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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 Business Tax Climate Ranks 5th
New Hampshire ranks 5th in the State Business Tax Climate Index, which measures the impact on business of five major elements of the tax system: the percentage of income taken by all taxes, the individual income tax rates, the corporate income taxes, the sales tax rate, and the complexity of the tax system. Neighboring states ranked as follows: Vermont (45th), Maine (33rd) and Massachusetts (33rd).New Hampshire’s State/Local Tax Burden Second Lowest in the Nation
In the early nineties, New Hampshire had a steadily rising tax burden that peaked in 1992 at 10.3%. From 1993 until the present, the state has seen individual incomes rise significantly faster than state/local tax collections. Estimated in 2004 at 7.5% of income, New Hampshire’s state/local tax burden percentage is the second lowest in that nation, higher than only Alaska.
New Hampshire Individual Income Tax System Among Nation's Simplest, Least Expensive
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 income tax only applies to dividend and interest income (not ordinary income). As a result many citizens have little or no income tax liability. New Hampshire’s flat rate of 5.0% is 6th lowest among states levying personal income taxes. New Hampshire' 2002 individual income tax collections were $56 per person (42nd highest nationally).
New Hampshire’s Corporate Income Tax Collections Per Capita, Second Highest Nationally
New Hampshire’s corporate tax structure consists of simply a flat tax of 8.5% on all corporate income. This tax ranks the state 13th highest among states levying corporate income taxes. In 2001, corporate tax collections reached $278 per capita.