Are you looking to form a professional limited liability company (PLLC) in New Hampshire, but you’re not sure how the formation process works? There are several important steps when it comes to creating a New Hampshire PLLC that is compliant and able to do business in the state.
What is a New Hampshire Professional LLC?
The professional limited liability company (PLLC) is a specialized type of LLC that is intended for licensed professionals to offer their unique services. In New Hampshire, PLLCs are LLCs formed for the purpose of rendering services that may only be lawfully rendered by licensed professionals such as public accountants, architects, attorneys, podiatrists, chiropractors, dentists, pharmacists, professional engineers, land surveyors, registered professional nurses, optometrists, physicians, surgeons, psychologists and veterinarians.
The New Hampshire PLLC is typically more popular than a professional corporation (PC) because it’s a more flexible business type, but it still includes the personal asset protection and professional qualifications that make the PSC valuable.
PLLCs in New Hampshire have relatively simple formation and maintenance requirements, several options for how they want to be taxed, and flexible management. From one-person businesses to multi-member PLLCs with several owners, the PLLC is a popular choice for a reason.
An important detail of the PLLC that differs from a traditional LLC is that liability protection is not shared across all members of the company. For example, if you operate a PLLC for physicians, your business structure does not shield each individual member from malpractice suits. Instead, each member is liable for their own malpractice insurance, and no member is liable for another member’s malpractice.
Forming a PLLC in New Hampshire (in 6 Steps)
Step One) Choose a PLLC Name
Your PLLC’s name is often the first impression you get to make on potential customers, and therefore it goes without saying that this is an important step. There are a few different aspects to take into consideration when selecting a name for your business:
In New Hampshire, the name of a PLLC must end with "professional limited liability company" or " P.L.L.C." or a similar abbreviation. The name also can’t contain any word or phrase that indicates or implies that the company is organized for any purpose other than the purposes contained in its certificate of formation. You must also be sure that the name conforms to any rule adopted by the licensing authority having jurisdiction of the professional service for which your PLLC was formed.
Another aspect to consider is including language that explains what your business does. For example, if you’re a doctor, put the word “physician” or the initials “MD” in your PLLC name. Additionally, if your business has strong values like being environmentally friendly, you can indicate that by including the word “green.”
Do You Like It?
At the end of the day, this is your business, and you should choose a name that makes you proud. You should also make sure your PLLC name both sounds good when spoken out loud, and looks good when written down.
The most important consideration for naming a PLLC is to not get too attached to any one business name until you know that it is available for use. You can check if your desired name is available by using the Business Search tool on the New Hampshire Secretary of State’s website. Once you’ve chosen a name and confirmed it is available, you can submit an Application for Reservation of Name to the Secretary of State to reserve the name for 120 days. The filing fee is $15, and the reservation period is renewable for successive 120-day periods.
Step Two) Designate a Registered Agent
Every PLLC in New Hampshire is required to designate a registered agent, which is the individual or business entity that receives government correspondence on behalf of your business, then forwards those documents to you.
Under New Hampshire law, your PLLC’s registered agent can be an individual residing in New Hampshire; a New Hampshire corporation, LLC, PLLC or LLP; or a foreign corporation, LLC, PLLC or LLP authorized to do business in New Hampshire, so long as such registered agent’s address is identical to your PLLC’s registered office address.
Without a registered agent, you could lose your good standing with the state of New Hampshire, and the state also has the right to dissolve your PLLC if they decide to. In a worst-case scenario, the state could fail to alert you regarding a lawsuit against your company, which could even lead to a judgment against your business because you didn’t defend yourself.
At the end of the day, we recommend hiring a dedicated registered agent service to handle these requirements. Doing so will help eliminate junk mail and more importantly, keep your personal and/or business address off public record.
Step Three) File Formation Documents with the State
Once you are ready to form your New Hampshire professional limited liability company, you will fill out the Certificate of Formation (Form PLLC-1).
This is THE document that will register your PLLC with the state. You’ll want to ensure all of the following information is correct on the form:
- Name of your PLLC
- Street and mailing address of your PLLC’s principal office
- Business phone and business email
- Description of professional services for which your PLLC is organized
- Name of registered agent
- Street address of registered office
- Whether your PLLC is manager-managed
- Names, business address, and titles of each of your PLLC’s members and managers
- Signature and title of the organizer
You can file your Certificate of Formation online through the Secretary of State’s NH Quickstart website, or you can submit your completed Certificate of Formation by mail or in person to the New Hampshire Secretary of State’s Corporation Division.
Cost to Form a PLLC
The filing fee for the Certificate of Formation is $100. An additional $25 fee applies if you file in person and have the documents processed while you wait.
Online filings are typically processed in 1-2 business days, while mailed filings can take 3-4 weeks. If filing in person, you can request for your documents to be processed while you wait for an additional fee.
Step Four) Create an Operating Agreement
After you register a PLLC in New Hampshire, create a detailed outline that explains how you will run and manage your new business. Even though it doesn’t need to be filed with the state, put one together and keep it for your records.
When you open a bank account, you may be asked for a copy of this document. You’ll also want to keep in mind that any future business partners or managing members may also be interested in seeing your operating agreement before joining your company. After all, this document essentially serves as your overall plan for success.
An attorney can help you outline your operating agreement, or you can create one from a free template online. You can read more about operating agreements here, but some of the basic information you’ll want to have includes:
- Individual members' ownership percentages
- Rights and responsibilities
- Voting powers and meeting guidelines
- Allocation of profits and losses
- Management rules for the PLLC
- Provisions for buying a member owner out, or transferring their shares in the case of illness or death
Step Five) Handle Taxation Requirements
The vast majority of PLLCs require a federal tax ID number, or EIN. An EIN is basically the business version of a social security number, and it’s used for a variety of important PLLC functions.
For instance, you’ll need an EIN if you want to hire any employees, and many banks require them to open business bank accounts as well. You’ll also need one for tax purposes, hence the name federal tax ID number. Get an EIN for your LLC for free through the IRS.
Subject to certain exceptions, all for-profit business organizations carrying on business in the state of New Hampshire are subject to a Business Profits Tax. Your PLLC may also be subject to other New Hampshire state taxes, such as the Business Enterprise Tax. For a general overview of business taxes in New Hampshire, see the Department of Revenue Administration’s website.
The e-File New Hampshire website can help make filing and paying your business taxes easier. If you need assistance with this system, help documents for the various types of tax filings are available online.
Depending on where in New Hampshire your business is located, you may also need to pay some local taxes. You should check with your city and county to confirm whether your PLLC has any additional tax obligations. You can visit the websites of the four largest cities in New Hampshire for business resources and contact information: Manchester, Nashua, Concord, and Dover.
Step Six) Obtain Business Licenses and Permits
A general business licenses is not required to operate a business in New Hampshire. However, depending on the nature of your PLLC’s business, you may need to obtain certain other licenses and permits. General information about licenses and permits in New Hampshire is available on the State of New Hampshire’s website.
You will also need to be sure you meet all licensing requirements for your occupation or profession. You can learn more about occupational licenses on the New Hampshire Employment Security’s website. A list of contact information for various professional regulatory bodies is available on the Office of Professional Licensure and Certification’s website as well.
Would You Prefer a Professional Form Your PLLC?
If you would prefer to have a professional handle the paperwork for you, consider hiring an online business formation service.
Because of the often-complex nature of professional limited liability companies, some of our favorite service providers don’t offer PLLC formations, but there are still plenty of quality companies that do provide this service. A couple of our favorites for PLLC formation are LegalZoom and MyCorporation.
Another option would be to hire a business attorney to handle your PLLC formation. While this is certainly a more expensive route than using an online formation service, a lawyer’s expertise could come in handy when you’re forming a specialized business structure like this.
Next Steps: What to Do After Creating a PLLC in New Hampshire
Open a business bank account
We highly recommend that you establish a separate business banking account so that your business and personal finances are maintained completely separate. This is important because it helps protect your personal assets and also makes filing taxes much easier. Once you receive your EIN from the IRS, you’ll be able to use it to establish an account at the bank or credit union of your choice.
If you plan to hire employees, note that New Hampshire law requires employers to provide workers’ compensation insurance. Information about this requirement is available on the New Hampshire Department of Labor’s website. Though not required, it’s probably also a good idea to pursue general liability insurance, as well as some industry-specific policies pertaining to the profession practiced by your PLLC.
Understand income reporting
Income reporting is just what it sounds like – reporting the income you made from your business. It’s important to note that you must file this form whether you made or lost money over the course of the year.
In New Hampshire, your PLLC’s income will be reported on a Business Profits Tax Return. Which form you use depends on your PLLC’s tax status. You can find the various forms on the New Hampshire Department of Revenue Administration’s website.
Understand annual reporting
New Hampshire requires LLCs, including PLLCs, to file an Annual Report each year. This report helps ensure that the information about your company on file with the Secretary of State is current. The Annual Report incurs a fee of $100 and must be filed online through NH QuickStart.
Find an accountant
We don’t recommend that you attempt to manage your business finances without the help of a professional. There is too much room for error, and a professional can ultimately save you time and money by guiding you on how to best manage your business finances. At a minimum, enlist professional help to set you up with software and the steps for keeping up with your finances on a regular basis. Then, consult back with your accountant at least a couple of times per year – and especially at tax time – to ensure you’re keeping track of everything correctly.