How To Incorporate In New York
- Optional: Choose a Registered Agent Service: In New York, the Secretary of State acts as the registered agent by default, though you may choose to use an alternative service.
- Optional: Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553.
- Hold an Organizational Meeting to properly organize the corporation, take contributions from the shareholders, elect directors and officers, issues stock, adopts the Corporate Bylaws and more.
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How To Get Consent From The Tax Department
- File a final corporation tax return. Use the form you normally use, but mark an X in the box marked Final at the top of the return.
- You may also choose to e-file your final return. You must use e-file software thats been approved by the Tax Department.
- If the current tax year form is available, you must file using that years tax form. If the current years form is not yet available, taxpayers may file a short period report using the prior years form. The computation of the tax on the final return needs to take into account any tax law changes that are effective for that final tax year. Payment of the tax must be submitted in conjunction with such report.
- Mail your returns and payments to the appropriate address .
- When we receive the final return, well check to see if the corporation is up-to-date with its returns and taxes. This includes any taxes and returns due for any part of a year in which the corporation was in existence.
- If your corporation has filed all its returns and paid all its taxes, well issue a written consent to dissolve the corporation.
- If not, well send you a letter telling you what you need to do before we can give our consent.
What Are The Differences Between A C Corporation And An S Corporation
One of the key advantages of a C corporation is that it can have an unlimited number of shareholders. Businesses that anticipate hundreds or thousands of shareholders will want to form a C corporation. For example, publicly traded companies are usually C corporations.
C corporations may also deduct the cost of fringe benefits they provide for employees, such as health and disability insurance. Stockholders in a C corporation are not required to pay tax on the fringe benefits received, as long as 70 percent of the corporation also receives the same benefits. It’s quite easy for a C corporation to raise capital because they’re able to issue an unlimited number of shares across multiple classes of stock. Also, investors have limited liability for the actions of the business.
S corporations are entities that elect to pass corporate income, losses, credits, and deductions through to their stockholders for federal tax purposes. The main disadvantage of an S corporation is that it’s not allowed to have more than 100 stockholders. Shareholders in both S and C corporations are required to pay personal income tax on the following transactions:
- Dividends paid.
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How To Start A Corporation In New York
Starting a corporation in New York is easy with our 5 step guide. You can start a corporation by filing formation documents with your state and setting up a board of directors.
Well show you how to start a corporation in New York yourself.
Or simply use a professional service:
2021-10-07
S To Form Your New York Corporation
To start a corporation in New York, you must file a Certificate of Incorporation with the New York Department of State.
To simplify the process of forming a corporation in New York, weve put together 10 easy steps to form your business:
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File The New York Certificate Of Incorporation
You will need to file Form DOS 1239 – Certificate of Incorporation to set up a corporation in New York. The New York Certificate of Incorporation is the document that officially creates your New York corporation. You can file it online, by mail, by fax, or in person with the New York Department of State. The filing cost is $125.
This document will cover the basics of your corporation, including:
- Corporate name and county in which its main office will reside
- Registered office address
- Incorporator name and address
The Certificate of Incorporation form issued by the New York Department of State only authorizes 200 common shares without par value. If your corporation needs a multiple share class structure or more than 200 common shares, you must compose your own Certificate of Incorporation.
The Certificate of Incorporation form issued by the New York Department of State only authorizes 200 common shares without par value. If your corporation needs a multiple share class structure or more than 200 common shares, you must compose your own Certificate of Incorporation.
What is a Share Class?
A share class is a group of shares that have a unique set of rights and privileges compared to other shares of the same corporation.
We recommend starting with a high number of authorized shares. Many attorneys suggest 10 million. By starting with a high number, you have the flexibility to issue shares as needed without paying legal fees to increase your initial authorized shares amount.
Create A Name For Your Nys Corporation
When naming your New York Corporation, you will need to:
- Follow New York Name Requirements
- Complete a Name Search With the New York Department of State
- Consider Securing a Domain Name
Name Requirements
First, you will need to choose a name that complies with New York Secretary of State naming guidelines:
- Your name must contain the word corporation, incorporated, limited, or an abbreviation of one of these terms.
- Your name must be distinguishable from any existing business in your state. This includes New York reserved names.
- You must receive approval and/or meet certain conditions to include certain restricted or prohibited words.
- Your name cannot include words that could confuse your corporation with a government agency .
- Your name cannot contain any word, phrase, or abbreviation that is indecent or obscene or that ridicules or degrades any person, group, belief, business, or agency of government.
You can also read the New York state statute about corporation naming guidelines for more information.
Name Search With the New York Department Of State
You will need to check name availability by searching the business name database on the New York Department of State website.
This tool is also useful if you decide to register an assumed name or DBA for your company. For detailed information about setting up a DBA for your New York corporation, check out our How to File a DBA in New York guide.
Name Reservation
There is a $20 fee to file your New York Name Reservation.
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New York State Corporation Tax Requirements
Depending on the nature of your business, you may be required to register for one or more forms of state tax:
New York Sales Tax
If you are selling a physical product, youll typically need to register for a seller’s permit through the New York Business Express website. This certificate allows a business to collect sales tax on taxable sales.
Sales tax, also called “Sales and Use Tax,” is a tax levied by states, counties, and municipalities on business transactions involving the exchange of certain taxable goods or services.
Read our sales tax guide to find out more.
New York Employer Taxes
If you hire employees, you will need to register for New York Employer Taxes through the New York Business Express website. This includes Employee Withholding Tax, Unemployment Insurance Tax, and Disability Insurance.
Five Handle Taxation Requirements
Federal Requirements
The vast majority of PLLCs require a federal tax ID number, or EIN. An EIN is basically the business version of a social security number, and its used for a variety of important PLLC functions.
For instance, youll need an EIN if you want to hire any employees, and many banks require them to open business bank accounts as well. Youll also need one for tax purposes, hence the name federal tax ID number. Get an EIN for your LLC for free through the IRS.
State Requirements
New York has a number of state taxes, such as corporation franchise tax and sales tax, that may apply to your business. Which New York state taxes apply to your PLLC will depend on how your PLLC is treated for federal tax purposes and its specific business activities. More information about New York state taxes is available on the New York Department of Taxation and Finances website. You can also review the New York State Tax Guide for New Businesses to learn more about business taxes in the state.
Note that certain business taxpayers are required to file electronically. The Department of Taxation and Finance offers a number of other online services for business taxpayers as well.
Local Requirements
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Professional Limited Liability Entities
NYSEDs Office of the Professions, in conjunction with the State Boards for the Professions, administers regulations for more than 50 professions in New York. Unless practicing as individuals or general partnerships, entities practicing these professions must register as a professional corporation or a professional LLC .
General partnerships practicing a profession can register as an LLP, if limited liability status is desired but unlike professional corporations and PLLCs, LLPs do not need to obtain consent. While they need to abide by the same entity naming rules , LLPs only need to file a certified copy of their registration certificate, as filed with the Secretary of State, with NYSED. However, CPA partnerships both general and limited liability must register with the NYS Board for Public Accountancy.
Excluded from the NYSED Office of Professions regulatory purview is the legal profession. For professional entities practicing law, a Certificate of Good Standing for the attorneys who make up the entity must be obtained from the New York State Bar Association and submitted with a Certificate of Incorporation or Articles of Organization.
For PCs and PLLCs practicing other professions, the process for obtaining approval gives these entities authorization to practice their profession in New York and enables them to file formation or qualification documents with the Secretary of State.
Annual And Ongoing Requirements
DBA: Your Fictitious Business Name should be valid for 5 years at which point youll need to renew it with the county.
LLC: New York LLCs and corporations must file a biennial report during their anniversary month of incorporation.
Corporation: New York corporations must keep complete books and records of account at their principal place of business. These records must include minutes of all shareholder, executive, and director meetings, list the names and addresses of all shareholders, the number and shares of each, and the date each became a shareholder. LLCs and Corporations will pay a filing fee.
Franchise Taxes: New York businesses are required to pay an annual franchise tax based on several categories, outlined here.
which can automate most or your ongoing compliance tasks.
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File Certificate Of Incorporation
Your corporation is legally created by filing a Certificate of Incorporation with the New York Secretary of State . The certificate must include the corporation’s name the corporate purpose the county in New York in which its main office is located the stock structure the designation of the SOS as the corporation’s agent for service of process and the name and address of the person to whom the SOS should mail any process received.
The SOS has developed an optional Certificate form that includes a general purpose clause and authorizes the corporation to issue 200 shares of common stock with no par value. If more shares and/or a par value are desired, rewrite this portion of the form to insert the desired number of shares and a statement of their par value or that they are without par value.
The certificate may be filed online or by mail. The fee for filing the Certificate of Incorporation is $125.
Form A New York Professional Corporation Today
Learn how to start your New York professional corporation today using our fast, expert services and support.
New York law permits certain licensed professionals to form a professional corporation , referred to by New York statute as a professional service corporation, to shield the personal assets of shareholders from liability for debts of the business. ZenBusiness has compiled a step-by-step guide to New York PCs to help business professionals determine whether a PC is the right entity for them.
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What Are The Publication Requirements For Limited Liability Company Law And Partnerships In New York
Publication must be done once a week for six weeks consecutivly in two newspapers in the county in which the office of the limited liability entity is located. One newspaper must be “printed daily” and the other “printed weekly.” The newspapers must be designated by the county clerk.
The printer or publisher of each newspaper will provide you with an Affidavit of Publication. A Certificate of Publication, with the Affidavits of Publication annexed thereto, must be filed with the Department of State, Division of Corporations.
Failure to comply with the publication requirements within 120 days after the formation or qualification of LLC are will have their authority to carry on, conduct or transact any business suspended.
Choose A Corporate Name
Your corporation’s name must include the word “Incorporation,” “Incorporated,” or “Limited,” or an abbreviation.
Your corporation’s name must be recognizably different from the names of other business entities already on file with the New York Secretary of State. Names may be checked for availability at the New York Department of State Division of Corporations business name database.
You may reserve a name for 60 days by filing an Application for Reservation of Name with the New York Department of State Division of Corporations. The application must be filed by mail.
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What Is An S Corporation
An S corporation is an incorporated business that is taxed as a pass-through entity. This means that S corps do not pay federal taxes on their business income. Instead, the business profits “pass-through” to the owners of the S corp, who are also known as shareholders. Then, the shareholders pay income tax and report their share of the profits in the form of salaries on their individual tax returns, which are then taxed.
In order to elect an S corporation status for tax purposes, corporations will need to file Form 2553 – Election by a Small Business Corporation. The form must be signed by all shareholders and must be filed within two months and 15 days after the start of the initial tax year.
To learn more, read our What is an S corporation guide.
Requirements For The Certificate Of Incorporation
The document required to form a corporation in New York is called the Certificate of Incorporation. The information required in the formation document varies by state. New York’s requirements include:
- Officers.Officer names and addresses are not required to be listed in the Certificate of Incorporation.
- Stock.Authorized shares and par value must be listed in the Certificate of Incorporation. An increase in the number of shares or par value can affect initial filing fees.
- Registered agent.Listing the name and address of a registered agent is optional in New York. Corporations must, however, include the address to which legal documents, such as Service of Process, should be sent. The registered agent or person at the Service of Process address must be available during normal business hours.
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What Are The Benefits Of A Corporation In New York
There are many benefits to forming a corporation in New York.
First, theres less risk for owners, as the corporate structure creates an entity entirely separate from the individuals forming the business. This provides owners more personal protection financially and legally.
The issuance of stock also makes it easier for corporations to raise capital and obtain funding. Its also easier for corporations to offer retirement plans and transfer ownership.
Specifically, there are many advantages to forming a corporation in New York, including tax incentives, financial support for small business owners, and professional development opportunities.
There are some disadvantages to incorporation, as well. C corporations can experience double taxation first on their profits as a corporation, and again when their shareholders are taxed on their dividends.