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New Hampshire has long been one of the most business-friendly states in New England. It’s considered the best place in the country for taxpayer return on investment, applying no sales tax and no income tax on small businesses. Aside from these incentives, New Hampshire boasts a high quality of life, an educated workforce, and overall economic stability compared to other states. Here’s how to start a business in the Granite State in eight steps.
Start a business in New Hampshire
1. Choose a business idea
The first step toward building your small business in New Hampshire is coming up with a business idea. It’s a critical choice you’ll make as an entrepreneur and lays the foundation for your entire enterprise. You may want to sell a product, a service, or some combination of both. Before pursuing your project, ask yourself to two following questions:
- Who is your customer? You need to know who you’re selling to—will you sell directly to consumers (B2C) or business-to-business (B2B)? Will you operate online or through a traditional storefront? To identify your target customer, look up similar businesses in your market and marketplaces where similar products or services are sold (like Amazon or Wayfair), and research industry trends.
- What’s your projected profitability? A business is only viable insofar as it can turn a profit. New Hampshire businesses are no exception. Consider the elements that impact your potential for profit, including pricing, packaging, distribution, and bundling models. Will you offer subscription options? What’s your break-even point—how much do you have to sell to cover your costs?
2. Name your business
Once you’ve settled on an idea for your business, it’s time to choose a name. A good, memorable name conveys your company’s purpose and attracts the right kind of customer. Consider the following guidelines when picking a New Hampshire business name:
- Be original. Your New Hampshire business name must be “distinguishable”—different from any other business name registered with the state. Search New Hampshire business entities online through the Secretary of State’s office to see if your preferred name is available.
- Include certain words. If your New Hampshire business is an LLC, its name must contain the words “Limited Liability Company,” “L.L.C.,” “LLC,” or another abbreviation of the term. If your business is a corporation, the name must include the word “Corporation,” “Incorporated,” or “Limited,” or an abbreviation thereof.
- Exclude certain terms. Your New Hampshire business name cannot imply an affiliation with a US or state agency, nor can it contain words that suggest involvement in certain specialized fields, like “bank,” “credit union,” “trust company,” “home care,” “architects,” or even “farmers market.” If you wish to include such words, you must obtain approval from the appropriate state agency.
- Reserve your name. To reserve a business name in New Hampshire, complete and file an Application for Reservation of Name and pay the $15 filing fee.
- Adopt a DBA. To operate your business under a name different from the legal entity you registered with the state, apply for a DBA, or “doing business as,” known in New Hampshire as a trade name. To assume a trade name, file a Form TN-1 Trade Name Registration along with the $50 filing fee with the Secretary of State’s office.
- Secure a domain name and social media handles. A unique name is essential for conducting business online. Potential customers should easily be able to find your website and social media pages. When deciding on a business name, check to see if a suitable domain name (URL)is available, then reserve social media usernames that align with your business name or DBA.
3. Create a business plan
A business plan is necessary for small business success. Your plan should reflect your overall business goals and give readers a sense of how you intend to run the company in the near and long term. An effective business plan includes the following:
- An executive summary and mission statement
- A detailed company description
- Market analysis
- Your organizational structure
- A list of products or services
- A customer segmentation report
- A marketing plan
- A logistics and operations plan
- A financial plan
4. Choose a formal business structure and get started
Before formally establishing your business in New Hampshire, determine its legal structure. There are four primary entity types in New Hampshire: sole proprietorships, general partnerships, LLCs, and corporations. Each offers different benefits for personal liability, ownership, taxation, and funding. Here’s how they differ:
- Sole proprietorship. A sole proprietorship is the default designation for individual-run businesses in the US. Sole proprietorships are taxed as “pass-through” entities, meaning earnings are assessed once, at the proprietor’s personal-income tax level. (Because residents of New Hampshire don’t pay income tax, sole proprietors only pay taxes to the federal government.) There’s no legal distinction between the proprietor and the business itself, meaning the proprietor is personally liable for most debts or legal damages incurred by the business.
- General partnership. General partnerships are formed by two or more partners and are taxed similarly to sole proprietorships. Likewise, there’s no legal distinction between partners and the business entity.
- LLC. A limited liability company (LLC) is formed by one or more owners, known as “members.” Like partnerships and sole proprietorships, LLCs can elect to be taxed as “pass-through” entities, meaning they’re taxed once, at members’ personal-income levels. (Because New Hampshire doesn’t levy income tax, this only applies to LLC members at the federal level.) LLC members enjoy personal asset protection, because an LLC is considered a separate legal entity from its members. This added layer of liability protection means LLCs are a bit more complex and costly to set up.
- Corporation. A corporation is a separate legal business entity from its business ownership, meaning owners’ personal assets are protected in case the company goes bankrupt or is named in a lawsuit. Corporations can issue stocks to shareholders, making it easier to raise funds and garner investments. However, corporations are subject to corporate taxation, meaning the government taxes business income and the personal income of the corporation’s owners and shareholders (the so-called “double taxation” most LLCs avoid). In New Hampshire, corporation owners do not pay state income tax on payouts they receive from the company.
All New Hampshire businesses are subject to a business enterprise tax, or BET, of .75% if they generate more than $250,000 in annual revenue.
Obtaining a federal employer identification number (EIN)
Once you’ve decided on a structure for your New Hampshire business, apply for a federal employer identification number (EIN) through the Internal Revenue Service (IRS) website, free of charge. An EIN is a nine-digit number assigned to businesses by the IRS for tracking tax obligations—like a Social Security number for companies. An EIN also helps secure business credit cards and bank accounts for business expenses.
Incorporating in New Hampshire
To formally set up your New Hampshire corporation or LLC, you must file formation documents with the Secretary of State’s office. (Sole proprietorships and general partnerships don’t need to be formally set up with any state office.) Here’s how to incorporate in New Hampshire:
- LLCs. File your Certificate of Formation with the New Hampshire Secretary of State’s office and pay the $100 filing fee. Your certificate should contain your contact information, contact information for a registered agent, and other disclosures about your business.
- Corporations. File Articles of Incorporation with the Secretary of State’s office and pay a $100 filing fee. Your articles should contain your contact information, information on any shares you’ve issued or plan to issue, your registered agent’s contact information, and other disclosures.
5. Obtain business licenses and permits
New Hampshire does not issue a state-wide business license. However, specific industries and business activities may require one. The New Hampshire Department of Revenue can help you determine whether you need environmental permits, food-service health, and safety licenses, or licenses to sell alcoholic beverages, for example. Because New Hampshire doesn’t apply a sales tax, you don’t need to obtain a seller’s permit.
6. Examine business insurance options in New Hampshire
Unforeseen losses can be disastrous for new businesses. While some business structures like corporations and LLCs offer a degree of personal asset protection, you may still want to purchase business insurance to cover your products, vehicles, and other property from the unpredictable. Standard insurance plans available to New Hampshire businesses include:
- Workers’ compensation insurance. Under New Hampshire law, all businesses with employees must purchase workers’ compensation insurance. Workers’ comp covers a portion of lost wages, medical bills, disability, and death benefits in the case of a workplace accident and protects employers from any related lawsuits.
- General liability insurance. General liability insurance covers some financial losses (like no-fault property damage) and injuries on the job (like a customer slip-and-fall). While New Hampshire businesses are not required to purchase this policy, some leases may require it.
- Professional liability insurance. Professional liability insurance—also known as errors and omissions insurance—covers legal fees from claims that business advice or high-competency services caused a customer financial harm.
- Business owner’s policy. A business owner’s policy (BOP) bundles multiple coverage types into a single insurance package, often offering coverage at a lower rate than the same separately purchased policies. The specifics vary based on your company’s needs and your insurance company’s offerings.
The federal Small Business Administration maintains a list of more insurance policies your new New Hampshire business may need.
7. Understand financial considerations
In addition to buying insurance, you’ll likely have to make other investments to get your New Hampshire business up and running. These include renting brick-and-mortar retail space or warehouse, setting up a professionally designed business website, and purchasing ads, equipment, and software. You may also want to hire lawyers, accountants, publicists, and other professionals to support your endeavors.
These early costs can quickly add up. Thankfully, resources are available to help you get your hands on startup funding. The state of New Hampshire offers a variety of funding programs. Federal development resources are also available through the US Small Business Administration, which has a district office in Concord. There’s also Shopify Capital, which offers fast funding and flexible payments. Don’t forget to set up a business bank account to handle startup costs and cash flow.
8. Market your business
- Market research. Thorough market research is critical to understanding your target market. Looking into your core customers can give you a sense of how to make your New Hampshire business stand out.
- Advertising. Design and purchase or look for free print or digital ads. You can do this yourself or hire an agency to do it on your behalf.
- Social media. Most successful businesses today must maintain a solid social media presence on platforms like Facebook, Instagram, YouTube, and TikTok. Consistently publish content that aligns with your brand to boost customer engagement.
- Public relations. Identify and cultivate relationships with media outlets—in New Hampshire and across the country—to help organically increase your visibility.
- Customer retention. Build genuine relationships with customers that keep them coming back—and spreading the word to friends, family, and colleagues.
Starting a business in New Hampshire FAQ
How much does it cost to start a business in New Hampshire?
Setting up an LLC or corporation in New Hampshire costs at least $100 to cover incorporation fees. Although you won’t have to pay state taxes on the income derived from your business, you may have to pay a .75% business enterprise tax if you generate more than $250,000 in annual revenue.
Does New Hampshire require a business license?
New Hampshire does not require a general business license or sales permit, though specific industries are subject to state permitting rules.
Is New Hampshire a good place to start a business?
New Hampshire consistently ranks among some of the most tax-friendly states to start and run a business. It also boasts a high quality of life, an educated workforce, and economic stability.