Our Step By Step Guide

How to Form a corporation In New York

Forming a corporation provides liability protection for any type of business, and should be among the first steps you take as a new business owner. Starting a corporation can help you protect your personal assets while adding legitimacy to your company. Follow our step by step guide or let us handle the paperwork on your behalf, ensuring your business is filed quickly and accurately.

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Why start your business in New York?

The state of New York is home to more than 1.5 million small businesses, which employ an estimated 4 million people across the state. Small businesses in New York employ over 50% of the state's workforce, making startups and small businesses critical to the state's economic health. Thanks to its diverse and well-educated population, New York offers small businesses an excellent source of skilled talent to tap into to create a successful business. Some of the world's largest companies have their roots in New York, including NBC, J.P. Morgan Chase, Time Warner, HBO, and AOL, among many others.

New York also offer ample opportunities to seek outside business investors. With a robust business climate and highly skilled workforce, the promise of prosperity creates incentives for investment in New York businesses.

Two Ways to Register Your Business

MyCorporation® can help you file all of the necessary documents to form your corporation in New York.

File and submit the formation paperwork yourself

Our free guide provides you with all of the information you'll need to form your corporation in New York. Bookmark this page as a reference so you can return easily as you complete each step of the process.

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Are you looking for another entity type? We offer several other guides for the state of New York.

One of the most important decisions you will make as a new business owner is deciding on which type of entity you will form for your business. While each business type offers its own benefits, forming a Corporation (also referred to as a general for-profit corporation or C Corp), is one of the most common entity types chosen by new businesses.

One of the reasons for the entity's popularity is that a corporation provides a business with the ability to deduct certain benefits, like employee health insurance and dental plans, which can add up to substantial savings per year. Additionally, corporations allow the issuance of stock, which helps attract entrepreneurs and venture capitalists that may want to invest in your business.

Corporations may also enter into legal contracts, borrow money or take out loans, hire employees, and create initial public offerings (IPOs) to take their businesses public.

The Benefits of a Corporation

  • Limit your legal and fiscal responsibility.
    Incorporating your business separates you from your business as a separate legal entity, preventing you from being fully responsible for any debts accrued by your business.
  • Build Credibility
    Adding a corporate indicator like "INC." at the end of your business name immediately indicates credibility to potential investors, customers, or business partners.
  • Potential tax advantages
    Forming a corporation may provide a tax advantage for some businesses, allowing additional deductions for operating expenses, advertising, employee compensation, and more.

Compare the main entity types below

Entity Type
Liability
Taxation
Maintenance
Limited Liability Company Combines limited liability protection with a pass-through tax structure. IRS rules allow LLCs to choose between being taxed as partnership or corporation. The easiest entity to maintain with the least amount of formal annual requirements.
Corporation Owners / shareholders have limited personal liability for business related debts. Separate taxable entity, corporate profits among owners and corporation. Meetings are required to maintain corporate status. Stock may be sold to raise capital.
Non-Profit Corporation A corporation formed for a charitable, educational, religious, literary, or scientic purpose. Contributions to charitable corporation are tax-deductible. Can get tax exempt status with the IRS. Annual reports, minutes, meetings are required to maintain nonprofit / tax exempt status.
Tip: Try our free entity choice tool. Answer a few simple multiple choice questions about your business, and our tool can recommend the entity type that best fits the needs of your business.

The next step will be to decide on a name for your business. Choose a name that is memorable and unique, easy to understand and pronounce, and accurately represents your business. When picking out a name, remember to conduct a name search to find out whether it is available. Jot down one or two alternatives, in case the name you settle on is not available for registration in New York.

There are a few rules that New York Corporations must follow in order to register a name.

  1. First and foremost, the name you choose must be unique and not "deceptively similar" to the name of any other New York business. This is to prevent fraud or misrepresentation and is a common rule in all 50 states. You can find out whether a name is available in New York by searching the New York Department of State business entity database for possible conflicts. Be sure to check variations or alternate spellings, otherwise your filing may be rejected. You can also utilize MyCorporation's business name search service. Our team of skilled professionals will conduct a thorough search on your behalf and report back with the name's availability. As an added bonus, when you complete your corporation filings with MyCorporation we also include a business name search for free.
  2. New York corporations are not required to include a corporate indicator along with the name of their business. However, if you which to include one, some possibilities may include: Incorporated, Incorporation, Corporation, Company, Corp, Inc, Co, Ltd, Limited, PC, and Professional Corporation.
  3. Your name can also not contain restricted words such as "Bank," "University," "Academy", "Finance", "Cooperative", "Investment", or "Union," unless you obtain permission to do so from the state of New York.

You can learn more about business name entity rules and regulations in the Restricted or Prohibited Words and Phrases provided by the New York Secretary of State.

Tip: A business name check is included with every one of our business formation packages. We check with the state to determine the availability of your business name automatically. You can also conduct a nationwide business name search here.

Most states require that you designate a registered agent for your business, and New York is no exception. A registered agent (often abbreviated as RA) acts as the state's means to communicate with a business. An RA is responsible for receiving legal and official documents related to the business. This may be an individual or third party service that agrees to accept legal papers on the corporation's behalf. A corporation may not act as its own registered agent for service of process.

A registered agent can be any individual who resides in New York, or a third party registered agent service like MyCorporation who will act as a registered agent on behalf of the business. The agent must have a physical street address in New York, and a P.O. Box is not accepted. In many cases, smaller businesses will designate a director of officer of the corporation to serve as the registered agent to start and select a new agent later when the business grows.

Registered agent information is publicly available. This may cause privacy concerns for business owners who do not wish to list their personal contact information for everyone to see. It is also common for the registered agent to become a target of spam or robocalls since this private information is relatively easy to obtain. Registered agents are highly valued for their discretion. For example, if you did not have a registered agent and your business was served with lawsuit paperwork the documents would be delivered directly to your business address. This could be incredibly embarrassing for the business owner, especially if this happened in front of customers. An RA will accept the documents privately to ensure additional privacy, organize the materials, and then deliver them to the business owner. This is why many business owners opt for a third-party registered agent service like MyCorporation to act as a registered agent on behalf of their business.

Tip: Our Deluxe and Premium formation packages include a full year of registered agent services for your business. We also offer standalone registered agent services which you can add to your business later.

The state of New York requires you to file Certificate of Organization to order to form an LLC. The Articles of Organization is a simple one page form online or on paper that contains all of the basic information required to register your business. Once your Articles of Organization have been accepted by the New York Department of State's office, your business is officially formed. A standard filing fee of $200 must be included along with your application.

What information should be included in the Certificate of Incorporation?

The information required in the Certificate of Incorporation are your basic business details, including the corporation's name, the corporation's principal business address, registered agent, business purpose, and the number of shares the corporation is authorized to issue (or the stock structure). Authorizing is the same as creating. For example, when you authorize 50 shares you are creating 50 shares of stock.

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Corporate bylaws are a detailed set of rules agreed upon and adopted by the board of directors after a corporation is formed, that specify the internal management structure of the corporation. They are typically drafted by the corporation's founder or directors. Corporate bylaws are not submitted to the state.

The state of New York does not require a corporation to create bylaws upon approval of the Certificate of Incorporation, but it is strongly recommended. Bylaws allow a business to maintain consistency in the way it operates, and communicate organizational rules to help avoid conflicts and disputes. They cover how directors are elected, meetings are organized, and officer roster and summary of duties. In addition to management, bylaws specify details about ownership rights, annual meetings, and the addition or removal of officers and directors.

If you are not sure how to create corporate bylaws, you can purchase MyCorporation's customized Minutes and Bylaws Package. This kit provides you with the internal documents required to fulfill your corporate formalities and properly operate your business after incorporating.

The board of directors of a corporation are normally elected by the shareholders. However, for a new business, the incorporator (the person who signed the Articles of incorporation) will often designate the initial directors if there are no initial directors named in the certificate of incorporation. This is done by creating the "Statement of Incorporator" which will list the names and addresses of the initial directors of the business. The statement of incorporator is then signed by all of the incorporators, which passes all elements of control over to the initial directors. This is filed not with the state, but in a corporate minute book of the incorporation. It is kept as part of the corporate record.

The first meeting of the board of directors is an important time in the life cycle of a corporation. During this meeting, the initial directors of the business will adopt the corporate bylaws, set the fiscal year, and appoint corporate officers. It is also common to authorize the issuance of shares of stock to the founders of your company, usually in exchange for assets.

This meeting, and all future meetings of the board of directors, must be recorded in corporate minutes. Minutes are documents that detail what was discussed and any decisions the business makes during meetings. They are stored with the corporate records.

Corporate minutes are required for all New York corporations by law. Falling behind on keeping and maintain minutes can jeopardize the corporation's liability protection and overall tax advantages. It is important to maintain updated corporate minutes and keep copies of all the signed and approved minutes or actions by unanimous consent from any special or annual meetings of the corporation's shareholders and directors.

Stock is a representation of ownership in your corporation. When your shareholders purchase stock, they are buying a small piece of your business. Although it's not legally required, it is common that most corporations will issue paper stock certificates to their shareholders.

In a private company (not publicly traded on the stock market), you can set the value to each stock however you see fit in your corporate bylaws. For example, one share could be worth $10 or $10,000, either would be completely acceptable. If you have additional questions, you may contact the New York Department of Financial Services to learn more.

Tip: MyCorporation can help you issue stock certificates for your business, allowing you to raise money by way of outside investment.

In New York, all businesses are required to file for a general business license (sometimes referred to as a business tax certificate). If you plan on operating your business in multiple cities, you will need to apply for a business license in each location. Some additional permits may be required in addition to a general business license, which may need to be filed with the county or the state. For example, you may be required to get a seller's permit or a liquor license, depending on your company's offerings and services. You can find out about the specific licenses applicable to your business by checking with the city offices where you will conduct business, or by using MyCorporation's business license compliance package. Our team of skilled professionals will identify the licenses required by your business and provide you with all the information you need to file.

In a pinch, you can also check out the New York Business Permits Assistance Program (OPAL). OPAL helps businesses find appropriate permit information. Contact the county, city, town, or village clerk if you have more questions about local licensing and permits for your LLC.

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An EIN (also referred to as a Federal Tax ID) is a nine-digit number that is issued by the IRS and used to uniquely identify your business for tax purposes. Think of it as a Social Security Number (SSN) for your business, except an EIN is less sensitive. It is important to wait until the LLC has been approved by the state before applying for an EIN. For that reason, filing for an EIN is one of the last things to do when you are setting up a business.

  • Open business checking, savings, or investment accounts
  • File taxes for the business
  • Complete payroll for employees if applicable
  • Obtain lines of credit and credit cards, as well as "build credit" for your business
  • Apply for applicable business licenses when required.

You will only need a few pieces of information to file including your mailing address and legal business name. You can apply online with the IRS by downloading IRS Form SS-4, or work alongside a third party organization like MyCorporation to complete an EIN application.

If a New York corporation pays more than $100 in wages to employees each calendar quarter, you'll need to obtain a State Employer Identification Number, or SEIN. You'll need to register with the New York Employment Development Department (EDD).

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Frequently asked questions

In New York, a Professional Service Corporation ("PC") is formed in order to provide professional services within a single profession. According to New York's Professional Service Corporation Statute, a New York PC can be formed for "pecuniary profit for the purpose of rendering the professional service or services that the professionals are authorized to practice.

Generally, this can include the following professions:

  • Accounting
  • Acupuncture
  • Architecture
  • Chiropractic
  • Clinical social work
  • Dentistry
  • Law
  • Marriage, family, and child counseling
  • Medicine
  • Speech-language pathology and audiology
  • Nursing
  • Optometry
  • Osteopathy
  • Pharmacy
  • Physical therapy
  • Physician assistants
  • Podiatry
  • Psychology
  • Shorthand court reporters

A professional corporation provides the same benefits of a standard Corporation, with the additional formation requirement of proving the business has an effective certificate of registration issued by the governmental agency regulating their profession. Professional corporations are also governed by the agency responsible for overseeing the profession they engage in, and may have rules or limitations on the choice of name or ownership requirements.

If you are unsure if your service requires a license in the state of New York, you can check with the New York Department of Education, Office of Professions. The submission form for a Professional Service Corporation is here.

In order to keep your corporation in good standing, there are certain reoccurring requirements that must be met.

  • All corporations must file a Biennial Statement with the Department of State every other year.
  • Profitable New York corporations must submit and pay required annual tax returns, and pay out estimated corporation taxes.
  • Corporations must hold an annual meeting of the directors logged with corporate minutes.
  • Corporations must hold an annual meeting of the shareholders.

In order to form a corporation in New York, you will be required to pay various fees and taxes. The breakdown of the required fees is as follows:

  • Articles of Incorporation - $125
  • Biennial Statement - $9

There are other optional costs to consider, such as reserving a name, but in total, expect to set aside $125 - $300 to form a Corporation yourself in New York.

New York does require corporations to pay a franchise tax, although the process is fairly unique to the state and is imposed to prevent the use and abuse of tax loopholes. Simply put, the state uses four different methods to calculate possible taxes, after which the corporation is required to pay the highest amount. The four methods are:

  • Minimum taxable income
  • Total net income
  • Total business/investment capital
  • A fixed minimum tax

Whichever number is highest is the amount the corporation pays in franchise taxes. It's also worth noting that foreign corporations that only engage in interstate commerce are exempt from this tax.