Arizona and New Hampshire, two distinct states within the United States, each offer their own set of regulations and requirements for Limited Liability Companies (LLCs).
This comparative perspective aims to shed light on key aspects of Arizona and New Hampshire LLCs, providing a comprehensive overview of their formation, name requirements, membership structure, management options, operating agreements, annual reporting obligations, and dissolution procedures.
Arizona vs. New Hampshire LLC
Arizona requires filing Articles of Organization with the Arizona Corporation Commission, while New Hampshire requires filing a Certificate of Formation with the Secretary of State’s office.
Although not mandatory, having an operating agreement is highly recommended for LLCs in both states to establish internal operations and ownership structure.
Arizona LLCs are subject to corporate income tax but can elect to be treated as a “pass-through” entity. New Hampshire does not impose state-level income tax on LLCs or individuals.
| Arizona LLC | New Hampshire LLC |
|---|---|
| Arizona LLCs are formed by filing Articles of Organization with the state. | New Hampshire LLCs are formed by filing a Certificate of Formation with the state. |
| The cost of forming an Arizona LLC includes a filing fee of $50 for the Articles of Organization. | Forming a New Hampshire LLC entails a higher filing fee of $100 for the Certificate of Formation. |
| Arizona LLCs are not required to file an Annual Report. | New Hampshire LLCs must file an Annual Report, with a filing fee of $100. |
| The cost of hiring a registered agent for an Arizona LLC can range from $50 to $300 per year. | The cost of a registered agent for New Hampshire LLC typically ranges from $100 to $300 per year. |
| Arizona LLCs are subject to a flat corporate income tax rate of 4.9% on taxable income. | New Hampshire levies a Business Profits Tax (BPT) at a rate of 7.6% on taxable income for corporations. |
| It imposes a progressive personal income tax system, with rates ranging from 2.59% to 4.5% based on income levels. | It does not impose a state-level personal income tax on earned income. |
| Arizona has a state sales tax rate of 5.6%, which can be augmented by additional local taxes. | New Hampshire does not impose a statewide sales tax, making it one of the few states without a general sales tax. |
Cost Breakdown of The Two
You may use our free LLC cost calculator by state to find out filing fees, tax percentages, income taxes, and more.
Arizona LLC
The filing fee for the Articles of Organization in Arizona is $50.
Arizona LLCs are not required to file an Annual Report with the Arizona Corporation Commission.
LLCs in Arizona must have a registered agent with a physical address in the state. Hiring a registered agent service can cost anywhere from $50 to $300 per year.
New Hampshire LLC
The filing fee for the Certificate of Formation in New Hampshire is $100.
New Hampshire LLCs are required to file an Annual Report with the Secretary of State’s office. The filing fee for the Annual Report is $100.
LLCs in New Hampshire must have a registered agent with a physical address in the state. Hiring a registered agent service can cost anywhere from $100 to $300 per year.
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- Arizona LLC: Cost Breakdown, Pros and Cons, Requirements
- New Hampshire LLC: Cost Breakdown, Pros and Cons, Requirements
Similarities Between Arizona and New Hampshire LLC
Both Arizona and New Hampshire LLCs provide limited liability protection to their members.
This means that the personal assets of the members are generally protected from the company’s debts and liabilities.
The liability of the members is typically limited to their investment in the LLC.
Both states allow for flexible ownership structures in LLCs. Members can be individuals, other LLCs, corporations, or even foreign entities.
Additionally, both states allow for single-member LLCs, where the LLC is owned and operated by a single individual.
Both Arizona and New Hampshire offer privacy protections for LLC owners.
In both states, the names and addresses of the LLC members do not need to be publicly disclosed in the formation documents filed with the state.
Instead, the registered agent’s address is typically used for public record purposes.
Both states generally follow the federal tax treatment for LLCs. By default, LLCs are treated as “pass-through” entities for tax purposes.
This means that the LLC itself does not pay taxes at the entity level. Instead, the profits and losses “pass-through” to the individual members, who report them on their personal tax returns.
Additional Resources:
- Arizona vs. Maryland LLC
- Arizona vs. Michigan LLC
- Domestic vs. Foreign LLC: Choosing the Right State
Steps to Form LLC in Arizona
Select a unique name for your LLC that complies with Arizona naming requirements.
Prepare and file the Articles of Organization with the Arizona Corporation Commission, including necessary information such as the LLC’s name, principal place of business, and registered agent details.
Submit the required filing fee of $50 along with the Articles of Organization.
Appoint a registered agent who will receive legal and official documents on behalf of the LLC.
While not legally required, it’s recommended to create an operating agreement that outlines the internal operations and management of the LLC.
Depending on the nature of your business, you may need to obtain specific permits or licenses at the local, state, or federal level.
Fulfill any additional ongoing requirements, such as maintaining proper records, holding annual meetings, and adhering to tax obligations.
Steps to Form LLC in New Hampshire
Select a unique name for your LLC that complies with New Hampshire naming requirements.
Prepare and file a Certificate of Formation with the New Hampshire Secretary of State’s office.
Include information such as the LLC’s name, principal place of business, registered agent details, and duration of the LLC.
Submit the required filing fee of $100 along with the Certificate of Formation.
Appoint a registered agent who will receive legal and official documents on behalf of the LLC.
Although not legally required, it’s recommended to create an operating agreement that outlines the internal operations and management of the LLC.
Depending on the nature of your business, you may need to obtain specific permits or licenses at the local, state, or federal level.
Each year, file an Annual Report with the New Hampshire Secretary of State’s office and pay the applicable filing fee.
Fulfill any additional ongoing requirements, such as maintaining proper records, holding annual meetings, and adhering to tax obligations.
Feature Comparisons Between Arizona LLC vs. New Hampshire LLC
Formation Process: Both states require filing specific formation documents with the respective state agencies, such as Articles of Organization in Arizona and a Certificate of Formation in New Hampshire.
Limited Liability Protection: Both Arizona LLCs and New Hampshire LLCs provide limited liability protection to their members, shielding personal assets from the company’s debts and liabilities.
Ownership Structure: Both states allow for flexible ownership structures in LLCs, permitting individuals, other LLCs, corporations, or even foreign entities to be members of the LLC.
Registered Agent Requirement: Both states mandate the appointment of a registered agent who will receive legal and official documents on behalf of the LLC.
Privacy Protections: Both Arizona and New Hampshire offer privacy protections for LLC owners.
The names and addresses of LLC members do not need to be publicly disclosed in the formation documents filed with the state.
Operating Agreement: While not legally required in either state, it is highly recommended to create an operating agreement for both Arizona LLCs and New Hampshire LLCs to establish internal operations, management structure, and member rights and responsibilities.
Taxation: Arizona LLCs are subject to Arizona’s corporate income tax, but they can elect to be treated as a “pass-through” entity, where profits and losses flow through to individual members’ personal tax returns. In contrast, New Hampshire does not impose state-level income tax on LLCs or individuals, making it a tax-friendly state for LLCs.
Business Environment
Both Arizona and New Hampshire have robust and diverse economies.
Arizona is known for industries such as tourism, healthcare, real estate, and technology, while New Hampshire has a strong presence in manufacturing, healthcare, finance, and tourism.
Arizona imposes a corporate income tax on LLCs, which can impact the tax burden for businesses.
However, Arizona also offers the option for LLCs to be treated as “pass-through” entities, allowing profits and losses to pass through to individual members’ tax returns.
New Hampshire does not levy state-level income tax on LLCs or individuals, providing a tax-friendly environment.
Both states have business-friendly regulations and aim to foster entrepreneurship and economic growth.
However, specific regulations, licensing requirements, and compliance obligations may vary between the two states.
It’s important to understand the specific requirements in each state for your industry or business activities.
Both Arizona and New Hampshire have well-developed infrastructure, including transportation networks, access to markets, and a skilled workforce.
The availability of resources, such as business support organizations, incubators, and networking opportunities, may vary between the two states and depend on your specific location within each state.
The cost of living and doing business can differ between Arizona and New Hampshire.
Factors such as labor costs, real estate prices, utilities, and overall cost of living should be taken into account when considering the business environment in each state.
Arizona and New Hampshire have different industry strengths and focus.
Arizona is known for its tourism, healthcare, real estate, and technology sectors, while New Hampshire excels in manufacturing, healthcare, finance, and tourism.
Consider the compatibility of your business with the prevailing industries in each state.
Read Also:
Arizona vs. New Hampshire Taxes
Arizona Taxes
Corporate Income Tax: Arizona imposes a corporate income tax on businesses. The corporate tax rate is a flat rate of 4.9% on taxable income.
Personal Income Tax: Arizona has a progressive income tax system with multiple tax brackets ranging from 2.59% to 4.5%, depending on the income level.
Arizona has a state sales tax rate of 5.6%. However, local jurisdictions can impose additional sales taxes, resulting in combined rates that vary across the state.
Property taxes in Arizona vary depending on the county and municipality. The state’s effective property tax rate is generally below the national average.
Arizona levies excise taxes on specific goods and services, including tobacco, alcohol, and fuel.
New Hampshire Taxes
New Hampshire imposes a Business Profits Tax (BPT) on corporations. The BPT rate is currently 7.6% on taxable income.
New Hampshire also imposes a Business Enterprise Tax (BET) on certain businesses. The BET rate is 0.55% of the enterprise’s adjusted net income.
New Hampshire does not have a state-level personal income tax on earned income.
However, it does tax interest and dividend income at a rate of 5% for individuals who exceed certain income thresholds.
New Hampshire does not impose a statewide sales tax, making it one of the few states without a general sales tax.
Property taxes in New Hampshire play a significant role in funding local governments and can vary widely depending on the municipality.
The state’s property tax rates are generally higher than the national average.
It’s important to note that tax laws can change, and there may be additional taxes or exemptions specific to certain industries or activities.
Consultation with a tax professional or advisor is recommended to fully understand the tax implications and obligations for your specific situation in either Arizona or New Hampshire.
Flexibility in Rules and Regulations
Both states have relatively straightforward processes for forming LLCs and offer flexibility in terms of ownership structure.
They allow individuals, corporations, other LLCs, and even foreign entities to be members of an LLC.
While an operating agreement is not legally required in either state, it is highly recommended.
This document provides flexibility for LLC members to establish their own rules and guidelines regarding internal operations, management structure, profit distribution, and decision-making processes.
Both Arizona and New Hampshire offer privacy protections for LLC owners.
The names and addresses of LLC members are not typically required to be publicly disclosed in the formation documents, providing some flexibility in maintaining confidentiality.
Both states have specific licensing and permitting requirements based on the type of business or industry.
While regulations are in place to ensure compliance with safety, health, and other standards, there may be some flexibility in the specific requirements based on the nature and scale of the business.
Both states have ongoing compliance requirements for LLCs, such as filing annual reports and paying applicable fees.
While these requirements must be fulfilled, there may be some flexibility in terms of the specific timelines and procedures involved.
Key Differences Between Arizona and New Hampshire- An Overview
