Accounting theory and practice, Volume 1 (of 3)

by Roy B. Kester

2. The purpose or purposes for which it is created. There is practically no limitation as to the lines of endeavor the corporation may declare itself desirous of following, with the exception that banks, trust, transportation, and insurance companies, etc., come under special laws.

3. The amount of capital stock of the corporation, common and preferred if both are to be issued. Preferred stock of various classes may be authorized after incorporation. The minimum amount of capital required by the New York law is $500. One-half of the capital must be paid in within one year from the date of incorporation. The certificate must state also the amount of capital to be paid in before the corporation can commence business and this must not be less than $500. No debts can be contracted before that amount is paid in.

4. The number of shares into which the authorized capital is divided and the par value of each. This must not be less than $5 nor more than $100, although more recently capital stock has been authorized with no named par value.

5. The place in which the principal office is to be located, which must be within the state.

6. The contemplated duration of its life. This may be made perpetual.

7. The number of directors, which must not be less than three.

8. The names and post-office addresses of the directors for the first year. Directors usually are stockholders and at least one-fourth of the directors are subject to election annually.

9. The names and post-office addresses of the subscribers to the certificate of incorporation, and the number of shares in the corporation subscribed by each.

Filing the Certificate—New York State.—The certificate of incorporation is usually made out in triplicate. The original must be filed and recorded in the office of the Secretary of State; the duplicate certified by the Secretary must be filed with the clerk of the county in which the principal business office is to be located; and the certified triplicate is retained by the corporation in its own files. The fees for filing the certificate with the Secretary of State are $10, and for recording 15 cents per folio. The county clerk’s fees are 6 cents per folio for filing.

Organization Tax—New York State.—Before the filing of the certificate, an organization tax of 1/20th of 1% of the authorized capital stock must be paid to the State Treasurer. Record of this payment is forwarded to the Secretary’s office.