What is double taxation and how does it affect C-Corporations in New Hampshire?

Double taxation means C-Corp profits are taxed twice: first at the corporate level (21% federal rate) and again when distributed as dividends to shareholders at personal tax rates. In New Hampshire, there's no state corporate income tax, so C-Corps only face federal corporate taxation, making them more tax-efficient than in other states.

When does a C-Corporation save money compared to an LLC in New Hampshire?

C-Corps typically save money when business profits exceed $100,000 annually. Owner-employees can take reasonable salaries (subject to payroll taxes) and receive additional profits as dividends, avoiding the 15.3% self-employment tax that LLC members pay on all profits. The savings increase with higher profit levels.

Can I convert my New Hampshire LLC to a C-Corporation later?

Yes, you can convert an LLC to a C-Corporation in New Hampshire, but it requires dissolving the LLC and forming a new corporation, which may have tax consequences. It's often easier to start as an LLC and make an S-Corp tax election if you want corporate tax benefits while maintaining LLC flexibility.

Why do venture capitalists prefer C-Corporations over LLCs?

VCs prefer C-Corps because they offer cleaner cap tables, easier transfer of ownership interests, familiar corporate governance structures, and avoid pass-through tax complications for tax-exempt investors. C-Corps also allow for different classes of stock with varying rights and preferences.

Are there any special C-Corporation fees or taxes in New Hampshire?

New Hampshire charges a $100 filing fee for C-Corporation formation, the same as LLCs. There's no state corporate income tax, but C-Corps must file annual reports with associated fees. New Hampshire also has a Business Profits Tax that may apply to larger corporations based on gross receipts and income levels.

Which business structure should I choose for a small business in New Hampshire?

For most small businesses in New Hampshire, an LLC is the better choice due to simpler taxation, flexible management, and minimal administrative requirements. Choose a C-Corp only if you plan to seek venture funding, have high profits where self-employment tax savings matter, or need maximum business credibility.

New Hampshire LLC vs C-Corp: Complete Business Structure Comparison

Understand the key differences between LLCs and C-Corporations in New Hampshire to choose the right structure for your business goals, tax situation, and growth plans.

By Edmond Hui · Last updated: January 2026

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LLC vs C-Corp: Side-by-Side

Factor	LLC	C-Corp
Formation cost	$100 state filing fee to New Hampshire Secretary of State	$100 state filing fee plus additional incorporation documents
Taxation structure	Pass-through taxation - profits taxed once at owner's personal rate	Double taxation - corporate profits taxed at 21% federal rate, then dividends taxed again
Ownership limits	Unlimited owners (members), flexible ownership percentages and classes	Unlimited shareholders, multiple share classes allowed, easier to transfer ownership
Self-employment / payroll tax	Members typically pay self-employment tax on all profits (15.3%)	Owner-employees pay payroll taxes only on salary, not distributions
Investor appeal	Less attractive to VCs and institutional investors due to complex tax reporting	Preferred by venture capitalists and for raising capital from investors
State taxes in New Hampshire	No state income tax on LLC profits - only federal taxes apply	No state corporate income tax - New Hampshire has no corporate income tax
Administrative complexity	Minimal requirements - annual report and registered agent	Board meetings, corporate resolutions, detailed record-keeping, annual reports
Profit distribution	Flexible profit sharing not tied to ownership percentage	Dividends must be distributed proportionally to shareholding

When an LLC Makes More Sense

You want simple tax filing with pass-through taxation and don't mind self-employment taxes
Your business has multiple owners who want flexible profit-sharing arrangements
You prefer minimal administrative requirements and don't need to raise venture capital
You want to take advantage of New Hampshire's lack of state income tax on business profits

When a C-Corp Makes More Sense

You plan to seek venture capital funding or attract institutional investors
Your business profits exceed $100,000+ and you want to minimize self-employment taxes
You need to retain significant earnings in the business for growth and expansion
You want maximum credibility with customers, suppliers, and potential business partners

Tax Deep Dive

Llc Default Tax

New Hampshire LLCs benefit from pass-through taxation, meaning business profits flow directly to members' personal tax returns. Since New Hampshire has no state income tax, LLC members only pay federal income taxes and self-employment taxes on their share of profits.

C Corp Tax

C-Corporations face double taxation - the corporation pays 21% federal corporate tax on profits, then shareholders pay personal income tax on dividends. However, New Hampshire's lack of state corporate income tax provides some relief compared to other states.

When C Corp Wins

C-Corps become advantageous when business profits exceed $100,000 annually, as owner-employees can take reasonable salaries (subject to payroll taxes) and receive remaining profits as dividends (avoiding self-employment tax). In New Hampshire's tax-friendly environment, this structure becomes even more attractive for profitable businesses planning to retain earnings or seek investment.

Frequently Asked Questions

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