SETTING UP A FOR-PROFIT BUSINESS CORPORATION

For-Profit Business Incorporation in New York State

FILING THE CERTIFICATE OF INCORPORATION

To set up a corporation in the State of New York, a person who is at least 18 years old, called the incorporator, must file a signed certificate of incorporation with the New York State Department of State. New York Business Corporation Law, Section 403(a) sets fort the information required to be included in a certificate of incorporation:

• The incorporator's name and address.
• The name of the corporation.
• The corporation's business or purpose.
• The New York county where the office of the corporation will be located.
• The total number of shares of all classes which the corporation has the authority to issue, the number of shares of each class and their respective par values, and a statement about which shares (if any) have no par value.
• The designation of each class of shares (if any) and a statement of their relative rights, preferences, and limitations.
• The designation of each series of a preferred class of shares (if any) and their variations in the relative rights, preferences, and limitations.
• Whether the board of directors has the authority to establish and designate a series, fix variations in the relative rights, preferences, and limitations as between series and change the number of shares of any series of preferred shares.
• A designation of the New York secretary of state as agent for service of process against the corporation;the post office address within or without New York, which the secretary of state can use to forward a copy of any service of process to the corporation; andif desired, an email address which the secretary of state can use to email notice that process against the corporation has been electronically served.
• The name and address of the registered agent (if any) in the state of New York and a statement that the registered agent is to be its agent for service of process against the corporation.
• The duration of the corporation, if not perpetual.

The certificate of incorporation may also include a statement limiting the personal liability of a corporation’s directors for breach of their duties as directors. Liability for acts or omissions in committed in bad faith, involving intentional misconduct or a knowing violation of law, resulting in personal gain to which the director was not entitled, or violations of New York Business Corporation Law Section 719, cannot be limited.

The certificate of incorporation may include any other provisions relating to the corporation’s business, its affairs, its rights or powers, or the rights or powers of its shareholders, directors or officers.

• The filing fee for incorporation is $125.

CORPORATE ACTIONS UPON INCORPORATION

After the certificate of incorporation is filed, the incorporator must hold an organizational meeting to adopt by-laws, elect directors to serve until the first annual meeting of shareholders, and to transact any other business. The by-laws are the unique set of rules by which the corporation is governed. It should set forth the procedures for holding meetings of shareholders and directors, the requirements for shareholder and director resolutions (ie. decisions), the type and number of officers and committees of the corporation, and the issuance and transfer of shares of stock in the corporation.

After the organizational meeting, the incorporator will resign and going forward, the board of directors will direct and manage the corporation going forward.

CONCLUSION

It is a good idea to consult with an attorney when setting up a corporation. Many DIY incorporation options are available online, but these come with limited tailored advice, and will often lack the customization for each unique company that has needs that depart from the basic kits provided. Many times these shortcomings will not become apparent until issues arise years later. To guard against future issues, retaining an attorney to review the unique needs of the new company is critical. An attorney can help address issues and tailor organizational documents that will meet the needs of each company.