Set up a Profitable Business in New York
For A Name’s Sake
The New York Business Corporation Law requires three things in regards to the name of the corporation. They are as follows:
- The name must include one of the following words (or an abbreviated version): corporation (corp), incorporated (inc), or limited (ltd).
- A corporations name cannot be the same as another corporation or partnership on file with the Department of State
- Certain words are prohibited in the name of the corporation. The complete list of restricted words can be found here.
- The availability of the chosen name can be searched by writing to the Department of State Division of Corporations. These inquiries must be done by mail, and a $5 fee must accompany the request for each name to be searched.
You may also chose to file an Application for Reservation of Name . This optional form reserves the name for 60 days, and may be extended twice each time for a 60 day period.
Forms to File
In order to be legally recognized as a corporation in the state of New York, a Certificate of Incorporation must be filed with the New York Secretary of State. This form will list:
- The name of the corporation (see rules for naming a corporation above)
- The county in which the corporation will operate
- The purpose of the corporation. Certain purposes will require the approval of state agencies. A complete list of those exceptions can be found here
- The stocks allowed to be issued by the corporation and their value. Note: When the corporation is formed, a minimum of $10 tax on authorized shares must be paid. This tax will increase if the number of shares to be authorized by the company is more than 200.
- The New York Secretary of State must be designated as the agent for service of process by any corporation formed in the state. This allows the Secretary of States office to accept any papers served against the corporation should it be involved in a lawsuit. The corporation must keep a current address on file to avoid default.
- The name and address of any incorporators
The fee to file this form is $125, plus the amount of tax on shares required. The form can be filed online, in person, by mail, or fax.
The New York Department of State requires all corporations doing business in the state to file a Biennial Statement every other year. The statement is mailed to the address on file for your corporation, and is due in the calendar month of which your original Certificate of Incorporation was filed.
As the old adage goes, “the only things certain in life are death and taxes,” that is not something to be overlooked when starting a business in New York. From the time the corporation begins until it is legally dissolved by the Secretary of State, the New York State Tax Law requires a franchise tax to be paid. This tax is assessed even if the corporation did not do business, or experienced a loss.
The corporation will need to have an employer identification number (EIN) from the IRS for federal tax purposes. To get this, go to the IRS website. If you are choosing to operate as an S-Corp, you will also need to file Form 2553 “Election by a Small Business Corporation” that must be signed by all shareholders. This form can also be found on the IRS website.
Finally, it is important to know that the state of New York will not automatically recognize your corporation as an S-Corp unless you are mandated to file that way under the State Tax Law. To make the New York S-Corp election, form CT-6.1 must be filed with the state.
For more information on paying state taxes as an S-Corp, please visit the Department of Taxation and Finance.