How Much Does It Cost to Incorporate Your Business?

Consider all of the costs to start a business, including incorporation filing fees, taxes, operating expenses, and more.

By , Attorney · Penn State Dickinson School of Law

The cost to incorporate your business (when you file paperwork with the state to form your corporation) will depend on the state where you file. That expense will likely be a small portion of the overall cost to start the business. Depending on your corporation's location and services, you might be responsible for taxes and fees relating to name reservations, licenses, permits, and annual renewals. You should also consider your start-up and operating costs, such as purchasing your inventory, and paying rent and utilities.

Formation Filing Fees

To create a corporation, you must file formation documents (articles of incorporation, also known as articles of organization or a certificate of formation) with your Secretary of State and pay the filing fee. Depending on the location and the needs of your business, you could be responsible for additional filings (and filing fees) to form your business, which might include:

Name reservation: If you are not ready to file your incorporating documents but want to save your business name (so no one else can register the name), you might be able to file a name reservation request, available in some states.

Foreign corporation registration: If you will do business in a state other than where you incorporated, the state where you provide your services might require you to register your business as a foreign corporation.

Fictitious business name: You must file for a fictitious business name if you will provide services under a name other than the one you listed on your articles of incorporation. Your state might refer to this as a tradename or a Doing Business As (DBA).

Trademark registration: You can register a trademark to protect your name, logo, slogan, or anything else that identifies your brand. You can file for state trademark registration or federal registration with the United States Trademark and Patent Office (USTPO). Click here to learn more about trademark registration.

Cost to Create Bylaws

Bylaws are the internal rules for your corporation that outline the board of director's procedures, policies, and the rights and responsibilities of shareholders and directors. Bylaws are an internal document that you do not file with the state but keep with your corporate records. You will not face state filing fees to create bylaws, but you might pay an attorney to draft the document or use a document creation service.

Registered Agent Service

Your corporation must appoint a registered agent, which is the person or organization responsible for receiving legal notices on behalf of the company. You or another owner can serve as the registered agent, or you can pay for a registered agent service. Because the registered agent must be a resident of the incorporating state, a service is a good option if you are filing in a state other than where you and the other owners live. When you live in the state where you incorporate, you have the option to use a registered agent service to maintain your privacy (the registered agent's contact information is public record).

Business Licenses and Permits

Depending on your location and services, you might need one or more licenses or permits. Some cities and counties require all businesses to obtain permits, and certain business types (such as restaurants and marijuana dispensaries) need a number of additional licenses (such as health and/or sign permits). You will likely face fees to apply for each license, and annual fees as long as your business is open.

Tax Payments

All corporations that generate income pay tax. The amount your business will pay depends on your revenue and the laws of the state where your corporation operates. The types of taxes your corporation might be responsible for include:

  • federal corporate income tax
  • state corporate income tax
  • gross receipts tax
  • franchise tax
  • sales tax
  • property tax, and
  • payroll tax.

Annual Report Fees

In most states, to keep your corporation in good standing, you must file reports with your state. Most states require you to file the report annually, while other states require every other year, and a few states do not require annual reports. A few states do not charge a fee for the annual report, and in other states, the fee is over $300.

Securities Exemption Filing

Corporations that issue stock to shareholders must register with the Securities and Exchange Commission (SEC) and state securities agencies, unless the company is exempt from the process. Most small corporations are exempt. However, your state might require you to file an exemption request and pay a fee.

Start-Up and Operating Costs

When starting a corporation, you should budget for your start-up and operating costs, which are highly variable and depend on the type of business. Some of the costs you should consider include:

  • accounting and legal fees
  • employee wages and independent contractor fees
  • insurance
  • inventory
  • office supplies
  • marketing and advertising
  • utilities, and
  • rent or lease payments.

State Incorporation Costs

The following is a breakdown of the formation and annual report fees by state (as of September 2020). The numbers represent the minimum charges for incorporation, and you might pay more depending on the number of shares your corporation authorizes. Some states charge additional fees for online filing, in-person filing, rush service, or other administrative fees. Check with your Secretary of State to confirm.

State Corporation Filing Fees Ongoing Fees
Alabama 100 No annual report; franchise tax based on revenue
Alaska 250 $100 biennial
Arizona 60 $45 annual
Arkansas 50 minimum $150 annual franchise tax
California 100 $25 annual + minimum $800 franchise tax
Colorado 50 $10 annual
Connecticut 250 $150 annual
Delaware 89 minimum $50 annual + franchise tax
District of Columbia 220 $300 biennial
Florida 35 $150 annual
Georgia 100 $50 annual + franchise tax
Hawaii 50 $15 annual
Idaho 100 No annual fee
Illinois 150 $75 + franchise tax
Indiana 90 $20 biennial
Iowa 50 $60 biennial
Kansas 90 $50 annual
Kentucky 40 $15 annual
Louisiana 75 $30 annual + franchise tax based on income
Maine 145 $85 annual
Maryland 120 Annual report fee based on revenue (minimum $300)
Massachusetts 275 $100 annual
Michigan 60 $25 annual
Minnesota 135 No fee for annual report
Mississippi 50 $25 annual + franchise tax based on capital used and property value (minimum $25)
Missouri 50 $20 annual + franchise tax based on assets
Montana 70 $20 annual
Nebraska $60 + $5/page Biennial report - based on property value (minimum $52)
Nevada 75 $150 annual
New Hampshire 100 $100 annual
New Jersey 125 $75 annual
New Mexico 100 $25 annual
New York 125 $9 biennial + franchise tax based in income and capital
North Carolina 125 $25 annual + franchise tax based on income (minimum $200)
North Dakota 100 $25 annual
Ohio 99 $25 biennial
Oklahoma 50 No annual report, Franchise tax based on revenue
Oregon 100 $100 annual
Pennsylvania 125 $70 every ten years
Rhode Island 230 $50 annual
South Carolina 110 minimum $25 annual
South Dakota 150 $50 annual
Tennessee 100 $20 annual + franchise tax based on earnings
Texas 300 No annual report fee; franchise tax based on revenue
Utah 70 $20 annual
Vermont 125 $45 annual
Virginia 75 Annual minimum $25 nonstock / $100 stock corporations
Washington 180 $60 annual
West Virginia 100 $25 annual
Wisconsin 100 $25 annual
Wyoming 100 $50 annual
Get Professional Help
Talk to a Business Law attorney.
There was a problem with the submission. Please refresh the page and try again
Full Name is required
Email is required
Please enter a valid Email
Phone Number is required
Please enter a valid Phone Number
Zip Code is required
Please add a valid Zip Code
Please enter a valid Case Description
Description is required

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you