How to Start an S Corp in New York

Factors to Consider Before Starting an S Corp in New York

Before forming an S corp, you have to consider the following factors:

• Is an S corporation the best strategy for your business?
• S corporation requirements and restrictions
• Are S corp tax advantages right for you?

Is a New York S Corporation the Best Strategy for Your Business?

For help with choosing the right structure for your business, visit our Choosing a Business Structure guide.

S Corporation Requirements and Restrictions

The following are IRS S corp requirements and restrictions:

• Limited to one class of stock
• Must be domestic LLCs or corporations
• 100 shareholders
• Shareholders must: 
  • All agree to electing S corp status
  • Be U.S. citizens or permanent resident aliens 
  • May not be partnerships, corporations or non-resident alien shareholders
• File biennial report on the month of incorporation and every other year with the Department of State’s Division of Corporations (cost: $9, failure to file may result in loss of good standing status in the state of New York and even dissolution). You may file online.

Are S Corp Tax Advantages Right for You?

An S corporation is a tax designation that can be elected by a limited liability company (LLC) or corporation. With an S corp, business owners are considered employees of the company and must receive a reasonable salary. Since all S corps technically have employees, the s corp must run payroll. 

In order to benefit from a New York S corp tax designation, your business needs to make enough money to offset payroll expenses. Furthermore, S corps are beneficial for business owners who take large distributions in addition to their salary.

To learn more about the tax advantages of an S corp, read our LLC vs. S corp guide and take a look at our S Corp tax calculator.

How to Form a New York S Corp

There are two main ways to start an S corp:

• By forming an LLC and electing S corp tax status from the IRS Form 2553 when you request your employee identification number (EIN). You must also file Form CT-6 from the New York Department of Taxation and Finance to officially be taxed as an S corporation.
• By forming a corporation and electing S corp status from the IRS Form 2553. You must also file Form CT-6 from the New York Department of Taxation and Finance to officially be taxed as an S corporation.

There are also specific deadlines when it comes to electing S corp status. 

• If you want the S corp status to take effect the following year, you may file at any time in the previous year. 
• If you’re filling within the same year, you must submit your application within 2 months and 15 days or before on the same calendar year (ie. March 15). 
• For a new business, you must file within 2 months and 15 days after you start your company, based on the date on the Certificate of Incorporation, for the S corp tax status to take effect.

We recommend forming an LLC because it’s simpler and more cost-effective.

Not in New York? Check out our other How to Start an S Corp guides to learn more.

Recommended: If you have an existing LLC, visit our How to Convert an LLC to S Corp guide.

Steps for Forming an LLC and Electing S Corp Status in New York

Starting a New York LLC and electing S corp tax status is easy. You can use our guides to start an LLC with the S corp status yourself, or you can hire a service provider like Northwest to guide you through this process.

There are six basic steps to start an LLC and elect S corp status:

Step 1: Name Your LLC

Step 2: Choose a Registered Agent

Step 3: File the Articles of Organization

Step 4: Complete Publication Requirement

Step 5: Create an Operating Agreement

Step 6: Get an EIN, File Form 2553 to Elect S Corp Tax Status, and File Form CT-6

Step 1: Name Your LLC

Choosing a company name is the first and most important step in starting your LLC in New York.

Be sure to choose a name that complies with New York naming requirements and is easily searchable by potential clients.

1. Follow the naming guidelines for a New York LLC:

• Your name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.).
• Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
• You must receive approval and/or meet certain conditions to include certain restricted or prohibited words.
• Your name must be distinguishable from any existing business in the state. This includes New York reserved names.

You can also read the New York state statute about LLC naming guidelines for more information.

2. Is the name available in New York? Make sure the name you want is available by searching the business entity database on the New York Department of State website.

3. Is the URL available? We recommend checking to see if your business name is available as a web domain. Even if you don’t plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it.

Step 2: Choose Your New York Registered Agent

The New York Secretary of State acts as the statutory agent for service of process, or registered agent, for all businesses by default, but you can elect a registered agent for your New York LLC.

An LLC registered agent will accept legal documents and tax notices on your LLC’s behalf. You will list your registered agent when you file your LLC’s Articles of Organization.

Many business owners choose to hire a registered agent service. Many of these services will form your LLC for a small fee and include the first year of registered agent services for free.

Step 3: File the New York LLC Articles of Organization

The New York Articles of Organization is used to officially register an LLC.

File Your New York Articles of Organization

OPTION 1: File Online With the New York Department of State

File Online

– OR –

OPTION 2: File Form DOS 1336 by Mail, by Fax, or In Person

Download Form

State Filing Cost: $200, payable to the Department of State (Nonrefundable)

Filing Address:
Department of State Division of Corporations
State Records and Uniform Commercial Code
One Commerce Plaza
99 Washington Ave.
Albany, NY 12231

Fax: (518) 474-1418

Note: Faxed filings must include a Credit Card/Debit Card Authorization form.

Step 4: Complete Publication Requirement

You must publish a notice of LLC formation within 120 days of formation. This notice must be published in two newspapers (one weekly and one daily) for six consecutive weeks. The newspapers must be approved by the local county clerk in your Articles of Organization and be circulated in the county of the LLC’s principal office or designated registered agent’s office. Fees will vary by newspaper.

After publication, the printer or publisher of each newspaper will provide you with an affidavit of publication. You must submit these affidavits, along with a Certificate of Publication, to the New York Department of State.

The certificate of publication fee is $50.

File Certificate of Publication with New York

File a Certificate of Publication With the New York Division of Corporations, State Records and Uniform Commercial Code

Download Form

Fee: $50, payable to the Department of State (Nonrefundable)

Read our full New York publication requirements guide to learn more.

Step 5: Create an LLC Operating Agreement

An LLC operating agreement is a legal document that outlines the ownership and member duties of your LLC.

For more information, read our LLC Operating Agreement guide.

Our operating agreement tool is a free resource for business owners.

Step 6: Get an EIN, Complete Form 2553 on the IRS Website, File Form CT-6

An EIN is a number that is used by the US Internal Revenue Service (IRS) to identify and tax businesses. It is essentially a Social Security number for a business.

EINs are free when you apply directly with the IRS.

Elect S Corp Tax Status
During the online EIN application, the IRS will provide a link to Form 2553, the Election By a Small Business form.

Visit our Form 2553 Instructions guide for detailed help with completing the form.

This is the form to elect S corp tax status for your LLC:

File Form CT-6

Form CT-6 is required for your New York LLC or corporation to be taxed as an S corp after electing an S corp tax status. You can complete and file Form CT-6 with the New York Department of Taxation and Finance.

Keep Your New York S Corp Compliant

Maintaining compliance with state and federal regulations is crucial for keeping your business in good standing. Here’s what you need to do to keep your New York S corp compliant.

File the BOI Report

The federal government requires all S corporations — whether LLCs or corporations — to file a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN). This report provides the government with necessary information about the individuals who own or control your business, helping to maintain transparency and compliance.

File the BOI report through the FinCEN website.

Open a Business Bank Account

Separating your business finances from your personal accounts is essential to protect your LLC’s limited liability status. A dedicated business bank account will ensure your financial transactions are clear, organized, and legally compliant.

Find the best banking options by reviewing our guide on the Best Banks for Small Business.

Obtain Required Business Licenses and Permits

New York S corps may need various licenses and permits, depending on the business’s type and location. Compliance with local, city, and state licensing requirements is essential to avoid fines and legal issues.

For specific licensing requirements, refer to our New York Business License guide.

File Your Biennial Statement

Every two years, New York LLCs must file a Biennial Statement with the New York Department of State. This filing updates the state on key business information, such as your principal office address and registered agent details. The Biennial Statement is due in the calendar month of your incorporation anniversary. Failure to file can result in penalties and the inability to do business in New York.

You can file your Biennial Statement online at the New York Department of State’s website.

Understand New York’s S Corp Tax Obligations

While New York S corps benefit from pass-through taxation, the state imposes a franchise tax based on your business’s income or capital. Additionally, New York City may have separate tax requirements if your business operates within city limits. Staying informed of these obligations is crucial for compliance.

For more details on state and local tax requirements, visit the New York Department of Taxation and Finance.

Fulfill New York Sales Tax Requirements

If your New York S corp sells goods or services that are subject to sales tax, you must register with the New York State Department of Taxation and Finance. Compliance with sales tax regulations is critical to avoid penalties.

To learn more about registering and collecting sales tax, visit the New York State Sales and Use Tax page.