The actual cost of incorporating is relatively minimal. Each state has its own fee structure in place for corporations. Typically, costs include:
- Filing fees
- Annual report fees
- Attorney fees
- First-year franchise taxes
Filing fees, including administration fees, vary from state to state, but will fall anywhere from $50 to $350. Some states will also require every business to obtain a business license, which can be obtained for a nominal fee. Annual report fees will run in the $25-to-$200 range, depending on the state. Arizona, Georgia, Nebraska, and Pennsylvania also require a new corporation to pay a publication fee, which ranges from $150 to $300.
The size and scope of your business will dictate your legal fees. A law firm specializing in startup businesses will charge in the $500-to-$5,000 range for assisting you, a small business owner, with the incorporation process. The firm can help you fill out the documents necessary for incorporating, explain the process, and review the paperwork you have filled out prior to filing. Legal costs will increase if you have multiple shareholders or complicated shareholder arrangements.
The other cost of incorporating is that of paying first year-franchise taxes. The tax rates vary from state to state, but will usually land somewhere between $800 to $1,000.