How to incorporate in US? State of incorporation? New York Company?
January 10, 2022
As discussed in our other blogs there are several benefits of incorporation. When it comes to a Canadian incorporating in the US, we come across the questions that how to incorporate in US? Or Which state of incorporation is better? Or What is a New York Company? In this blog we will be specifically discussing about the steps that you need to take or Pre-requisites for Starting a Company in New York.
Before we proceed, we just wanted to highlight a few Canadian incorporate in New York because its famous, known as “Big Apple”, and you also end up incorporating if business establishment or properties in New York.
The following are the steps that you need to follow to incorporate in New York:
Choosing a Company Name in New York
Following are some mandatory contemplations that must be taken into consideration while selecting the name of a new business in New York.
The selected name must contain words like “Corporation”, Incorporated”, “Limited”, etc. These words can also be used in abbreviated forms like Corp. Ltd. But, other punctuation marks like an exclamation mark (!) should not be used in company names.
The selected name should have a factor or diversity and uniqueness in it, such that it does not show similarity with any of the existing, domestic or foreign, registered company names of New York.
The company’s name should reflect its purpose stated in its Certificate of Incorporation and no other meaning. It is forbidden to use any word or abbreviation in the company name that represents a relation to another business profession, e.g. insurance, banking, health.
Requirements for Selecting the Board of Directors
Following are the criteria for selecting the Board of Directors in a corporation of New York:
The number of Directors: Should be one or greater than one.
Residence of Directors: New York does not restrict the selection of directors based on residence.
Age of Directors: Every director must be of 18 years or older in age.
Mentioning Director Names and Addresses in the Certificate of Incorporation is not a mandatory requirement.
Information to include in the Certificate of Incorporation
It is compulsory for a company to file a Certificate of Incorporation in order to become legally recognized in New York. The following information is to be included in this document:
The officers’ names and addresses are NOT required.
The number of authorized shares along with the par value must be mentioned in the document of Incorporation. Otherwise, the initial filing fees charged from the investors get affected.
There is no compulsion to include the names and addresses of registered agents in the Certificate of Incorporation. Nonetheless, it is crucial to mention the address at which necessary legal documents are to be sent, like the document of Service of Process. Also, the registered agent should ensure his/her availability at the given address during office hours.
Steps to Ensure the Continuous Legitimacy of the Business
In New York, professional service providers like accountants, attorneys, and physicians are permitted to form a Professional Corporation (PC). It is necessary for companies to perform certain processes on a continuous basis so as to ensure the legitimacy of the firm and protect the limited liability it provides to its shareholders. The processes include the followings,
Maintaining a Corporate Records Book
State of incorporation
The important documents related to company affairs should be kept in a designated corporate records file. This record can be kept at either the headquarters of the company or with the registered agent. Following are examples of documents to keep in the records book:
A comprehensive record of company accounts
Minutes of all corporate meetings like shareholder, director and executive committee meetings
Shareholder information: Names and addresses, number and type of stock held by each, date of becoming a member of the company’s shareholders
Tax and Fees Requirements for New York Corporations
Stated below are the rules for filing tax and payment of ongoing fees for New York corporations:
Corporations have to file a biennial report every two years during the month in which the company came into existence. The charges to file a biennial report amount to $9. For more information on how much tax is deducted by the state on New York corporations, visit Business Owner’s Toolkit or the State of New York.
Any and all organizations have some sort of employment process going on, and such organizations have to be registered under Federal tax, which allots that organization a Federal Tax Identification Number called “EIN”. Most bank accounts ask for an EIN number in order to create a business bank account for the company.
Though in New York City, a State Identification Number is not required for companies to have.
License Requirements for New York Corporations
Most businesses require licenses to run legitimately. Looking at the “Bizfillings Business License Application Package” is the best option to fulfil the requisites for getting further information.
S Corporation Election requirement for New York Corporations
State-level S corporation election holds true for New York rather than federal S corporation election.
Disclaimer: Information in the blog/post/article has been presented for a broad and simple understanding. This is not legal advice. RKB Accounting & Tax Services does not accept any liability for its application in any real situations. You need to contact your accountant or us for further information
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