated with forming a Professional Corporation in New Hampshire?
Yes, there is a filing fee of $100 when forming a Professional Corporation in New Hampshire.
What are the reporting requirements for a Professional Corporation in New Hampshire?
A Professional Corporation in New Hampshire is required to file an Annual Report with the Secretary of State. The report must include the corporation’s name, current registered agent, and address.
Are Professional Corporations in New Hampshire subject to taxation?
Yes, Professional Corporations in New Hampshire are subject to taxation. The amount of tax will depend on the type of business and the amount of income generated.
Does a Professional Corporation in New Hampshire need to obtain a business license?
Yes, a Professional Corporation in New Hampshire is required to obtain a business license from the municipality in which the business is located.
Do I need to have a physical presence in New Hampshire to form a Professional Corporation in the state?
No, it is not necessary to have a physical presence in New Hampshire to form a Professional Corporation. However, it is important to have a registered agent in New Hampshire who is authorized to receive service of process.

Also Read

Why New Hampshire Professional Corporation is So Important

One of the primary reasons why a New Hampshire professional corporation is so important is liability protection. By forming a professional corporation, professionals can protect their personal assets from business debts and legal claims. In the event that the corporation faces a lawsuit or bankruptcy, the personal assets of the professionals involved will generally be shielded from these liabilities, providing a layer of protection that can safeguard their financial future.

Additionally, professional corporations in New Hampshire offer tax advantages that can benefit professionals in the long run. By operating as a professional corporation, individuals can take advantage of tax deductions and credits that may not be available to sole proprietors or partnerships. This can result in significant savings for professionals, allowing them to reinvest in their business or personal finances.

Furthermore, a New Hampshire professional corporation can provide professionals with a sense of credibility and professionalism in the eyes of clients, partners, and other stakeholders. Incorporating as a professional corporation signifies a commitment to excellence and adherence to ethical standards within a specific field. This can help professionals attract and retain clients, establish strong partnerships, and build a reputable brand in the marketplace.

Another key benefit of a New Hampshire professional corporation is the ease of transferring ownership and managing succession planning. Unlike other legal structures, such as sole proprietorships or partnerships, professional corporations offer a clear framework for transferring ownership and navigating changes in leadership. This can help ensure the continuity and longevity of the business, providing professionals with peace of mind as they plan for the future.

In addition to the aforementioned benefits, professional corporations in New Hampshire also offer professionals the flexibility to structure their business in a way that aligns with their goals and objectives. Whether professionals are looking to expand their practice, pursue new opportunities, or attract investors, a professional corporation can provide the legal framework necessary to achieve their aspirations.

Overall, a New Hampshire professional corporation is a valuable tool for professionals looking to protect their personal assets, maximize tax benefits, enhance their credibility, facilitate succession planning, and structure their business for long-term success. By taking advantage of the opportunities afforded by this legal structure, professionals can position themselves for growth, profitability, and sustainability in an increasingly competitive business environment.

Conclusion

In forming a professional corporation in New Hampshire, having someone to help you build it is not necessary but suggestible. Even though it is easy because of the listed benefits and advantages above, forming your group of professional individuals will make it somehow successful. Just make sure to be guided by the steps and ensure that every one of the details and records is accurate and precise. And if you have any questions, share them in the comment section below.

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