Incorporate in New York
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Ranking as the 11th largest economy in the World, and with world trade and business a hall mark of New York state, it is no wonder that many companies and individuals choose to incorporate in New York. Incorporating in New York has been the first step to success for many individuals looking to tap into the fast-paced, international-flavored New York economy. With favorable taxation, asset protection, confidentiality and limited liability, New York has become a popular place to incorporate for entrepreneurs and large businesses alike.
There are some factors to consider before deciding that New York is the state best suited for you to incorporate in. Lets examine what some of these factors, advantages, and even disadvantages might be.
Factors to Consider
The decision to incorporate yourself or your company in New York should be based on the business goals for your company, where you intend to conduct the business, and where you intend to bank and establish financial and credit footholds. If the vast majority of your business is to be conducted within the state, and you intend to open an account and establish lines of credit with a New York bank, then it is easy to determine that this is the state you should incorporate in. States are becoming more aware of the tax revenue they are relinquishing to “foreign” corporations and are finding it financially feasible to enforce statutory and tax regulations. Thus, incorporating in the state you will ultimately conduct the most business in will save your corporation from having to pay excessive franchise fees in more than one state.
New York offers a quite favorable taxation environment with a flat 7.5% corporate tax, with no business inventory tax, nor a tax on intangible personal property. Incorporating here can offer considerable income and taxation benefits for your company if the proper formation decisions are made.
It is also imperative to remember that you observe the general corporate formalities once your corporation is formed. This will help ensure the integrity of your “corporate veil” and provide you and your corporation with the liability, asset, and tax protection and benefits that incorporating in New York can offer.
Assuming that you indeed intend to conduct business in New York, establish a financial foothold there, and observe the formalities, then incorporating in New York makes perfect sense.
Advantages of Incorporating in New York
- Strong Economy. Ranked 11th in the world, and with added value from name recognition alone, having a New York based corporation will give you financial and business access to arguably the most recognized business environment in the world, with a robust economy, and access to one of the largest ports/shipping centers in the world.
- Asset Protection from Liability. Incorporating in New York offers protection for shareholders, Officers and Directors from personal liability against any lawsuits or business debts arising from the operation of the corporation or by actions committed on behalf of the corporation. The extent of liability exposure is limited to the amount of initial investment.
- Stock Flexibility. New York corporations may sell, transfer, gift, or purchase shares of it’s own corporate stock. A corporation may issue stock for cash, property and services. Directors can determine the worth or value of the stock, and the stock can be in any quantifiable form: property, capital value, liquid funds, etc.
- Credibility. Incorporating in New York will increase the “credibility” of your company, and will increase the amount of investor interest in your company. It speaks of “serious business” when your company is a “New York Corporation.”
- Management Flexibility. New York requires three officer positions: president, chief financial officer and secretary. These three positions may be filled by one person, and so long as the corporate formalities are observed, there is much flexibility with respect to structure and style of management.
- Confidentiality. Only the director and the resident agents are disclosed as a matter of public record in New York. Stockholders’ names are not a matter of public record. Further, depending on the type of formation (LLC, etc.), a corporation can hold shares of stock.
- Tax Advantages. New York corporate tax sits at a very reasonable 7.5%, with sizeable income and taxation advantages available depending upon the type of corporation formed.
It should be apparent that incorporating in New York offers a tremendous amount of benefits in the form of recognition, credibility, protection from liability, asset protection, taxation, and business flexibility. Incorporating in New York will make your company more credible, and with this increase in credibility and recognition will come the ability to attract investors. Further, the ability to safeguard shareholders’ assets and limit them from liability will also make your company more attractive. With a diligent implementation and business development strategy, you can build your business into a highly competitive, investment-attracting entity.