Form a S-Corp in New York
Everything you need to know about forming a S-Corp in New York. Filing fees, requirements, timeline, and step-by-step guidance.
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How to File
Choose a Corporate Name
Select a unique name that includes a corporate designator such as 'Inc.', 'Corp.', or 'Incorporated'. Conduct a name availability search on the New York Department of State's Corporation & Business Entity Database to ensure the name is not already in use.
30 minutes
Appoint a Registered Agent
Designate a registered agent with a physical street address in New York to receive legal and official documents on behalf of the corporation. The registered agent can be an individual resident or a registered commercial service.
1-2 hours
File the Certificate of Incorporation
Prepare and file the Certificate of Incorporation (Form DOS-1239) with the New York Department of State, Division of Corporations. Include the corporate name, county of principal office, registered agent information, and the number of authorized shares.
1-2 hours
Adopt Corporate Bylaws
Draft and adopt corporate bylaws at the initial organizational meeting, which govern the internal operations of the corporation including shareholder rights, director roles, and meeting procedures. While not filed with the state, bylaws are legally important and should be kept in corporate records.
2-4 hours
What's Next After Filing
Once your S-Corp is officially formed, you'll want to complete these important steps:
- •Hold Organizational Meeting & Issue Stock — Hold the initial board of directors meeting to appoint officers, adopt bylaws, and authorize the issuance of shares to initial shareholders. S-Corps may have no more than 100 shareholders, all of whom must be U.S. citizens or permanent residents.
- •File IRS Form 2553 for S-Corp Election — Submit IRS Form 2553 (Election by a Small Business Corporation) to the Internal Revenue Service to elect S-Corporation tax status. The form must be filed no later than 2 months and 15 days after the beginning of the tax year in which the election is to take effect.
- •Obtain EIN, Licenses & Open Bank Account — Apply for a Federal Employer Identification Number (EIN) from the IRS, obtain any required New York state and local business licenses or permits, register for New York State taxes with the Department of Taxation and Finance, and open a dedicated corporate bank account.
Advantages
- ✓Pass-through taxation avoids double taxation — corporate income and losses flow directly to shareholders' personal tax returns, avoiding the federal corporate income tax.
- ✓Shareholders who are active in the business may reduce self-employment tax liability by splitting income between reasonable salary and S-Corp distributions.
- ✓Provides limited liability protection, shielding shareholders' personal assets from most business debts and legal judgments.
- ✓Eligible for New York's fixed-dollar minimum franchise tax treatment, which can be lower than standard corporate taxes for qualifying S-Corps with modest New York receipts.
Considerations
- •Strict IRS eligibility restrictions apply — limited to 100 shareholders, one class of stock only, and shareholders must be U.S. citizens or permanent residents, which limits growth and investment flexibility.
- •New York imposes its own S-Corp election requirement (Form CT-6) separate from the federal IRS Form 2553, adding an additional compliance step and potential for misalignment.
- •Ongoing corporate formalities such as maintaining bylaws, holding annual shareholder meetings, keeping minutes, and filing biennial statements create higher administrative burdens compared to an LLC.
- •Shareholders must receive a 'reasonable salary' subject to payroll taxes before taking distributions, adding payroll administration complexity and cost.
Annual Obligations
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