For businesses seeking recognition as separate legal entities, New Hampshire law allows them to undergo the process of incorporation. As a separate entity from the owners, the business is then considered to be acting on its own when it buys and sells property, assents to contracts and exercises legal rights. A business seeking to incorporate in New Hampshire must file with the Secretary of State in accordance with established guidelines.
Benefits of Incorporation in New Hampshire
There are distinct benefits to incorporating a business. Most importantly, liabilities the business accrues may be satisfied only by assets that the owners have specifically invested in it. Had the business instead remained a collection of the owners' personal assets, the personal property of the stakeholders could be liquidated to pay the liabilities of the business, if it runs into financial problems. A corporation also allows creditors in the Meredith area to assess the credit worthiness of the business as a whole rather than that of its owners, allowing the business to receive loans more easily. Lastly, a corporations charter requires that ownership be divided into stakes or "shares" of stock, all of equal size. This makes the process of transferring control much more practical.
Costs of Incorporation
There are costs associated with incorporation, both short and long term. First, businesses in New Hampshire may be charged a fee to incorporate. Also, a corporation is taxed as its own entity. The individual incomes of the owners are still taxed also, and this can mean the same income is taxed twice, known as double taxation. With proper planning and assistance from a local Meredith lawyer, you can avoid this disadvantage.