Incorporate in New York
The state authority handling the corporation formations in New York is the Department of State, more precisely the Division of Corporations.
The incorporation process is quite simple, limited to the followed actions: filing the certificate of incorporation, electing directors, issuing and adopting the first by-laws. These steps can be done by any individual over 18 years either for their purpose either in behalf for others. In fact, the incorporator does not need to be a shareholder or a director in the new corporation. Usually, people choose their attorney to handle the incorporation process, not because filling is difficult, but for deciding which form of business entity suits your business better, how to deal with IRS (as a C-Corp or as a S-Corp) etc.
Further reading: NY Certificate of Incorporation
New York State is not known as a very corporate friendly state, its corporate laws and taxing being regular, with no particular advantages. Therefore, people that incorporate in New York are either NY residents or indent to conduct business here but located somewhere else. If you do not fall under those two categories but you want to incorporate in the USA, perhaps Delaware or Nevada are more attractive for you.
Further reading: NY Corporate Taxing
Incorporation costs are decent, allowing all entrepreneurs to start off a legal entity for running their business. The Filing Fee is minimum $135, consisting of a $125 state filing fee plus a $10 minimum shares tax payable to the “Department of State.” The minimum tax on shares is $10. This allows you to authorize up to 200 shares without par value or par value shares with a total par value of $20,000 in your Certificate of Incorporation. If you authorize more than 200 no-par shares or par value shares with a total par value in excess of $20,000, the shares tax portion of your fee is computed differently:
- Shares without Par Value: The shares tax is 5 cents for each share authorized without par value. For example, if your certificate authorizes 500 shares without par value, the shares tax portion of your fee is $25 (500 x $.05 =$25). Your total filing fee is $150 ($125 filing fee plus $25 shares tax).
- Shares w/ Par Value: The shares tax is 1/20 of 1% (0.0005) of the stated par value of all par value shares authorized. For example, if your certificate authorizes 50,000 shares with a stated par value of $1, the shares tax is $25 (50,000 x $1 = $50,000 total par value x 0.0005 = $25). Your total filing fee is $150 ($125 filing fee plus $25 shares tax).
Extra fees apply if you require copies of the Certificate, $10 each and the expedite fees: $25 (24 hours), $75 (same business day) and $150 (just two hours).
You must pay your fee by check, money order or by certified check for fees over $500.
After you fill the New York Certificate of Incorporation, you will wait for receipt of incorporation. This will serve as a proof of the incorporation of you business and pay special attention to it as it is not replaceable.
If you want to obtain "Sub-Chapter S" status for your corporation, an election under state law (which is separate from the Federal election) must be submitted to the New York State Tax Department for approval. This is possible only for corporations which are owned only by natural persons, residents of the USA.
After you receive the receipt you should contact the IRS to obtain your EIN. Beside IRS taxing you will also need to pay a franchise tax to the Department of State. This tax is mandatory and must be paid whether the corporation had profits or not.
Please note that some businesses require licenses or permits in order to operate. You should check with the online government documentation to check if you will need any special licensing for your corporation.
