Creating a corporation does not have to be a stressful and time-consuming process. The process of forming a corporation can be extremely manageable with proper planning. The following is a 10-step guide to the legal formation of a corporation that includes some of the most important factors to consider when forming a corporate entity, especially Nys Incorporation Filing.
1. SELECT AN APPROPRIATE COMPANY NAME
When you decide to start your own business, one of the first things you should think about is what you will call your company.
If you are registering a business in New York, your business name should stand out from the other documented names. If not, your name may be rejected when you try to register it (and might get canceled later down the line). You can check the availability of your name by calling the New York Department of State – Division of Corporations or by using the online database. Furthermore, if you are not yet ready to register your corporation but want to ensure that no one else takes your name in the meantime, you can reserve a name for $20 for a maximum of 60 days by mailing an application to reserve your name.
In addition, as a more technical requirement, qualifying names in New York State must include a designation indicating their form, such as “Limited,” “Incorporation,” “Incorporated,” or an abbreviation of such. (Either Inc. or Ltd.).
While I won’t go into detail in this article, you should also think about intellectual property rights, especially as to if your name will infringe on the trademark rights of another when you register it. A trademark search to ensure your name is clear could be a wise investment, as it could come back to haunt you later on.
2. DRAFT AND FILE A CERTIFICATE OF INCORPORATION
Filing a Certificate of Incorporation with the NY Department of State marks the legal creation of your corporation. It must include the corporate name and county of the central office’s location, the street address, the number of shares the company is authorized to issue, and the name and address of the incorporator. Other provisions for Nys Incorporation Filing can be included, but they are more optional than mandatory. The New York Department of State provides a complimentary template that contains the bare minimum of what you must include. The main fee for filing the certificate is $125.
3. ENGAGE AN AGENT
In this case, every corporation in New York is required to use the New York Department of State as its agent. In the event that the corporation is served, it asserts and forwards legal papers on its behalf.
4. CREATE A CORPORATE RECORDS SYSTEM
Keep all of your company’s vital information in a record book at your main/head office. In New York, corporations are required to keep complete and accurate books and records of account, including minutes of meetings, shareholder names and addresses, and the number and class of shares held by each. This ensures that you are meeting one of the significant company formalities required to keep your corporation running smoothly.
5. DEVELOP CORPORATE BYLAWS
This is a document that outlines the fundamental rules that govern the corporation. These are critical guidelines for the firm’s smooth operation, as well as legal proof and an assessment tool when dealing with 3rd parties.
6. BOARD OF DIRECTORS NOMINATION
The incorporator is usually in charge of this. He or she completes a “Incorporator’s Statement” with the home addresses of the appointed board members, a copy of which should be kept in the Corporate Records Book. Appointees typically serve until the first annual general meeting of shareholders.
7. CALL THE FIRST BOARD OF DIRECTORS MEETING
During a board of directors meeting, at least the initial meeting, the following is usually done:
Appointment of corporate officers; approval of stock share issuance; consideration of a corporate bank; establishment of a fiscal year; and adoption of an official stock certificate form and corporate seal.
8. HANDING OUT THE STOCK
Each shareholder receives the available stock, and a record of each shareholder’s contact information is kept in the corporation’s stock transfer ledger. Shareholders may be given stock certificates.
9. REQUIREMENTS OF THE NEW YORK BIENNIAL STATEMENT
Every business engaging in commercial activities in New York is required to file a Biennial Statement with the Department of State every year. There is a $9 fee for this service.
10. COMPLY WITH ALL OTHER TAX AND REGULATORY REQUIREMENTS
Every corporation must follow additional tax and regulatory requirements in their area of operation.
TAX AND REGULATORY REQUIREMENTS COULD INCLUDE:
- S corporation formation (where applicable).
- Registration for a Federal Employer Identification Number (EIN), which can be obtained online by submitting a free online application on the IRS website.
- New York state taxes and report filing are required.
- Business Permits and Licenses are specified by the relevant authorities.