Facts on Incorporating in New York:

• Officers are not required to be listed in the articles of incorporation
• Annual Statements must be filed
• Each domestic corporation and foreign corporation authorized to do business in New York must file a biannual statement of addresses and directors
• Personal liability is limited, for shareholders
• The lifespan of the business is perpetual; or for a designated period stipulated in the Certificate of Incorporation
• For purposes of taxation, a corporation pays state franchise taxes and taxes on income; shareholders pay taxes on income distributed as dividends (a limited exception exists for Subchapter S Corporations)
• An increase in the shares of stock may cause an increase in the initial filing fee
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Corporate Name Ending

Your corporate name must include a word or an abbreviation of a word that indicates that the named entity is a corporation or LLC. Examples of a corporate name ending include: Incorporated, Corporation, LLC, Company, or the appropriate abbreviation there of.

Corporation Requirements

Director Information
A corporation is required to have three or more directors unless the corporation only has one or two shareholders. They are not required to live in the State of New York. They are required to be 18 years of age or older. Also, directors are required to be listed in the articles of incorporation.

Officer Information
The officers are not required to be listed in the articles of incorporation.

Stock Information
The amount of corporate stock shares may affect the initial filing fee.

Corporation Records
The stock transfer ledger must be kept in the principal corporate office.

Annual Statements
Each domestic and foreign corporation authorized to do business in New York must file a Biennial Statement of directors including their addresses. 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). A $9 filing fee must accompany each statement.

Income Tax Rate
The New York corporate income tax is sometimes referred to as a "franchise tax" but is measured by net income and by the value of subsidiary capital allocated to New York. (New York net income is your entire federal net income with adjustments.) Your accountant or tax professional can help you determine the income from your business that's taxable in New York.

Corporations: If you are a corporation that's subject to the franchise tax, the franchise tax rate is .09 percent of your subsidiary capital plus the greater of:

• 7.5 percent of net income
• 0.178 percent of capital (not to exceed $350,000)
• 2.5 percent of minimum taxable income or
• a fixed dollar minimum tax ($1,500 maximum)

New York has a special lower graduated tax rate for qualified small businesses. To qualify, your business cannot have net income greater than $290,000 or capital or paid-in surplus of more than $1 million.

For tax years beginning before July 1, 2003, the amount of tax imposed is 7.5 percent of the entire net income base up to $290,000.

For tax years beginning on or after July 1, 2003, the amount of tax imposed is 6.85 percent of the entire net income base up to $200,000. If the entire net income is over $200,000 but not over $290,000, the tax due is the sum of $13,700, plus 7.5 percent of the entire net income base over $200,000, and 3.25 percent of the excess entire net income base over $250,000.

S-Corporations: New York imposes a franchise tax on S-Corporations. The franchise tax is equal to the greater of the franchise tax that would be computed on the net income of a New York C-Corporation or the fixed dollar minimum tax, reduced by the amount of tax that would be computed on the net income based on the highest personal income tax rate in effect for the tax year; provided, however, that the franchise tax isn't less than the fixed dollar minimum tax. Through June 30, 2003, the rate used is 6.85 percent (7.1425 percent starting July 1, 2003).

S-Corporation Election
The state of New York does recognize the S-Corporation election. A separate state election is required.

LLC Publication Requirement
New York law requires all LLCs to publish a "Notice of Publication" 8-10 weeks after formation within 2 authorized newspapers in the county of formation. To meet this requirement, please contact your local county recorder's office and they will assign the newspapers. The county recorder's phone number will be located in the blue pages of your phone book.