Benefits of a Corporation
One of the major benefits of a corporation is its limited liability, which means that if the corporation is sued or files bankruptcy, the shareholders’ personal assets are protected. In contrast, the owner of a sole proprietorship or the partners in a general partnership are personally liable for the total amount of the company’s debts. Corporations may also offer other benefits, including tax savings and increased appeal to investors.
Requirements for Incorporating in New Hampshire
Preparing Your Articles of Incorporation
To form a New Hampshire corporation, you must file articles of incorporation and with the Secretary of State, as well as pay the appropriate filing fees. Your corporation’s existence begins at the close of business on the day you file the articles. The articles of incorporation may contain many provisions, but they must contain the following:
- Name of the corporation
- Statement regarding securities act compliance
- Names and addresses of incorporators
- Registered agent and registered office
- An addendum, or additional document, that states the company will comply with state laws
- Stock structure
A corporation can offer different types of stock, called classes or series. These classes can offer different rights to their shareholders, for example some classes of stock may offer voting rights while others do not.
Regarding stock structure, the follow applies:
- The number of shares the corporation is authorized to issue
- If the corporation authorizes more than one class of shares, the articles must list each class and provide the number of shares authorized and a distinguishing designation. The articles must also describe the preferences, limitations and relative rights of a class before shares can be issued.
Statement of Compliance
Unlike other states, New Hampshire requires an addendum, or additional document, be filed with the articles of incorporation. The addendum fulfills a requirement under New Hampshire law that all corporations provide a statement that they are in compliance with New Hampshire securities laws.
The statement reads as follows: “The sale or offer for sale of any ownership interests in this business will comply with the requirements of the New Hampshire Uniform Securities Act (RSA 421-B).”
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Naming Your Corporation
Before filing incorporation documents, you should research whether or not your chosen corporation name is available, which you can do by searching the Secretary of State’s records online.
You can reserve a name for 120 days by filing an application with the Secretary of State.
Your corporation’s name must meet the following requirements:
- It must contain the words “corporation,” “incorporated” or “limited,” or the abbreviations “corp.,” “inc.” or “ltd.”
- Your corporation’s name must be distinguishable from all other business names on file with the Secretary of State.
Incorporators sign and file the articles of incorporation and the addendum. The following requirements apply when specifying incorporators:
- Incorporators’ names and addresses must be listed in the articles of incorporation.
- Your corporation must have at least one incorporator.
- An incorporator may be a person or a business entity.
- If the articles of incorporation do not name initial directors, the incorporators must elect directors. They may also approve bylaws and appoint officers. Once the directors have been chosen, the incorporators have no further duties.
Corporate directors determine the overall policies and direction for the corporation. They have a fiduciary duty to the corporation, which means that they must exercise care in performing their responsibilities and must place the corporation’s interests ahead of their own.
Although your corporation must have at least one director, New Hampshire does not have an upper limit on the maximum number of directors a corporation may have. The articles of incorporation or bylaws should include the number of directors.
Directors do not have to be shareholders in the corporation or residents of New Hampshire unless required by the articles or bylaws. The articles or bylaws may establish additional eligibility requirements for directors.
Specifying a Registered Agent and Registered Office
A registered agent is appointed by a corporation to receive lawsuits or other legal documents on its behalf. The registered office is a business address where the agent is physically located and can personally receive hand-delivered documents.
The following requirements apply when specifying your corporation’s registered agent:
- The articles of incorporation must list a registered office and a registered agent.
- The registered agent may be an individual that resides in New Hampshire or a corporation, limited liability company or limited liability partnership that is formed or authorized to do business in New Hampshire. The registered office must have a physical address, post office boxes are not accepted.
Stating a Corporate Purpose
New Hampshire corporations are not required to state a corporate purpose in the articles of incorporation. However, if a corporation does state a purpose, it may help the Secretary of State determine whether its name is available for use.
Determining Incorporation Bylaws
A corporation’s bylaws establish the corporation’s internal structure and the rules that the officers, directors and shareholders will follow. The bylaws may include provisions for managing the corporation’s business and regulating its affairs.
The following requirements apply when developing your corporation’s bylaws:
- The directors or incorporators must adopt bylaws. They are not filed with the Secretary of State.
- Bylaws must be consistent with the law and the articles of incorporation.
Costs of Incorporating in New Hampshire
The New Hampshire Secretary of State requires a fee when filing articles of incorporation or reserving a corporation name. Corporations are also required to pay state and federal income taxes.
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