10 Steps to Start an S Corp in New York

Starting an S corp in New York City can provide significant benefits for your small business. New York has a robust economy, bustling metropolitan areas, and an expansive workforce. New York State offers an attractive environment for businesses to grow and thrive, making it an ideal location for entrepreneurs to launch their S corporations.

Before diving into the world of S corps in New York, it's essential to be aware of the various rules, steps, and fees associated with the process. Navigating the intricacies of starting an S corp may seem daunting, but with the right guidance and understanding, you'll be well on your way to building a successful business. Keep reading to discover the essential steps to successfully establishing an S corp in New York and set your business on the path to success.

What are the benefits of an S Corporation in New York?

You might already know what is an S corp, but what are the benefits? There are several benefits to start an S corp in New York. Some of the most critical include:

S corp is easy to set up

S corp is a perpetual entity

S corp avoids double taxation because it’s a pass-through entity.

S corp owners can write off start-up losses.

S corp profits and losses can pass onto the shareholder.

S corp provides liability protection, like LLCs.

How to Start an S Corp in New York

There are ten steps you’ll complete to start an S Corp in New York.

Step 1: Choose a Business Name

The first step to starting an S corp in New York is to choose a business name. In New York, your S corp business name must be distinguishable from other names. 

There are other requirements for business names in the state. First, businesses that are corporations must have the word Corporation in their name. There are several phrases and words which are prohibited.

You have the option of sending a written inquiry to the Division of Corporations for your name availability. If you send a written inquiry, it will need to state that you wish to determine the availability of a name. You’ll also list the name or the names you want to be searched.

There’s a fee of $5 per name submitted to search for the records for the availability of names.

Finding a unique brand name and (normal-looking) domain to go with it can be a bit of a time-sink for new business owners. This free tool from Business Name Zone generates name and domain combos for you based on your input – and it only takes a few minutes.

Step 2: Obtain EIN

Next, you should obtain an EIN. There are three ways to apply for an EIN: by fax, by mail, or even apply for an EIN online. It is free to apply and receive an EIN no matter which option you choose, but there are differences in how long it will take to receive your EIN:

Applying by fax may take up to four business days to receive your EIN if you provide a fax number.

Applying by mail may take up to four weeks to receive your EIN. 

Applying online is the fastest option, with your EIN being issued immediately. However, you’ll need to complete the EIN application in one sitting.

Step 3: Certificate of Incorporation

Third, you’ll complete and file a Certificate of Incorporation to send to the New York Department of State. You’ll provide your: 

Corporation Name 

Purposes

County location 

Stock structure 

Designation for Service of Process

You have the option to file a Certificate of Incorporation by mail or online. Whether you file by mail or online, there’s a fee of $125 to file the Certificate of Incorporation.

Step 4: Registered Agent

Fourth, you’ll complete the registered agent requirement. Registered agents will act as a contact for your S corporation, and they will accept documents on your S corp’s behalf.

In New York, the state will operate as your registered agent. However, you can choose to work with a registered agent service.

Step 5: Corporate Bylaws

The fifth step to starting an S corp in New York is to create your corporate bylaws. These are rules your S corp owners will develop, outlining the rules which your S corp will follow. 

It may be helpful to include the following in your New York S corp’s corporate bylaws:

Purpose of the S corp (outline of the objectives of your corporation)

Board of Directors (duties, number of members, and terms of service)

S corp information (address, corporation fiscal year, name, principal place of business)

Shareholder meeting information (annual meeting procedures, meeting notifications, and voting procedures)

Stock information (number and type of shares and stock classes)

Management structure (simple or complex management structure)

Amendment (the outline of the bylaw amendment process)

Step 6: Directors and Meeting Requirements

The sixth step to starting an S corp in New York is to meet the director and meeting requirements. 

Each S corp shareholder will elect a board of directors to represent their interests as the S corp develops. Directors can also elect officers who’ll manage the S corporation’s operations.

Shareholders must have meetings, and the S corp will track their minutes. There’s also a requirement for S corps to have annual meetings in New York State. 

Step 7: Stock Requirements

Next, you’ll have to choose a single class of stock. S corps can only have one class of stock, and it can only issue one class of stock to shareholders. 

Step 8: Biennial Statement

Eighth, you’ll file a Biennial Statement with the Department of State. The Biennial Statement will provide: 

The name and business address of its chief executive officer.

The street address of its principal executive office.

The address where the New York Secretary of State will send copies of the process accepted on behalf of the corporation.

The number of directors who constitute the board and how many directors of the board are women.

You have the option to file Biennial Statements online. Make sure to file for one every two years. If you file online, you’ll need your entity name and your S corporation’s DOS ID number. There’s a filing fee of $9 for the Biennial Statement.

Step 9: Form 2553

One of the last steps is to complete Form 2553. This form allows a corporation to make an election to become a New York S corporation. There are four parts to Form 2553:

Election Information     

Fiscal Tax Year 

Qualified Subchapter S Trust (QSST) Election 

Late Corporate Classification Election Representations 

The QSST section of Form 2553 applies if you’re making a QSST election, and you’ll only complete the late corporate classification if you’re filing the form late.

There’s no option to submit Form 2553 online, but you have the option to fax or mail Form 2553.

Step 10: Form CT-6

The last step to start an S corp in New York is to complete Form CT-6. This form will allow your federal S corporation to be treated as a New York S Corporation. To complete Form CT-6, you’ll need:

Corporation name

Date business began in New York State

Date of incorporation

DBA or trade name (if any)

Election year to be treated as a resident S corporation

The legal name of a corporation

Mailing address information (including city, state, and ZIP code)

S corp EIN

State of incorporation

Telephone number

You’ll also provide:

Number of shareholders who are nonresidents of New York State

The month and date the tax year ends

The tax year when the New York corporation will be treated as an S corp 

Total number of shareholders

Second, you’ll provide shareholder information.

In section A, you’ll provide each shareholder’s address, name, and zip code.

In section B, you’ll provide each shareholder’s Social Security Number

In section C, you’ll provide stock owned or percentage of ownership information. You’ll include the number of shares or percentage of ownership and the date acquired within this part.

In section D, you’ll provide each shareholder’s signature. 

Third, an authorized person will print their name and provide a signature. They’ll also provide their e-mail address, telephone number, and date. Finally, you’ll fax the form to the New York Department of Taxation and Finance.

Work With Professionals To Start Your S Corp In New York

Starting an S corp in New York is a great way to operate your business. You’ll have an opportunity to grow your business quickly, with few fees and liability protection. 

When it’s time to start an S corp in New York, you’ll want to work with the pros. Work with 1-800Accountant to form your S corp in New York.