Article 17 of the Business Corporation Law (“BCL”) governs the incorporation and operation of benefit corporations. Business corporations formed as benefit corporations, in addition to business purposes, are formed for the purpose of creating a “general public benefit.” BCL §1702(b) provides that a “general public benefit” is a “material positive impact on society and the environment, taken as a whole, assessed against a third-party standard, from the business and operations of a benefit corporation.”
How to File
- Complete and file the Certificate of Incorporation with the Department of State.
- To form a benefit corporation, the filer must present a certificate of incorporation pursuant to §402 of the Business Corporation Law to the Department of State. The certificate of incorporation must include all of the statements required by BCL §402 including the corporation’s business purpose. Additionally, the certificate of incorporation must include a statement that “The corporation is a benefit corporation under Article 17 of the Business Corporation Law.” This statement is not a statement of purposes and should be set forth in a separate paragraph of the certificate of incorporation. A benefit corporation’s certificate of incorporation is not required to include a statement regarding general public benefit purpose.
- The certificate of incorporation for a benefit corporation may include a statement of one or more “specific public benefit” purposes. "Specific public benefit" purposes include, but are not limited to: “(1) providing low-income or underserved individuals or communities with beneficial products or services; (2) promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business; (3) preserving the environment; (4) improving human health; (5) promoting the arts, sciences or advancement of knowledge; (6) increasing the flow of capital to entities with a public benefit purpose; and (7) the accomplishment of any other particular benefit for society or the environment” (BCL §1702(e)).
- The name of a benefit corporation must comply with the provisions of §301 of the Business Corporation Law. Consent of the New York State Department of Financial Services is required if the benefit corporation’s name includes the word “benefit.”
- The fee for filing the certificate of incorporation is $125.
- The completed certificate of incorporation, together with the statutory filing fee of $125, should be forwarded to:
- New York Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231.
- The Division of Corporations is required by statute to reject for use any corporate, limited partnership, or limited liability company name that is not "distinguishable" from existing names on file. The only avenue to determine whether a name is available for a corporation, limited partnership or limited liability company is to make a name availability inquiry. The Corporation and Business Entity Database online search is intended for status inquiries of entities already on file with the Department of State. Customers are cautioned to avoid interpreting database search information as an indication that a name is or is not available for use.
- The records of the Division of Corporations may be searched for availability of name by submitting a written request to the Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231. The written inquiry should state that you wish to determine the availability of a name and list the name or names to be searched. Although it is not required, it is recommended that a copy of the name availability response be attached to the document you are submitting for filing.
- A finding that the name is available is not an approval of the name by the Department of State and is not a determination that the proposed name satisfies any particular requirement of law. No expenditure or other commitment should be made in reliance upon the availability of a name.
- Pursuant to Section 96 of the New York State Executive Law, the fee for searching the records for availability of name is $5 per name submitted. Please note that the Department's determination regarding the availability of a name applies only to the date and time that the name search was completed. Requests for name availability cannot be handled by telephone.
$125 filing fee for Certificate of Incorporation
- All fees must be paid by cash, check, money order, MasterCard, Visa or American Express.
- To pay for a fee using your credit card or debit card, complete and sign the Credit Card/Debit Card Authorization Form and submit it to the Division of Corporations with your request for service.
- Checks and money orders should be made payable to the “Department of State.” Please do not send cash through the mail. All checks over $500 must be certified.
- Expedited Handling Services: (optional) The NYS Department of State's Division of Corporations offers expedited processing of time-sensitive documents. For an additional fee, the Department of State will process a document within the following time frames for the additional fee indicated; $25.00 per document for processing within 24 hours, $75.00 per document for processing within the same day, or $150.00 per document for processing within 2 hours.
- The additional, non-refundable fee for expedited processing service must be paid by a separate check or money order or indicated in the appropriate space on the Credit Card/Debit Card Authorization Form.
- The Division of Corporations accepts MasterCard, Visa and American Express for the payment of fees. To pay for a fee using your credit card or debit card, simply complete and sign the Credit Card/Debit Card Authorization Form and submit it to the Division of Corporations with your request for service.
- The Credit Card/Debit Card Authorization Form submitted with any request for services must specifically indicate the level of expedited service requested.
- The envelope bearing documents for filing and other requests for expedited processing services must be marked with the notation "Expedited Processing" on the envelope.
Election of an Existing Business Corporation to become a Benefit Corporation
An existing business corporation may elect to become a benefit corporation by amending its certificate of incorporation to include a statement that “The corporation is a benefit corporation under Article 17 of the Business Corporation Law.” The certificate of amendment must be authorized by the “minimum status vote” of the shareholders (BCL §§1702(d) and 1704).
Termination of Benefit Corporation Status
An existing benefit corporation may terminate its status as a benefit corporation by amending its certificate of incorporation to delete the statement that “The corporation is a benefit corporation under Article 17 of Business Corporation Law.” The certificate of amendment must be authorized by the “minimum status vote” of the shareholders (BCL §§1702(d) and 1704).
Business Corporation Stock Certificates
Benefit corporation stock certificates must contain the following conspicuous language on the face of each certificate: "This entity is a benefit corporation organized under Article Seventeen of the New York Business Corporation Law" (BCL 1709)
Annual Benefit Reports
Benefit corporations are required to file an annual report pursuant to Business Corporation Law §1708 within 120 days following the end of its fiscal year with the Department of State. The completed annual benefit report, together with the statutory filing fee of $60, should be forwarded to the New York Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231.
The annual report must include a white cover sheet (“backer”) that sets forth the document’s title (Annual Report of (name of the benefit corporation) under Business Corporation Law section 1708) and the name and address of the individual to whom the receipt for the filing should be mailed.
- The existence of the corporation begins upon the filing of the Certificate of Incorporation with the Department of State. After the corporate existence has begun, an organization meeting of the incorporator or incorporators must be held for the purpose of adopting by-laws, electing directors and transacting any other business. (See Section 404 of the Business Corporation Law.) The initial by-laws of a corporation are adopted by its incorporator or incorporators at the organization meeting. (See Section 601 of the Business Corporation Law.)
- The corporation is required to keep correct and complete books and records of account and must keep minutes of the proceedings of its shareholders, board of directors and executive committee, if any. The corporation must also keep a record containing the names and addresses of all shareholders, the number and class of shares held by each and the dates when they respectively became the owners of record thereof. (See Section 624 of the Business Corporation Law.)
- The NYS Department of Taxation and Finance (TAX) creates a NYS Corporation Tax Account for all newly formed corporations. The NYS Department of State (DOS) notifies TAX of the formation. TAX generates a temporary New York State identification number prefixed by the letters TF and notifies the corporation of this "TF" number by mailing Form CT-198, Corporation Tax Account Information to the address provided by DOS. The form provides the corporation with the identification number, file number, and current filing period. The corporation must complete the CT-198 form or contact TAX to provide its Federal Identification Number. It is the responsibility of the corporation to keep TAX informed of corrections to their records and must return Form CT-198 as soon as possible to ensure proper identification. For more information, contact the TAX at (518) 485-2889 or visit their website at www.tax.ny.gov.
- Business corporations are required to file a Biennial Statement two years after the filing of the Certificate of Incorporation with the NYS Department of State, and every two years thereafter. The filing period is the calendar month in which the original Certificate of Incorporation was filed by the Department of State. Online filing is available on the Department of State’s website. The filling fee is $9. Entities who wish to receive a notice when the Biennial Statement is due for filing must provide an email address at the Department of State’s Email Address Submission/Update Service.
- Corporations are required by statute to conduct business under their true legal or “real” name. If a corporation wishes to conduct business under a name other than its true legal name, a Certificate of Assumed Name must be filed with the NYS Department of State. The filing fee for a Certificate of Assumed Name is $25. Additionally, the NYS Department of State collects county clerk fees for each county in which the corporation does/transacts business. For each county outside of New York City the fee is $25. For the five counties within New York City (Bronx, Kings, New York, Queens, and Richmond), the fee is $100 per county. The total fee for a corporation to file a certificate of assumed name in all counties in New York State, including the NYS Department of State's fee, is $1,950.
- The NYS Department of State recommends that legal documents be prepared under the guidance of an attorney.