How to Start a Business in New Hampshire

New Hampshire's vibrant economy is full of opportunities for entrepreneurs looking to start a new venture, making it one of the best states for small businesses. From tech startups in Manchester to quaint bed-and-breakfasts in the White Mountains, the state boasts a diverse array of thriving businesses.

Thanks to its business-friendly landscape, your dream of owning a successful enterprise can become a reality here. Let our comprehensive guide lead you through each step of starting your business in New Hampshire.

Selecting a business structure

Choosing the right business structure is important—it impacts your taxes, legal obligations, and personal risk. Explore your options carefully to ensure you make the best choice for your new venture in New Hampshire and set your business up for success.

Determine legal and tax implications

Understand how different business structures impact tax liability and legal status:

• Sole Proprietorship. You are the sole owner. Business income is reported on your personal taxes, and you’re personally responsible for business debts and legal issues.
• Partnership. If you start a business with others, a partnership allows sharing of profits and losses on personal tax returns. In general partnerships, partners share management and liability; limited partnerships offer liability protection to some partners.
• Limited Liability Company (LLC). An LLC provides liability protection by separating personal assets from business debts and lawsuits. It offers flexible taxation, with profits typically passing through to personal tax returns, avoiding double taxation.
• Corporation. A corporation offers strong liability protection and a formal structure. It’s a separate legal entity, so personal assets are generally protected from business debts. Corporations may face double taxation unless electing S corporation status, which allows profits to pass through to personal tax returns.

Assess liability and ownership considerations

Consider your comfort level with personal risk and desired ownership structure:

• Sole Proprietorship. You have full control, but there is no separation between personal and business assets, resulting in personal liability for business obligations.
• Partnership. Decisions and profits are shared among partners. In general partnerships, all partners are personally liable for debts; limited partnerships provide liability protection to some partners.
• LLC. Members are typically not personally liable for business debts or lawsuits. The LLC can have one or multiple members; for example, a single-member LLC has one owner. The management structure is flexible.
• Corporation. Shareholders enjoy limited liability, protecting personal assets. Ownership is divided into shares that can be transferred. Corporations have a formal management structure with directors and officers.

Consider consulting with a legal or tax professional to ensure you choose the option that best fits your business goals and protects your interests.

Registering your business

Registering your business is an important step in legally establishing your company and gaining official recognition in the state. It protects your brand, ensures compliance with regulations, and opens doors to benefits like opening a business bank account and applying for licenses. Plus, once registered, you can obtain a certificate of good standing to prove your business is in full compliance with state requirements.

Choose a business name

It’s reported that the White Mountain State has 136,535 small businesses. So, selecting a unique name for your business can help you stand out from the crowd.Check if it’s available by searching through New Hampshire Secretary of State's business search tool.

If you're forming an LLC or corporation, include the appropriate designation, such as "LLC" or "Inc." Some words, like "Bank" or "Engineer," may have restrictions. Need more time? You can reserve your business name for 120 days with a simple $15 filing.

File formation documents with the NH Secretary of State

To register your business:

• For an LLC, file a Certificate of Formation.
• For a corporation, file Articles of Incorporation.

Each filing comes with a $100 fee, and you’ll also need a registered agent with a physical New Hampshire address. You can easily complete the process online via the NH QuickStart system or by mail—whichever works best for you!

Obtain an Employer Identification Number (EIN)

Apply for an Employer Identification Number (EIN) from the IRS. This number is required to hire employees, open a business bank account, or handle specific taxes. The application is quick, easy, and free on the IRS website. After applying, the IRS will issue a CP-575 form, which serves as official confirmation of your EIN.

Register with the NH Department of Revenue Administration

Ensuring tax compliance is critical. If your business earns over $50,000 annually, be sure to register with the New Hampshire Department of Revenue Administration. You may be subject to the Business Profits Tax (BPT) and should also consider the Business Enterprise Tax (BET). For guidance on your tax obligations, reach out to the Department of Revenue or visit their website for more details.

Obtaining necessary licenses and permits

Obtaining the required licenses and permits is vital to keep your business licensed and registered, ensuring your business complies with state and federal regulations. This not only legitimizes your operations but also builds trust with customers and protects you from potential legal penalties.

Identify industry-specific licenses and permits

Determine the licenses and permits required for your industry:

• Licensed Occupations. Review occupations that require licensing on the New Hampshire Employment Security website.

Examples include:

• Food Service Businesses. Apply for a Food Service License through the Department of Health and Human Services. Compliance with health and safety standards is required.
• Alcohol Sales. Obtain a license from the New Hampshire Liquor Commission if your business involves alcohol sales.
• Hospitality Services. Register with the Department of Revenue Administration for a Meals & Rentals Tax License if you're providing lodging or meals.
• Retail Businesses. May require a resale certificate to purchase items tax-free for resale.
• Professional Services. Professions like medicine, law, accounting, real estate, and cosmetology have specific licensing requirements. Refer to the Licensed Occupations list for details.
• Environmental Permits. Businesses impacting the environment may need permits from the Department of Environmental Services.

Apply for state and local licenses

To apply for the necessary licenses and permits, follow these steps:

1. Gather Your Documents. Collect everything you'll need, like your business registration documents and any certifications.
2. Complete Application Forms. Obtain forms from relevant state agencies or local government offices, often available online.
3. Submit Applications and Fees. Send in your applications along with any required fees. Submission processes vary by agency.
4. Comply with Local Regulations. Check with your city or county clerk's office for additional local permits or zoning regulations.
5. Await Approval. Submit applications well in advance of your planned opening date and follow up if needed.

Obtaining the necessary licenses and permits ensures your business operates legally and smoothly.

Setting up business finances

Setting up proper business finances is essential for managing your cash flow, simplifying tax obligations, and making informed financial decisions.

Open a business bank account

Open a dedicated business bank account. This keeps your personal and business finances separate, makes accounting easier, and protects your personal assets. Most banks require your EIN and business formation documents to get started.

Register for state taxes

Although New Hampshire does not have sales or personal income tax, your business may owe other taxes. Register with the New Hampshire Department of Revenue Administration for taxes such as the Business Profits Tax (BPT) and the Business Enterprise Tax (BET) using Granite Tax Connect.

Evaluate insurance needs

Assess your business insurance needs. General liability insurance can protect against unforeseen events. If hiring employees, workers' compensation insurance is required. Consult an insurance professional to determine appropriate coverage. Obtain workers' compensation insurance through the New Hampshire Department of Labor.

Hiring employees

If you plan to hire employees, ensure compliance with New Hampshire labor laws and regulations.

Review labor laws and employment regulations

Stay compliant with New Hampshire’s labor laws by understanding regulations on minimum wage, overtime, safety, and discrimination. The state minimum wage is $7.25 per hour.

Ensure you follow wage and hour rules, keep accurate records of employee hours, and register with the New Hampshire Department of Employment Security within 30 days of hiring. Don’t forget to report new hires to the New Hampshire Employment Security Bureau within 20 days!

Obtain workers' compensation insurance

Before hiring staff, make sure to secure workers' compensation insurance as required by New Hampshire law. This insurance protects employees in case of workplace injuries. You can get policies through private insurers, or some businesses may even qualify to self-insure. For more information, visit the New Hampshire Department of Labor.

Staying informed about local regulations

Stay up-to-date with local regulations to keep your business running smoothly—laws can shift, and non-compliance may lead to costly fines or legal trouble. Proactively understanding and following these rules helps you avoid business disruptions and keeps your reputation strong in the community.

Monitor changes in state and local laws

Keep up on laws that may affect your business. Here are ways you can stay informed:

• Check official websites. Regularly visit the New Hampshire Secretary of State and Department of Revenue Administration websites.
• Use local resources. Utilize resources from the New Hampshire Small Business Development Center (NH SBDC) and SCORE New Hampshire.
• Maintain annual filings. File annual reports by April 1 each year to comply with New Hampshire requirements for LLCs and corporations.
• Consult professionals. Engage with legal and tax professionals who can inform you of relevant changes.

Start your New Hampshire business today

Starting a small business is an exciting journey that comes with its fair share of challenges. By following this guide, you're taking important steps toward turning your entrepreneurial dreams into reality in the Granite State.

To make the process even smoother, consider utilizing Homebase HR Pro, designed to help small businesses like yours with workforce management, including scheduling, time tracking, hiring, and compliance.

With Homebase, you can focus more on building your business and less on administrative tasks. Get started today and let Homebase be your partner in success!

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