Doing Business in New Hampshire: Everything You Need To Know
Doing business in New Hampshire is the process of establishing a legal business entity in the state.3 min read
Creating a Business Plan
First, you need to figure out what type of business you want to create. The idea should suit your natural abilities, personal goals, and interests, so you'll stay motivated even through challenges. Careful planning is critical to the success of your business. Make sure you can provide comprehensive answers to questions:
- What product or service will you sell?
- What customer problem does this product or service solve?
- What distinguishes your product or service from the offerings of competitors?
- Who are your target customers?
- How will you attract and retain clientele?
- What professional relationships to you need to foster in order to succeed?
- Who should you hire and partner with?
- What will be your financial plan?
- Where will you get funding?
- How many sales do you need to make in order to profit?
Forming a Business Entity
Registering an official New Hampshire company such as a corporation or limited liability company (LLC) offers personal liability protection and boosts your business's credibility. An LLC is a great option for many small businesses because they offer tax advantages along with simple set-up and maintenance. The filing fee in New Hampshire starts at $100.
Companies that decide not to create a separate business entity must file a doing business as (DBA) name if they are doing business in a name other than the owners' legal names. In addition, the owners will have personal responsibility for business debts and obligations.
Meeting Financial Responsibilities
Most businesses need to register with the IRS for a federal employer ID number (EIN). This number is used to open a business bank account, hire employees, and file your business taxes. New Hampshire businesses that have employees must pay unemployment insurance tax on their behalf. Sales tax is not required in New Hampshire.
You must have separate bank and credit accounts for your business to maintain limited liability protection if you have established a corporation or LLC. This also makes your accounting easier, especially at tax time. By the same token, you should choose high-quality accounting software and use it to keep track of your business transactions.
Obtain Business Licenses and Permits
Local, state, and federal laws govern the types of permits and licenses your business needs to operate legally. Common examples include permits for signs, building, health codes, occupation, alarm, zoning, liquor license, alcohol and tobacco permit, sales tax permit, and seller's permit.
Purchasing Business Insurance
Most businesses need general liability insurance, which covers the costs associated with a lawsuit against your company. If you are a consultant, lawyer, accountant, or another professional, you should also consider professional liability insurance. Workers compensation insurance is required for businesses that have employees. In New Hampshire, this is state law even if your company only has one employee, which includes owners and corporate officers.
Establishing a Brand
Consider the core values of your business and use these as inspiration to build a brand that can connect with your customers. The best brands are memorable, compelling, and authentic. In the digital age, an attractive professional website is critical to building a strong brand. It also apprises your target customers about the services and products your business offers. You should create accounts for your business on social media sites like Facebook and Instagram and register your business on review sites such as Google and Yelp.
Benefits of Doing Business in New Hampshire
Many business owners opt to incorporate in New Hampshire because of the low tax burden, the sixth lowest in the nation in 2016 according to the Tax Foundation. Although the 8.5 percent corporate income tax is on the high side, you won't have to pay sales tax or personal income tax. Dividends and income, which are taxed at 5 percent, are the exception. This structure is especially advantageous for LLCs.
In addition, the per capita personal income in New Hampshire is 17 percent higher than the national average. This means that residents have more disposable income and often choose to invest these funds in the local economy by purchasing products and services.
If you need help with doing business in New Hampshire, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.