How to Start an S-Corp in New Hampshire

New Hampshire, popularly known as The Granite State, offers a bunch of benefits for business owners, especially the state capital Concord has a lot to offer to the rising entrepreneurs in the state. If you want to start a business in New Hampshire, you must choose an appropriate corporate structure. You can have a corporation or a sole proprietorship or set up an LLC in New Hampshire. There are a few guidelines that you should be aware of when it comes to starting an S-Corporation. In New Hampshire, S-Corporation is businesses’ most common corporate structure, especially start-ups. It was developed in order to give companies limited liability protection while preserving the advantages of being a distinct legal organization.

In this article, you will learn about how to start an s-corporation in New Hampshire. You will also learn whether an s-corporate business structure suits your business. Please read all the points carefully before starting your business in New Hampshire.

What is an S-Corp in New Hampshire?

An S corporation (S-corp) is not a type of corporate entity, unlike a limited liability company (LLC) or other business structures. It’s a tax classification that might result in significant financial savings for both corporations and LLCs but in different ways. S-corp is similar to LLC, except that the IRS treats it as a corporation for tax purposes.

If you want an S corp status for your business, you can always form an LLC to protect your personal assets from business debts. It takes some basic steps to have a successful s-corporation in New Hampshire. S-Corps do pay corporate income taxes, but they are still treated as disregarded companies for federal tax purposes.

S-corps pay corporate taxes that LLCs do not have to pay. If you want to have an S-corp status, then we would recommend you have an LLC instead. This will protect your personal assets from your business liabilities and you don’t have to pay any corporate taxes.
–LLCBuddy Editorial Team

Limitation and Requirements of S-Corp in New Hampshire

As you have decided to have an S-Corp structure for your business, you must know the limitations and requirements to qualify for S-Corp status. We have listed some important points to consider following for your reference-

Be a domestic corporation.
Not be an ineligible corporation, such as specific financial institutions, insurance providers, or domestic corporations engaged in overseas sales.
Have just one type of stock.
Have a maximum of 100 shareholders or members.
Have only permitted individuals, certain trusts, and estates as stockholders or members.

If you are qualified for the limitations and requirements, you can apply for an S-Corp in New Hampshire.

How to Start an S-Corporation in New Hampshire?

To create S-Corp in New Hampshire, you must follow the below guidelines that include forming a business name, hiring a Registered Agent, filing your Certificate of Formation, creating an operating agreement in New Hampshire, requesting an EIN, filing a form 2553.

Step 1: Register a Business Name in New Hampshire

After you have decided on the idea to start an S-Corp in New Hampshire, deciding the name for your corporation is significant. Legal procedures should be taken into account when choosing your partnership name. Choose a business name that will enable you to develop a strong brand identity.

If you want to set up an LLC, there is a complete guide on New Hampshire LLC name guidelines for a proper LLC name. Here are some guidelines you must follow while naming your S-corp.

Avoid profanities
The name should be available, and no other entity should have the same name in New Hampshire.
Limit of restricted words that need a license in New Hampshire, for example, doctors, attorneys, etc.
Do not use a business name that sounds like a government agency or entity (like “police,” “county,” and “state”)

Step 2: Hiring the New Hampshire Registered Agent

The next step in starting an S-corp in New Hampshire is hiring a 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 (such as subpoenas), all notices of lawsuits, and other official government correspondence in New Hampshire. Forming an LLC and an S-corp will be easier if you have Registered Agent in New Hampshire.

Step 3: File Your New Hampshire Certificate of Formation

The Certificate of Formation is an important document to start your limited liability company (LLC). New Hampshire Certificate of Formation is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization. In order for the “Certificate of Formation” to be filed, you need to pay a filing fee to the state. In New Hampshire, the filing fee is $100.

In California, along with the Certificate of Formation, you must send the Statement of Information to file your company. The statement of information is a mandatory document in California, but other states do not have this document.

Step 4: Creating an Operating Agreement in New Hampshire

After you have filed your Certificate of Formation in New Hampshire, the next step is to create an LLC operating agreement in New Hampshire. The New Hampshire LLC operating agreement is essential and necessary since it will cover your corporation’s important documentation and rules. The operating agreements usually include the following-

Article I: Organization
Article II: Management and Voting
Article III: Capital Contributions
Article IV: Distributions
Article V: Membership Changes
Article VI: Dissolution

After creating the LLC operating agreement, you can benefit in several ways since it will discuss how decisions for the business will be made, including management and member voting structure. For more details about how an operating agreement works, please check Operating Agreement.

Step 5: Request for 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 general partnership. 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- You can apply for EIN online, the most desirable and fastest method for users.
Apply by Fax- Another method of obtaining EIN is to fax Form SS-4 (PDF) after entering all the correct information to (855) 641-6935.
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.

If you would like to be assisted in getting an EIN in the Internal Revenue Service, we can get your EIN for you. Our EIN service is quick and hassle-free. For more details about EIN for your business, check why you need EIN.

Step 6: File Form 2553 for Your S-Corp Business in New Hampshire

Once you have obtained your EIN and Certificate of Formation to form an S-Corp, you must file Form 2553, Election by a Small Business Corporation, to apply for S-corp status. Filing a form 2553 should be done 75 days after the formation of your S-Corp, or not more than 75 days after the beginning of the tax year in which the election is to take effect.

If your LLS-Corp has passed the deadline of 75 days, you must also file Form 8832, Entity Classification Election, in order to opt to be taxed as a corporation. Then you would send Form 2553 and Form 8832 jointly by certified mail from the USPS. In New Hampshire, you can send your form 2553 to the Department of the Treasury Internal Revenue Service Center – Kansas City, MO 64999 Fax: 855-887-7734.

Advantages of Starting an S-Corporation in New Hampshire

Filing an S-Corp in New Hampshire has numerous benefits and advantages.

Writing Off Losses: With S-corp, owners can deduct business losses from their individual income statements. If the company loses money in the first few years, it may balance its other sources of revenue. Even so, understand the shareholder loss limitations set by the IRS.

Pass-Through Taxation: Starting an S-Corp is the widely known advantage in forming this kind of business structure since an s-corp uses a pass-through taxation structure. The company does not pay twice the tax in this kind of taxation. Because of this structure, most start-ups and entrepreneurs in New Hampshire apply for an S-Corp LLC.

Qualified Business Income Deduction: A qualified business income, or QBI, is the total of all qualified items of income, gain, deduction, and loss from any qualified trade or business, including S-Corp. With this, S corp owners may deduct up to 20% of their eligible earnings under the Tax Cuts and Jobs Act.

FAQs

What is an S-Corp?

An S-Corp is a type of business entity that combines the limited liability of a corporation with the pass-through taxation of a partnership or sole proprietorship.

What are the advantages of an S-Corp in New Hampshire?

The advantages of setting up an S-Corp in New Hampshire include limited personal liability, tax savings, and the ability to attract investors.

What are the requirements to form an S-Corp in New Hampshire?

To form an S-Corp in New Hampshire, the business must be registered as a corporation with the New Hampshire Secretary of State, must have at least one shareholder, and must have no more than 100 shareholders.

Are there any annual fees or taxes associated with an S-Corp in New Hampshire?

Yes, S-Corps in New Hampshire are subject to annual franchise taxes and fees, as well as income taxes.

What is the process for forming an S-Corp in New Hampshire?

The process for forming an S-Corp in New Hampshire typically involves filing articles of organization with the Secretary of State, filing a Certificate of Assumed Name, filing for an employer identification number, and filing for a business license.

Do I need to file any additional documents with the state to form an S-Corp in New Hampshire?

Yes, you will need to file additional documents with the state, such as a Statement of Information, a Certificate of Assumed Name, and a Statement of Qualification.

How long does it take to form an S-Corp in New Hampshire?

The processing time for forming an S-Corp in New Hampshire varies, but generally takes between 3-5 weeks.

Do I need to have a physical address in New Hampshire to form an S-Corp?

Yes, all corporations must have a physical address in New Hampshire to be in compliance with state law.

Is there a minimum capital requirement for forming an S-Corp in New Hampshire?

No, there is no minimum capital requirement for forming an S-Corp in New Hampshire.

Do I need to file any additional documents with the IRS to form an S-Corp in New Hampshire?

Yes, you will need to file Form 2553 with the IRS to elect S-Corp status for your business.

Is there an annual filing requirement for S-Corps in New Hampshire?

Yes, all S-Corps in New Hampshire must file an annual report every year with the Secretary of State.

Do I need to appoint a registered agent for an S-Corp in New Hampshire?

Yes, all businesses in New Hampshire must appoint a registered agent in order to be in compliance with state law.

What types of taxes are S-Corps in New Hampshire subject to?

S-Corps in New Hampshire are subject to income taxes, as well as franchise taxes and fees.

Is there a minimum wage requirement for S-Corps in New Hampshire?

Yes, the minimum wage for New Hampshire is $7.25 per hour.

Are there any special rules or regulations for S-Corps in New Hampshire?

Yes, S-Corps in New Hampshire must adhere to the state’s regulations for corporate governance and operations.

Do I need to issue stock to form an S-Corp in New Hampshire?

No, you do not need to issue stock to form an S-Corp in New Hampshire.

What are the steps for dissolving an S-Corp in New Hampshire?

The steps for dissolving an S-Corp in New Hampshire include filing a Certificate of Dissolution with the Secretary of State, notifying creditors, distributing assets, and filing final tax returns.

Does New Hampshire allow foreign companies to form S-Corps?

Yes, foreign companies are allowed to form S-Corps in New Hampshire.

What are the corporate income tax rates for S-Corps in New Hampshire?

The corporate income tax rate for S-Corps in New Hampshire is 7.7%.

What are the franchise tax rates for S-Corps in New Hampshire?

The franchise tax rate for S-Corps in New Hampshire is $125.

Does New Hampshire require S-Corps to have an annual meeting?

Yes, all S-Corps in New Hampshire must hold an annual meeting of shareholders.

Are there any other taxes or fees associated with S-Corps in New Hampshire?

Yes, there are several other taxes and fees associated with S-Corps in New Hampshire, including corporate income taxes, franchise taxes, and sales taxes.

Are there any restrictions on who can own an S-Corp in New Hampshire?

Yes, all S-Corps in New Hampshire must have at least one shareholder and no more than 100 shareholders.

Does New Hampshire require S-Corps to keep records of their activities?

Yes, all S-Corps in New Hampshire must keep records of their activities, including minutes from meetings, stock certificates, and financial records.

Does New Hampshire require S-Corps to have a board of directors?

Yes, all S-Corps in New Hampshire must have a board of directors.

Does New Hampshire require S-Corps to register with the state?

Yes, all S-Corps in New Hampshire must be registered with the Secretary of State.

Does New Hampshire require S-Corps to have an employee handbook?

Yes, all S-Corps in New Hampshire must have an employee handbook that outlines the company’s policies and procedures.

What do I need to do to start an S-Corp in New Hampshire?

To start an S-Corp in New Hampshire, you will need to file a certificate of formation with the New Hampshire Secretary of State. You will also need to create a set of organizational documents, such as bylaws and an operating agreement, and obtain an Employer Identification Number (EIN) from the IRS.

Is there a filing fee to start an S-Corp in New Hampshire?

Yes, there is a filing fee of $100 to start an S-Corp in New Hampshire.

Are there any other requirements for starting an S-Corp in New Hampshire?

Yes, in addition to filing the certificate of formation, you must also register with the New Hampshire Department of Revenue Administration for taxes and file an annual report with the Secretary of State.

What are the tax implications of starting an S-Corp in New Hampshire?

Starting an S-Corp in New Hampshire will result in corporate income tax, unemployment insurance tax, and state business profits tax.

What type of liability protection can I expect with an S-Corp in New Hampshire?

An S-Corp in New Hampshire can provide limited liability protection for its owners, meaning that their personal assets are generally not at risk in the event of a lawsuit.

What are the ongoing requirements for an S-Corp in New Hampshire?

An S-Corp in New Hampshire must file an annual report with the Secretary of State, pay taxes, and maintain its organizational documents.

Why New Hampshire S Corporation is So Important

One of the biggest advantages of electing to have your business structured as an S Corporation in New Hampshire is the pass-through taxation benefit. This means that the profits of the business are not taxed at the corporate level. Instead, they “pass through” to the shareholders and are taxed at their individual tax rates. This can result in lower overall taxes for both the business and its owners.

Another advantage of choosing an S Corporation in New Hampshire is the limited liability protection it provides. By forming an S Corporation, shareholders are not personally liable for the debts and obligations of the business. This can help protect personal assets in the event of a lawsuit or financial difficulties.

Additionally, electing S Corporation status in New Hampshire allows for greater flexibility in terms of ownership and investment. Unlike a traditional C Corporation, an S Corporation can have up to 100 shareholders, all of whom must be U.S. citizens or residents. This can be beneficial for businesses looking to raise capital or transfer ownership shares.

In New Hampshire, choosing to operate as an S Corporation can also lead to enhanced credibility and reputation among customers, vendors, and investors. Being recognized as an S Corporation shows a level of commitment and professionalism that can help attract new business and opportunities.

Another critical aspect to consider is the ease of compliance and administration associated with operating as an S Corporation in New Hampshire. Compared to other business entities, there are fewer formalities and reporting requirements for S Corporations. This can save time and money in the long run, allowing business owners to focus on growing their businesses rather than dealing with unnecessary paperwork.

When considering the benefits of setting up an S Corporation in New Hampshire, it is essential to consult with legal and financial professionals to ensure that this entity structure is the right fit for your business goals and needs. While there are numerous advantages to choosing an S Corporation, it may not be the best option for every business.

In conclusion, selecting to operate as an S Corporation in New Hampshire offers numerous benefits, including pass-through taxation, limited liability protection, flexibility in ownership, enhanced credibility, and ease of compliance. By carefully weighing these advantages against the specific needs of your business, you can determine if an S Corporation is the right choice for your entrepreneurial endeavors.

Conclusion

In conclusion, starting an S-corp in New Hampshire is a strategic choice for entrepreneurs seeking the benefits of limited liability and favorable tax treatment. One can successfully establish an S-corp by following the outlined steps, including selecting a unique name, filing the Articles of Incorporation, obtaining necessary licenses, and adhering to state-specific regulations. Ultimately, this corporate structure offers a strong foundation for business growth and protection, making it a worthwhile consideration for those looking to launch a venture in New Hampshire.