How to start a New York corporation

It might seem like a lot at first, but once you understand the steps, it’s very doable. This guide will walk you through everything you need to know to start your New York corporation.

How to start a corporation in New York

Incorporating means registering your business as a corporation so the law sees it as its own entity, separate from you. Each state has its own rules for how to do this, so the process can seem confusing. Let’s go through each step: 

1. Choose a name for your New York corporation

Your corporation’s name should be unique and make a statement about your business. Make sure it complies with the following New York requirements:

• Your name should be distinguishable from that of any other registered business in New York. It must be followed by "Incorporated," "Corporation," "Limited," or an abbreviation of one of these words.
• Your name cannot be deceptive. If you're selling pizza, don't name your company "Sal's New York Dry Goods."
• Ensure that your name is distinguishable from that of any other existing corporation.
• Your name cannot contain any words that might mislead the public into thinking it's a public corporation or a government agency.

Need help coming up with a business name for your corporation? Try the Rocket Copilot™ AI Business Name Generator, a free tool to help you brainstorm business names and get started registering your corporation.

2. Decide between a New York S-Corp and C-Corp tax designation

There are similarities between a New York S-Corp and a C-Corp regarding personal liability, management, structure, and compliance. The differences, however, come down to the following:

• Ownership Rules: A C-Corp is taxed as a separate entity from its shareholders. Shareholders also report and pay taxes personally on what the corporation pays them. An S-Corp is taxed like a partnership with a "pass through" tax structure. It's not doubly taxed because the corporate entity can pass income, losses, deductions, and credits to shareholders for federal tax purposes. Corporate owners pay taxes on their share of the corporation's profits at their individual tax rates. To qualify as an S-Corp, your business must be a domestic corporation, provide only one class of shares, have no more than 100 shareholders, and your shareholders can include only individuals, certain trusts, and estates.
• Documents: If you want to form an S-Corp, you must file IRS Form 2553 to elect this status, as well as New York Form CT-6 with the New York Tax Department.

3. Appoint directors and shareholders for your New York corporation

Each state has its own personnel requirements for incorporating. In New York, you must have one or more directors. New York also requires that each corporation have a president, a chief financial officer, and a secretary. All three positions can be held by one person, but only under certain circumstances.

There is no requirement that directors must live in New York, but directors must be at least 18 years of age. You can list your directors in your Articles of Incorporation.

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have a New York address) or choose one to do that service for you (if you are not located in New York or would like an extra layer of privacy).

5. File your Articles of Incorporation with the state of New York

Once you have a business name and registered agent, you can register your business as a New York corporation with the state by filing your Articles of Incorporation. This document may be referred to in other states as "Certificate of Organization," "Certificate of Filing," or "Articles of Organization."

New York requires that corporations file other paperwork in addition to their Articles of Incorporation. You must file a biennial report every two years with the New York Secretary of State. This report is due in the anniversary month of your incorporation, and it must include the following:

• The name and address of your chief executive officer.
• The street address of your corporation's principal executive office.
• An address to which the Secretary of State can mail a copy of any legal documents served on your corporation.
• Failure to provide these reports might result in your company losing its ability to operate in New York.

6. Get an Employer Identification Number (EIN)

Before opening your doors for business, apply to the IRS for an employer identification number, or EIN. All corporations with employees in New York must have an EIN. An EIN is similar to your Social Security number, but it's for businesses. You'll also need an EIN to open your corporate bank account.

Congratulations! After you have completed all these steps, you have formed your New York corporation.

What to do after incorporating in New York

New York requires that corporations create records to maintain their corporate status, including Bylaws and Corporate Meeting Minutes. Bylaws set forth your company's operating rules, the responsibilities of its directors, and the rights and powers of shareholders. They can also address other corporate matters. We can tell you whether Bylaws and Meeting Minutes are required by each state. You don't have to file your Bylaws with the state, but you'll need them to demonstrate to banks, lending institutions, creditors, the IRS, and the courts that your corporation is valid and legitimate. Bylaws also help to establish rules so you can keep your corporate assets and debts separate from your personal ones.

Keeping Minutes of your director and shareholder meetings is also mandated by New York. Your Corporate Minutes should be maintained at either your corporate office with your other company records, or with your designated agent. The Minutes are a historical record of your corporation's decisions, tracking votes on important business decisions and helping secure your corporate status.

Still have questions? Learn more about how to start your own business with Rocket Lawyer and get started today!
 

Key takeaways Starting a corporation in New York means following state rules, like choosing a unique name, filling out paperwork, and paying fees to make it official. One important choice is deciding how your corporation will be taxed in New York, either as an S-Corp or a C-Corp. This affects how the business and owners pay taxes, and the differences between the two change from state to state. After forming the corporation, it’s required to keep records – like Bylaws and Meeting Notes – to stay in good standing with the state and prove your business is real and operating correctly.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is a corporation?
• What is an S-corporation?
• How are corporations taxed?
• How to start a corporation
• How to register a corporation by state