Friday, February 21, 2014

Organization of New York Corporations

In New York, organizing a Corporation has formal and informal requirements that you should be aware of.  Formation requirements are generally, and more simply put, "People" "Paper" and "Acts".

The People Necessary to Form a New York Corporation

In New York, The Incorporator(s) is the only party necessary to form a valid Corporation in New York.  The incorporators must:

  1. Execute the Certificate of Incorporation
  2. Deliver the Certificate of Incorporation to the Department of The Secretary of State AND
  3. Hold the "Organizational Meeting"
In New York, you only need one incorporator to start a valid Corporation.  One natural person, a Corporation may not act as an incorporator, a corporation can hold stock in another corporation, but can not act as the initial incorporator in New York.  

The Papers Necessary to Form a New York Corporation

In New York, in order for a corporation to be valid, the incorporator must file a "Certificate of Incorporation" with the Secretary of State.  The filing serves two purposes, it is a contract between the coporation and the shareholders as well as a contract between the corporation and The State of New York. Before delivery of the Certificate, it must be executed correctly.  The Certificate of Incorporation must include: 
  1. Corporate Name: The Name Must include the words "Corporation", "Incorporation", or "Limited" and may be abbreviated. would NOT suffice for a corporate name, it must read Inc, Corporation etc..
  2. An Address: This is the County in New York of the office of the corporation.  The office address need not be a place where the company actually does business.  
  3. Corporation's Agent: In New York, you must designate The Secretary of State as your corporations' agent for "service of process".  You must additionally provide a forwarding address for mail.  In addition to The Secretary of State acting as agent, you may provide an additional agent for "service of process".
  4. Name and Address of each Incorporator: Full legal name and address for forwarding. 
  5. Purpose of the Corporation: You must state a legal purpose for existence.  Most companies write "any lawful purpose" which suffices.
  6. The Number of Authorized Shares and Description: This includes is you are issuing different series of shares, difference classes or shares, shares with par value or no par value, common stock preferred stock etc.  
  7. Duration: If not stated, the duration is perpetual. 

The Acts Necessary to Form a New York Corporation

Each Incorporator signs The Certificate and acknowledges it before a notary.  They file it with the Secretary of New York Department of State and if it conforms with the Laws and Requirements, and the filing fees are paid, the Department files the Certificate.  This is now conclusive evidence that a Valid Corporation has been formed.  Then the incorporators hold an organizational meeting; this can also be done by written consent.  At the organizational meeting, the incorporators adopt bylaws and elect initial directors.  Then the Board of Directors takes over management of the Corporation.  

No comments:

Post a Comment