Whenever a business looks to expand, it’s ultimately going to have to consider whether a corporate structure is the best option for their growth. C-Corporations are often an ideal choice for companies in New York that are wanting to diversify their ownership structure or list shares to the public. But getting started with a C-Corporation in this state often requires legal counsel that understands and navigates the local regulations.

## What is a C-Corporation?

A C-Corporation (or “C-Corp.”) is one type of corporate business structure. It is the most common type and is separate from its owners in the eyes of the law. It shields its owners from personal liability and offers certain tax advantages. C-Corps are the ideal structure for those companies that are interested in growth through the sale of shares.

## The Differences Between C-Corporations, S-Corporations, and LLCs

C-Corp.s are only one form of business entity structure. There are a few other popular options to consider, such as S-Corporations, LLCs, and other variations. To understand the specific advantages of doing business as a C-Corp., it’s essential to understand the differences between each.

* S-Corporations: An S-Corp. is similar to a C-Corp. in many ways. It also provides the same personal liability protection. The key difference is the taxation structure; profits and losses of other S-Corps are reported on an individual’s income tax return. Also, S-Corps are limited to having less than 100 shareholders, have restrictions on who can be a shareholder, cannot issue preferred shares, and cannot list them on a stock exchange.

* LLCs: LLCs stand for ‘Limited Liability Companies’. Unlike the other two entities, LLCs do not require special state filings or an owners’ meeting. Its members are often given a certain level of privacy in that their personal info does not need to be disclosed. LLCs also have pass-through taxation, meaning that the profits are taxed at the individual’s income rate.

## How to Get Started with a C-Corp. in New York

Setting up a C-Corp. in New York isn’t as hard as it may seem. The New York Department of State Division of Corporations provides guidance and resources on how to form a C-Corp. As long as the proper documentation is filed, it should be relatively straightforward. In terms of legal advice, though, it’s important to seek the counsel of legal experts familiar with the complex New York laws.

The main steps to forming a C-Corp. in New York include:

* Choosing a Name: All C-Corp.s in New York must end with Inc. or variations of Inc. such as Corp. or Co. Additionally, the name must not be already in use or be deemed offensive.

* Filing Articles of Incorporation: This document is required to register the new C-Corp. It includes important information such as the business name, address, contact information, and the number of shares the C-Corp. is authorized to issue.

* Obtaining an Employer Identification Number (EIN): EINs are required by the IRS and the New York State Tax Department, and may be obtained online.

* Creating Company By-Laws: These are the rules by which the C-Corp. will be governed by and outline its ownership, bi-laws, and procedures.

* Opening a Corporate Bank Account: A separate bank account is necessary to ensure that personal and corporate finances are kept separate.

These are just the general steps and processes in setting up a C-Corp., and a full understanding of the nuances of the law requires legal expertise. That’s why it’s important to make sure you find secure legal counsel that understands local regulations. UpCounsel is a great resource for finding attorneys with the experience and credentials to provide trustworthy counsel and advise.

## Conclusion

Choosing the appropriate corporate structure for a business is an important decision. C-Corps provide several advantages, particularly when it comes to growth through offering shares to the public. To make sure this process is done correctly, it’s essential to hire experienced legal counsel that understands the complexities of the local regulations, such as those found in New York. UpCounsel can help you find the right fit while making the entire process easier and more efficient.



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