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New Hampshire LLC Foreign Qualification: Here’s What to do

New Hampshire Foreign QualificationYour business is growing, and you’re planning an expansion to other states. It’s a good problem to have! But it’s not quite as simple as choosing another location. Because each state has different rules and requirements for business operations, you may need a “foreign qualification” in each state you plan to do business.

It’s a common misconception that foreign qualification is only for businesses operating outside the U.S. But in this case, “foreign” refers to any business operating in a state that isn’t the state where the LLC was originally formed.

For example, if your LLC is registered in Washington and you are looking to open a second location in New Hampshire, you may need to complete a foreign qualification in New Hampshire before you can expand there.

 

What happens if I fail to foreign qualify before doing business in New Hampshire?

Foreign qualifying is essentially asking permission to do business in the state of New Hampshire. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before starting a business in New Hampshire yields consequences that are far costlier than registering in the first place. If you fail to foreign qualify, your business:

  • Will no longer be able to commence or maintain lawsuits in New Hampshire courts
  • Will be required to pay all fees it would have owed during its time in New Hampshire had it been properly registered
  • Will have the New Hampshire Secretary of State appointed as its registered agent

Those fees can add up quick, especially when you take late fees into account. Although it’s not all bad news. If you transact business in New Hampshire without authorization, it won’t prevent you from defending a lawsuit in the state, nor will it invalidate your current contracts.

Want a little more reading material? Check out Section 304-C:180 of the LLC Act for more info.

 

What is considered “doing business” in New Hampshire?

We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in New Hampshire? Scan the state’s LLC Act and you won’t find any specific examples. However, other state and tax laws tell us that you are considered to be “doing business” in most states and required to foreign qualify if:

  • Your LLC maintains stores, warehouses, offices, distribution centers, or other physical presences in the state.
  • There are salespeople, agents, or other representatives operating on your behalf in the state.

Depending on how your LLC is organized and how much profit you earn, you may be required to pay a Business Profits Tax or other business-related taxes in New Hampshire. But the state won’t know how to tax you unless you foreign qualify. Maybe you’re thinking it would save money to simply fly under the radar, but this could lead to some bigger fines in the future. It’s best to qualify as soon as you begin doing business. See the New Hampshire Department of Revenue website for more information on taxes.

If you’re unsure whether or not you need to file for foreign qualification in New Hampshire, we suggest seeking legal counsel.

 

Could I be exempt from foreign qualifying in New Hampshire?

The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in New Hampshire. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:

  • Maintaining, defending, or settling any action or proceeding
  • Activities solely concerning internal affairs, like meetings of managers, members, shareholders, etc.
  • Having accounts at in-state financial institutions
  • Holding offices for the exchange or transfer of the LLC’s own securities
  • Creating or acquiring indebtedness, or securing debts
  • Owning, without more, real or personal property
  • One transaction, apart from other business activities and not part of a series, completed within 30 days
  • Transacting business in interstate commerce

Make a list of your business activities in New Hampshire, now cross-check that list with this one (or the more detailed one in the LLC Act Section 304-C:174). If you find your only business activities present here, you’re probably exempt from foreign qualifying. But again, if you have questions, it’s best to check with an attorney.

 

How to Foreign Qualify your LLC in New Hampshire

Foreign qualification in New Hampshire is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC in New Hampshire, head over to the Department of State’s Foreign LLC Forms page and scroll down to find Form FLLC-1: Application for Foreign LLC Registration. Or, go to the NH Quickstart page to file online.

Looking to foreign qualify as soon as possible? Take the online route. You’ll need to create an account to proceed. After you do, select “Create a Business Online” and follow the instructions to enter your information. There’s a $100 fee (plus a $2 electronic filing fee) that you can pay with a card at the end.

Or, there’s always trusty postal mail. Page one of the form linked above has step-by-step instructions for how to fill it out. But for quick reference, here’s the info you’ll need:

  • LLC name (both the original name and the one you’re registering in New Hampshire)
  • Principal Office Address
  • Business contact info (phone and email)
  • The LLC’s state and date of formation
  • Nature of the business you will be doing in New Hampshire
  • Your New Hampshire registered agent name and address

For either filing option, you’ll also need to include a Certificate of Existence or Good Standing from your home state, not dated more than 60 days prior to your filing.

When you’ve completed your paper form, you can mail it – with a $100 check made out to “State of New Hampshire” – to:

Corporation Division, NH Dept. of State

107 N Main St, Rm 204

Concord, New Hampshire 03301-4989

Or, if you live in the area, you can also drop your documents off at the State House Annex, 3rd Floor, Rm 317, 25 Capitol St, Concord, New Hampshire, 03301

After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is on its way to foreign qualification and you’re embarking on another chapter in the life of your business.

 

Name Requirements to Remember

Don’t forget that each state has its own rules for business names, so before you submit your materials, double check to make sure your name is compliant. Your LLC name must:

  • Use a term that identifies its business type, like “limited liability company,” “L.L.C.,” “LLC,” or a similar abbreviation.
  • Be available and distinguishable from every other business entity name registered or reserved with the Department of State.

For more details on naming and name distinguishability, see Section 304-C:32 of the New Hampshire LLC Act.

 

Need to save time?

Let’s face it, there’s never enough time in the day, especially when you’re running a company. And properly registering your LLC in New Hampshire involves research and time, time that you could be using to continue growing your business.

If the thought of paperwork, fees and state correspondence makes your head spin, consider using a service like Northwest Registered Agent to foreign qualify your business. Services like Northwest ensure that your forms are filed correctly and on-time, potentially saving you thousands of dollars in penalties, not to mention a bunch of time and stress.

And as a bonus, they include a free registered agent service for one year to keep your business compliant and in good standing with the state of New Hampshire. For a $100 service fee, they’ll handle that paperwork so you don’t have to.