New Hampshire LLC and Asset Protection
New Hampshire LLC:
An New Hampshire LLC
offers business entrepreneurs the form of corporate organization that provides perhaps the most flexibility to you. An LLC formation, like the alternative corporate forms of organization like alimited partnership
or aSubchapter S Corporation,
are generally prime candidates for a business juststarting. The state of New Hampshire gives public support to an New Hampshire LLC.
Should I form a New Hampshire LLC?
An New Hampshire LLC satisfies a necessary condition of your business planning developement in that it meets the requirement that you establish a legal form of organization in order to gain the statutory benefits and protection available in New Hampshire to your LLC. Your New Hampshire LLC establishes a legal presence within the state, which you can use either as a platform for in-state operations or by registering your New Hampshire LLC via your agent's physical address in order to meet the purely statutory requirement for tax and filing purposes absent an in state operation.
Advantages and Disadvantages:
New Hampshire LLC
Advantages of Limited Liability Company
- Limited Liability: Owners of a LLC have the limited liability protection of a corporation.
- Flexible Profit Distribution: Limited liability companies can select varying forms of distribution of profits. Unlike a common partnership where the split is 50-50, LLC have much more flexibility.
- No Minutes: Corporations are required to keep formal minutes, have meetings, and record resolutions. The LLC business structure requires no corporate minutes or resolutions and is easier to operate.
- Flow Through Taxation: All your business losses, profits, and expenses flow through the company to the individual members. You avoid the double taxation of paying corporate tax and individual tax. Usually, this will be a tax advantage, but circumstances can favor a corporate tax structure.
Disadvantages of Limited Liability Company
- Limited Life: Corporations can live forever, whereas a LLC is dissolved when a member dies or undergoes bankruptcy.
- Going Public: Business owners with plans to take their company public, or issuing employee shares in the future, may be best served by choosing a corporate business structure.
- Added Complexity: Running a sole-proprietorship or partnership will have less paperwork and complexity. A LLC may federally be classified as a sole-proprietorship, partnership, or corporation for tax purposes. Classification can be selected or a default may apply.
By New Hampshire and other state law in order to proceed with forming a llc, you need to prepare a written abstract detailing your llc purpose, the names of your initial New Hampshire LLC members, the name and address of your New Hampshire registered agent, the details of which will be introduced into the body of your LLC operating agreement and related New Hampshire LLC formation documents assembled for application to the state of New Hampshire.
New Hampshire's 2008 Business Tax Climate Ranks 7th
New Hampshire ranks 7th in the nation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Vermont (44th), Maine (41st) and Massachusetts (34th).
New Hampshire's Individual Income Tax System
New Hampshire's personal income tax system is one of the nation's most simple and inexpensive systems. With no separate tax brackets, New Hampshire's 5% flat income tax only applies to dividend and interest income. As a result many citizens have little or no income tax liability. New Hampshire's 2005 individual income tax collections were $52 per person, which ranked 42nd highest nationally.
New Hampshire's Corporate Income Tax System
New Hampshire's corporate tax structure consists of two brackets, with a top rate of 9.25% kicking in at an income level of $150,000. Among states levying corporate income taxes, this top rate ranks the state 6th highest nationally. In 2006, state-level corporate tax collections (excluding local taxes) were $412.69 per capita, which ranked 2nd highest nationally.