If you are an entrepreneur or business owner, you may be aware that there are many advantages to forming a corporation. A corporation separates the shareholders from the entity and can provide personal liability protection. However, you may be wondering, “how do I form a corporation in New York?” It’s crucial to understand there are a number of formalities required and steps that must be taken to form this type of business entity.
1. Select a Corporate Name
Selecting a corporate name is the first step in forming a corporation in New York. The name you choose must be different from the names of other entities already filed with the New York Secretary of State. It must also include the word “Incorporation,” “Incorporated,” “Limited,” or an abbreviation of any of the foregoing. A name may be reserved for up to sixty (60) days by filing an Application for Reservation of Name with the New York Department of State Division of Corporations.
2. Appoint a Board of Directors
A board of directors provides oversight for the corporation and makes decisions on behalf of the shareholders. New York corporations must have at least one director — this individual can be the corporation’s founder or a shareholder but is not required to be.
3. Establish Bylaws
Bylaws must be established to govern the board of directors and approved at the organizational meeting. While bylaws are not filed with the state, they set the ground rules for the operation of your corporation. Your banking institution or any creditors may also require bylaws to demonstrate that your corporation is legitimate.
4. Designate a Registered Agent
Every corporation in New York must appoint the New York Secretary of State as the registered agent for the purpose of service of process. The Secretary of State will forward any correspondences and legal notices it receives to the address you provide. You may also appoint a registered agent while allowing the Secretary of State to remain your primary agent.
5. File Certificate of Incorporation With the Secretary of State
In order to legally form your corporation, a Certificate of Incorporation must be filed with the New York Secretary of State. The certificate must include specific information including the corporation’s name, purpose, the county in which it is located, and the stock structure. In addition, the certificate must indicate the designated agent for service of process and list their name and address.
6. Issue Stock
A corporation of any size can issue stock certificates to shareholders in return for their capital contributions. The shares may be issued with a par value or no par value. Many smaller corporations issue stock at no par value, which can be sold at any price.
7. File the Biennial Statement
New York State requires every corporation doing business within the state to file a Biennial Statement with the Department of State biannually. The statement must be filed during the same calendar month in which the certificate of incorporation was filed.
8. Ensure Compliance with Tax and Regulatory Requirements
There are additional regulatory and tax requirements that may be applicable to your corporation. For instance, you must obtain an employer identification number (EIN) with the Internal Revenue Service for federal tax purposes, as well as comply with New York State tax law — regardless of whether the corporation conducts business or makes a profit.
Contact an Experienced New York Business Attorney
If you are wondering “how do I form a corporation in New York?” a knowledgeable business attorney can best advise you regarding business formation and compliance with the necessary requirements. Brinen & Associates provides high-quality legal services and reliable counsel for a wide variety of business law matters in New York. Call (212) 330-8151 or send us a message to schedule a consultation.