OBTAINING CERTIFICATES PERMITTING FOREIGN CORPORATIONS TO DO BUSINESS IN NEW YORK.
A previous opinion contained some information regarding foreign corporations obtaining certificates to do business in New York. The following additional information, from our attorney in New York, Mr. Eustace Conway, 15 William Street, regarding amendments effective November 1st, will be interesting:
There went into effect on November 1st, 1906, various important amendments to the corporation Tax Law. The annual franchise tax is placed on a different basis from what it has been heretofore for foreign corporations, and the license tax which foreign corporations have to pay for doing business in this State is also changed as to its method of determination. Under the new law the measure of amount of capital stock employed in this State (on which the tax of ⅛ of 1 per cent. is to be paid for this corporation license to do business here) is to be such a proportion of the issued capital stock as the gross assets employed in any business within this State bear to the gross assets wherever employed in business. As no action shall be maintained in any of the courts of this State by such foreign corporation without obtaining a receipt for this license fee, it is important to foreign corporations expecting to do business here to comply with the statute and take out the certificate. This tax, of course, is only to be paid once for the license, unless later an increased amount of capital stock is employed in the State, but this is not likely to occur. The annual franchise tax is, of course, a different tax, but it is based on the same proportion, except that the amount of dividends is also to be considered.
Opinion No. 26.