There are a few requirements that must be met in order to form a corporation in the state of New York.
Incorporating in New York undergoes three major processes: a) choosing a business type, submitting the requirements and settling the fees, b) stating facts about your business, 3) and finally, starting to run the operations. By now, you must have realized that incorporating your company is the next big thing for your business as it expands not only your network but also improves your relationship with the government concerned and the community. The process of NY incorporation is fairly fast especially if you already have these requirements at hand.
Requirements for Forming a Corporation
First, decide on the name of your company. If you are already an existing business entity, you will have to put either Incorporation (Inc.), Corporation, (Corp.), or LLC as an extension title of your business name.
Next, state some of the most important details on your Certificate of Incorporation form. This information includes:
Minimum number of directors – the required number is not less than three unless there are only two shareholders that make up your executive board aside from you. Otherwise, name at least three of them. It is not required to name all other shareholders from the minority or majority group.
Residence – the NY corporation law does not require business owners who wish to incorporate in the state to establish a physical address within their boundaries. Thus, you may opt to include or not to include the address of your operations especially if it is outside New York.
Age – the law mandates that all members of the board of directors must be 18 years old and above. This is to ensure that they are legally binding to be held liable for all company resources and dealings.
Stocks – if you have changes in the number of stocks, you may be required to settle additional fees.
After this, the state government mandates you to settle specific taxes and fees to fuel your application as a NY incorporation. You must file an annual income statement not later than June 1. It is required to submit all your statements of income and assets for the last five years. There is a filing fee of $9. Annually, you also need to pay franchise fees. New York imposes relatively higher taxes than other neighboring states primarily because it is among the world’s center of financial transactions. Your annual franchise tax is primarily based on two factors:
The 8% of your annual net income
0.178% of your capital which should not exceed $350,000 or 2.5% of the taxable income
You are also mandated to pay a subsidiary tax amounting to 0.9 mill per $1 of its capital
If your annual net income is lower than $290,000, you are qualified to avail of New York’s guaranteed lower rate for small-scale businesses.
The computation is different if your company is categorized as an S corporation.
For existing companies, you are required to submit your Employer Identification Number (EIN) which will be used as your ID when you remit taxes to the government. For new applicants, once the incorporation is approved, your EIN will also be released.