Start a New York Corporation

Step 1: Name your New York corporation

Your first step when setting up your New York corporation is to choose a business name that fits your product or service.

New York Business Naming Requirements

Before you incorporate, ensure your top New York corporation name choice is available for use. You’re not allowed to choose the same name as an existing company in New York.

Luckily, it’s easy to check your chosen name with our business name checker. The state of New York also has a business entity database you can check. When brainstorming names, have a few options in case one is taken.

Other business name considerations for your New York corporation:

• Your company name has to include a designator to indicate the type of business it is. It must be one of the following words or abbreviations: Incorporated, Corporation, Limited, Inc., Corp., or Ltd.
• Incorporated means your company has been established as an entity separate from the individuals who have formed it. This limits their liability in the event of a lawsuit. Shareholders and others leading the company have limited liability when it comes to the business’s debts and legal issues.
• Certain words and phrases are also prohibited from being used in corporate business names in New York. You might be surprised by some of the restricted words, like: “Olympic,” “Chamber of Commerce,” “Academy,” “Redevelopment,” “Education,” “Handicapped,” and many others. 
• Check the New York Secretary of State’s complete list of restricted words before finalizing your name.

Naming a NY Professional Corporation

There are a few unique nuances to address when you’re naming a professional corporation. For the most part, you’ll need to uphold all of the requirements mentioned above, plus the following regulations:

• Your name cannot include the name of a deceased shareholder unless their name was part of your business name before they died, OR the deceased person’s name was part of an existing partnership name, and the partnership has turned into a professional corporation with at least two-thirds of the partners becoming shareholders
• Your name must end with the designator “Professional Corporation” or “P.C.”
• Design corporations must end their name with the designator “Design Professional Corporation” or “D.P.C.”

Business Name Trademarking

Once you’ve settled on a name that works for your brand, check to make sure it isn’t trademarked.

Names can be trademarked on the federal or state level. To see if your desired name has been trademarked in New York, call the state records office of the New York Department of State at (518) 473-2492. To search federal trademarks, visit the United States Patent and Trademark Office (USPTO) website.

After you determine that your name is legally available, consider registering your own trademark at the state and/or federal levels. Federal registration comes with broader protection, which is valuable if you plan to do business outside of New York. Visit the USPTO website for more information on federal registration. 

To register a trademark in New York, you will need to fill out a form and submit it with a filing fee. It is often quicker and easier to file at the state level. You can learn more about New York trademarks on the NY.gov website.

Note that if you need some time before you file your Certificate of Incorporation with New York, you can reserve your chosen name for up to 60 days. You’ll need to pay the filing fee and mail the form to:

New York Department of State
Division of Corporations
One Commerce Plaza
99 Washington Avenue
Albany, NY 12231

DBA Names

Determine if you want to use an assumed name, commonly referred to as a “doing business as” (DBA) name in other states. This is another name you can use to operate your corporation in New York. To use it, you will need to submit a Certificate of Assumed Name with a fee, plus an additional fee for every county where your New York corporation conducts business.

Website Domain

Finally, once you’ve chosen a name, you may want to create a website for your business. Before you register your business as a corporation, it’s a good idea to see if an available website domain name matches your business name. Once you’ve found one, you can partner with ZenBusiness to obtain the domain name on your behalf.

Step 2: Appoint your directors

Once you’ve established a name, your next step is to appoint a board of directors. Your board’s primary job is to provide oversight for your organization, particularly regarding financial matters.

New York Requirements

In New York, corporations are required to have at least one director. These directors must be at least 18 years old, but they don’t need to be residents of the state. It’s important to note that the company’s founders and shareholders may be directors. At the same time, directors are not required to be shareholders of the business.

For New York professional corporations, the requirements are a bit stricter. Under professional corporation law, the directors of a PC must be licensed in the same profession as the corporation. The directors must also be shareholders of the corporation or actively engaged in its profession. There are a few exceptions to this:

• Design professional corporations can have some non-licensed directors as long as at least 75% of the directors are licensed shareholders or practicing professionals. At least 75% of the officers, the president, the chairperson of the board, and the CEO must also be licensed for this exception to apply.
• Accounting firms can have non-licensed directors as long as a simple majority of the directors and officers, the president, chair of the board, and CEO are licensed accountants.

Bylaws

You also need to establish bylaws to govern your board of directors, who will approve them at an organizational meeting. You should hold this meeting before incorporation, but New York law allows you to hold this meeting after filing.

At this same organizational meeting, those incorporating the business will present and sign a document that formally appoints the board of directors and transfers certain powers and actions. It’s also a good time to establish your company’s share structure. 

Step 3: Choose a New York registered agent

Every state requires a corporation to have a registered agent, sometimes referred to as an “agent for service of process.” This is an individual or entity designated to receive legal documents and state correspondence — such as tax notices and subpoenas — for your business.

New York Registered Agent Requirements

New York is unusual in that it requires you to list the New York Secretary of State as your registered agent. However, state law also allows you to appoint a registered agent in addition to the Secretary of State (the Secretary of State office remains your primary agent). This agent can be a resident of New York, someone with a business address in New York, or a corporation authorized to do business in the state.

New York Registered Agent Services

A registered agent service can help fulfill this role by ensuring you’re quickly notified when important notices arrive and by organizing and safekeeping important correspondence for you. Take advantage of our registered agent service in New York.

Step 4: File the New York Certificate of Incorporation

Once your company name, directors, and registered agent are in place, you’re ready to file your Certificate of Incorporation with New York’s Department of State. Filing this document establishes your business as a New York corporation.

When filing a Certificate of Incorporation in New York, you’ll need the following information and items:

• The name of your corporation
• Your business address, including the county where it’s located
• A statement of purpose
• A copy of your name reservation certificate, if you have one
• Information about your corporation’s authorized stock
• An address where the Secretary of State can mail any process they receive in their role as registered agent
• The duration of your corporation, if not perpetual
• Names and addresses of your incorporators
• A filing fee ($130 for for-profit companies, $75 for nonprofit organizations)

You’re not required to use the state’s designated form if filing by paper. You can create your own and add any optional provisions, as long as they’re legal. For example, the state’s form lists an authorized stock structure of 200 shares with no par value. If you’d rather have a different number of authorized shares with a certain par value, you can make your own certificate.

Filing Your Certificate of Incorporation

You can file your Certificate of Incorporation by mail, forwarding the form and payment for the filing fee to: 

New York Department of State
Division of Corporations
One Commerce Plaza
99 Washington Avenue
Albany, New York, 12231

Other filing options include in-person or by fax, but the easiest method is using the Department of State’s online filing system.

Filing the Certificate of Incorporation for a Professional Corporation

New York professional corporations have some additional requirements to address when filing their formation paperwork. For starters, you’ll need to use a different version of the form, the Certificate of Incorporation for a Professional Corporation. This form requires a lot of the same information as the normal Certificate with additional details like the profession you’ll be practicing.

New York law also requires you to attach a Certificate of Good Standing or a Certificate of Authority (Form PLS709) to your filing. These certificates are obtainable from your appellate division, the New York State Department of Education, or the Division of Professional Licensing Services. Without this attachment, your filing will be rejected.

The filing fee for the professional corporation Certificate of Incorporation is $130, but we recommend you spend an extra $10 to get a certified copy of the Certificate. That’s because you’re required to send a certified copy to your industry’s licensing board within 30 days of filing your formation documents. Getting the certified copy upfront will help streamline that process.

Step 5: Create corporate bylaws

Creating corporate bylaws is an important step in launching your business. This legal document will define how your company governs itself.

Among the items your bylaws might include are:

• A statement of purpose
• Defined operational guidelines
• A list of duties and responsibilities of all shareholders
• A list of rights and powers of shareholders, officers, and directors
• The process for electing and removing officers and directors
• Annual meeting scheduling and goals
• Plans for stock distribution, sales, and transfers

Your company’s incorporators should adopt the bylaws at your organizational meeting. After this, they can be adopted, amended, or repealed by a majority shareholder vote. For professional corporations, bylaws must follow regulations specific to the profession and ensure compliance with state laws governing professional services.

While you aren’t legally required to file your bylaws with the New York Department of State, you are still expected to maintain them as internal documents.

Step 6: Draft a shareholder agreement

As you launch your New York corporation, another integral document is your shareholder agreement. This legal contract is designed to protect the rights of your stockholders — both majority and minority investors.

This document should clearly define who can be a shareholder in your company and provide safeguards for minority positions. Any restrictions on the transfer of shares should also be included.

Finally, your agreement should define the value of a single share of your company’s stock and details on payments in the event of a company sale.

Step 7: Issue shares of stock

As a corporation, you’re required to issue stock in your company.

When you filed your Certificate of Incorporation, you designated the number of shares that you hoped to issue. Legally, you can issue any number of shares up to the figure you filed.

Assigning Value to Stock

As you launch your company, you also need to assign a value to your stock. You can determine this number by anticipating your corporation’s future performance and dividing it by the total shares of stock offered. After this, the value will fluctuate based on supply and demand.  

Private vs. Public Issuing

Your corporation’s stock may be issued privately or publicly. A privately traded company is typically owned by its founders, managers, or a small group of investors. If your company is public, a portion of your corporation’s stock must be made available to the public.

If your corporation is public, you’re legally required to keep track of stock purchases and sales. These transactions must be reported to the U.S. Securities and Exchange Commission (SEC). You must also register with New York’s Investor Protection Bureau as a broker-dealer.

However, this often doesn’t apply to small corporations making an unadvertised private sale of their initial shares, so check with the Investor Protection Bureau about your situation.

Issuing Shares as a Professional Corporation

The rules are a little stricter if you’re going to issue shares as a PC. Generally, under state law, a professional corporation may only issue shares to individuals who are licensed in the corporation’s profession. There are, however, a couple of exceptions to this rule:

• Design PCs may issue shares to non-licensed employees as long as at least 75% of the directors and officers are licensed along with the president, CEO, and chair of the board. Additionally, the largest shareholder of the corporation must be a licensed professional or an employee stock ownership plan, 75% or more of which is owned by licensed professionals.
• Accountancy PCs may issue shares to non-licensed employees as long as a simple majority of its shares are held by licensed accountants. Over half the directors and officers, the president, the CEO, and the chairperson of the board must also be licensed accountants.

Step 8: File for an EIN and review tax requirements

After you incorporate your business, you’re required to apply for a federal Employer Identification Number (EIN). Like a Social Security number for an individual, this nine-digit number is used for business identification and tax purposes.

You can apply for an EIN for your corporation by visiting the IRS website. The process is free.

Once you’re assigned an EIN, you must register it with New York, especially if you have employees. This number is used to track your employees’ wages, unemployment claims, and tax withholdings. Your EIN is also needed for your corporation to file its federal and state taxes each year.

Need an EIN? We can register for yours with our EIN service.

Step 9: Apply for necessary business permits or licenses

Even after you file your Certificate of Incorporation, you’ll need to acquire the required licenses and permits to operate. This step is especially important for professional corporations, whose very existence is governed by a licensing board; the shareholders, directors, and employees that offer the corporation’s professional service will all need to be licensed

Unfortunately, there’s no one-stop shop for all the necessary licenses and permits. Licenses vary by industry and location and could include federal, state, and local requirements. Luckily, the New York Business Express offers new business owners a helpful tool that creates a checklist of required New York forms, licenses, and permits tailored to their specific situations.

Check with the economic development offices at the county and city levels to learn about any permits or licenses that you’re required to obtain through these local municipalities.

Step 10: Submit your corporation’s first report

All New York corporations must file a New York Biennial Statement with the Department of State every two years.

Your first report should be filed in the calendar month that you filed your Certificate of Incorporation.

The statement should include:

• The name and business address of the company’s chief executive officer
• The address of its main office
• The address where the Secretary of State forwards copies of official documents received on the corporation’s behalf
• The number of members on the board of directors
• The number of female directors

Corporations can file their Biennial Statement online through the Department of State’s e-Statement Filing System. There’s a small filing fee for this transaction. 

How much does it cost to start a corporation in New York?

The cost to form a corporation in New York starts with the filing fee of your Certificate of Incorporation, which is $130. This cost remains the same whether you file online, in person, by mail, or by fax. You’ll also have the $9 biennial statement fee. Professional corporations need to pay an extra $10 for a certified copy of their Certificate of Incorporation, which needs to be filed with their industry’s regulatory board.

There may also be additional costs, like the name reservation fee of $20 or fees associated with licenses or permits needed to operate. All of these fees are subject to change.

ZenBusiness can help streamline the formation process with our starter package. We’ll worry about the red tape so you can focus on growing your small business.

What are the benefits of a corporation in New York?

There are many benefits to forming a corporation in New York.

Less Risk

First, there’s less risk for owners, as the corporate structure creates an entity entirely separate from the individuals forming the business. This provides owners with more personal protection financially and legally.

Raising Capital

The issuance of stock also makes it easier for corporations to raise capital and obtain funding. It’s also easier for corporations to offer retirement plans and transfer ownership.  

Tax Incentives

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.

Considerations  

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.

How is a New York corporation taxed?

How your New York corporation is taxed depends on its specific structure.

C Corporations

C corporations (c corp) are viewed as distinct taxable entities, which means they are responsible for paying corporate taxes. This means that the corporation itself is taxed on profits, and the shareholders then are taxed on their share of the profits. New York also requires them to pay an annual franchise tax. The amount is calculated based on whichever of the following is the highest tax: the company’s business income, its business capital, or a fixed dollar minimum (FDM) tax, which is determined by the corporation’s New York State receipts.

C corporations may also have to pay a metropolitan transportation business tax if they do business or have office space in what’s known as the Metropolitan Commuter Transportation District (MCTD). This district is made up of the counties of New York, Bronx, Kings, Queens, Richmond, Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester.

S Corporations

An S corporation (s corp) refers to a tax status a C corporation or a limited liability company (LLC) can apply for with the IRS. Under this structure, you avoid double taxation because the business itself is not federally taxed on profits, only the shareholders when they receive their share of profits.

If your business is registered as a federal S corporation, it isn’t automatically recognized as one by New York. To elect S corporation status for New York tax purposes, your shareholders will need to select this designation by filing form CT-6. If you successfully apply, New York will still charge your S corporation a franchise tax, but it will be a fixed dollar minimum tax based on New York receipts. Also, the metropolitan transportation business tax doesn’t apply to S corporations.

Nonprofit Corporations

Nonprofit corporations can apply to the IRS to be exempt from federal income tax. New York nonprofits can also submit an application to the state to be exempt from the state’s franchise tax. They also may be able to apply for a sales tax exemption.

We can help!

Ready to create your corporation? While we don’t currently offer formations for professional corporations, we can help you form your standard corporation in minutes with our corporation filing service. We also offer a variety of other services, quick filing for other business entities like LLCs and worry-free compliance once your corporation is up and running.