How to Form a Professional Corporation in New Hampshire (2024 Guide)

Steve Bennett
Business Formation Expert  |   Fact Checked by Editorial Team
Last updated: 
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Forming a Professional Corporation in New Hampshire

If you would like to start and learn how to form a corporation in New Hampshire, there are a few things that you should do now. However, in a professional corporation, professionals must create a special organizational structure to establish a professional or service corporation. Among the appropriate professions to organize a professional corporation in New Hampshire are accountants, physicians, engineers, architects, and attorneys.

Forming a professional corporation in New Hampshire or any business organization needs a certain number of steps. In this article, Webinarcare Editorial Team is going to share those steps. Keep in mind that these are general procedures. Depending on local law, it may be modified. For instance, your professional corporation may be subject to city or county-based rules.

What is a Professional Corporation in New Hampshire?

A professional service corporation (PSC), often known as a professional corporation (abbreviated as PC), is a particular type of organization that is permitted by state law to allow owners of specifically licensed professions to practice in the New Hampshire. A professional corporation’s owner is answerable for their own negligence or wrongdoing but is not held personally liable for the actions of other owners. The abbreviation PC or P.C. is frequently used to denote professional corporations.

This structure allows professionals to enjoy some of the benefits and protections of a traditional corporation while maintaining their professional status and abiding by the regulations of their respective licensing boards.

LegalZoom is the recommended corporation formation if you are thinking of forming a professional corporation from scratch. However, you can always start an LLC in New Hampshire, if you changed your mind.

WEBINARCARE EDITORIAL TEAM

How to Form a Professional Corporation in New Hampshire

To form a Professional Corporation in New Hampshire for the professional service you provide, you must follow a few steps that include verifying if you are qualified for a PC, naming your business, hiring a Registered Agent, filing the Articles of Incorporation, outlining an operating agreement, requesting for an EIN, opening a bank account, getting a business license, and filing for an Annual report and taxes.

Step 1: Verify If You Are Qualified for a Professional Corporation

In forming a professional corporation in New Hampshire, you should know if you are qualified. There are specific professions that are allowed to form a professional service corporation, including-

To provide your service, you must be qualified and have a license. In most cases, you can now form a professional corporation after finishing your studies, passing the exam, and receiving your license. If you work in an industry that does not provide a license or professional certification, you should consider starting an LLC or corporation.

Step 2: Name your Professional Corporation in New Hampshire

After you have decided to form a professional corporation in New Hampshire, you must choose a name for your corporation. Here are some pointers to consider when naming your professional corporation.

  • The business name should have the word PC, frequently followed by the name of the principal owner in place of Inc or LLC. (Example. John Doe, MD, PC)
  • Limit of restricted words that need a license.
  • A unique name is needed with no match
  • No confusion with a government entity name.

In New Hampshire, if you do not wish to file your professional corporation right away but want to hold the name that you have decided on, then you can reserve your corporation name for 120 days. You must file a name reservation application in the New Hampshire Secretary of State to keep the name.

If not already present, a professional corporation, professional association, service corporation, or professional service corporation must be included in the name. You may register your business under a different legal name if your preferred legal name is unavailable. Once you’ve decided on a name, you can apply for New Hampshire DBA (doing business as). This way, you can run a clinic or law firm under your name.

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Step 3: Choose the New Hampshire Registered Agent

The next step in forming a professional corporation is hiring a Registered Agent, who accepts legal paperwork for your business. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in New Hampshire. Forming a professional corporation for your service will be easier if you have Registered Agent in New Hampshire.

Alternatively, you can serve as your own Registered Agent if you have the time. Usually, in New Hampshire, a Registered Agent costs is ranging from $50 – $150. To make it easier, you can hire New Hampshire Registered Agent Services for your professional corporation.

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Step 4: File the Articles of Incorporation in New Hampshire

After you hire a Registered Agent to form a professional corporation, the next step is to file the New Hampshire Articles of Incorporation. In writing the Articles of Incorporation, the business name, owner’s contact information, corporation address, and Registered Agent contact information, should be written. Include the names of all co-owners as well. All owners must demonstrate that they have the necessary licenses to practice the profession in question.

Filing the Articles of Incorporation in New Hampshire may be done with three methods that are online, by mail and in-person. The Articles of Incorporation fee may vary from different state. However, in New Hampshire, it costs $100 for filing online, by mail, or in person. Create an account/Log in to the SOS site, get the online form, fill it, and submit online. For offline filing, Send the form by mail or drop it off in person at Corporation Division, NH Dept. of State, 107 N Main St, Rm 204, Concord, NH 03301..

Step 5: Write an Operating Agreement in New Hampshire

An operating agreement in New Hampshire is a document that contains all of your company’s organizational details. It is optional to draft an operating agreement in most states. Yet, having one as an internal document is strongly advised. The operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

Step 6: Designate the PC Board of Directors in New Hampshire

The next step is to form the first board of directors for your PC in New Hampshire. All of the initial directors must provide the owner with their contact information. The owner must keep records and submit them by the New Hampshire Secretary of State. As a shareholder and owner, you must ensure that a provision for appointing a new director is included in the By-laws. In New Hampshire, you must have Five directors in forming your Professional Corporation.

Step 7: Write the Corporate Bylaws

Now that you are done forming the team of the board of directors, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

Creating comprehensive corporate bylaws requires specific knowledge about the company, its structure, and operations. However, I can provide you with a general outline of what corporate bylaws usually include. It is crucial to consult with New Hampshire Business Attorney or a legal expert to ensure that your bylaws comply with the laws and regulations governing your jurisdiction and industry.

  • Name and Purpose of the Corporation
  • Registered Office and Agent
  • Shareholders
  • Board of Directors
  • Officers
  • Committees
  • Indemnification and Insurance
  • Conflict of Interest
  • Records and Reports
  • Amendments
  • Miscellaneous

Step 8: Hold the First Board of Directors’ Meeting

Gather the board of directors for the first meeting after drafting the corporate bylaws. This meeting will conclude with the appointment of directors to manage the company’s daily operations, approval of the bylaws, selection of the corporation’s financial reporting year, and approval of the stock issue. Minutes should be taken at all board meetings and kept with the company’s records.

Step 9: Request an EIN in New Hampshire.

After the operating agreement’s documentation, you should get or request an Employer Identification Number (EIN) in New Hampshire. The tax ID for your professional corporation will be an EIN. The Internal Revenue Service can provide an EIN (IRS). It has nine digits and is comparable to a social security number. Nevertheless, EIN is different from SSN. Only business-related tasks, primarily filing general taxes, are performed using it. The form needs to be filled out and submitted online to the IRS.

The application of an EIN in New Hampshire can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in several ways. It will give your professional corporation the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

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Step 10: Open a Bank Account and Prepare for Taxes.

You should open a business bank account as soon as you have applied for and received your Employer Identity Number because you will use this account for yourself, your clients, and your staff. Check out the Best Banks in New Hampshire for you to decide on which bank you are going to open an account.

Due to your organization’s increased legality and liquidity, having a US business bank account may make conducting business in New Hampshire easier. Most banks require an EIN for businesses other than sole proprietorships to open a business bank account. Also, keeping your accounts separate will prevent you from merging your personal and business finances. Also, filing taxes is simpler when you have an EIN. You can expect to pay employee and corporate taxes when you form a professional corporation.

Step 11: Get a Business License in New Hampshire

Before your professional corporation operates in New Hampshire, you must have New Hampshire Business License first. A business license is a formal document issued by a state government agency that allows you to conduct business in the geographic area governed by that agency. The cost of business licenses and permits in New Hampshire ranges from $50 – $300. You must check with the local authorities to see if any special licenses or permits are required.

Step 12: File Your Taxes in New Hampshire

Finally, you’ve arrived at the final process. Remember to file your taxes when you have obtained a business license and are ready to begin operations. To avoid a large tax bill, you should begin paying taxes quarterly as soon as possible. Each state has different tax requirements. Start examining the New Hampshire tax classification for the taxes that an LLC in New Hampshire must pay.

Main Characteristics of a Professional Corporation

In forming a Professional Corporation, the main characteristics must be distinguished before forming it. These are the general characteristics of forming a Professional Corporation in New Hampshire.

  • Limited Liability Protection: A professional corporation provides its owners, shareholders, or members limited liability protection like a regular corporation. This means the shareholders’ personal assets are generally protected from business debts, obligations, and lawsuits, except in malpractice or professional negligence cases.
  • New Hampshire Licensing Requirements: All shareholders must typically be licensed professionals in the same field in a professional corporation. The corporation must also comply with specific state regulations and licensing requirements that govern the profession.
  • Governance and Management: A professional corporation is governed by a board of directors, who the shareholders elect. The board appoints officers to manage the day-to-day operations of the corporation. All directors and officers must be licensed professionals in the same field as the corporation.
  • Taxation: Professional corporations are taxed as C corporations, where the corporation pays taxes on its income, and shareholders pay taxes on dividends received from the corporation. However, some professional corporations may be eligible for S corporation status, allowing pass-through taxation. Income, losses, deductions, and credits flow to the shareholders, who report this information on their income tax returns.
  • Restrictions on Ownership and Transfer of Shares: Professional corporations often restrict the ownership and transfer of shares to ensure that only licensed professionals in the same field can become shareholders. This helps maintain the professional nature of the corporation and adheres to state licensing requirements.
  • Malpractice Liability: While a professional corporation provides limited liability protection for general business debts and obligations, it does not shield shareholders from liability for their own malpractice or professional negligence. Shareholders can still be personally liable for their actions in providing professional services.

In summary, a professional corporation is a specialized corporate structure designed for licensed professionals, offering limited liability protection and a formal governance structure while adhering to state licensing requirements and regulations.

Maintain Professional and Business License in New Hampshire

You must maintain or renew your professional license regularly now that you have established your professional corporation. Even if your company is well-established, it is only meaningful if you have a valid operating license. And it makes no difference if your professional license is still valid for a year or two, but your business license has already expired.

Make time at least once a year to check the status of your licenses. You won’t miss anything important this way. You can address any issues that arise.

Filing Annual Report in New Hampshire

In New Hampshire, you must submit a report. The owners’ and Registered Agent’s names and contact details are listed in the Annual Report. Also, it should include all of your yearly financial activity. You must submit the report every 1 year (1st April) in the New Hampshire Secretary of State.

FAQs

What is a professional corporation in New Hampshire?
A professional corporation in New Hampshire is a type of corporation designed to provide licensed professional services such as medical, legal, and accounting services.
Who can form a professional corporation in New Hampshire?
Only individuals licensed or authorized to provide professional services in the state of New Hampshire can form a professional corporation.
What are the benefits of forming a professional corporation in New Hampshire?
The benefits of forming a professional corporation in New Hampshire include limiting personal liability, separating personal and business assets, and obtaining tax advantages.
How do I form a professional corporation in New Hampshire?
To form a professional corporation in New Hampshire, you must file Articles of Incorporation with the New Hampshire Secretary of State and obtain a Certificate of Incorporation.
Are there any special requirements for naming a professional corporation in New Hampshire?
Yes, the name of a professional corporation in New Hampshire must include the words “professional corporation” or “PC.”
Can a professional corporation provide nonprofessional services?
A professional corporation in New Hampshire can only provide professional services for which it was formed, and cannot provide nonprofessional services.
Are there any restrictions on ownership of a professional corporation in New Hampshire?
Yes, the ownership of a professional corporation in New Hampshire is restricted to licensed professionals, as defined in state law.
Do I need to have a Board of Directors to form a professional corporation in New Hampshire?
No, a professional corporation in New Hampshire can choose to have a Board of Directors or be run by its Shareholders.
What is the minimum number of Shareholders required to form a professional corporation in New Hampshire?
In New Hampshire, a professional corporation must have at least one Shareholder.
Are Shareholders liable for the debts and obligations of a professional corporation in New Hampshire?
No, Shareholders typically have limited liability and are not responsible for the debts and obligations of the professional corporation.
What is a Registered Agent in New Hampshire?
A Registered Agent in New Hampshire is a person or business that is responsible for receiving and forwarding legal documents, such as lawsuits, on behalf of a corporation.
Is a Registered Agent required to form a professional corporation in New Hampshire?
Yes, a Registered Agent is required for a professional corporation in New Hampshire.
Can a professional corporation change its Registered Agent in New Hampshire?
Yes, a professional corporation in New Hampshire can change its Registered Agent by filing a Change of Registered Agent form with the Secretary of State.
What is a Certificate of Good Standing in New Hampshire?
A Certificate of Good Standing in New Hampshire is a document that indicates a corporation is authorized to do business in the state and is current with all necessary filings and payments.
Is a Certificate of Good Standing required to form a professional corporation in New Hampshire?
No, a Certificate of Good Standing is not required to form a professional corporation in New Hampshire, but it may be necessary for other business requirements.
Are professional corporations in New Hampshire subject to annual reports or fees?
Yes, professional corporations in New Hampshire are subject to annual reports and fees.
Are professional corporations in New Hampshire subject to state and federal taxes?
Yes, professional corporations in New Hampshire are subject to state and federal taxes.
What is a Corporate Bylaws in New Hampshire?
Corporate Bylaws in New Hampshire are internal operating rules and procedures of a corporation.
Are Corporate Bylaws required for a professional corporation in New Hampshire?
Yes, a professional corporation in New Hampshire should have Corporate Bylaws to govern the corporation’s operations and obligations.
Can a professional corporation in New Hampshire own property or enter into contracts?
Yes, a professional corporation in New Hampshire can own property and enter into contracts in its own behalf.
What is a Professional Services Agreement in New Hampshire?
A Professional Services Agreement in New Hampshire is documentation outlining how the corporation and the clients will conduct professional services.
Is a Professional Services Agreement mandatory for a professional corporation in New Hampshire?
No, it is not a mandatory document for a professional corporation in New Hampshire.
Can a professional corporation act as a Registered Agent for other corporations in New Hampshire?
Yes, a professional corporation in New Hampshire can act as a Registered Agent for other corporations.
Can a professional corporation conduct business outside of New Hampshire?
Yes, a professional corporation in New Hampshire is allowed to conduct business outside of the state.
What is a Foreign Corporation in New Hampshire?
A Foreign Corporation in New Hampshire is a corporation that’s registered in another state or jurisdiction but has been authorized or qualified to do business in NH.
Can a Foreign Professional Corporation operate in NH?
Yes, a Foreign Professional Corporation can operate in NH if it obtains authorization to do so.
Are there any special requirements or restrictions on licensed professionals forming a professional corporation in New Hampshire?
Yes, the licensing board that governs each profession may have specific requirements for forming a professional corporation in New Hampshire.
What types of licensed professions can form a professional corporation in New Hampshire?
New Hampshire allows licensed professionals in various fields, including medicine, law, and accounting to form a professional corporation.
What is a professional corporation?
A professional corporation is a type of business organization that is formed by individuals who provide professional services, such as doctors, lawyers, and accountants.
Can a professional corporation operate in New Hampshire?
Yes, a professional corporation can operate in New Hampshire.
What are the advantages of forming a professional corporation in New Hampshire?
Some advantages of forming a professional corporation in New Hampshire include personal asset protection, tax benefits, and the ability to provide liability protection for professionals.
What is the process of forming a professional corporation in New Hampshire?
The process for forming a professional corporation in New Hampshire involves filing the appropriate paperwork with the Secretary of State and complying with state-specific requirements.
What are the specific requirements for forming a professional corporation in New Hampshire?
The requirements for forming a professional corporation in New Hampshire include having at least two shareholders who are licensed in the professional services provided by the company, and the use of “P.C.” or “Professional Corporation” in the company name.
Can a professional corporation be owned by non-licensed individuals?
No, a professional corporation cannot be owned by non-licensed individuals in New Hampshire.
Are there restrictions on what type of professions can form a professional corporation in New Hampshire?
Yes, only professionals who hold licenses issued by the New Hampshire Department of State may form a professional corporation.
How many shareholders can a professional corporation have in New Hampshire?
A professional corporation in New Hampshire must have at least two shareholders and cannot have more than 100.
Are there any filing fees for forming a professional corporation in New Hampshire?
Yes, there are filing fees that must be paid to the Secretary of State when forming a professional corporation in New Hampshire.
Does a professional corporation in New Hampshire need to obtain any licenses or permits?
Yes, a professional corporation in New Hampshire may need to obtain licenses or permits specific to the profession or industry in which it operates.
What are the tax implications of forming a professional corporation in New Hampshire?
The tax implications of forming a professional corporation in New Hampshire may depend on the specific circumstances of the corporation and the shareholders, and it is advisable to consult a tax professional for advice.
Can a professional corporation be dissolved in New Hampshire?
Yes, a professional corporation in New Hampshire can be dissolved in accordance with state-specific requirements.
Can a professional corporation in New Hampshire merge with another corporation?
Yes, a professional corporation in New Hampshire may engage in a merger with another corporation in accordance with state-specific requirements.
What happens to the assets of a dissolved professional corporation in New Hampshire?
The assets of a dissolved professional corporation in New Hampshire may be distributed to shareholders or creditors in accordance with state-specific requirements.
What are the residency requirements for shareholders of a professional corporation in New Hampshire?
There are no residency requirements for shareholders of a professional corporation in New Hampshire.
Can a professional corporation in New Hampshire sue or be sued?
Yes, a professional corporation in New Hampshire can sue or be sued in accordance with state-specific requirements.
Can a professional corporation in New Hampshire be owned by a trust?
Yes, a professional corporation in New Hampshire can be owned by a trust.
Can a professional corporation in New Hampshire have foreign shareholders?
Yes, a professional corporation in New Hampshire can have foreign shareholders.
Can a professional corporation in New Hampshire be owned by another corporation?
Yes, a professional corporation in New Hampshire can be owned by another corporation.
Can a professional corporation in New Hampshire be owned by a partnership?
Yes, a professional corporation in New Hampshire can be owned by a partnership.
Does a professional corporation in New Hampshire need an operating agreement?
Yes, a professional corporation in New Hampshire should have an operating agreement or bylaws to establish governance and operating procedures.
Can a professional corporation in New Hampshire distribute profits to shareholders?
Yes, a professional corporation in New Hampshire can distribute profits to shareholders in accordance with state-specific requirements and regulations.
What is the liability protection offered by a professional corporation in New Hampshire?
A professional corporation in New Hampshire can provide reduced personal liability for shareholders in case the corporation is sued or is unable to meet its financial obligations.
Can shareholders of a professional corporation in New Hampshire be held personally liable for the acts of the corporation?
In general, shareholders of a professional corporation in New Hampshire are not held personally liable for the corporation’s debts or obligations unless they have signed a personal guarantee or personally committed the act in question.
How long does it take to form a professional corporation in New Hampshire?
The time it takes to form a professional corporation in New Hampshire can vary depending on the complexity of the corporation’s structure and the state’s processing times.
Can a professional corporation in New Hampshire convert to a different type of business entity?
Yes, a professional corporation in New Hampshire can convert to a different type of business entity or restructure in accordance with state-specific requirements.
What is the minimum amount of initial capital required to start a professional corporation in New Hampshire?
There is no specific minimum amount of initial capital required to start a professional corporation in New Hampshire.
What happens if the shareholders of a professional corporation in New Hampshire disagree?
It is advisable for shareholders of a professional corporation in New Hampshire to address issues of disputes or disagreements in the corporation’s bylaws or operating agreement, or seek the assistance of a legal professional if necessary.
Can a professional corporation in New Hampshire change its business purpose after formation?
Yes, a professional corporation in New Hampshire may be able to change its business purpose after formation in accordance with state-specific requirements.

Also Read

How to Save Money While Forming New Hampshire Professional Corporation

One of the strategies that can drastically reduce costs when establishing a professional corporation is to work on the legal aspects of the formation process oneself. While it may initially seem overwhelming, there are numerous resources available, such as online guides and templates, which can provide necessary assistance. By taking the time to educate oneself on the legal requirements and following the step-by-step instructions, the need for costly legal consultations can be minimized. Additionally, utilizing online resources for legal advice or establishing a simple correspondence with an attorney can also help keep expenses at bay.

Moreover, efficient resource management is vital when trying to save money during the formation of a professional corporation. Often, entrepreneurs are keen on investing in top-of-the-line office spaces and expensive equipment from the start, unnecessarily inflating costs. However, it can be advantageous to start small and consider affordable alternatives, such as co-working spaces or shared offices. These options not only significantly reduce the financial burden but also provide a flexible environment to adapt to business needs. Similarly, in the early stages of forming a professional corporation, it might be prudent to opt for lease agreements rather than outright purchasing office furniture or equipment, which can easily become financial burdens if the business fails to succeed.

Taking advantage of technology is another cost-effective approach for establishing a professional corporation in New Hampshire. With the growing availability of online services, there is no longer a requirement to hire a vast team of employees or in-house experts. Many business functions, such as accounting, human resources, and marketing, can effectively be outsourced to freelancers or agencies. This thus eliminates a significant portion of fixed costs, such as salaries, benefits, and office space. Additionally, utilizing various digital tools to streamline processes and automating certain tasks can provide further cost-saving advantages.

Furthermore, networking and seeking guidance from experienced professionals can also prove immensely valuable during the formation of a professional corporation without breaking the bank. Engaging with like-minded individuals in the same industry or entrepreneurs who have already gone through a similar process can provide insightful advice and offer cost-cutting strategies they have implemented themselves. Building a strong network not only generates potential business opportunities later on but also grants access to valuable resources at lower or no cost, reducing expenditures altogether.

In conclusion, forming a professional corporation in New Hampshire does not have to be a financially draining process. By employing tactics such as handling legal aspects independently, identifying cost-effective alternatives, leveraging technology, and seeking support from fellow professionals, significant savings can be achieved. These small steps, when combined, can make a substantial difference in keeping expenses low and ensuring a successful establishment of a professional corporation, optimally positioning the business for the future.

Conclusion

In conclusion, forming a professional corporation in New Hampshire is a strategic decision for licensed professionals who seek to combine their expertise and services under a single corporate entity. This business structure offers limited liability protection, a formal governance structure, and compliance with state licensing requirements. However, it also comes with certain restrictions on ownership, transfer of shares, and personal liability for professional malpractice. By carefully considering the advantages and disadvantages of a professional corporation, professionals can determine whether this structure aligns with their business goals, regulatory requirements, and risk management needs, ultimately contributing to a more organized, secure, and compliant professional practice.

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