Setting Up a Business Partnership in New Hampshire
Establishing a business partnership in New Hampshire requires understanding specific state requirements and legal formalities. Partners must file a Certificate of Formation with the NH Secretary of State, create a comprehensive partnership agreement, and obtain necessary licenses and tax registrations to operate legally.
Without a written partnership agreement, your business will default to New Hampshire's Uniform Partnership Act provisions, which may not align with your specific business needs or intentions. Taking time to properly document your partnership structure now can prevent costly disputes and legal complications in the future.
Key Considerations
Scenarios
Decisions
Scenarios
Decisions
Scenarios
Decisions
Relevant Documents
Buy-Sell Agreement
A contract that outlines what happens to a partner's share of the business if they die, become disabled, retire, or wish to sell their interest in the partnership.
Partnership Agreement
A comprehensive contract that outlines the rights, responsibilities, and obligations of all partners, including profit sharing, decision-making authority, capital contributions, dispute resolution, and dissolution procedures.
Partnership Capital Contribution Agreement
A document that specifies the initial and ongoing capital contributions of each partner, including cash, property, services, or other assets.
Partnership Operating Procedures
An internal document that details day-to-day operations, management responsibilities, and standard procedures for the partnership business.
Relevant Laws
New Hampshire Uniform Partnership Act (RSA 304-A)
This is the primary law governing partnerships in New Hampshire. It defines what constitutes a partnership, the rights and duties of partners, and how partnerships are formed and dissolved. Understanding this act is essential when setting up a partnership as it establishes the legal framework for your business relationship.
New Hampshire Business Name Registration (RSA 349)
When forming a partnership in New Hampshire, you must register your business name with the Secretary of State if you're operating under a name other than the surnames of the partners. This law outlines the requirements for registering a trade name and the process for doing so.
New Hampshire Business Profits Tax Law (RSA 77-A)
Partnerships in New Hampshire may be subject to the Business Profits Tax. While partnerships themselves don't pay taxes (as they're pass-through entities), this law is relevant because it affects how business income is reported and taxed for the partners.
New Hampshire Business Enterprise Tax Law (RSA 77-E)
Partnerships with substantial business activity in New Hampshire may be subject to the Business Enterprise Tax. This tax is based on the enterprise value tax base, which includes compensation paid to partners. Understanding this tax obligation is important when setting up your partnership.
New Hampshire Securities Act (RSA 421-B)
If your partnership plans to raise capital by offering investment opportunities, you need to be aware of New Hampshire's securities laws. This act regulates the offer and sale of securities within the state and may apply if you're seeking investors for your partnership.
Regional Variances
New Hampshire Counties
Hillsborough County, as New Hampshire's most populous county containing Manchester and Nashua, may have additional business registration requirements. Partnerships in this county should check with the county clerk's office, as they may need to file a 'doing business as' (DBA) certificate if operating under a name different from the partners' names.
Partnerships in Rockingham County should be aware of specific zoning regulations that may affect home-based businesses. The county has stricter requirements for signage and client visits for businesses operating from residential properties.
In Merrimack County, which includes the state capital of Concord, partnerships should be aware that they may need to register with both the Secretary of State and the city clerk's office. The county also offers specific tax incentives for partnerships operating in designated economic revitalization zones.
Major Cities in New Hampshire
Manchester has specific local business licensing requirements for partnerships. Businesses must obtain a tax certificate from the city's tax collector office in addition to state registrations. The city also has a small business development center that offers specialized assistance for new partnerships.
Nashua requires partnerships to obtain a business license from the city clerk's office, regardless of business type. The city also has specific regulations for partnerships operating near the Massachusetts border, including potential dual-state tax considerations.
Portsmouth has unique historic district regulations that may affect partnerships operating in the downtown area. Businesses in these zones face additional restrictions on signage, building modifications, and operating hours. The city also offers tax incentives for partnerships involved in maritime or tourism industries.
As the state capital, Concord offers streamlined registration processes for partnerships. However, partnerships operating near state government buildings may face additional regulatory scrutiny. The city also has specific requirements for partnerships contracting with state agencies.
Suggested Compliance Checklist
Choose a Partnership Structure
Day 1 days after startingDecide between a general partnership, limited partnership (LP), or limited liability partnership (LLP). This decision affects personal liability, management structure, and tax treatment. General partnerships offer simplicity but unlimited personal liability, LPs protect limited partners but require at least one general partner with unlimited liability, and LLPs offer liability protection for all partners but have more regulatory requirements.
Select a Partnership Name
Day 3 days after startingChoose a unique business name that complies with New Hampshire naming requirements. Verify availability by searching the NH Secretary of State's business name database. Ensure the name isn't misleading or similar to existing businesses. Consider trademark issues and domain name availability if you plan to have an online presence.
Draft a Partnership Agreement
Day 10 days after startingCreate a comprehensive agreement outlining the rights and responsibilities of all partners, profit and loss allocation, decision-making processes, dispute resolution, and dissolution procedures. While not legally required in New Hampshire, this document is crucial for preventing future conflicts. Include provisions for adding or removing partners, capital contributions, and management duties.
Prepare Partnership Capital Contribution Agreement
Day 12 days after startingDocument the initial and any future capital contributions from each partner. Specify the type of contribution (cash, property, services), valuation methods for non-cash contributions, timing of contributions, and how capital accounts will be maintained. Include provisions for additional capital calls if needed and consequences for failure to contribute.
Register with the New Hampshire Secretary of State
Day 15 days after startingFile a Certificate of Partnership with the NH Secretary of State if forming an LP or LLP. General partnerships are not required to register but may do so voluntarily. The filing fee is $100 for LPs and $100 for LLPs. Registration must be renewed annually with the Secretary of State.
Apply for an Employer Identification Number (EIN)
Day 17 days after startingObtain an EIN from the IRS, which is required for partnerships even if you don't have employees. This number is used for tax filings, opening business bank accounts, and hiring employees. Apply online through the IRS website for immediate processing or by mail using Form SS-4.
File a Fictitious Business Name Statement
Day 20 days after startingIf operating under a name different from the legal partnership name or partners' surnames, file a trade name registration (also known as 'doing business as' or DBA) with the NH Secretary of State. The filing fee is $50 and registrations must be renewed every 5 years.
Obtain Required Business Licenses and Permits
Day 25 days after startingResearch and apply for all necessary licenses and permits at the state and local levels. Requirements vary by industry and location within New Hampshire. Contact your local city or town clerk's office for municipal requirements and the NH Department of Revenue Administration for state licenses.
Register for State Taxes
Day 28 days after startingRegister with the New Hampshire Department of Revenue Administration for applicable state taxes. While NH doesn't have a general income tax, partnerships may need to register for the Business Profits Tax (BPT) if gross receipts exceed $50,000, Business Enterprise Tax (BET), and other industry-specific taxes.
Apply for Sales Tax Permit
Day 30 days after startingIf your partnership will sell taxable goods or services, register for a sales tax permit with the NH Department of Revenue Administration. New Hampshire doesn't have a general sales tax, but does tax specific items like meals, rentals, and telecommunications services.
Open a Business Bank Account
Day 32 days after startingEstablish a separate bank account for the partnership to maintain clear separation between business and personal finances. Bring your EIN, Certificate of Partnership (if applicable), and partnership agreement. All partners may need to be present depending on bank requirements.
Establish Partnership Operating Procedures
Day 35 days after startingCreate a document outlining day-to-day operational procedures, including accounting methods, record-keeping practices, meeting schedules, and internal reporting requirements. This helps ensure consistent operations and compliance with partnership agreement terms.
Create a Buy-Sell Agreement
Day 40 days after startingDraft an agreement that outlines what happens if a partner wants to leave, becomes disabled, or dies. Include valuation methods for partnership interests, payment terms, and funding mechanisms (such as life insurance). This protects all partners and ensures business continuity during ownership transitions.
Obtain Business Insurance
Day 45 days after startingSecure appropriate insurance coverage, which may include general liability, professional liability, property, business interruption, and workers' compensation (if you have employees). General partners especially should consider additional liability coverage since they face unlimited personal liability for partnership debts.
Comply with Employment Laws
Day 50 days after startingIf hiring employees, register with NH Employment Security for unemployment insurance and set up systems for payroll taxes, workers' compensation, and compliance with labor laws. New Hampshire follows federal minimum wage requirements and has specific regulations regarding youth employment and workplace safety.
Establish Recordkeeping Systems
Day 55 days after startingSet up systems to maintain required business records, including financial statements, tax documents, meeting minutes, and partnership changes. New Hampshire partnerships should keep records of all financial transactions, capital accounts, and major business decisions for at least 7 years.
Schedule Annual Compliance Calendar
Day 60 days after startingCreate a calendar of recurring compliance deadlines including tax filings, annual reports, license renewals, and partnership agreement review dates. In New Hampshire, annual reports for LPs and LLPs are due by April 1 each year, and Business Profits Tax returns are typically due on the 15th day of the 3rd month after the close of the tax year.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Choose a Partnership Structure | Decide between a general partnership, limited partnership (LP), or limited liability partnership (LLP). This decision affects personal liability, management structure, and tax treatment. General partnerships offer simplicity but unlimited personal liability, LPs protect limited partners but require at least one general partner with unlimited liability, and LLPs offer liability protection for all partners but have more regulatory requirements. | - | Day 1 |
| Select a Partnership Name | Choose a unique business name that complies with New Hampshire naming requirements. Verify availability by searching the NH Secretary of State's business name database. Ensure the name isn't misleading or similar to existing businesses. Consider trademark issues and domain name availability if you plan to have an online presence. | - | Day 3 |
| Draft a Partnership Agreement | Create a comprehensive agreement outlining the rights and responsibilities of all partners, profit and loss allocation, decision-making processes, dispute resolution, and dissolution procedures. While not legally required in New Hampshire, this document is crucial for preventing future conflicts. Include provisions for adding or removing partners, capital contributions, and management duties. | Partnership Agreement | Day 10 |
| Prepare Partnership Capital Contribution Agreement | Document the initial and any future capital contributions from each partner. Specify the type of contribution (cash, property, services), valuation methods for non-cash contributions, timing of contributions, and how capital accounts will be maintained. Include provisions for additional capital calls if needed and consequences for failure to contribute. | Partnership Capital Contribution Agreement | Day 12 |
| Register with the New Hampshire Secretary of State | File a Certificate of Partnership with the NH Secretary of State if forming an LP or LLP. General partnerships are not required to register but may do so voluntarily. The filing fee is $100 for LPs and $100 for LLPs. Registration must be renewed annually with the Secretary of State. | Certificate of Partnership | Day 15 |
| Apply for an Employer Identification Number (EIN) | Obtain an EIN from the IRS, which is required for partnerships even if you don't have employees. This number is used for tax filings, opening business bank accounts, and hiring employees. Apply online through the IRS website for immediate processing or by mail using Form SS-4. | Employer Identification Number (EIN) Application | Day 17 |
| File a Fictitious Business Name Statement | If operating under a name different from the legal partnership name or partners' surnames, file a trade name registration (also known as 'doing business as' or DBA) with the NH Secretary of State. The filing fee is $50 and registrations must be renewed every 5 years. | Fictitious Business Name Statement | Day 20 |
| Obtain Required Business Licenses and Permits | Research and apply for all necessary licenses and permits at the state and local levels. Requirements vary by industry and location within New Hampshire. Contact your local city or town clerk's office for municipal requirements and the NH Department of Revenue Administration for state licenses. | Business License Application | Day 25 |
| Register for State Taxes | Register with the New Hampshire Department of Revenue Administration for applicable state taxes. While NH doesn't have a general income tax, partnerships may need to register for the Business Profits Tax (BPT) if gross receipts exceed $50,000, Business Enterprise Tax (BET), and other industry-specific taxes. | - | Day 28 |
| Apply for Sales Tax Permit | If your partnership will sell taxable goods or services, register for a sales tax permit with the NH Department of Revenue Administration. New Hampshire doesn't have a general sales tax, but does tax specific items like meals, rentals, and telecommunications services. | Sales Tax Permit Application | Day 30 |
| Open a Business Bank Account | Establish a separate bank account for the partnership to maintain clear separation between business and personal finances. Bring your EIN, Certificate of Partnership (if applicable), and partnership agreement. All partners may need to be present depending on bank requirements. | Business Bank Account Resolution | Day 32 |
| Establish Partnership Operating Procedures | Create a document outlining day-to-day operational procedures, including accounting methods, record-keeping practices, meeting schedules, and internal reporting requirements. This helps ensure consistent operations and compliance with partnership agreement terms. | Partnership Operating Procedures | Day 35 |
| Create a Buy-Sell Agreement | Draft an agreement that outlines what happens if a partner wants to leave, becomes disabled, or dies. Include valuation methods for partnership interests, payment terms, and funding mechanisms (such as life insurance). This protects all partners and ensures business continuity during ownership transitions. | Buy-Sell Agreement | Day 40 |
| Obtain Business Insurance | Secure appropriate insurance coverage, which may include general liability, professional liability, property, business interruption, and workers' compensation (if you have employees). General partners especially should consider additional liability coverage since they face unlimited personal liability for partnership debts. | - | Day 45 |
| Comply with Employment Laws | If hiring employees, register with NH Employment Security for unemployment insurance and set up systems for payroll taxes, workers' compensation, and compliance with labor laws. New Hampshire follows federal minimum wage requirements and has specific regulations regarding youth employment and workplace safety. | - | Day 50 |
| Establish Recordkeeping Systems | Set up systems to maintain required business records, including financial statements, tax documents, meeting minutes, and partnership changes. New Hampshire partnerships should keep records of all financial transactions, capital accounts, and major business decisions for at least 7 years. | - | Day 55 |
| Schedule Annual Compliance Calendar | Create a calendar of recurring compliance deadlines including tax filings, annual reports, license renewals, and partnership agreement review dates. In New Hampshire, annual reports for LPs and LLPs are due by April 1 each year, and Business Profits Tax returns are typically due on the 15th day of the 3rd month after the close of the tax year. | - | Day 60 |
Frequently Asked Questions
In New Hampshire, you can form three main types of partnerships: (1) General Partnerships (GPs), where all partners share equally in management and liability; (2) Limited Partnerships (LPs), which have both general partners who manage the business and limited partners who are primarily investors; and (3) Limited Liability Partnerships (LLPs), which provide liability protection for all partners. Each structure has different formation requirements, tax implications, and liability protections.
It depends on the type of partnership. General Partnerships (GPs) don't require any state filing to exist legally, though it's recommended to register your business name with the Secretary of State. Limited Partnerships (LPs) and Limited Liability Partnerships (LLPs) must file a Certificate of Formation with the New Hampshire Secretary of State and pay the required filing fee. All partnerships should also obtain any necessary business licenses and permits specific to their industry and location.
A comprehensive New Hampshire partnership agreement should include: (1) Each partner's capital contributions; (2) Profit and loss allocation percentages; (3) Partner authority and decision-making processes; (4) Management responsibilities; (5) Procedures for admitting new partners; (6) Buyout provisions if a partner leaves; (7) Dispute resolution methods; (8) Partnership dissolution terms; (9) Non-compete clauses if applicable; and (10) Meeting requirements and voting procedures. While not legally required for General Partnerships, having a written agreement is strongly recommended to prevent future disputes.
Partnerships in New Hampshire are typically pass-through entities for federal tax purposes, meaning the business itself doesn't pay income tax. Instead, profits and losses pass through to the individual partners, who report them on their personal tax returns. New Hampshire doesn't have a personal income tax, but it does have a Business Profits Tax (BPT) and Business Enterprise Tax (BET) that may apply to your partnership. Additionally, partnerships must file an annual federal information return (Form 1065) and provide each partner with a Schedule K-1 showing their share of income or losses.
Liability varies by partnership type in New Hampshire. In General Partnerships (GPs), all partners have unlimited personal liability for partnership debts and legal claims. In Limited Partnerships (LPs), general partners have unlimited liability while limited partners' liability is restricted to their investment. In Limited Liability Partnerships (LLPs), partners are generally protected from personal liability for the partnership's debts and the negligence of other partners, but remain liable for their own negligence. Regardless of structure, partners should consider obtaining appropriate business insurance to mitigate risks.
To register your partnership name in New Hampshire, you'll need to file a Trade Name Registration with the Secretary of State's office. First, search the business name database on the NH Secretary of State website to ensure your desired name is available. The name must be distinguishable from other registered business names. Then, complete the Trade Name Registration form and submit it with the required fee (currently $50). This registration is valid for 5 years and can be renewed. If you're forming an LP or LLP, the name will be registered when you file your Certificate of Formation.
When a partner exits a New Hampshire partnership, the process should follow the terms outlined in your partnership agreement. Without a specific agreement, New Hampshire law (RSA 304-A) governs the process. Generally, the departing partner is entitled to their share of partnership assets after debts are paid. In a General Partnership, a partner's departure may dissolve the entire partnership unless the remaining partners agree to continue. For LPs and LLPs, the departure procedures are typically outlined in the Certificate of Formation and partnership agreement. It's advisable to include detailed exit provisions in your partnership agreement to avoid disputes.
Yes, partnerships in New Hampshire need an Employer Identification Number (EIN) from the IRS, even if they don't have employees. The EIN functions like a Social Security number for your business and is required for opening business bank accounts, filing partnership tax returns, and hiring employees. You can apply for an EIN online through the IRS website at no cost. Each partner will also need to use this EIN when reporting their share of partnership income on their personal tax returns.
New Hampshire partnerships have several ongoing compliance requirements. LPs and LLPs must file an annual report with the Secretary of State by April 1 each year and pay the required fee. All partnerships with employees must register with NH Employment Security and the Department of Revenue Administration for withholding taxes. Partnerships subject to the Business Profits Tax (BPT) or Business Enterprise Tax (BET) must file returns and make estimated tax payments. Additionally, partnerships should maintain accurate financial records, hold regular partner meetings, and comply with any industry-specific regulations or licensing requirements.
To dissolve a partnership in New Hampshire, follow these steps: (1) Review your partnership agreement for dissolution procedures; (2) Hold a partner meeting and document the dissolution decision; (3) Notify all creditors, customers, and vendors; (4) Settle all outstanding debts and obligations; (5) Distribute remaining assets according to ownership percentages; (6) File final tax returns. For LPs and LLPs, you must also file a Certificate of Cancellation with the NH Secretary of State. It's advisable to work with an attorney to ensure all legal obligations are properly fulfilled during dissolution.