Checklist to set up a business in New York
- Create business plan
- Choose State of Incorporation: New York, Delaware or other
- Choose Entity Type: business corporation, LLC, not for profit corporation, PLLC, PC or other
- Choose your company’s name and alternatives
- Prepare and file formation documents
- Obtain federal tax number (“Employer Identification Number” or “EIN”)
- Register with NYS Tax Department
- Open bank account
- Obtain any necessary licenses or permits, including sales tax permit
- Lease office space if necessary and hire staff
- Remember your annual reports, tax filings and other obligations
Corporate Name Endings
* The name must contain one of the following words or an abbreviation thereof: “corporation”, “incorporated”, “limited”. The name may not be same as that of any domestic or authorized foreign corporation or reserved name or so similar thereto as to be confusing. The name may not contain any word or phrase indicating that corporation is formed for any purpose other than purpose for which corporation may be and is formed. The use of certain enumerated words and abbreviations including banking, insurance and various professions is prohibited or restricted.
Articles of Incorporation Requirements
- Minimum Number – Three or more, except if the corporation is owned by less than 3 shareholders, in that case the corporation may have less than three directors but that number may not be less than the number of shareholders
- Residence Requirements. – No provision.
- Age Requirements – Must be 18 years old.
- Directors are not required to be listed in the articles of incorporation.
- The officers are not required to be listed in the articles of incorporation.
- Each domestic corporation and foreign corporation authorized to do business in New York must file a biannual statement of addresses and directors. The applicable filing period for a corporation is the calendar month during which its original certificate of incorporation or application for authority was filed (or the effective date thereof). The reporting periods run from April 1 through March 31. A $9 filing fee must accompany each statement.
Franchise Tax Rate – Based on two Factors
- First, the tax is based on the highest of: (a) 9% of entire net income allocated to New York, , or (b) 1.78 mills (or .00178) of business investment capital allocated to New York (with a maximum of $350,000), or (c) 3.5% of minimum taxable income allocated to New York or (d) fixed dollar amount of: $1,500 (if the corporation has a gross payroll of $6,250,000 or more); $425 (if the gross payroll is less than $6,250,000 but more than $1,000,000); $325 (if the gross payroll is not more than $ 1,000,000); $800 (if the gross payroll is $1,000 or less with total receipts of $1,000 or less and average value of gross assets is $1,000 or less);
- Second: added subsidiary tax of 0.9 mill per $1 of subsidiary capital.
For more information on taxes, visit http://www.tax.ny.gov/
- Shareholders have limited liability protection
- May be listed and traded as a publiccorporation on the stock market or “over the counter”
- Has a separate and independent tax status from its owners
- Profits are not subject to “double taxation”
- Corporate losses may be “passed through” to share holders
- Shareholders are afforded the same protection as C Corp.
- Contains characteristics of both corporation and partnership
- Shareholders may take advantage of “Pass-Through” taxation
- Limited liability for share holders
Not for profit corp
- Eligible for tax-exempt status
- Limited Liability protection
- Qualify for public and private gains