Costs of Forming a Corporation

While fees can vary from state to state, there are typically four types of costs associated with forming a simple corporation.

There are typically four types of costs for forming a simple corporation:

• Filing fees with the Secretary of State;
• First year franchise tax payment;
• Various governmental filings; and
• Attorney fees.

Typical costs: Filing fees with the Secretary of State generally cost from $45 to $300. First year franchise tax prepayment will typically run you from $800 to $1,000. Various additional governmental filings will be $50 to $200. And attorney fees will cost from $500 to $5,000.

Filing fees: Each state requires a fee to be included along with the incorporation papers. The filing fee may be set, may be based on the number of shares authorized, or be a combination of both. The highest filing fee of $300 is charged by Texas, with Alaska coming in at a close second at $250. Most filing fees range from $75 to $125.

Franchise tax payment: A franchise tax is the fee paid for the privilege of doing business in a state. Not all states charge a franchise tax as an incentive for businesses. Nevada does not charge an annual franchise tax payment.

Government filings: Two factors will determine the types of governmental filings for your corporation: the type of business; and the state of incorporation.

Attorney fees: Attorney fees is the cost that can vary the most when you incorporate and will depend on several factors: whether you are incorporating a simple corporation; whether you incorporate in the state in which your corporation conducts the majority of its business; whether the corporation can qualify for exemptions from federal and state securities laws; and, whether your corporation is involved in a heavily regulated type of business. For advice on how to find an attorney who specializes in incorporation, see How Do I Find a Corporate Attorney?

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