Bi-473 Instructions

[Evangeline Mellon]

TheVermont Partnership Income Tax Return is prepared for calendar, fiscal and short year partnerships. Using the entries from the federal return and Vermont worksheets, the following forms and schedules are prepared for the Vermont return:

Vermont partnership conforms to the federal depreciation. No adjustments are made for depreciation differences due to federal bonus depreciation or Section 179 expense deduction. Entries for state depreciation and amortization are not used in the calculation of the Vermont income.

The following items carry from the federal return to the VT Form BI-472 for non-composite returns and Form BI-473 for composite returns. Additional entries do not need to be made on the Vermont input.

Vermont uses federal special allocations detail section to specially allocate Vermont distributive share items. All federal special allocation features (i.e., single entry of ratios, tiered allocation, residual suppression) are available for Vermont purposes.

Indicate the partner's state of residency in the "State" field on the federal partner information section. If the state is blank or "VT", the partner is considered to be a Vermont resident. In all other cases, the partner is considered to be a Vermont nonresident.

If an extension is required for the Vermont partnership return and a Federal partnership extension has been filed the Vermont return has automatically been extended. Only the minimum tax must be paid by the original due date. Attach a copy of the Federal extension to the Vermont partnership return when filed.

Schedule K-1VT is designated as final and amended at the top of the form if the same partner's Form 1065, Schedule K-1 is final or amended. In addition, if the Vermont return is final or amended, all Schedules K-1VT are designated as final or amended. Use the Generic State Schedule K-1 Information Worksheet to override these defaults, or to designate a Schedule K-1VT separately.

Use the partner general options worksheet to suppress all Schedules K-1VT. See the instructions on the partner general options worksheet "Suppress Schedules K-1 Print Code". An option to suppress the Vermont schedule K-1 has been added to Vermont Worksheet , These entries will override input made on the General Options section of the Partner Information worksheet.

If the partnership is making a composite return filing, use the Vermont Composite section. For tax year 2014 and later years, a composite filing must include ALL qualifying nonresident partners. There is no longer an option to include selected partners in the common state input. In addition, composite filing is mandatory if the number of qualifying nonresident partners is fifty or more. If there are fifty or more qualifying nonresident partners, and composite filing is NOT selected on theVermont Composite section, a warning diagnostic message will be issued. A consolidated K-1VT is prepared for all nonresident partners when filing a composite return. To prepare separate K-1VTs for each nonresident partner, use the Vermont Composite section.

New York recognizes many business forms including corporations, limited liability companies, limited partnerships, sole proprietorships and general partnerships. Each has its own advantages and disadvantages. For any particular venture, personal and business circumstances will dictate the business form of choice. The Department of State cannot offer advice about the choice of business form and strongly recommends consulting with legal and financial advisors before making the decision. Forming a corporation should only be done after careful analysis. These instructions have been developed to answer your questions regarding formation of a business corporation and to assist in the filing of a certificate of incorporation.

The staff of the Department of State is dedicated to providing quality service. Although we cannot provide legal advice, we are available to assist in answering questions about filing corporate documents. Please contact the Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231 or one of our representatives at (518) 473-2492 with any questions you may have.

A corporation is a legal entity separate and distinct from the individual(s) who compose the business. It has rights and abilities similar to those of a natural person. Principal features are perpetual duration, limited liability and easy transferability of interests.

One or more persons, called "incorporators" may form a corporation. Incorporators are natural persons who are 18 or older. The incorporator(s) signs the Certificate of Incorporation. The completed Certificate of Incorporation is filed with the Department of State pursuant to Section 402 of the Business Corporation Law. Please see Section 102(a)(4) of the Business Corporation Law for the definition of a corporation.

One or more professionals may form, or cause to be formed, a professional service corporation (P.C.) for pecuniary profit for the purpose of rendering the professional service or services that the professionals are authorized to practice. A P.C. is formed by filing a Certificate of Incorporation pursuant to Section 1503 of the Business Corporation Law. "Profession," as defined in Section 1501(b) of the Business Corporation Law, includes the occupations regulated by Title VIII of the Education Law plus any practice as an attorney and counselor-at-law, or as a licensed physician.

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.)

In addition, a meeting of shareholders must be held annually for the election of directors and the transaction of other business on a date fixed by or under the by-laws. (See Section 602 of the Business Corporation Law.)

Please note by-laws and corporate books and records are not filed with the Department of State or any other state agency. These are internal documents maintained by the corporation. The Department of State cannot provide legal advice regarding the preparation of these documents.

A Certificate of Incorporation has legal effect and enforceable rights and responsibilities. The Department of State recommends that a lawyer guide the preparation of these and other legal documents. However, there is no requirement that a lawyer prepare the documents when forming a corporation.

The Department of State issues an official filing receipt to the filer of the Certificate of Incorporation. The filing receipt reflects the date of filing, the name of the corporation, an extract of information provided in the Certificate of Incorporation and an accounting of fees paid. Filers should verify that this information is correct.

The filing receipt is your proof of filing. The Department of State does not issue duplicate filing receipts to replace those lost or destroyed.

Corporate kits may be purchased from a legal stationery store. A corporate kit usually contains a corporate seal, blank stock certificates and forms for the adoption of by-laws and recording the minutes of meetings. Rather than composing their own forms, some may find it easier to use the preprinted forms provided in a corporate kit. Please note that New York State law does not require a corporation to have a seal.

The New York State Tax Law requires a corporation to file franchise tax reports and pay franchise taxes annually even if the corporation does not conduct business or loses money. Franchise tax requirements begin the date the corporate existence begins. Tax responsibilities continue until the corporation is legally dissolved by the Secretary of State.

The corporation will need a taxpayer identification number, obtainable from the federal Internal Revenue Service. The IRS can answer questions about paying or withholding federal income tax, social security taxes and other federal taxes.

Questions concerning New York State taxes should be directed to the New York State Department of Taxation and Finance, Taxpayer Assistance Bureau, W.A. Harriman Campus, Albany, NY 12227. You may contact The Business Tax Information Center at (518) 485-2639.

A Certificate of Incorporation form has been developed to meet the basic requirements of the Business Corporation Law. The form does not include any optional provisions permitted by law. A Certificate of Incorporation may include other provisions consistent with law. You are not required to use this form. You may draft your own form or use forms available from legal stationery stores.

The Department of State must make an official record of the completed Certificate of Incorporation presented for filing. The Department will not accept papers incompatible with its recording technology. All entries and signatures should be typewritten or legibly printed in black ink on white paper. Avoid dark paper, small or light type, outline or condensed fonts, colored inks, etc.

First, Section 301(a)(1) of the Business Corporation Law requires that the name of the corporation contain one of the following words: Incorporated, Corporation or Limited, or one of the following abbreviations: Inc., Corp. or Ltd.

Second, the name of the corporation must be distinguishable from the names of other corporations, limited liability companies and limited partnerships already on file with the Department of State.

Third, Section 301 of the Business Corporation Law prohibits or restricts the use of certain words and phrases in the name of the corporation. Generally, the name of a corporation may not include a word or phrase restricted by another statute unless the conditions of the restriction have been complied with. In addition, certain words and phrases in the name of a corporation require consent or approval from another agency prior to filing the Certificate of Incorporation with the Department of State.

Prior to submitting the Certificate of Incorporation for filing, the proposed name of the corporation can be searched for availability by writing 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 corporate name (or names) and list the name (or names) to be searched. There is a $5 fee for each corporate name to be searched for availability, which must accompany the request. Searching the availability of a corporate name does not reserve the name.

Some filers may wish to reserve the corporate name prior to filing the Certificate of Incorporation. To reserve a corporate name, file an Application for Reservation of Name. The fee for filing an Application for Reservation of Name is $20. The filing of an Application for Reservation of Name is optional. An Application for Reservation of Name holds the name for 60 days and may be extended twice for additional periods of 60 days. The fee to extend the reservation of name is also $20. The filing receipt issued by the Department of State for the Application for Reservation of Name must accompany the Certificate of Incorporation when presented to the Department of State for filing. The filing receipt issued by the Department of State for an Application for Reservation of Name must also accompany any request to extend the name reservation.

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