How to Start a Limited Partnership in New Hampshire | A Step-by-Step Guide

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Start a Limited Partnership in New Hampshire

A limited partnership is an attractive business structure for those who want to start an LLC in New Hampshire. It combines the best of both worlds, offering limited liability protection for limited partners and the ability to manage the business for general partners actively. This article will outline the steps on How to Start a Limited Partnership in New Hampshire, covering everything from researching and preparing to registering your limited partnership with the New Hampshire government and beyond.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your New Hampshire Limited Partnership, all the steps in this article must guide you.

Steps in Starting a Limited Partnership in New Hampshire

What is a Limited Partnership?

A Limited Partnership (LP) is a business structure comprising two types of partners: general and limited. It is a legal entity distinct from its partners and combines certain features of partnerships and corporations.

General partners are responsible for the day-to-day management of the business, make decisions on behalf of the partnership, and have unlimited liability for the partnership’s debts and obligations. This means their assets can be seized to cover the partnership’s liabilities if necessary.

Limited partners, on the other hand, are passive investors who do not participate in business management. They provide capital to the partnership and receive a share of the profits in return. Their liability is limited to the amount they have invested in the partnership, meaning that their assets are generally not at risk for the partnership’s debts beyond their investment.

It is suggested that you speak with a legal professional before you begin setting up your limited partnership in New Hampshire. They’ll understand what’s best for you and your company. To safeguard your personal assets from business debts, you can always start an LLC rather than a limited partnership.

– WEBINARCARE EDITORIAL TEAM

Steps in Starting a Limited Partnership in New Hampshire

To form a limited partnership in New Hampshire, you must consider following the below guidelines that, include research and preparation, establishing the limited partnership structure, drafting the limited partnership agreement, registering the limited partnership, complying with additional New Hampshire requirements, and ongoing management and compliance and reporting requirements. 

Step 1: Research and Preparation

Before starting a limited partnership in New Hampshire, you must familiarize yourself with this business structure’s laws and regulations. In the United States, limited partnerships are primarily governed by the Uniform Limited Partnership Act (ULPA). However, each state has its laws and regulations, so it’s essential to know the specific rules that apply in New Hampshire.

While researching, consider whether a limited partnership is the most suitable structure for your business needs. Limited partnerships are ideal for businesses with one or more passive investors who want to avoid taking on the business’s day-to-day responsibilities. Consider alternative structures like New Hampshire Corporations if a limited partnership doesn’t seem right.

Step 2: Establishing The Limited Partnership Structure

Once you’ve determined that a limited partnership is the right choice for your business, the next step is to establish the structure of your partnership. This involves choosing a name, hiring a Registered Agent, and determining the roles of the partners.

Choose a Name for the Limited Partnership

The name you choose for your limited partnership is essential to your business identity. In New Hampshire, there are specific requirements that your limited partnership name must meet, such as including the words “Limited Partnership” or the abbreviation “LP.” Before settling on a name, conduct New Hampshire Business Name Search through the New Hampshire QuickStart Business Lookup to ensure the name you’ve chosen is available and not already used by another business.

Naming requirements for a Limited Partnership in New Hampshire may include:

  • The name must be unique and distinguishable from other business entities registered in the state.
  • The name must include the words “Limited Partnership,” “L.P.,” or “LP.”
  • Certain words and phrases may be restricted or require additional approval from New Hampshire.

If the limited partnership name is available, you may choose to reserve it for a specific period of 120 days by filing a name reservation application and paying the online name reservation fee of $15 and mail name reservation fee of $15. If your corporation plans to operate under a name other than its legal name, you may also need to register a fictitious or “doing business as” (DBA) name. 

The DBA filing can be done by three methods, online, by mail, and in person filing., which costs around $50. In addition, the DBA’s validity in New Hampshire is five years, which you can file in New Hampshire Secretary of State.

You can check out how to file a DBA in New Hampshire for clearer understanding.

Hire a Registered Agent

A Registered Agent is a person or entity responsible for receiving legal documents and official notices on behalf of your LP. In New Hampshire, your Registered Agent must:

  • Be a resident of New Hampshire or a business entity authorized to do business in the state
  • Have a physical address in New Hampshire (P.O. boxes are not acceptable)

Choosing a reliable and responsible Registered Agent is essential, as failure to receive and respond to legal documents can seriously affect your business. 

You can serve as your own Registered Agent or appoint a friend or family member, or hire a professional New Hampshire Registered Agent Services. With that, we reviewed some of the best-registered agent services and provided features as an add-on with their formation packages for you to check out.

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Determine the Roles of the Partners

A limited partnership consists of two types of partners: general and limited. General partners are responsible for the day-to-day management of the business and have unlimited liability for the partnership’s debts and obligations. Limited partners, on the other hand, are passive investors who don’t participate in the management of the business and have limited liability up to the amount they’ve invested in the partnership.

As you structure your partnership, carefully consider who will take on the roles of general and limited partners. Remember that general partners will have more responsibility and potential liability, so choose those individuals wisely.

Step 3: Drafting the Limited Partnership Agreement

With the partnership structure established, the next step is to draft a limited partnership agreement. This document sets forth the partnership’s terms and conditions and should be carefully crafted to ensure it meets all legal requirements in New Hampshire.

Include Essential Elements

A well-drafted limited partnership agreement should include the following essential elements:

  •  Name of the limited partnership
  •  Purpose of the limited partnership
  •  Duration of the limited partnership
  •  Names and addresses of general and limited partners
  •  Capital contributions of each partner
  •  Allocation of profits and losses
  •  Management and decision-making structure
  •  Process for admitting new partners

Address Optional Elements

In addition to the essential elements, it’s a good idea to address the following optional elements in your limited partnership agreement:

  •   Transfer of partnership interests
  •   Withdrawal or removal of partners
  •   Dissolution and winding up the process

To ensure your limited partnership agreement is legally sound and compliant with New Hampshire laws and regulations, it’s advisable to seek legal advice from a Business Attorney in New Hampshire with experience in limited partnerships.

Step 4: Registering the Limited Partnership

Once your limited partnership agreement is in place, the next step is to register your limited partnership with the New Hampshire government. This process typically involves filing a Certificate of Limited Partnership with the New Hampshire Secretary of State’s office.

Prepare and File the Certificate of Limited Partnership

To file the Certificate of Limited Partnership, complete the required forms, which can typically be found on the New Hampshire Secretary of State. Include all necessary information and signatures, and pay the filing fee of $100.

Obtain an Employer Identification Number (EIN) from the IRS

After registering your limited partnership with the New Hampshire government, you’ll need to obtain New Hampshire Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number is used to identify your partnership for tax purposes and is required for filing federal and state tax returns.

The application of an EIN 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 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, you can benefit in several ways. It will give your LLP the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

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Register For New Hampshire Taxes

Depending on your business activities and location, you may need to register for certain New Hampshire taxes. Check with the New Hampshire Department of Revenue Administration or a tax professional to determine which taxes apply to your limited partnership.

Step 5: Complying With Additional New Hampshire Requirements

In addition to registering your limited partnership with the New Hampshire government, there may be other requirements you need to meet to operate your business legally. These may include obtaining business licenses or permits, filing annual reports with the New Hampshire Secretary of State, and maintaining proper records and documentation.

Obtain Any Necessary Business Licenses or Permits.

Depending on the nature of your business, you may need to obtain various licenses or permits from state or local authorities. Check with the New Hampshire Department of Business and Industry or a licensing professional to determine which licenses and permits apply to your limited partnership. However, in New Hampshire, the costs of New Hampshire Business Licenses range from $50 – $300.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in New Hampshire.

File Annual Reports 

New Hampshire require limited partnerships to file Annual Reports with the New Hampshire Secretary of State’s office. These reports typically include updated information about the partnership, such as the names and addresses of partners and any changes to the partnership agreement. 

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Maintain Proper Records and Documentation

As a limited partnership, it’s essential to maintain proper records and documentation, including copies of your limited partnership agreement, tax returns, financial statements, and any other relevant documents. These records should be kept in a safe and accessible location and may be required in the event of an audit or legal dispute.

Step 6: Ongoing Management and Compliance

Starting a limited partnership in New Hampshire is the beginning. To ensure the ongoing success of your business, it’s crucial to stay on top of management and compliance tasks. It is better to have regular meetings with your partners to ensure everyone is on the same page regarding the direction and performance of your business. These meetings can also help identify and address issues or concerns before they become more significant problems.

As a limited partnership, you must file annual tax returns and pay any required taxes at the federal and state levels. Consult with a tax professional to ensure you comply with all tax laws and deadlines.

Advantages of Limited Partnerships in New Hampshire

Here are some key advantages of forming a limited partnership in New Hampshire:

  • Limited Liability for Limited Partners: One of the main benefits of a limited partnership is that limited partners enjoy limited liability protection. This means their assets are generally not at risk for the partnership’s debts and obligations beyond their investment in the partnership. This limited liability can be attractive for investors who want to participate in a business venture without taking on the same level of risk as general partners.
  • Pass-through Taxation: Limited partnerships are typically subject to pass-through taxation, meaning the partnership’s profits and losses flow to the partners’ individual tax returns. This structure avoids double taxation, as the partnership is generally not subject to federal income tax. Instead, each partner is responsible for paying taxes on their share of the partnership’s income at their individual tax rate.
  • Flexibility: A limited partnership allows for flexibility in the management structure. General partners have the authority to make decisions and manage the business, while limited partners can remain passive investors. This division of responsibilities and decision-making power can appeal to both parties. It allows general partners to maintain control over the business operations and limited partners to invest without being involved in day-to-day management.
  • Ease of Formation: A limited partnership is typically less complicated and expensive than a corporation. Limited partnerships generally require filing a Certificate of Limited Partnership with the state and creating a limited partnership agreement, which is less complex than the documentation required for a corporation.
  • Attracting Capital: Limited partnerships can attract capital from investors who want to participate in a business venture without taking on the responsibilities and risks of being a general partner. This structure can help businesses secure funding while allowing limited partners to benefit from the partnership’s profits.
  • Continuity of the Partnership: In New Hampshire, limited partnerships can continue to exist even if one of the general partners dies, withdraws, or is replaced, as long as there is at least one remaining general partner. This continuity can provide stability and help ensure the ongoing success of the partnership.

Can a Foreign Limited Partnership Do Business in New Hampshire?

Yes, a foreign Limited Partnership can do business in New Hampshire by registering as a foreign LP with the New Hampshire Secretary of State or appropriate state agency. The foreign LP must provide a certificate of good standing from its home state and pay any required registration fees.

What are the Tax Implications of Forming a Limited Partnership in New Hampshire?

Limited Partnerships are generally considered pass-through entities for tax purposes, meaning that the profits and losses of the business are passed through to the individual partners, who report them on their personal income tax returns. However, specific tax implications may vary depending on the state and the nature of your business. It is recommended to consult with a tax professional to determine your specific tax obligations.

FAQs

What is a limited partnership in New Hampshire, and how does it work?
A limited partnership in New Hampshire is a type of business entity that consists of at least one general partner (who manages the business and assumes legal responsibility) and one limited partner (who contributes capital but has limited control).
How do I start a limited partnership in New Hampshire, and what are the requirements?
To start a limited partnership in New Hampshire, you must file a Certificate of Limited Partnership with the Secretary of State, pay the associated fee, and meet all requirements for state law.
Can I name my New Hampshire limited partnership anything I want?
As long as the name is not already taken in the state of New Hampshire and meets all other requirements, you can name your limited partnership anything you want.
Can I form a limited partnership in New Hampshire if I am not a resident of the state?
Yes, you can form a limited partnership in New Hampshire even if you are not a resident of the state.
Do I need to hire a lawyer to start a limited partnership in New Hampshire?
While it is not required, it is strongly recommended that you consult with an experienced attorney who can help you navigate the complex laws and regulations that govern limited partnerships in New Hampshire.
What is the fee for filing a Certificate of Limited Partnership with the Secretary of State in New Hampshire?
The filing fee for a Certificate of Limited Partnership in New Hampshire is currently $100.
Do I need to file an annual report for my limited partnership in New Hampshire?
Yes, all limited partnerships in New Hampshire are required to file an annual report with the Secretary of State and pay the associated fee.
What is the penalty for not filing an annual report for my limited partnership in New Hampshire?
If you fail to file an annual report for your limited partnership in New Hampshire by the designated deadline, you may be subject to late fees, penalties, and even dissolution.
Can a limited partner participate in the management of the partnership in New Hampshire?
No, a limited partner in New Hampshire cannot participate in the management of the partnership without risking the loss of their limited liability status.
What is the liability of the general partner in a New Hampshire limited partnership?
The general partner in a New Hampshire limited partnership assumes unlimited personal liability for all debts and obligations of the partnership.
What is the limit of liability for the limited partner in a New Hampshire limited partnership?
The limited liability status of a limited partner in a New Hampshire limited partnership means that their liability is generally limited to their capital investment in the partnership.
Can a general partner in a New Hampshire limited partnership be held legally responsible for the actions of another partner?
Yes, a general partner in a New Hampshire limited partnership can be held legally responsible for the actions of another partner if they were acting in the course of the partnership’s business and with the actual or apparent authority of the partnership.
Can a New Hampshire limited partnership own property?
Yes, a New Hampshire limited partnership can own property just like any other business entity.
What is the minimum number of partners required for a New Hampshire limited partnership?
To form a limited partnership in New Hampshire, you need at least one general partner and one limited partner.
How does the taxation work for a New Hampshire limited partnership?
In most cases, a New Hampshire limited partnership is not subject to income tax on the partnership level, but the profits and losses are attributed to the partners on their personal income tax returns.
Can a New Hampshire limited partnership continue to operate after the death of one or more partners?
Yes, a New Hampshire limited partnership can continue to operate after the death of one or more partners as long as there is still at least one general partner and one limited partner remaining.
What is a partnership agreement?
A partnership agreement in New Hampshire outlines the rights, obligations, and liabilities of all partners in the limited partnership, as well as the rules and procedures for various business decisions.
Is a partnership agreement required to start a limited partnership in New Hampshire?
No, a partnership agreement is not required, but it is highly recommended to establish clear communication and expectations among all partners.
Can a limited partner sell their interest in a New Hampshire limited partnership?
Yes, a limited partner in a New Hampshire limited partnership can sell their interest with the permission of the general partner(s).
Is a New Hampshire limited partnership a type of corporation?
No, a limited partnership in New Hampshire is not a corporation.
What is the difference between a general partnership and a limited partnership in New Hampshire?
The main difference between the two is that in a general partnership, both partners share management responsibilities and unlimited liability for the business’s debts, while in a limited partnership, the limited partner has no management responsibilities and limited liability.
Can a New Hampshire limited partnership have more than one general partner?
Yes, a New Hampshire limited partnership can have more than one general partner.
How do I dissolve a New Hampshire limited partnership?
To dissolve a New Hampshire limited partnership, you must file a Certificate of Dissolution with the Secretary of State and follow any other legal requirements.
What happens to a New Hampshire limited partnership when one of the partners files for bankruptcy?
In New Hampshire, if a general partner files for bankruptcy, the limited partnership may continue to operate with the remaining partner(s), but if a limited partner files for bankruptcy, their interest could be transferred to another party.
Can a New Hampshire limited partnership be converted to another type of business entity?
Yes, a New Hampshire limited partnership can be converted to another type of business entity, such as a corporation or an LLC, through legal conversion and/or transfer of ownership.
Can a foreign limited partnership do business in New Hampshire?
Yes, a foreign or out-of-state limited partnership can legally do business in New Hampshire as long as it is registered with the Secretary of State and meets other legal requirements.
How long does it take to file a Certificate of Limited Partnership in New Hampshire?
The processing time for a Certificate of Limited Partnership in New Hampshire can vary depending on the current workload of the Secretary of State’s office.
How do I get more information about forming a limited partnership in New Hampshire?
For more information and specific details on how to form a limited partnership in New Hampshire, consult an experienced attorney and visit the official website of the New Hampshire Secretary of State.
What is a limited partnership in New Hampshire?
A limited partnership in New Hampshire is a type of business entity in which there are one or more general partners and one or more limited partners who assume only partial risks with respect to the partnership’s debts and obligations.
How do I form a limited partnership in New Hampshire?
To form a limited partnership in New Hampshire, you must file a Certificate of Formation with the New Hampshire Secretary of State and pay the appropriate filing fee.
What is required to include in a Certificate of Formation for a limited partnership in New Hampshire?
A Certificate of Formation for a limited partnership in New Hampshire must include the name of the partnership, the name and address of each general partner, the name and address of each initial limited partner, and a brief statement of the partnership’s purpose.
Do I need to have a registered agent for my limited partnership in New Hampshire?
Yes, you must have a registered agent for your limited partnership in New Hampshire who is authorized to receive legal and official documents on your behalf.
Can I be both a general and limited partner in my New Hampshire limited partnership?
Yes, a person can be both a general and limited partner in a New Hampshire limited partnership.
Are there any residency requirements for limited partners in a New Hampshire limited partnership?
No, there are no residency requirements for limited partners in a New Hampshire limited partnership.
Is there a minimum capital requirement to form a limited partnership in New Hampshire?
No, there is no minimum capital requirement to form a limited partnership in New Hampshire.
What tax implications do I need to consider when forming a limited partnership in New Hampshire?
You should consult a tax professional about the tax implications of forming a limited partnership in New Hampshire for both the partnership and individual partners.
Can a limited partner actively participate in the management of the partnership in New Hampshire?
No, a limited partner cannot actively participate in the management of the partnership in New Hampshire without losing their limited liability status.
How often do I need to file annual reports for my limited partnership in New Hampshire?
You must file an annual report for your limited partnership in New Hampshire with the Secretary of State every year.
Are there any filing fees associated with filing annual reports for my limited partnership in New Hampshire?
Yes, there is a filing fee associated with filing annual reports for your limited partnership in New Hampshire.
What type of information is required in annual reports for limited partnerships in New Hampshire?
Annual reports for limited partnerships in New Hampshire must include the name of the partnership, the names and addresses of any changes to general and limited partners, an update on registered agent information, and a description of any changes to the partnership’s purpose.
Where can I find forms needed to file a limited partnership in New Hampshire?
You can find forms needed to file a limited partnership in New Hampshire on the New Hampshire Secretary of State’s website.
Do I need to obtain any licenses or permits before beginning business in my limited partnership in New Hampshire?
The requirements for licenses or permits for a limited partnership in New Hampshire may vary by industry, but you should consult with appropriate governing bodies as needed.
What types of liability protection do limited partners get in New Hampshire?
Limited partners generally have limited liability protection in New Hampshire, but they may still be liable for their specific contributions and any acts that violate the partnership agreement.
Can a limited partner lose their limited liability protection in New Hampshire?
Yes, a limited partner can lose their limited liability protection in New Hampshire if they participate in the management of the partnership.
What are the roles of a general partner in a New Hampshire limited partnership?
The general partner of a New Hampshire limited partnership generally has full control of management and decision making for the partnership.
What are the roles of a limited partner in a New Hampshire limited partnership?
The limited partner of a New Hampshire limited partnership typically provides only capital contributions and has no responsibility in management.
Can there be more than one general partner in a New Hampshire limited partnership?
Yes, a New Hampshire limited partnership can have more than one general partner.
What restrictions are there on transferring ownership interests in a New Hampshire limited partnership?
A New Hampshire limited partnership agreement can restrict transfer of ownership interests to protect financial investment from being diluted, bringing in new partners without appropriate discussions or diluting fiduciary control.
Can parts of the partnership assets be assigned to individual general partners?
Assignment of partnership assets to individual partners is possible as per the existing partnership agreement.
Do we need to get a professional licensed contractor for anything to do with licenses?
This would depend on the nature of the business. Look for experienced attorneys or certified public accountants to discuss all your regulatory submissions.
Who may offer a professional limited partnership in New Hampshire?
Some states differentiate between professional service providers, like CPAs, reserving the right to organize as a Professional Limited Liability Partnership, also known as a PLLP. CPA Registrants should be eligible offering professional services in partnerships.
What is the annual registration fee for Foreign LP in New Hampshire?
New Hampshire foreign LPs who initially register in their qualifying/registering period pay $100 for annual HIPAA privacy protection compliance oversight three years into their establishment.
How is a New Hampshire foreign limited partnership created?
A foreign limited partnership can conduct business once a registration application process is completed complying with the New Hampshire business statutes.
Is the general partner always at risk in a New Hampshire limited partnership during decision making?
General partners have full control when making decisions about the partnership until they involve other partners, and they, then, share responsibility for the consequential outcome.
Can General Partners also score as a limited partner?
General partners can play a small tactical role within a New Hampshire limited partnership and still qualify as a limited partner.
What happens if I do not file a New Hampshire LP annual report by April 1?
Non- compliance within the stated period (April 1) monthly fines up to $100 will occur until proper forms and subsequent fines are paid.
How long does it take for limited partnership registration in New Hampshire?
A New Hampshire limited partnership is available for immediate filing after meeting statutory registration requirements, receiving a stamped acknowledgement submitted electronically in next few hours.
Are there any exemptions for Bonding in New Hampshire Limited Partner setup?
Starting January 1, 2021 select trades do not require surety bonding previously required by individuals and LLCs (real estate brokers and mortgage bankers/OLA brokers). Such rules for bonding for NYSE:TITLE not applicable certificated citizens & lender partners

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Conclusion

Starting a limited partnership in New Hampshire can be a rewarding experience, providing you with the benefits of limited liability protection for passive investors and the opportunity to manage your business actively. By following the steps outlined in this article and staying on top of ongoing management and compliance tasks, you can establish a successful limited partnership and enjoy the benefits of this unique business structure.

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