The One State That Tells Single Owners the Shield Has a Hole in It
New Hampshire rewrote its limited liability company law in 2012, effective 1 January 2013, and the result at RSA 304-C is one of the most detailed LLC statutes in the country. It runs to well over a hundred sections, and unusually it takes clear positions rather than leaving gaps. Two of those positions should change how a New Hampshire company is set up.
The first is about creditors. RSA 304-C:126, IV makes a charging order the sole and exclusive remedy against a member, and RSA 304-C:126, V(a) removes execution against the membership rights of a member of a multi-member company. Then RSA 304-C:126, VI carves out the single owner. If a judgment creditor shows that distributions under a charging order in respect of a debtor-member of a single-member limited liability company will not satisfy the judgment within a reasonable time, the charging order is no longer the sole and exclusive remedy, and the court may order the sale of the member's membership rights at an execution sale. Under paragraph VII the purchaser obtains all of the membership rights, becomes the member, and the debtor ceases to be one. Nevada says the opposite in NRS 86.401(2)(a). New Hampshire says it out loud.
The second is about exits. RSA 304-C:103, I lets a member withdraw at any time on 30 days written notice unless the agreement says otherwise, and RSA 304-C:105, II says that unless the agreement provides otherwise a dissociating member is not entitled to receive any payment for the value of their membership rights. Under paragraph III the leaver keeps the rights of a transferee. So in New Hampshire a member can walk out in a month and stay on the distribution list forever without being bought out.
What RSA 304-C supplies where the agreement is silent
Member management under RSA 304-C:47, II. Managers appointed by majority vote of the members under RSA 304-C:48, II, and removable at any time for any reason or for no reason by majority vote under RSA 304-C:50, II. Voting proportionate to the contributions made in connection with formation under RSA 304-C:65, II. Profits, losses and distributions allocated on the agreed value of contributions as of the date of contribution, under RSA 304-C:90, II and RSA 304-C:95, II. Withdrawal on 30 days notice with no payout, under RSA 304-C:103 and RSA 304-C:105.
Why the single owner case is the strongest one here
RSA 304-C:43 removes the old objection: an operating agreement of a single-member company shall not be unenforceable on the ground that there is only one person who is a party to it. RSA 304-C:42 adds that the company need not sign it to be bound by it. Given RSA 304-C:126, VI, a New Hampshire sole owner has to build protection into the structure rather than assume the statute supplies it: a documented capital account, a distribution policy that is discretionary rather than scheduled, and clean separation between owner and company. RSA 304-C:131 helps on the succession side, providing that on the death of the only member the membership passes to the estate and the company is not dissolved. Our single-member LLC guide covers the record keeping.
Does New Hampshire Require One, and What Form Does It Take
No requirement, and almost no formality. RSA 304-C:16 defines an operating agreement as any agreement, however it is labelled, of the member or members as to the internal affairs of the company or the conduct of its business. RSA 304-C:40 provides that unless a written operating agreement provides otherwise, an agreement and its amendments may be written, oral, or implied by course of dealing or otherwise. RSA 304-C:44 then states that an operating agreement shall not be subject to any statute of frauds. New Hampshire is not among the states, headed by California, Delaware, Missouri, Maine and New York, whose statutes tell members they must adopt one.
That flexibility cuts both ways. If an agreement can be implied by course of dealing, then how you have actually behaved is capable of being the agreement, which is a problem when members remember the course of dealing differently. RSA 304-C:41, I deems a person who becomes a member or manager to assent to the agreement, and paragraph II binds a transferee of an interest whether or not they sign. RSA 304-C:45 allows the agreement to grant rights to people who are not parties, but only to the extent set forth in writing. A written agreement in New Hampshire is not a legal necessity; it is the only way to know what the terms are.
Nothing is filed. The Secretary of State's Corporation Division records the certificate of formation, the annual report and later charter documents. There is no operating agreement form, no submission channel and no fee, because there is no filing. The New Hampshire filings that do carry a fee are formation, the annual report, certificates of amendment, dissolution and reinstatement.
What Belongs in a New Hampshire Operating Agreement
New Hampshire operating agreement at a glance
| Item | New Hampshire position |
|---|---|
| Statutory requirement | None. RSA 304-C never compels adoption |
| Form recognised | Written, oral or implied by course of dealing: RSA 304-C:40, and no statute of frauds under RSA 304-C:44 |
| Filed with the State | No. Not part of any Corporation Division filing |
| State fee to adopt | $0, because nothing is filed |
| Governing act | New Hampshire Revised Limited Liability Company Act, RSA 304-C |
| Custom drafting | $99 flat |
Ten clauses do the work. In New Hampshire the two that pay for the whole document are the exit clause and the distribution policy.
1. Members and membership rights
RSA 304-C:15 defines membership rights and RSA 304-C:12 defines the limited liability company interest, which is the economic slice. Name each member, state the percentage, and be explicit about which rights are membership rights and which are purely economic, because a transferee under RSA 304-C:123 gets the economics only.
2. Contributions, valuation and later money
RSA 304-C:85 sets the permitted forms of contribution, RSA 304-C:86 the valuation of non cash contributions and RSA 304-C:87 liability for promised contributions. Record everything with an agreed value at the date of contribution, because RSA 304-C:90, II and RSA 304-C:95, II both allocate by that figure.
3. Managers, their offices and how easily they go
RSA 304-C:47, I lets the agreement provide for management in whole or in part by managers, and paragraph II makes the company member managed if it does not. RSA 304-C:49, II gives managers general responsibility for managing the company, and RSA 304-C:50, II lets a majority of members terminate a manager at any time for any reason or for no reason. If a manager needs security of tenure, that has to be written.
4. Voting, and the formation snapshot problem
RSA 304-C:65, I allows voting on a per capita, number, profits, financial interest, class, group or any other basis. Paragraph II is the default, and it is unusual: unless the agreement provides otherwise, the number of votes each member may cast is proportionate to that member's share of contributions of cash, property and services made "in connection with its formation". Money put in later does not move the votes. A member who funded the whole second round can still be outvoted by the original split. RSA 304-C:66 lists what members may decide, and RSA 304-C:68 the matters requiring a unanimous vote of the other members.
5. Allocations, distributions and the policy that protects you
RSA 304-C:90 allocates profits and losses and RSA 304-C:95 allocates distributions, both by the agreed value of contributions at the date they were made. RSA 304-C:96 deals with the form of a distribution. Write the ratio you intend, add a tax distribution, and make ordinary distributions discretionary above a stated reserve, because that policy is the practical answer to RSA 304-C:126, VI.
6. Transfers, pledges and who can become a member
RSA 304-C:121 governs transfers of membership rights, RSA 304-C:122 pledges and RSA 304-C:123 transfers of the economic interest. Add consent, a right of first refusal and a mandatory offer on death, divorce or bankruptcy, and deal expressly with pledges, since RSA 304-C:126, VIII(a) preserves the rights of a creditor holding a consensual security interest.
7. Withdrawal on 30 days notice, and what the leaver takes
RSA 304-C:103, I is the default: a member may withdraw at any time on 30 days written notice to the other members. Paragraph II lets the company recover damages where the withdrawal breaches the agreement or accompanies wrongful conduct, including the reasonable cost of replacing services the member was obliged to provide, and paragraph III allows an offset. Paragraph IV makes early withdrawal from a term company wrongful conduct. Then RSA 304-C:105, II pays the leaver nothing for the value of their rights, and paragraph III leaves them holding a transferee interest. Decide deliberately whether you want that outcome, and write the buyout if you do not.
8. Dissolution, and the sections that keep the company alive
RSA 304-C:129 sets the events of dissolution and RSA 304-C:130 lets a majority of members revoke a dissolution. RSA 304-C:132, I(a) provides that unless the agreement says otherwise, the death, withdrawal, expulsion, bankruptcy or dissolution of a member does not dissolve the company, but paragraph II states that the resignation of the last remaining member terminates its existence. RSA 304-C:133 lets the agreement provide for a substitute member on the dissociation of the last remaining member, which is the clause that prevents that outcome.
9. Federal tax election and the person who signs it
Record whether the company is taxed as a partnership, an S corporation on Form 2553 or a corporation on Form 8832, name the signer and appoint the partnership representative. New Hampshire imposes entity level business taxes, so the agreement should also say who is responsible for those returns. The federal classification rules are in the IRS guidance for limited liability companies.
10. Amendment, remedies and dispute resolution
Set the amendment method in writing, since RSA 304-C:40 otherwise lets amendments be oral or implied. RSA 304-C:88 gives remedies for a member's breach of the agreement and RSA 304-C:114 gives remedies for a manager's breach. Add mediation, a valuation formula and a venue clause so a disagreement resolves faster than RSA 304-C:134 judicial dissolution.
Form your LLC
If you would rather not do this yourself, we prepare the articles, check name availability with the state, and file it for you. Or keep reading and file it on your own. This guide covers everything you need either way.
RSA 304-C:126: Strong Protection, With One Exception That Matters
Paragraph I lets a judgment creditor of a debtor-member, or of a transferee, apply for a charging order against the company for the unsatisfied judgment plus interest. Paragraph II makes the order a lien on the interest, gives the creditor only the right to receive distributions the debtor would otherwise have received and only to the extent of the judgment, and confirms the creditor does not become the holder of the interest. Paragraph III preserves exemption laws.
Paragraph IV is the headline: except as provided in paragraphs VI and VII, a charging order is the sole and exclusive remedy by which a judgment creditor of a debtor-member may satisfy a judgment from membership rights or from the assets of the company. Paragraph V(a) makes execution unavailable against a member of a multi-member company, and paragraph V(b) makes it unavailable against a member of a single-member company except as provided in paragraph VI.
Paragraph VI is the exception. If a judgment creditor shows to the satisfaction of a court that distributions under a charging order in respect of the interest of a debtor-member of a single-member limited liability company will not satisfy the judgment within a reasonable time, the charging order is not the sole and exclusive remedy, and the court may order the sale of the membership rights under an execution sale. The showing may be made when the creditor applies for the charging order or at any time afterwards. Paragraph VII then goes further than a transferee sale: the purchaser obtains all of the member's membership rights and not merely the rights of a transferee, the purchaser becomes the member of the company, and the debtor ceases to be a member.
Paragraph VIII confirms what the section does not touch: the rights of a creditor with a consensual security interest, the principles of law and equity affecting fraudulent transfers, the equitable principles of veil piercing, equitable lien and constructive trust, and the court's continuing jurisdiction to enforce its charging order. So for a New Hampshire sole owner the real protections are structural. Bring in a genuine second member with real economics if the facts support it, keep distributions discretionary above a stated reserve so a creditor cannot show a predictable stream, and avoid pledging the interest, since paragraph VIII(a) leaves a secured creditor outside the section entirely.
Duties: New Hampshire Lets the Agreement Go Almost All the Way
RSA 304-C:107 is the operative section. To the extent that a member, manager or other person has duties, including fiduciary duties, to the company or to another member, manager or person bound by the agreement, those duties may be expanded, restricted or eliminated by provisions in the operating agreement, provided that the agreement may not eliminate the implied contractual covenant of good faith and fair dealing. Elimination is on the table, which puts New Hampshire alongside Nevada and well beyond Minnesota, Nebraska and Montana, all of which forbid it.
The defaults that apply when nothing is written are real, though. RSA 304-C:108, I gives managers a duty of care to the company and the members, and paragraph II requires them to discharge management duties with the care a person in a like position would reasonably believe appropriate. RSA 304-C:109 supplies a business judgment rule with a rebuttable presumption that a manager has not breached the duty of care where the manager acted in accordance with contractual good faith, in a manner reasonably believed to be in the company's best interest, and on the basis of reasonably adequate information. RSA 304-C:110 sets out the duty of loyalty and RSA 304-C:111 the implied contractual covenant. RSA 304-C:106 applies certain manager duties to members who exercise management functions.
For a minority investor in a New Hampshire company, the practical consequence is that the duties you can enforce are the ones the agreement leaves standing. Read the duty section of any draft before the money section.
Authority, the Registered Agent and What Banks Ask For
RSA 304-C:52 sets out the agency power of members and managers, and RSA 304-C:23 governs the liability of members and managers to third parties. New Hampshire does not maintain a separate public statement of authority filing of the sort Minnesota and Nebraska use, so the operating agreement plus a members resolution is how a counterparty checks who may sign. RSA 304-C:36 requires the company to maintain a registered office and registered agent, and changing that agent is a Corporation Division filing.
A New Hampshire bank opening a business account will ask for the filed certificate of formation, the EIN letter, identification for each beneficial owner and either the operating agreement or a resolution naming the authorised signers. Federal customer due diligence rules require the bank to identify and certify the beneficial owners of a legal entity customer, and the membership schedule is what makes the percentages checkable. Commercial landlords in Manchester and Nashua and title companies handling New Hampshire land ask for the same package, as do the states where the company later registers as a foreign entity.
Keep the signed agreement with the diligence file: the certificate of formation, the current registered agent designation, a recent certificate of good standing and any trade name registration.
The Consequences of Going Without One in New Hampshire
New Hampshire imposes no penalty. The exposure sits in three sections, and each one carries a number.
Start with RSA 304-C:126, VI. A sole owner holds a New Hampshire company with $900,000 of equity in commercial property and picks up a personal judgment of $340,000 from an unrelated guarantee. Because the company is single member, the creditor can show that distributions will not satisfy the judgment within a reasonable time, and paragraph VII lets the purchaser at execution sale take all of the membership rights and become the member while the owner ceases to be one. The exposure is not the $340,000, it is the whole $900,000 of equity in an entity that changes hands.
Then the exit. RSA 304-C:103, I lets a member of a company worth $1.4 million withdraw on 30 days notice, and RSA 304-C:105, II gives them nothing for the value of their membership rights while paragraph III leaves them holding a transferee interest. On a 40 per cent share paying out $110,000 a year in distributions, the remaining members are funding a former colleague indefinitely, while the leaver has no cash for the value of their stake either. Nobody wins that arrangement. A buyout at a stated multiple would have settled it at roughly $560,000 on defined terms.
Third, the voting snapshot. RSA 304-C:65, II fixes votes by contributions made in connection with formation. A member who funds a $500,000 expansion three years later gains no votes at all. The control they thought they bought is worth nothing, and unpicking it in court through an RSA 304-C:134 dissolution petition costs each side $60,000 to $200,000 in fees and appraisal.
Five Mistakes New Hampshire Filers Keep Making
Mistake 1: Assuming the charging order protects a sole owner
Marketing copy about charging orders is usually written from Nevada or Wyoming law. RSA 304-C:126, VI says the opposite for a single-member New Hampshire company, and paragraph VII hands the purchaser the membership itself. A template that never mentions RSA 304-C:126 is not addressing the risk.
Mistake 2: The sole owner who thinks there is nothing to write
RSA 304-C:43 makes the single-member agreement enforceable and RSA 304-C:42 says the company need not sign it. Given paragraph VI of the charging order section, this is the state where a single owner has the most to gain from a documented distribution policy, a real capital account and clean separation.
Mistake 3: Letting the agreement change by course of dealing
RSA 304-C:40 allows an agreement and its amendments to be oral or implied by course of dealing unless a written agreement provides otherwise, and RSA 304-C:44 disapplies the statute of frauds. Two years of doing things differently can amount to an amendment nobody drafted. Write the amendment method and require signatures.
Mistake 4: Trying to file it with the Corporation Division
There is no channel and no fee, because there is no filing. Attaching it to a state submission publishes member names, capital accounts and buyout formulas for no benefit. Keep it internal, signed and dated.
Mistake 5: Ignoring what happens when the last member leaves
RSA 304-C:132, II provides that the resignation of the last remaining member terminates the company's existence as an entity. RSA 304-C:133 lets the agreement provide for a substitute member on that dissociation, and RSA 304-C:131 already covers death. Cover resignation as well, or a single signature can end the company.
Three New Hampshire Companies in Practice
Example: a machine shop in Manchester
Merrimack Valley Machining LLC was formed with two members contributing $60,000 each. Three years later one of them funded a $520,000 equipment expansion alone and assumed it had bought control. RSA 304-C:65, II fixed the votes by the contributions made in connection with formation, so the split stayed at 50 and 50. The agreement they adopted moved voting to a running capital account and required 75 per cent approval for any distribution over $50,000.
Example: a ski lodging company in North Conway
Saco River Lodging LLC lost a member who served 30 days notice under RSA 304-C:103, I. Under RSA 304-C:105, II she received nothing for the value of her rights and under paragraph III kept a transferee interest, so she continued to receive roughly $74,000 a year from a business worth $1.9 million that she no longer ran. The successor agreement required a mandatory purchase at three and a half times trailing earnings over 60 months and suspended distributions from the notice date.
Example: a single owner property company in Portsmouth
Piscataqua Harbour Properties LLC held one commercial building with $900,000 of equity, owned by a sole member who also guaranteed an unrelated business loan. When that guarantee produced a $340,000 judgment, the creditor invoked RSA 304-C:126, VI and showed that the company's fixed monthly distributions would not satisfy the judgment within a reasonable time. The response was to replace the fixed distribution schedule with a discretionary policy above a stated reserve, admit a second member with genuine capital and economics, and document both properly.
How File.Business Drafts New Hampshire Operating Agreements
Every New Hampshire agreement we draft is written and states that it may only be amended in writing, which shuts off the oral and course of dealing route RSA 304-C:40 otherwise leaves open. From there we set voting that tracks a running capital account rather than the RSA 304-C:65, II formation snapshot, a withdrawal and buyout clause in place of the no payment default in RSA 304-C:105, II, a discretionary distribution policy that answers RSA 304-C:126, VI, a substitute member provision under RSA 304-C:133, and duty terms set deliberately given how far RSA 304-C:107 lets them move. Included with New Hampshire LLC formation or available separately.
Free templates against drafted agreements
A free template is the weakest option in New Hampshire, because the state's distinctive rules, the single-member charging order carve out, the no payment exit and the formation snapshot on voting, are exactly the ones a generic form ignores. At $99 the drafted version costs less than an hour of New Hampshire counsel and a small fraction of an execution sale. Read operating agreement essentials and LLC against S corporation next.
New Hampshire operating agreement questions
Is an operating agreement required for a New Hampshire LLC?
No. RSA 304-C does not compel members to adopt one, and New Hampshire is not among the states whose statute uses a mandatory verb. RSA 304-C:40 goes the other way, allowing an operating agreement and its amendments to be written, oral, or implied by course of dealing, and RSA 304-C:44 exempts the agreement from any statute of frauds.
Does New Hampshire protect a single-member LLC with a charging order?
Only partly, and it says so expressly. RSA 304-C:126, IV makes a charging order the sole and exclusive remedy except as provided in paragraphs VI and VII. Paragraph VI removes that exclusivity where a judgment creditor shows that distributions in respect of a debtor-member of a single-member limited liability company will not satisfy the judgment within a reasonable time, and paragraph VII lets the purchaser at execution sale take all the membership rights and become the member.
Do I file the operating agreement with the New Hampshire Secretary of State?
No. The Corporation Division records the certificate of formation, the annual report and later charter documents. There is no operating agreement form, no submission channel and no fee, because there is no filing. Keep the signed original with the company records.
How much does a New Hampshire operating agreement cost?
The State charges nothing, because the document is never filed. The only cost is drafting. File.Business prepares a New Hampshire specific agreement at $99 flat, for a single owner or for a company with several members.
Can a member of a New Hampshire LLC just quit?
Yes, by default. RSA 304-C:103, I lets a member withdraw at any time on 30 days written notice to the other members unless the operating agreement provides otherwise. Where the withdrawal breaches the agreement or accompanies wrongful conduct, paragraph II lets the company recover damages, including the reasonable cost of replacing services the member was obliged to provide, and paragraph III allows an offset.
Does a departing New Hampshire member get paid for their interest?
Not unless the agreement says so. RSA 304-C:105, II provides that unless the operating agreement provides otherwise, a dissociating member is not entitled to receive any payment for the value of their membership rights as of the date of dissociation. Paragraph III leaves that person with the rights of a transferee, which means they keep receiving distributions without being bought out.
How do members vote in a New Hampshire LLC with no agreement?
RSA 304-C:65, II sets the default: the number of votes each member may cast is proportionate to that member's share of contributions of cash, property and services made to the company in connection with its formation. Contributions made later do not change the count, so a member who funds a subsequent expansion gains no additional votes unless the agreement provides for it.
Need a custom New Hampshire Operating Agreement?
File.Business drafts New Hampshire-specific Operating Agreements at $99 flat: customized for single-member or multi-member structure, ownership percentages, capital contributions, tax election preferences, and management structure. Includes member-signature template and document-vault storage.
Doing this in New Hampshire specifically: New Hampshire operating agreement drafting covers the clause set, the RSA 304-C defaults each clause displaces and the single-member charging order point. None of it is filed with the State.
Every section cited here was read in the New Hampshire General Court's own text of RSA 304-C. Confirm the current wording before relying on it.
Disclosure. File.Business is a private filing service, not a government agency and not a law firm. We prepare and submit filings at your direction, and nothing on this page is legal or tax advice. Filing fees, deadlines, and statutory references are current as of the last-updated date shown above and can change. Confirm current requirements with the relevant state agency before you file.
