How to Form a C Corporation in New Hampshire
Introduction
Congratulations! You’re ready to start your own business. You’ve got a great idea, and you’ve done your research on how to turn that idea into something profitable. Now it’s time to take the next step: forming a corporation (or LLC) in New Hampshire. While forming an LLC can be simpler than forming a corporation, there are still some important legal steps involved in setting up your new business entity. Here’s everything you need to know about incorporating your small business:
Learn the Law
As a corporation, you will be considered a separate legal entity from the owners of the company. This means that you will have your own tax ID number (EIN), and your corporation is responsible for paying its own taxes. The owners of the corporation are not personally liable for any debts that it incurs, but they can face personal liability if they commit fraud or other illegal acts. A C corporation can sue in court and defend itself against lawsuits brought against it by other parties.
Choose a Name
Have you decided on a name for your corporation? It should be unique, easy to spell, and easy to pronounce. A name like “The Great Company” or “New Hampshire Manufacturing Company Inc.” is probably not going to work very well. Neither is anything that sounds too long, like “The Great Company of New Hampshire Manufacturing Company Incorporated” (or TGCNHMCI).
If you want your business to always be known by its full name (to differentiate it from others), then make sure all the letters in the names are capitalized. You also shouldn’t use punctuation or special characters as part of your company’s name—it may cause problems with how people see it online or when they call up on the phone!
File the Certificate of Formation
Once you’ve decided to form a C corporation in New Hampshire, the next step is to file the Certificate of Formation. A Certificate of Formation is a legal document that establishes who owns and controls your business. The Secretary of State’s office will use this information when they prepare your corporate records at the Division of Corporations, but they can also use it as evidence during any future litigation involving your company.
The purpose of filing a Certificate of Formation is to provide proof that you are legally entitled to do business in New Hampshire under your chosen name and state registration number (which will be issued by the Secretary of State). If you don’t have this certificate on file with them, then there may be legal consequences down the road if someone sues or files for bankruptcy against them!
You should always try not only keep up with these forms but also make sure that everything is being filed correctly from day one.”
Appoint a Registered Agent
In order to form a corporation, you must appoint a registered agent in New Hampshire. The registered agent is an individual or company that will be responsible for receiving important documents on behalf of your business, including legal notices and subpoenas. If you don’t appoint someone as your registered agent and don’t take steps to maintain your current status as a corporation, then the Secretary of State may cancel your legal status as a corporation.
Registered agents are required by law to accept service of process and other documents on behalf of their client corporations. This means that if anyone wants to serve documents (such as lawsuits or tax liens) on your company, they have to go through the person who’s been designated as its registered agent first. If there’s no one in charge specifically designated by you or someone else in authority within your organization (like an officer), then it could be difficult for these documents—and even court orders—to reach their intended recipient(s).
Create Bylaws
Bylaws are the rules and regulations that govern a corporation. They can be as simple or involved as you want, but they should include information about:
- Your board of directors (who will make decisions on behalf of the company)
- The length of time each director is elected for
- How often meetings should be held, who needs to attend them, and how they’re conducted
The bylaws also need to state what powers your directors have (i.e., do they make all decisions themselves or must they consult with shareholders).
Hold Organizational Meetings
The first step in forming a corporation is to hold an organizational meeting of the board of directors and shareholders. This will occur after you file your Articles of Organization with the secretary of state, but before you complete your C Corporation formation process.
At the organizational meeting, you’ll have to appoint officers, adopt bylaws and approve stock certificates. In addition to these items, shareholders will also vote on whether they wish their corporation to be taxed as either an S or C corporation (see below).
Stock and Stock Certificates
When you first start your business, you’ll need to issue stock to the owners of your corporation. This is referred to as “capital stock.” There are two types of capital stock: common and preferred. It is recommended that you have both kinds in order for your company to be legally compliant with the state of New Hampshire and other states across the country.
Common Stock
This type of ownership gives an owner an equal right with other shareholders in a company, including voting rights and distribution rights when dividends are paid out by the corporation. If a shareholder decides he or she wants to cash out their common stock at some point down the road (perhaps because they want more money now), they can sell this type of ownership on an open market where other investors buy companies like yours through various brokers who specialize in mergers and acquisitions (M&As).
Get an EIN
If you’re establishing your corporation as a C Corporation, you’ll need an Employer Identification Number (EIN) to open your business bank account and file all tax documents. The EIN is a unique nine-digit number that identifies the business to the IRS. You can get one by filling out Form SS-4 from the IRS website or calling them at 800-829-4933. It will take about 15 minutes online and less than 5 minutes over the phone—just be prepared with some basic information like your name, address, phone number, and checkbook balance!
Once you have an EIN for your new company, it’s important to use it on all applicable legal forms throughout the startup process so that no confusion arises when filing taxes down the line.
Incorporating a business is a serious commitment, but it can help protect you from personal liability.
Incorporating a business is a serious commitment, but it can help protect you from personal liability. A corporation is an organization that exists as a separate legal entity from its owners. When you form a corporation in New Hampshire, there are several important factors to consider:
- Who owns the stock? Is there only one owner or many?
- How do they get their money out of the company?
- What’s the purpose of your corporation? Is it just for tax purposes or will your business be involved with making products or providing services to customers?
When you form an LLC or S-Corp in New Hampshire, these questions may not be as important because those structures have few formal requirements when compared with C-Corps (though both LLCs and S-Corps are still subject to state laws). However, if you’re thinking about incorporating under another type of structure like an L3C or B-Corp, then knowing how closely state law matches up with what’s written on paper matters quite a bit!
Conclusion
We hope that this article has helped you learn more about how to form a C corporation in New Hampshire. If you’re ready to get started, visit our website or give us a call.
