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

Double taxation occurs when a C-Corporation's profits are taxed first at the corporate level under the federal 21% flat tax rate, then again at personal income tax rates when shareholders receive dividend distributions. New Hampshire adds a state layer of its own: a C-Corp owes the 7.5% Business Profits Tax once its gross business income passes $109,000, and the 0.55% Business Enterprise Tax above a $298,000 threshold, so it does not escape state-level taxation on its profits. An LLC owes the same Business Profits Tax, so New Hampshire's business taxes alone are not a reason to convert to C-Corp status. The practical implication is that if your business generates substantial profits you plan to retain rather than distribute, a C-Corp structure minimizes federal exposure. To evaluate whether this structure suits your specific situation, consult a New Hampshire-based CPA or tax attorney who can model your projected tax liability under both entity structures before filing Articles of Incorporation with the New Hampshire Secretary of State.

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

Whether a C-Corp lowers the total tax depends on your profit, how much of it stays in the business and your own tax bracket, so run the figures with a tax professional. Here's why: as a C-Corp owner-employee, you pay yourself a reasonable salary subject to payroll taxes, then take remaining profits as dividends, avoiding the 15.3% self-employment tax that New Hampshire LLC members pay on 92.35% of net income (the 12.4% Social Security part stops at the annual wage base). New Hampshire imposes the Business Profits Tax at 7.5% of taxable business profits (a return is required once gross business income exceeds $92,000), and federal corporate tax (21%) applies to retained earnings. File the appropriate New Hampshire Business Profits Tax return (Form NH-1120 for corporations) with the Department of Revenue Administration to determine your specific tax liability before converting. Consult a New Hampshire tax professional to model your exact scenario, as savings depend on profit distribution strategy and personal tax brackets.

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

Yes, you can turn your New Hampshire LLC into a C-Corporation. How you do it depends on the filing options New Hampshire offers: some states let an LLC convert in a single filing, and others have you form a new corporation and move the business into it. Check which route applies with the state office that handles business filings before you start. The tax result of a conversion depends on how it is done and on the business's assets and debts, so talk to a tax professional before converting.

Why do venture capitalists prefer C-Corporations over LLCs?

Venture capitalists strongly prefer C-Corporations over LLCs because they provide the institutional structures and tax advantages that sophisticated investors require. C-Corps offer cleaner cap tables with standardized equity classes, common stock, preferred stock, and options. That VCs use to protect their investments through liquidation preferences and anti-dilution provisions. A New Hampshire LLC can only approximate this through custom terms in its operating agreement. Additionally, tax-exempt investors like pension funds and endowments avoid the "unrelated business taxable income" (UBTI) complications that arise when they invest in pass-through LLCs. C-Corps also enable straightforward secondary transactions and acquisitions, since equity transfers don't require unanimous consent from all members as they do in New Hampshire LLCs. Most critically, VCs expect standard corporate governance, boards of directors, stock option plans under federal tax rules, and predictable voting rights, which align with their template term sheets and due diligence processes. If you're seeking venture funding in New Hampshire, restructuring from an LLC to a C-Corp is essential before engaging investors. Contact the New Hampshire Department of State Division of Corporations to file Articles of Incorporation and initiate the conversion process immediately.

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

New Hampshire charges a $100 filing fee for C-Corporation formation through the Secretary of State's Division of Corporations, identical to LLC formation costs. However, corporations and LLCs alike must file an annual report with the Secretary of State by April 1st each year, costing $100 per filing. New Hampshire's Business Profits Tax applies to businesses with gross business income over $109,000 for taxable periods beginning on or after January 1, 2025, calculated at 7.5% of taxable business profits. This tax applies regardless of whether you distribute profits to shareholders. Additionally, C-Corps must pay the Business Enterprise Tax (0.55% of the enterprise value tax base) if gross business receipts or the enterprise value tax base exceed about $298,000. These cumulative fees create higher compliance costs than an LLC, though an LLC files the same $100 annual report and owes Business Profits Tax once its gross business income clears the filing threshold. Calculate your projected revenue against these thresholds before choosing C-Corp status, and consult the New Hampshire Department of Revenue Administration's Business Profits Tax guide to understand your exact tax exposure.

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. New Hampshire LLCs file a Certificate of Formation with the Secretary of State for a $100 filing fee and must file a $100 annual report each year (due April 1). 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. C-Corps require filing Articles of Incorporation ($100 fee), holding annual shareholder meetings, and submitting annual reports ($100 fee) to the Secretary of State, obligations that create administrative burden for small operations. This structural choice directly impacts your tax liability: as an LLC owner, you avoid self-employment taxes on profits beyond your reasonable salary, while C-Corp owners face double taxation unless they elect S-Corp status. Contact the New Hampshire Secretary of State's Business Services Division to confirm current filing fees and obtain the appropriate formation documents for your chosen structure.

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: October 2026

In New Hampshire, an LLC fits when you want simple tax filing with pass-through taxation and don't mind self-employment taxes; a C-corp fits when you plan to seek venture capital funding or attract institutional investors. Compare both structures in detail below.

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Comparison chart for New Hampshire LLC versus C-Corp, contrasting liability, taxation and ongoing filing burden across 8 factors. — Side-by-side on the factors that decide the choice, for New Hampshire. Source: New Hampshire Secretary of State.

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 92.35% of profits at 15.3%, with the 12.4% Social Security part capped at the annual wage base	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 personal income tax; the LLC owes Business Profits Tax (7.5%) once gross business income passes $109,000	Business Profits Tax (7.5%) once gross business income passes $109,000, plus the 0.55% Business Enterprise Tax above a $298,000 threshold
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 a personal income tax on your share of business profits

When a C-Corp Makes More Sense

You plan to seek venture capital funding or attract institutional investors
You plan to keep a large share of profits in the business to fund growth
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. New Hampshire has no personal income tax, so members pay federal income and self-employment taxes on their share of profits, while the LLC itself owes the Business Profits Tax (7.5%) once its gross business income passes $109,000.

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. New Hampshire adds its own entity-level Business Profits Tax (7.5%) once gross business income passes $109,000.

When a C-Corp Wins

Whether a C-Corp lowers the total tax depends on your profit, how much of it stays in the business and your own tax bracket, so run the figures with a tax professional. New Hampshire's Business Profits Tax applies to the business either way, so the choice turns on federal treatment for profitable businesses planning to retain earnings or seek investment.

Calculate Your Tax Savings in New Hampshire

Enter your profit and filing status to compare estimated annual taxes for LLC, S-Corp, and C-Corp side by side, specific to New Hampshire.

This guide is general information, not legal or tax advice, and reading it does not create an attorney-client relationship. It reports published tax rates and statutory attributes, with the sources this page cites. It cannot tell you which structure is better for you: that turns on your profit, the salary you could defend as reasonable compensation, every state you owe tax in, and plans for owners, investors and exit that no figure on this page measures. Confirm your own position with a CPA or tax attorney licensed in your state before you elect anything, because some elections are slow or costly to reverse.

Frequently Asked Questions

: Double taxation occurs when a C-Corporation's profits are taxed first at the corporate level under the federal 21% flat tax rate, then again at personal income tax rates when shareholders receive dividend distributions. New Hampshire adds a state layer of its own: a C-Corp owes the 7.5% Business Profits Tax once its gross business income passes $109,000, and the 0.55% Business Enterprise Tax above a $298,000 threshold, so it does not escape state-level taxation on its profits. An LLC owes the same Business Profits Tax, so New Hampshire's business taxes alone are not a reason to convert to C-Corp status. The practical implication is that if your business generates substantial profits you plan to retain rather than distribute, a C-Corp structure minimizes federal exposure. To evaluate whether this structure suits your specific situation, consult a New Hampshire-based CPA or tax attorney who can model your projected tax liability under both entity structures before filing Articles of Incorporation with the New Hampshire Secretary of State.
: Whether a C-Corp lowers the total tax depends on your profit, how much of it stays in the business and your own tax bracket, so run the figures with a tax professional. Here's why: as a C-Corp owner-employee, you pay yourself a reasonable salary subject to payroll taxes, then take remaining profits as dividends, avoiding the 15.3% self-employment tax that New Hampshire LLC members pay on 92.35% of net income (the 12.4% Social Security part stops at the annual wage base). New Hampshire imposes the Business Profits Tax at 7.5% of taxable business profits (a return is required once gross business income exceeds $92,000), and federal corporate tax (21%) applies to retained earnings. File the appropriate New Hampshire Business Profits Tax return (Form NH-1120 for corporations) with the Department of Revenue Administration to determine your specific tax liability before converting. Consult a New Hampshire tax professional to model your exact scenario, as savings depend on profit distribution strategy and personal tax brackets.
: Yes, you can turn your New Hampshire LLC into a C-Corporation. How you do it depends on the filing options New Hampshire offers: some states let an LLC convert in a single filing, and others have you form a new corporation and move the business into it. Check which route applies with the state office that handles business filings before you start. The tax result of a conversion depends on how it is done and on the business's assets and debts, so talk to a tax professional before converting.
: Venture capitalists strongly prefer C-Corporations over LLCs because they provide the institutional structures and tax advantages that sophisticated investors require. C-Corps offer cleaner cap tables with standardized equity classes, common stock, preferred stock, and options. That VCs use to protect their investments through liquidation preferences and anti-dilution provisions. A New Hampshire LLC can only approximate this through custom terms in its operating agreement. Additionally, tax-exempt investors like pension funds and endowments avoid the "unrelated business taxable income" (UBTI) complications that arise when they invest in pass-through LLCs. C-Corps also enable straightforward secondary transactions and acquisitions, since equity transfers don't require unanimous consent from all members as they do in New Hampshire LLCs. Most critically, VCs expect standard corporate governance, boards of directors, stock option plans under federal tax rules, and predictable voting rights, which align with their template term sheets and due diligence processes. If you're seeking venture funding in New Hampshire, restructuring from an LLC to a C-Corp is essential before engaging investors. Contact the New Hampshire Department of State Division of Corporations to file Articles of Incorporation and initiate the conversion process immediately.
: New Hampshire charges a $100 filing fee for C-Corporation formation through the Secretary of State's Division of Corporations, identical to LLC formation costs. However, corporations and LLCs alike must file an annual report with the Secretary of State by April 1st each year, costing $100 per filing. New Hampshire's Business Profits Tax applies to businesses with gross business income over $109,000 for taxable periods beginning on or after January 1, 2025, calculated at 7.5% of taxable business profits. This tax applies regardless of whether you distribute profits to shareholders. Additionally, C-Corps must pay the Business Enterprise Tax (0.55% of the enterprise value tax base) if gross business receipts or the enterprise value tax base exceed about $298,000. These cumulative fees create higher compliance costs than an LLC, though an LLC files the same $100 annual report and owes Business Profits Tax once its gross business income clears the filing threshold. Calculate your projected revenue against these thresholds before choosing C-Corp status, and consult the New Hampshire Department of Revenue Administration's Business Profits Tax guide to understand your exact tax exposure.
: For most small businesses in New Hampshire, an LLC is the better choice due to simpler taxation, flexible management, and minimal administrative requirements. New Hampshire LLCs file a Certificate of Formation with the Secretary of State for a $100 filing fee and must file a $100 annual report each year (due April 1). 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. C-Corps require filing Articles of Incorporation ($100 fee), holding annual shareholder meetings, and submitting annual reports ($100 fee) to the Secretary of State, obligations that create administrative burden for small operations. This structural choice directly impacts your tax liability: as an LLC owner, you avoid self-employment taxes on profits beyond your reasonable salary, while C-Corp owners face double taxation unless they elect S-Corp status. Contact the New Hampshire Secretary of State's Business Services Division to confirm current filing fees and obtain the appropriate formation documents for your chosen structure.

Sources

6 documents

Each entry below is a document recorded in our verified New Hampshire sources, and each entry says what the document is. Some statutory text is read from an accurate mirror rather than from the state's own host, and those say so. Where we hold the citation but no stable public link, the citation is printed on its own rather than pointed at a guessed address.

New Hampshire statute: RSA 304-C (New Hampshire LLC Act)
Federal statute: IRC Section 422 (incentive stock options)
irs.gov/pub/irs-irbs/irb04-24.pdfIRS: Revenue Ruling 2004-59, 2004-24 I.R.B. 1050 (partnership converting to a corporation)
Federal statute: IRC Section 351 (transfers to a controlled corporation)
sos.nh.gov/corporations-0New Hampshire Secretary of State: business entity filings
gc.nh.gov/rsa/html/XXVIII/304-C/304-C-191.htmNew Hampshire LLC filing fees

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Edmond Hui · Founder, MyStateLLC

Edmond Hui is a software engineer and serial entrepreneur based in New York who has founded multiple online businesses across e-commerce, media, and information publishing. Before transitioning into tech, he spent years as a commercial real estate professional closing deals totaling over 100,000 square feet, giving him firsthand experience with business formation and entity structuring. He built MyStateLLC to provide the free, state-specific LLC guidance he wished existed when forming his own companies.

How we check facts

LLC vs C-Corp: Side-by-Side

When an LLC Makes More Sense

When a C-Corp Makes More Sense

Tax Deep Dive

LLC Default Tax

C-Corp Tax

When a C-Corp Wins

Calculate Your Tax Savings in New Hampshire

Frequently Asked Questions

Sources

More for New Hampshire LLCs

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Taxes, money and growth

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By profession

Ready to Form Your New Hampshire LLC?

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