How to Form a Corporation in New York
To establish a corporation in New York, here's everything you need to know.
To form a corporation in New York, you need to take the steps set forth below. To find out what’s required to form a corporation in any other state, see Nolo’s 50-State Guide to Forming a Corporation.
1. 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 of Name with the New York Department of State Division of Corporations. The application must be filed by mail. The filing fee is $20.
2. Prepare and 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: corporate name and county in which main office is located; street address; number of shares the corporation is authorized to issue; name and address of incorporator.
The certificate may be filed online or by mail. The fee for filing the Certificate of Incorporation is $125 plus the applicable tax on shares. The minimum tax on shares is $10. The tax on 200 no par value shares is $10 (total $135). Corporations wishing to be authorized to issue more than 200 shares no par value or par value shares totaling more than $20,000 must pay an additional tax at the rate of 5 cents per share of no par value stock and 1/20 of one percent (.05%) of the par value of the shares that have a stated par value
3. Appoint a Registered Agent
Every New York corporation must appoint the New York Department of State as its registered agent for service of process in the state. The Department will accept and forward legal papers on the corporation's behalf if it is sued.
4. Set Up a Corporate Records Book
Set up a corporate records book in which you keep all of your corporation's important papers, including minutes of director and shareholder meetings, stock certificates, and stock certificate stubs. Keep your corporate records book at the principal office of your corporation. You can use a three-ring binder as the corporate records book or you can order a special corporate records kit through a corporate kit supplier.
5. Prepare Corporate Bylaws
Bylaws are an internal corporate document that set out the basic ground rules for operating your corporation. They are not filed with the state. Your corporation is not legally required to have corporate bylaws, but you should adopt them because they (1) establish your corporation's operating rules, and (2) help show banks, creditors, the IRS, and others that your corporation is legitimate. For corporate bylaw forms, see Nolo’s website or Incorporate Your Business, by Anthony Mancuso (Nolo). Corporate kits also typically contain sample bylaws.
6. Appoint Initial Corporate Directors
The incorporator—the person who signed the articles—must appoint the initial corporate directors who will serve on the board until the first annual meeting of shareholders (when the board members who will serve for the next term are elected by the shareholders). The incorporator must fill in an “Incorporator’s Statement” showing the names and addresses of the initial directors. The incorporator must sign the statement and place a copy in the corporate records book. The statement need not be filed with the state. For a sample Incorporators Statement, see Incorporate Your Business, by Anthony Mancuso (Nolo).
7. Hold Your First Board of Directors Meeting
The first meeting of the corporation's board of directors should be held at which the directors can appoint corporate officers, adopt bylaws, select a corporate bank, authorize issuance of shares of stock, set the corporation's fiscal year, and adopt an official stock certificate form and corporate seal. The directors' actions must be recorded in corporate minutes prepared by the incorporator or any of the directors. Additionally, if the corporation will be an S corporation, the directors should approve the election of S corporation status. It is usually necessary to prepare the minutes over one or two weeks, and then send them to all the directors for their signature. For corporate meeting minute forms, see Nolo’s website or refer to Incorporate Your Business, by Anthony Mancuso (Nolo).
8. Issue Stock
Issue stock to each shareholder. Although not legally required in most states, small corporations usually issue paper stock certificates. Enter each shareholder's name and contact information in the corporation’s stock transfer ledger. A share of stock in your corporation is classified as a security under state and federal securities laws that regulate the offer and sale of corporate stock.
However, the federal government and all states exempt most small corporations from these laws. For example, federal law exempts "private offerings": a non-advertised sale to a limited number of people (generally 35 or fewer); most states have enacted their own versions of this SEC exemption. Visit your state securities office website for information about your state's securities laws. Links to all such offices can be found at the Contact Your Regulator web page of the North American Securities Administrators Association.
9. Comply with New York Biennial Statement Requirements
All corporations doing business in New York must file a Biennial Statement with the Department of State every other year. The statement is due during the calendar month in which the corporation's original certificate of incorporation was filed. The statement form will automatically be mailed to your corporation's address on file with the Secretary of State. The filing fee is $9.
10. Comply With Other Tax and Regulatory Requirements
Additional tax and regulatory requirements apply to your corporation. These include:
EIN: Your corporation must obtain a federal employer identification number (EIN). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
S Corporation Filing: If the corporation wants to elect S corporation status for tax purposes, it must submit Form 2553 Election by a Small Business Corporation (signed by all the shareholders. The election should be filed within two months and 15 days after the beginning of the corporation's first tax year. See the IRS S Corporation Fact Sheet for details. To elect S corporation status for New York state tax purposes, file Form CT-6, Election by a Federal S Corporation to be Treated as a New York S Corporation.
New York State Taxes: New York State Tax Law requires a corporation to file franchise tax reports and pay franchise taxes annually even if the corporation does not conduct business or loses money. Franchise tax requirements begin the date the corporate existence begins and continue until the corporation is legally dissolved by the Secretary of State. For more information, visit the New York Department of Taxation and Finance website.
Business Licenses: Depending on the nature of your business, the State of New York may require that you either obtain a license or permit. For more information, see the New York Business Permits Assistance Program website. Contact the county clerk and the clerk of the city, town, or village in which the business will operate with questions regarding local licenses or permits.
11. Foreign Corporations Doing Business in New York
All corporations organized outside of New York must register with the New York Secretary of State to do business in New York. Foreign corporations must appoint the New York Department of State as its registered agent for service of process in the state. The Department will accept and forward legal papers on the corporation's behalf if it is sued. To register, file an Application for Authority (a fillable application is available online). The application must be accompanied by an original certificate of good standing or existence, no more than one year old, from the Secretary of State or similar official of the foreign corporation's home state. The filing fee is $225.
Before filing, make sure the corporation's name is available in New York by checking the New York business name database. If the name is not available, the foreign corporation must use a fictitious business name in New York. File a Certificate of Assumed Name with the Department of State Division of Corporations. There is a $25 fee plus an additional fee for each county in which the corporation will do business. The certificate must be filed by mail.