Forming a professional corporation in New Hampshire can be a complex process, but understanding the steps involved can help streamline the formation process and ensure compliance with all the necessary legal requirements. This guide aims to provide a comprehensive overview of the steps involved in forming a professional corporation in New Hampshire in the year 2023.
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What is a Professional Corporation?
A professional corporation, often abbreviated as PC, is a business entity formed by professionals who provide services in fields that require a state license such as doctors, lawyers, accountants, and architects. Forming a professional corporation helps shield individual professionals from personal liability related to the professional services they provide.
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Step 1: Choose a Name for Your Professional Corporation
Start the process by selecting a name for your professional corporation. New Hampshire requires that the name of the professional corporation should include words like "Professional Corporation," "PC" or "P.C." at the end. Ensure that the desired name is not already in use by conducting a thorough search on the New Hampshire Secretary of State's website.
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Step 2: Appoint Directors and Officers
A professional corporation must have a board of directors responsible for making major strategic decisions. These directors are typically professionals associated with the corporation. Additionally, officers, including a president, secretary, and treasurer, may also be appointed. It is essential to choose professionals who are qualified and experienced to serve in these roles.
Step 3: File Articles of Incorporation
To officially form your professional corporation, you need to file Articles of Incorporation with the New Hampshire Secretary of State's office. The articles must include specific information, such as the corporation's name, purpose, principal address, registered agent's name and address, duration of the corporation, and other pertinent details.
Step 4: Obtain Professional Licenses and Permits
In New Hampshire, certain professions require obtaining licenses from specialized boards or commissions. Make sure to research and fulfill all the necessary licensing requirements for your specific profession. Contact the appropriate licensing board to obtain the necessary applications and ensure compliance with their specific regulations.
Step 5: Draft Bylaws and Hold Initial Meetings
Create bylaws, which define the internal rules and procedures guiding the operation of the professional corporation. They typically cover issues such as director and shareholder meetings, voting procedures, dividend distributions, and other operational aspects. After the bylaws are prepared, the initial meeting of directors and shareholders should be held to adopt the bylaws and discuss essential initial corporate matters.
Step 6: Register for Taxes and Obtain an Employer Identification Number (EIN)
As with any business entity, a professional corporation in New Hampshire must register for state and federal taxes. To do so, you will need an Employer Identification Number (EIN), which can be obtained from the Internal Revenue Service (IRS). This unique identification number allows the corporation to hire employees, open bank accounts, and fulfill its tax obligations.
Step 7: Obtain Necessary Insurance Coverage
Consider obtaining professional liability insurance to protect you and your professional corporation from potential lawsuits or claims arising from professional negligence. Consult with insurance professionals who specialize in providing coverage for professional corporations in your specific field. Adequate insurance coverage can provide an essential layer of protection for your business.
Step 8: Comply with Ongoing Reporting and Compliance Requirements
After successfully forming your professional corporation, you must adhere to ongoing reporting and compliance requirements to maintain the legality of your corporation in New Hampshire. Each year, your corporation is required to file an annual report with the New Hampshire Secretary of State's office, as well as comply with any other regulatory and legal obligations specific to your profession.
In conclusion, forming a professional corporation in New Hampshire requires careful consideration of specific procedures and legal requirements for your profession. By following these steps and seeking guidance from legal and accounting professionals, you can navigate the process smoothly and ensure compliance, allowing you to focus on providing high-quality professional services with a limited personal liability.
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