Corporate Practice Series Portfolio No. 2-3rd, The New York Corporation: Legal Aspects of Organization and Operation, outlines the typical New York business and tax considerations relevant in deciding whether a business should be incorporated in New York. Steps in the New York incorporation process, both before and after incorporation, are dealt with in detail. The portfolio also discusses aspects of corporate finance; the powers, rights, and liabilities of shareholders and directors; amendment of the certificate of incorporation; mergers, consolidations, and disposition of assets; and dissolution.

Portfolio 2-3rd: The New York Corporation: Legal Aspects of Organization and Operation

I. Introduction
    A. Statutes
    B. Preincorporation Planning
    C. Corporation Service Companies

II. Reasons for Incorporating in New York
    A. New York Business Considerations
    B. New York Tax Considerations

III. Steps in the Incorporation Process
    A. Preincorporation Steps
         1. Preincorporation agreements
         2. Selection, clearance, and reservation of a corporate name
         3. Securing of any preincorporation share subscriptions
         4. Location of the office of the corporation
         5. Drafting of the certificate of incorporation
              a. Title; paper and backer; typing and riders
              b. Required provisions in the certificate of incorporation
              c. Optional provisions in the certificate of incorporation
                   (1). Valid only if in the certificate of incorporation
                   (2). Valid only if in the certificate of incorporation or a bylaw adopted by the shareholders
                   (3). Valid if in the certificate of incorporation or the bylaws
         6. Pre-examination by the Department of State
         7. Attachment to the certificate of incorporation of any required official consent or approval
         8. Execution of the certificate of incorporation by each incorporator
         9. Delivery of the certificate of incorporation to the Department of State
         10. Filing and indexing by the Department of State of the certificate of incorporation
    B. Postincorporation Steps
         1. Beginning of corporate existence upon filing
         2. Making, certifying, and transmitting by the Department of State of a `copy'; filing and indexing of such copy by the county clerk
         3. Optional designation of a registered agent for service of process
         4. Drafting of the bylaws
         5. Drafting of the certificates representing securities
              a. Bond certificates
              b. Share certificates
                   (1). Required provisions
                   (2). Legends
         6. Ordering of the corporation outfit (share certificate book and possibly transfer book, minute book(s), and corporate seal)
         7. Organization meeting of the incorporator(s) or organization action by the incorporator(s) without a meeting
         8. Organization meeting of the board of directors or organization action by the director(s) without a meeting
         9. Organization meeting of the shareholders or organization action by the shareholders without a meeting
         10. Execution of a shareholder agreement by the corporation
         11. Qualifying shares or other securities for offer and sale when necessary under the federal securities and/or state Blue Sky Law
         12. Payment of share subscriptions
         13. Issuance of shares
         14. Filing of a stock transfer tax certificate with the Tax Commission
         15. Filing of an assumed name certificate in the office of the secretary of state
         16. Designation of the chief executive officer
         17. Other noncorporate law steps

IV. Corporate Finance
    A. Capital Structure
    B. Bonds
    C. Shares 21
         1. Authorized shares
              a. Par value; without par value
              b. Basic rights
              c. Designations
              d. Preferences
              e. Other relative rights and limitations
              f. Preferred shares issuable in series
              g. Redemption
              h. Conversion
         2. Share subscriptions
         3. Consideration and payment for shares
         4. Stated capital
         5. Share options
         6. Fractions of share; scrip
         7. Distributions
              a. Cash or property dividends
              b. Share distributions
              c. Liquidating distributions
         8. Redemption and reacquisition of shares
         9. Reduction of stated capital
    D. Disclosure Requirements

V. Shareholders’ Functions: Powers, Rights, and Liabilities
    A. Management Role
         1. Voting rights
              a. Election and removal of directors
              b. Election and removal of officers
              c. Proxies
         2. Actions
              a. Meetings
              b. Action without a meeting
    B. Dividend Rights
    C. Liquidation Rights
    D. Classes and Series of Shares
    E. Preemptive Rights
    F. Inspection Rights
    G. Derivative Actions
    H. Duties and Liabilities
         1. Liability for wages
         2. Liability for watered shares
         3. Liability when the actions of the directors are governed by a certificate of incorporation provision
         4. Other liabilities
    I. Right to Receive Payment for Shares (Appraisal Remedy)

VI. Directors’ Functions: Powers, Rights, and Liabilities
    A. Management Role
         1. Meetings
         2. Action without a meeting
         3. Committees
    B. Duties and Liabilities
    C. Indemnification 58
    D. Liability Insurance

VII. Officers’ Functions: Powers, Rights, and Liabilities

VIII. Provisions Relevant to Close Corporations

IX. Amendments and Changes to the Certificate of Incorporation
    A. Amendments
    B. Changes
    C. Restated Certificate of Incorporation

X. Mergers, Consolidations, and Dispositions of Assets
    A. Mergers
         1. In general
         2. Parent and subsidiary mergers
         3. Mergers of domestic and foreign corporations
         4. Appraisal remedy
    B. Consolidations
         1. In general
         2. Consolidations with or into foreign corporations
         3. Appraisal remedy
    C. Dispositions of Substantially All the Assets
         1. Not made in the usual or regular course of business
         2. Made in the usual or regular course of business
         3. Appraisal remedy
    D. Guarantees
    E. Share Exchanges
         1. In general
         2. Share exchange with a subsidiary
         3. Appraisal remedy
         4. Effect of a share exchange
    F. Requirements for Certain Business Combinations

XI. Dissolution
    A. Nonjudicial (Voluntary) Dissolution
    B. Judicial (Involuntary) Dissolution

XII. Receivership

XIII. Doing Business As a Foreign Corporation

XIV. Tender Offer Statute

XV. Service of Process Against the Corporation
    A. Service Against Domestic Corporations
    B. Service Against Foreign Corporations
         1. Authorized foreign corporations
         2. Unauthorized foreign corporations
    C. Venue
    D. Appearance by the Corporation

Portfolio 2-3rd: The New York Corporation: Legal Aspects of Organization and Operation

Wks. 1 19 NYCRR (Department of State, Division of Corporations)

Wks. 2 Internal Search Guidelines

Wks. 3 13 NYCRR (Department of Law, Security Takeover Disclosure Rules)

Wks. 4 Memorandum in Support of Legislation *

Wks. 5 Business Startup Guide

Wks. 6 Pre-Incorporation Agreement

Wks. 7 Share Subscription

Wks. 8 Application for Reservation of Corporate Name

Wks. 9 Certificate of Incorporation * of (Name of Corporation)

Wks. 10 Checklist for Filing DOS Form for Incorporation

Wks. 11 Bylaws

Wks. 12 Share Certificate *

Wks. 13 Notice of Organization Meeting of Incorporator(s)

Wks. 14 Waiver of Notice of Organization Meeting of Incorporator(s)

Wks. 15 Minutes of Organization Meeting of Incorporator(s)

Wks. 16 Consent to Organization Action by Incorporator(s) Without Meeting

Wks. 17 Notice of Organization Meeting of Board of Director(s)

Wks. 18 Waiver of Notice of Organization Meeting of Board of Director(s)

Wks. 19 Minutes of Organization Meeting of Board of Director(s)

Wks. 20 Consent to Organization Action by Director(s) Without Meeting

Wks. 21 Notice of Organization Meeting of Shareholder(s)

Wks. 22 Waiver of Notice of Organization Meeting of Shareholder(s)

Wks. 23 Minutes of Organization Meeting of Shareholder(s)

Wks. 24 Consent to Organization Action by Shareholder(s) Without Meeting

Wks. 25 Checklist for Annual Shareholders Meeting *

Wks. 26 Checklist for First Regular Board of Directors Meeting After Annual Shareholders Meeting

Wks. 27 Designation of Registered Agent

Wks. 28 Shareholder Agreement

Wks. 29 Filing Fees, Organization Tax, and Miscellaneous Costs

Wks. 30 Business Corporation Filings with the New York Department of State's Division of Corporations

Wks. 31 Tax Department Memo on Corporate Dissolution and Reinstatement

Wks. 32 Tax Department Memo on Definition of Corporation

Wks. 33 Tax Department Memo on Corporate Dissolution

Wks. 34 1998 Changes to Laws Affecting Corporations and Other Business Entities

Wks. 35 Formation of Business Entities

Wks. 36 New York Business Corporation Law Article 13. Foreign Corporations

Wks. 37 "Doing Business” in New York: An Introduction to Qualification

Wks. 38 Department of State Memo on Service on Foreign Corporations

John R. Alexander
Sayles & Evans
Elmira, New York