How to Form a PLLC in New Hampshire

Here are the basic rules for forming professional limited liability companies (PLLC) in New Hampshire.

By , Contributing Author

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As a licensed professional in New Hampshire you can structure your business as a New Hampshire professional limited liability company (PLLC). This will give you protection from several important types of liability. It also may provide certain tax advantages compared to other ways of structuring your business.

What is a New Hampshire PLLC?

A New Hampshire PLLC is a limited liability company (LLC) formed specifically by people who will provide New Hampshire licensed professional services. LLCs in general are businesses registered with the state that consist of one or more people—called LLC members—who own the business. Like other LLCs, PLLCs protect their individual members from people with claims for many (but not all) types of financial debts or personal injuries.

What is a Professional Service in New Hampshire?

Under New Hampshire's PLLC law, a professional service is a service provided by:

  • certified public accountants
  • public accountants
  • architects
  • attorneys
  • podiatrists
  • chiropractors
  • dentists
  • pharmacists
  • professional engineers
  • land surveyors
  • registered professional nurses
  • optometrists
  • physicians and surgeons
  • psychologists, and
  • veterinarians.

Anyone who is licensed to practice one of these professions in New Hampshire can form a New Hampshire PLLC. In addition, New Hampshire's PLLC law states that the categories of professional services are not limited to those on the foregoing list, but also include all other professionals licensed, registered, certified, or otherwise authorized and permitted to practice independently under the provisions of various state laws. Check with a lawyer if you're unsure whether your profession is included among those allowed to form PLLCs.

How Do I Form a New Hampshire PLLC?

To form your New Hampshire PLLC you'll need to:

  • have the state license for each professional who will be a member of the company
  • check with the state licensing board for your profession to see if its prior approval is required, (and, if so, obtain the necessary documentation showing that approval), and
  • file a certificate of formation and a required addendum regarding security laws compliance with the Secretary of State (SOS).

You can download blank forms for the certificate of formation (Form PLLC-1) and required addendum (Form SRA) from the SOS website. Form PLLC-1 is specifically for PLLCs (as opposed to regular LLCs). Both forms (PLLC-1 and SRA) include helpful instructions. The current total filing fee for the certificate of formation and required addendum is $100 ($50 for the certificate and $50 for the addendum).

Naming Restrictions

New Hampshire requires that your PLLC's name end with "professional limited liability company'' or "P.L.L.C.'' or similar abbreviation. The name may not contain any language indicating or implying the business is formed for any other purpose than what is stated in your certificate of formation. The name also must comply with any requirements of any state licensing authority that has jurisdiction over the professional services your PLLC will provide. For additional important information on LLC names, check the Business Name, Location & Licenses section of the Nolo website.

Service and Membership Restrictions

A New Hampshire PLLC can only provide the professional services indicated in its certificate of formation. A New Hampshire PLLC can provide a combination of two or more professional services as long as the combination of services is permitted by all of the relevant state licensing laws. In general, only licensed professionals can be members of a New Hampshire PLLC. New Hampshire PLLCs and/or their members are subject to the regulation of the relevant state professional licensing authorities.

Operating Agreement

You should make sure you have an operating agreement for your PLLC. Unlike professional licenses, articles of organization, naming restrictions, and service restrictions, this is not a state requirement. However, it is important to have an operating agreement so that all members of the PLLC, as well as outside companies and businesses (for example banks), know what the internal rules are for the company. Depending on your own level of knowledge and expertise, you should consider having a lawyer assist you in preparing this document.

A PLLC Will Not Protect You From All Liability

Forming your professional service business as a PLLC will protect you personally from:

  • creditors seeking to collect unpaid debts owed solely by the PLLC
  • liability for the malpractice of other PLLC members (technically known as "vicarious liability"), and
  • people who are personally injured in connection with your PLLC because of things having nothing to do with your own professional malpractice or torts (for example, if someone slips and falls in your PLLC's offices).

Regarding protection from liability for the malpractice of fellow PLLC members, be aware that, for some professions in some states, PLLC members are required to have a minimum amount of malpractice insurance before they are eligible for such protection. Therefore, it's always a good idea to double check your state's PLLC laws, as well as your state's rules for your particular profession, regarding minimum insurance requirements.

Meanwhile, you are personally responsible if:

  • you personally guarantee repayment of a business loan
  • you engage in professional malpractice (such as completely botching a patient's treatment or egregiously mishandling a client's case), or
  • you intentionally or negligently commit a tort (such as assaulting someone).

Because you are not protected from your own malpractice, you should make sure you have professional liability insurance—and, if applicable, that your coverage meets any minimum insurance requirements.

A PLLC is Different From a Professional Corporation

A PLLC is not the same thing as a professional corporation (PC). A PLLC is a newer type of business entity than a PC. Here are some of the key differences:

  • a PLLC, like other LLCs, is comprised of members, but a PC, like other corporations, is comprised of shareholders
  • following from the previous point, PLLC ownership consists of so-called membership interests in the business, but PC ownership is based on shares of stock; and
  • a PLLC, like other LLCs, is a so-called pass-through tax entity, meaning that in most states (though not New Hampshire) only the individual members have income tax obligations, while a PC, like other corporations, usually has its own income tax obligations.

The tax differences between PLLCs and PCs can become complicated. New Hampshire, unlike most other states, directly taxes LLCs through both a business profits tax and a business enterprise tax. (More information on these taxes is available in other Nolo articles.) Moreover, a PC can elect a special tax status (S corporation status) that effectively makes it a pass-through tax entity like a PLLC. And, meanwhile, PCs that don't elect special status may be subject to double taxation—in other words, both the PC itself and its shareholders may have to pay taxes on business income.

New Hampshire allows professionals to form both PLLCs and PCs, and both PLLCs and PCs provide liability protection for, respectively, their members or shareholders. Because the protection is essentially the same for both PLLCs and PCs, but PLLCs are simpler to create and operate, many professionals prefer the PLLC structure.

Additional Information

For more information on the requirements for forming and operating an LLC in New Hampshire, such as those relating to annual reports or taxes, see Nolo's articles in 50-State Guide to Forming an LLC and 50-State Guide to Annual Report and Tax Filing Requirements for LLCs, along with the other articles on LLCs in the LLC section of the Nolo website.

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