Starting an S-Corporation in New Hampshire can be a complex process, but with the right knowledge and guidance, it can be a rewarding experience. This article will provide you with a step-by-step guide on how to start an S-Corporation in the state of New Hampshire in 2023.
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Before we delve into the process, let's briefly understand what an S-Corporation is. An S-Corporation is a special type of corporation that offers the benefit of limited liability protection while also allowing for a pass-through taxation structure. This means that the profits and losses of the corporation are passed through to the shareholders and included on their individual tax returns.
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Now, let's move on to the steps involved in starting an S-Corporation in New Hampshire:
Step 1: Choose a unique name for your corporation
Choosing a unique and distinguishable name is an essential first step. You will need to ensure that the name you choose is available and not already in use by another business entity in New Hampshire. You can check the availability of your desired name by conducting a search on the New Hampshire Secretary of State's website.
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Step 2: File the Articles of Incorporation
The next step is to file the Articles of Incorporation with the New Hampshire Secretary of State's Office. This document includes essential information such as the name of the corporation, address, registered agent, and purpose of the corporation. You can file the Articles of Incorporation electronically or by mail.
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Step 3: Appoint a registered agent
According to New Hampshire law, every corporation must maintain a registered agent within the state. The registered agent is responsible for receiving legal documents on behalf of the corporation. You can choose an individual or a professional registered agency to act as your registered agent.
Step 4: Draft corporate bylaws
The corporate bylaws serve as the internal operating rules of your S-Corporation. They outline how the corporation will be run, including procedures for shareholder meetings, election of directors, and distribution of profits. While it is not a legal requirement to have corporate bylaws, they are highly recommended to ensure smooth operations of your corporation.
Step 5: Obtain an EIN
An Employer Identification Number (EIN) is a unique nine-digit number issued by the Internal Revenue Service (IRS) to identify your S-Corporation for tax purposes. You can apply for an EIN online through the IRS website, and it's a relatively straightforward process.
Step 6: Make the S-Corporation election
To be treated as an S-Corporation for tax purposes, you must submit Form 2553 (Election by a Small Business Corporation) to the IRS. This form elects the S-Corporation status, enabling pass-through taxation rather than being taxed as a regular C-Corporation. It's important to file this form within the required timeframe, usually within 75 days of incorporation, to be eligible for S-Corporation status starting from the first day of the tax year.
Step 7: Obtain any necessary licenses and permits
Depending on the nature of your business, you may need to obtain various licenses and permits to operate legally in New Hampshire. The specific licenses and permits vary by industry, so it's crucial to research and identify the requirements for your particular business. You can find more information on the New Hampshire Business Licensing Service website.
Step 8: Register for and pay applicable taxes
As an S-Corporation, you are generally exempt from federal income tax at the corporate level. However, New Hampshire does impose a business profits tax on S-Corporations. You will need to register for this tax and make quarterly estimated tax payments. Additionally, make sure to comply with any other state and local taxes that are applicable to your business.
While this article provides a general overview of the steps involved in starting an S-Corporation in New Hampshire in 2023, it is always recommended to consult with a professional attorney or tax advisor who specializes in business formations to ensure compliance with all legal requirements.
Starting an S-Corporation can be a significant milestone for your business, providing benefits such as limited liability protection and favorable tax treatment. With thorough preparation and attention to detail, you can successfully establish an S-Corporation in New Hampshire and pave the way for future growth and success.
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